NOTIFICATIONS
INCOME-TAX (TWENTY SECOND AMENDMENT) RULES, 2015 – PERMANENT ACCOUNT NUMBER- SUBSTITUTION OF RULES 114B, 114C, 114D, 114E, FORM NOS.60, 61 AND 61A: In regard to section 139A, section 271FAA and section 285BA, read with section 295 of the Income-tax Act, the Central Board of Direct Taxes made the Income–tax (22nd Amendment) Rules, 2015. Rules 114B, 114C and 114D shall come into force from the 1st day of April, 2016.
"114B. Transactions in relation to which permanent account number is to be quoted in all documents for the purpose of clause (c) of sub-section (5) of section 139A.—Every person shall quote his permanent account number in all documents pertaining to the transactions specified in the table given in the mentioned notification. If the person is a minor with no income chargeable to Income Tax, then he shall quote the permanent account number of his father or mother or guardian, as the case may be, in the document pertaining to the said transaction. If a person does not have a PAN he shall make a declaration in Form No.60 giving therein the particulars of such transaction:”
“114C. Any person as mentioned in the rule, in relation to a transaction specified in rule 114B, has received any document shall ensure after verification that permanent account number has been duly and correctly mentioned therein or as the case may be, a declaration in Form 60 has been duly furnished with complete particulars.”
“114D. determines the time and manner in which persons referred to in rule 114C shall furnish a statement containing particulars of Form No. 60 in Form No. 61 to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation) ”
“114E deals with furnishing of statement of financial transaction in respect of a financial year in Form No. 61A”
(NOTIFICATION NO.SO 3545(E) [95/2015 (F.NO.142/28/2012-(SO)TPL)], DATED 30-12-2015)
INCOME TAX (FIRST AMENDMENT) RULES, 2016- SUBSTITUTION OF RULE 17- EXERCISE OF OPTION- FORM NO. 9A, 10: In regard Section 11 read with section 295 of the Income Tax Act, CBDT made the Income-tax (1st Amendment) Rules, 2016 to come into force from the 1st day of April, 2016. Rule 17 shall include that option to be exercised in accordance with the provisions of the Explanation to section 11(1) in respect of income of any previous year relevant to the assessment year beginning on or after the 1st day of April, 2016 shall be in Form No. 9A. The statement to be furnished to the Assessing Officer or the prescribed authority under section 11(2) or under the said provision as applicable under clause (21) of section 10 shall be in Form No. 10. Both the Forms should be furnished electronically before the expiry of the time to file the return of income.
(NOTIFICATION NO.SO 110(E) [95/2015 (NO.CW-II-11/4/2015)-C.W.I], DATED 12-1-2016)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVATION WITH FOREIGN COUNTRIES – BELARUS: A Protocol amending the agreement between the Government of the Republic of India and the Government of the Republic of Belarus for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on property (Capital) of the 27th September, 1997 was signed at Minsk, in June, 2015. The Central Government notified that all the provisions of the Protocol given in the mentioned notification, shall be given effect to in the Union of India with effect from the 19th November, 2015.
(NOTIFICATION NO.SO 111(E) [NO.2/2016 (F.NO.501/07/1999-FTD-I)], DATED 13-1-2016)
SOVEREIGN GOLD BOND SCHEME, 2016 -In regard of section 3(iii) of the Government Securities Act, 2006, the Central Government made the Sovereign Gold Bond Scheme, 2016. The Subscription of the Gold Bond under this Scheme shall open on and from the 18th day of January 2016 and shall close on the 22nd day of January 2016, provided that the Central Government may, with prior notice, close the Scheme before the period specified above. The interest on the Gold Bonds shall commence from the date of its issue and shall have a fixed rate of interest at 2.75 percent per annum on the amount of initial investment which shall be payable half- yearly and the last interest will be payable along with the principal on maturity. The Gold Bond shall be repayable on the expiration of eight years from the 8th February 2016, the date of the issue of Gold Bonds, whereas premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond. The interest on the Gold Bond shall be taxable as per the provisions of the Income-tax Act, 1961 and the capital gains tax shall also remain the same as in the case of physical gold. All other terms and conditions specified in the notification of Government of India in the Ministry of Finance (Department of Economic Affairs), dated the 8th October, 2008 shall apply to the Gold Bond issued under this scheme. The necessary forms for Application, ack. receipt, Gold bonds and nomination facilities; names of designated banks and post office, List of Post Offices Identified for Sale of Sovereign Gold Bonds are mentioned in the said notification.
(NOTIFICATION [F.NO.4 (19)-W&M/2014] DATED 14-1-2016)
AUTHORITY FOR ADVANCE RULINGS- PROCEDURES FOR APPOINTMENT AS CHAIRMAN AND VICE- CHAIRMAN : In regard section 245-O(3) read with section 295(2)(p)(1) of the Income Tax Act, the Board made the Authority for Advance Rulings (Procedure for Appointment as Chairman and Vice-Chairman) Rules, 2016. Vacancy as and when shall be circulated through open advertisement and applicants shall be asked to forward complete application through Registrar of Supreme Court or High Court, as the case may be. For this purpose, there shall be a Selection Committee consisting of the following members (a) the Chief Justice of India or a Judge of the Supreme Court as nominated by the Chief Justice of India as Chairman; (b) the Secretary to the Government of India in the Ministry of Finance, Department of Revenue; (c) the Secretary to the Government of India in the Ministry of Law and Justice, Department of Legal Affairs; (d) the Secretary to the Government of India in Ministry of Personnel, Public Grievances and Pensions, Department of Personnel and Training. The required quorum is three and the Committee may devise its own procedure for selection and appointment of the Chairman and the Vice-Chairman.
(NOTIFICATION NO. GSR 100(E) [F.NO.Q.23016/6-2015-A DATED 21-1-2016)
CIRCULARS
SECTION 194A OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - INTEREST OTHER THAN INTEREST ON SECURITIES - NOTIFIED INSTITUTION - TDS UNDER SECTION 194A ON INTEREST ON FIXED DEPOSIT MADE ON DIRECTION OF COURTS : The CBDT clarified that, as per the judgment in the case of CO Bank in Writ Petition No. 3563 of 2012[2014] 51 taxmann.com (Delhi), interest on FDRs made in the name of Registrar General of the Court or the depositor of the fund on the directions of the Court, will not be subject to TDS till the matter is decided by the Court. However, once the Court decides the ownership of the money lying in the fixed deposit, the provisions of section 194A will apply to the recipient of the income.
(CIRCULAR NO.23/2015 [F.NO.279/MISC/140/2015-ITJ], DATED 28-12-2015)
SECTION 153C, READ WITH SECTION 158BD, OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT OF INCOME IN CASE OF OTHER PERSON - RECORDING OF SATISFACTION NOTE UNDER SECTION 158BD/153C OF SAID ACT: The Central Board of Direct Taxes accepted the view of the Hon’ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No. 3958 of 2014 dated 12-3-2014 [2014] 43 taxmann.com 446 (SC) in which it laid down that for the purpose of section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/ pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person.
(CIRCULAR NO.24/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015)
SECTION 115JB, READ WITH SECTIONS 115JA AND 271(1)(c), OF THE INCOME-TAX ACT, 1961 - MINIMUM ALTERNATE TAX - PENALTY UNDER SECTION 271(1)(c) WHEREIN ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISIONS OF THE SAID ACT BUT TAX LEVIED UNDER MAT PROVISIONS UNDER SECTIONS 115JB/115JC, FOR CASES PRIOR TO ASSESSMENT YEAR 2016-17: In view of the Delhi High Court judgment dated 26-8-2010 in ITA No.1420 of 2009 [2010] 194 taxman 387 (Delhi) in the case of Nalwa Sons Investment Ltd., and substitution of Explanation 4 of section 271 of the Act with prospective effect, CBDT stated that prior to 1-4-2016, where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profits u/s 115JB of the Act, then penalty under section 271(1)(c) of the Act, shall not be attracted with reference to additions /disallowances made under normal provisions. It was further clarified that in cases prior to 1-4-2016, if any adjustment is made in the income computed for the purpose of MAT, then the levy of penalty u/s 271(1)(c) of the Act, will depend on the nature of adjustment. The above settled position is to be followed in respect of section 115JC of the Act also.
(CIRCULAR NO.25/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015)
SECTION 237 OF THE INCOME-TAX ACT, 1961 - REFUNDS - ISSUE OF REFUNDS UP TO Rs.5,000/- AND REFUNDS IN CASES WHERE OUTSTANDING ARREAR IS UP TO Rs.5,000/- IN NON-CASS CASES FOR ASSESSMENT YEARS 2013-14 AND 2014-15 : The CBDT directed that in order to provide relief to small taxpayers, refunds up to Rs. 6,000/- and refunds in cases where arrear demand is up to Rs. 5,000/- may be issued without any adjustment of outstanding arrears under section 243 of the Act during FY 2015-16. This must be completed before 31st January 2016 and the report must be sent to the Member (Revenue).
(OFFICE MEMORANDUM F.NO.312/109/2015-OT, DATED 14-1-2016)
JURISDICTION OF COMPETENT AUTHORITIES IN FOREIGN TAX & TAX RESEARCH DIVISION- USAGE OF FORM - UPDATED CONTACT DETAILS OF OFFICERS DEALING WITH EXCHANGE OF INFORMATION UNDER VARIOUS TREATIES: Frequently Exchange of Information addressed to Foreign Tax Authorities, received from field formations are not addressed to the appropriate/jurisdictional Competent Authority/ Joint Secretary in Foreign Tax & Tax Research Division. Further, many Pr. CsIT/ Pr. DsIT(Inv.) do not using the Form A issued by the C.B.D.T. in the revised Manual on Exchange of Information in May 2015 for sending the requests for information to Foreign Tax Authorities. In view of the above, the distribution of jurisdictions between the Competent Authorities (Joint Secretary, FT&TR-I and Joint Secretary, FT&TR-II) along with the updated contact details of officers in Exchange of Information Cell was provided. All request for exchange of information must be sent in 'Form-A', since requests made using old proforma may not be processed in the FT&TR Division.
(LETTER F.NO.500/20/2013/FT&TR-III (2)] DATED 21-1-2016)
PRESS RELEASES
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES - SLOVENIA & MALDIVES : The Union Cabinet has approved the signing of a Protocol amending the Convention between India and Slovenia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.
The Union cabinet also approved the signing and ratification of an Agreement for the exchange of information between India and Maldives with respect to taxes. This will broaden the scope of the existing framework of exchange of tax related information which will help curb tax evasion and tax avoidance between the two countries and will also enable mutual assistance in collection of taxes.
(PRESS RELEASE, DATED 30-12-2015)
SECTION 249 OF THE INCOME-TAX ACT, 1961 - COMMISSIONER (APPEALS) - FORM OF APPEAL AND LIMITATION - ELECTRONIC FILING OF FIRST APPEAL BEFORE CIT (APPEALS): In order to digitize various functions of the Income Tax Department, electronic filing of appeal before CIT(Appeals) has been made mandatory for persons who are required to file the return of income electronically. The existing Form 35 for filing of first appeal has been substituted by a new Form. The new format for filing of appeals is more structured, objective, systematic, and aligned with the current provisions of the Income-tax Act. With these changes, the burden of compliance on the taxpayers in appellate proceedings will be significantly reduced.
(PRESS RELEASE, DATED 30-12-2015)
GUIDANCE NOTE ON IMPLEMENTATION OF REPORTING REQUIREMENTS UNDER RULES 114F TO 114H OF THE INCOME-TAX RULES, 1962: The Guidance Note is for providing guidance to the Financial Institutions, Regulators and officers of the Income Tax Department for ensuring compliance with the reporting requirements provided in Rules 114F to 114H and Form 61B of the Income-tax Rules, 1962. The Guidance Note is intended to explain the reporting requirements of FATCA and CRS in a simple manner. Since a large part of the Rules is based on IGA between India-USA and the CRS on AEOI, the Financial Institutions may refer to the IGA and CRS along with its Commentary to get further understanding of the terms used. All the stakeholders are requested to provide feedback and suggestions so that Guidance Note can be further updated as per evolving issues in the implementation of FATCA and CRS.
(PRESS RELEASE, DATED 31-12-2015)
SECTION 197, READ WITH SECTIONS 195, 206C, OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - CERTIFICATE FOR DEDUCTION AT LOWER RATE - ADVISORY FOR DEDUCTORS: Deductors deduct tax at lower rate on payment/credit to deductee on production of lower deduction certificate manually issued by assessing officers under section 197 and quote the same in quarterly TDS statement. Instances of huge default of 'Short Deduction' are observed due to wrong quoting of 197 certificate number. CPC (TDS) has provided the facility of validating the 197 certificate to the deductors on TRACES. This enables a deductor to first validate the 197 certificates given to him by their deductees and then furnish the same in the TDS/TCS statement. If the 197 certificate is not valid as per TRACES validation, the deductor should always insist upon an ITD system generated certificate having a unique 10 digit alpha numeric number. This would minimize the generation of default of "Short Deduction due to 197 certificates".
(PRESS RELEASE, DATED 1-1-2016)
BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 - DECLARATIONS AND PAYMENTS MADE UNDER SAID ACT: The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provided for a one time compliance window to declare assets held abroad and pay due taxes and penalty on the value of assets declared. A total of 644 declarations were made under the compliance window provided in the Act which closed on 30th September, 2015. The amount involved in these 644 declarations was 4,164 crores. The amount received by way tax and penalty upto last date 31st December, 2015 was Rs 2,428.4 crores. The shortfall was primarily on account of certain declarations, in respect of which there was prior information under the provisions of Double Taxation Avoidance Agreements/Tax Information Exchange Agreements or receipt of payment after 31st December, 2015.
(PRESS RELEASE, DATED 6-1-2016)
(PRESS RELEASE, DATED 15-1-2016)
INSTRUCTIONS
SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - SCRUTINY ASSESSMENT - ISSUING QUESTIONNAIRE IN CASES SELECTED FOR SCRUTINY: The CBDT instructed all the Assessing Officers that in cases selected for scrutiny, the initial notice issued under section 143(2) of the Income-tax Act, 1961 should accompany a notice under section 142(1) along with the questionnaire containing details of specific documents/information/evidences etc. that are required to be furnished by the taxpayer in connection with scrutiny assessment proceeding in their respective case. This will prevent undue hardship to the taxpayers and unnecessary wastage of their time.
(INSTRUCTION NO.19/2015 [F.NO.225/328/2015-ITA-II], DATED 29-12-2015)
SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - SCRUTINY ASSESSMENT - SOME IMPORTANT ISSUES AND SCOPE OF SCRUTINY IN CASES SELECTED THROUGH COMPUTER AIDED SCRUTINY SELECTION (CASS): CBDT clarified the scope and applicability of the Instruction No. 7/2014 dated 26-9-2014 for the cases selected for scrutiny through CASS. The said Instruction is applicable where the case is selected for scrutiny under CASS only on the parameter(s) of AIR/CIB/26AS data. If a case has been selected under CASS for any other parameter besides the AIR/CIB/26AS data, then the said Instruction would not apply. In such cases, the Assessing Officer, shall confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data. Wider scrutiny in these cases can only be conducted as per the guidelines and procedures stated in Instruction No. 7/2014.
(INSTRUCTION NO.20/2015 [F.NO.225/269/2015-ITA-II], DATED 29-12-2015)