Clarified by CBDT vide press release dated 21-06-2016 that no statement regarding arrest of willful defaulters has been issued. CBDT also expressed that though the provisions for arrest and detention by the Tax Recovery Officers in respect of the non-compliant tax defaulters are contained in the Income-tax Act, these are used extremely sparingly
Lokpal inquiry into corruption complaint where Central Govt grant is more than 1 crore: Notification dtd 20-06-2016
Under Lok pal and Lokayaukta Act 2013, as per section 14(1)(g) the Lokpal shall inquire any allegation of corruption made in a complaint in respect of any person who is or has been a director, manager, secretary or other officer of every other society or association of persons or trust (whether registered under any law for the time being in force or not), by whatever name called, wholly or partly financed by the Government and the annual income of which exceeds such amount as the Central Government may, by notification, specify;
It has been notified vide Notification dated 20-06-2016 issued by Ministry of Personnel, Public Grievances and Pensions that inquiry into allegations of corruption in above cases to be made only where grants or financial assistance given by the Central Government exceeds Rs. 1 crores. Income other than Central Government Grants not to be considered for conducting such inquiry. Even state government grant not covered.
The moot point is whether Invocation of section 13(1)(c) of Income Tax Act i.e. use or application of any part of income or assets of the trust for the benefit of trustee etc. might invite such enquiry
Circular dated 24-06-2016 sets at Knot speculations on TCS
Yet another circular on TCS [23/2016 dtd 24-06-2016] sets at Knot all speculations regarding TCS 1. Goods Sold for Rs. 5 lac. Cheque Received Rs. 4 lacs. Cash Received Rs. 1 lakh. Since cash received lesser than 2 lacs, no TCS applicable 2. Goods Sold for Rs. 5 lac. Cheque Received Rs.2 lacs. Cash Received Rs.3 lakh. TCS shall apply on Rs. 3 lacs only and not whole of consideration of Rs. 5 lacs
Seperate dates for furnishing of Form 15G/15H: Notification dtd 09-06-2016
Separate date for furnishing 15G/15H announced by CBDT vide Notification dated 09-06-2016
Earlier, TDS return for June was required to be filed by 31st July, for Sep by 31st October, for December by 31st January, for March by 31st May as per N/N 30/2012 dtd. 29-04-2016.
No separate date was prescribed for 15G/15H.However now, separate dates for uploading 15G/15H have been provided vide Notification dated 09-06-2016.
Due Date for QE 30 June shall be 15th July, for 30th Sep shall be 15th October, for 31st December shall be 15th January and for 31st March it shall be 30th April
It means for first three quarters 15G/15H to be filed 16 days ahead of due date for TDS return and for last quarter a month ahead for TDS return, thus maintaining a time distance between the TDS return and 15G/15H so that information regarding 15G/15H may be timely submitted in TDS return.
Further in respect of 15G/15H for 3rd and 4th Quarter of 2015-16 not filed electronically can be so e-filed up to 30-06-2016
Rule 128 for foreign Tax Credit inserted on 27-06-2016
Rule for tax credit of foreign taxes. Rule 128 inserted vide Notification dated 27-06-2016
- Rule is applicable to resident assesses only.
- Credit to be allowed for foreign taxes.
- Credit of only those foreign taxes are allowed which are paid in country with which India has DTAA or TIEA.
- Credit of Foreign taxes to be allowed only if they have been paid whether by way of tax deduction or otherwise
- Credit to be allowed by converting foreign tax into Indian Currency at TT buying rate on last day of month immediately preceeding the month in which tax has been paid or deducted.
- Credit shall be allowed to the extent of Income corresponding to tax is offered to tax in India
- Where income on which foreign taxes are paid is reflected in multiple years, credit of taxes shall be allowed proportionately.
- Credit of foreign taxes can be adjusted against tax , surcharge and cess payable under the Act
- Credit of foreign taxes can not be adjusted against interest, fee or penalty.
- Where the levy of foreign tax is disputed by the assessee, no credit of foreign taxes to be allowed
- a) Where dispute is finally setteled, credit of foreign tax can be allowed if With in six months from the end of month in which dispute is finally settled:
- b) Assessee furnishes evidence of settlement of dispute and
- c) Assessee also furnishes evidence that liability for payment of foreign taxes has been discharged by him and
- d) Assessee furnishes an undertaking that no refund directly or indirectly has been claimed or shall be claimed in respect of such amount
- Credit of tax to be computed by aggregating taxes paid for each source of income from a particular country.
- Credit shall be allowed at lower of the tax payable under the Act and foreign tax
- Where foreign tax paid is more than payable under DTAA or tax relief, then excess shall be ignored.
- Where income of resident assessee is computed under special provisions u/s 115JB or S.115JC, credit of foreign tax shall be allowed against MAT /AMT as it allowable against tax payable under normal provisions.
- Following document to be furnished for availing credit of foreign taxes:
- a) Statement in F. 67 specifying detail of income from foreign country and foreign taxes claimed
- b) Certificate from tax authority of foreign country specifying the nature of income and tax deducted/paid OR Such certificate from deductor or Self Signed Certificate [In case of self signed certificate , the certificate to accompany an acknowledgement of online payment or bank counter foil or challan for payment of tax, where payment has been made the assessee and proof of tax deduction]
- Documents/Certificate regarding foreign taxes to be furnished before due date of furnishing of return u/s 139(1).
Relaxation to Non residents not havig PAN from 20% TDS u/s 206AA:Rule 37BC NN dtd24-06-2016
Finance Act 2016 had amended Section 206AA(7) to provide that higher rate of TDS u/s 206AA shall not apply to payments made to non residents not having PAN subject to certain conditions
The Conditions have now been specified by incorporating Rule 37BC which provides as under:
- Relaxation u/s 206AA(7) to apply to payments in the nature of interest, royalty, fees for technical services and payments on transfer of any capital asset
- Deductee to file following details/documents
- a) Name, Email id, Contact No.
- b) address in the country or specified territory outside India of which the deductee is a resident
- c) Tax Residency Certificate from foreign government, if the laws of that government provide for issuance of such certificate
- d) Tax Identificaton Number (TIN)of resident foreign country or if TIN is not available, Unique ID No. of resident foreign country
Procedure for online submission of TDS return through incometaxindiaefiling.gov.in provided by CBDT vide N/N 11/2016 dated 22-06-2016
- Get registered with your TAN on the site
- FVU file to be uploaded as zip file.
- Statement can be filed through DSC using DSC Management Utility or can be filed using EVC
- Submit TDS return by logging in through TAN. Then Go to TDS-Upload TDS. Then upload Zip file along with signature file discussed above
- On being uploaded the status shall be shown as “uploaded”. Uploaded file shall be accepted or rejected in 24 hours. Staus can be checked at TDS- View filed TDS. Rejection reasons shall be provided along rejected file
It is not open to the tribunal itself to raise a ground or permit the party who has not appealed to raise a ground, which will work adversely to the appellant
Old and Gold Rule of Law reiterated by Calcutta High Court in Sheo Kumar Mishra [2016] 70 taxmann.com 375 (Calcutta) FEBRUARY 26, 2016 that In the absence of an appeal or cross-objections by the department against the order in dispute, the Appellate Tribunal will have no jurisdiction or power to enhance the assessment. Under Section 251, CIT A has power to enhance the assessment but u/s 253 Tribunal does not have the power to enhance the enhancement. it is not open to the Tribunal itself to raise a ground or permit the party, who has not appealed, to raise a ground, which will work adversely to the appellant
Facts and Decision
The AO had treated excess claim of certain transportation expense amounting to Rs2.02 crores as undisclosed Income of the assesse. He also opined that the assessee had shown bogus expenditures and bogus creditors, the peak credit whereof was Rs. 1.59 crores. He, however, did not treat said amount as undisclosed income on ground that said amount was less than the amount of excess claim of transportation charges and, therefore, no separate addition was made on this account. CIT A upheld order of AO
The Tribunal reversed addition of Rs. 2.02 crores on ground that said charges were already accounted for by the assessee in its account books and, therefore, could not be taxed. The Tribunal, however, confirmed addition of Rs. 1.59 crores on account of bogus expenditures
| Held by High Court that :It was not open to the Tribunal to confirm the addition of the sum of Rs. 1.59 crores because no such addition was made. In the absence of any such addition, there was no basis for the Tribunal to confirm the same. This addition was made by the Tribunal for the first time which the Tribunal could not have done. |
The assessee did not raise the issue before the Tribunal of any addition of a sum of Rs. 1.59 crores because there was no addition of the sum of Rs. 1.59 crores or any part thereof. The assessee attempted to demonstrate the fallacy in the finding arrived at by the Assessing Officer by holding at one place that there was an undisclosed income of Rs. 2.02 crores and at another place by holding that there was an undisclosed income of Rs. 1.59 crores. When the Assessing Officer had not made the addition of Rs. 1.59 crores, the assessee had no occasion to challenge the same. When the assessee carried the matter to the Commissioner (Appeals), the latter, without anything more, could have enhanced the addition. But the Commissioner (Appeals) did not do so. He merely confirmed the order of the Assessing Officer. Therefore, the subject matter of challenge before the Tribunal was the addition of Rs. 2.02 crores. The Tribunal could either have upheld the same or could have set aside the same. The Tribunal chose to set aside that addition. The matter should therefore have come to an end in the absence of any cross objection by the revenue.
References:
- State of Kerala v. Vijaya Stores [1979] 116 ITR 15 (SC)
- Motor Union Insurance Co. Ltd. v. CIT [1945] 13 ITR 272,(Bom)
- New India Life Assurance Co. Ltd. v. CIT [1957] 31 ITR 844 (Bom)
Division Bench judgment of the Bombay High Court in the case of Motor Union Insurance Co. Ltd. v. CIT [1945] 13 ITR 272, wherein the following views were expressed:
‘Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objections. But if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to support the judgment of the first Officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour. Apart from that, the section, in our opinion, does not permit the course adopted by the Tribunal in this case. Under S. 31, when the Legislature thought of giving power to the Appellate Assistant Commissioner to enhance the assessment, it has in terms enacted that. In our opinion, that fact is against the contention that the words of S. 33(4) are wide enough to include a power of enhancement, without an appeal by the Commissioner. The, word “thereon” used in S. 33(4) only means “on the appeal,” which must mean on the grounds raised in the appeal. Read in that way, the sub-section only gives power to the Appellate Tribunal to give its decision and pass orders in respect of all grounds urged (which must be on behalf of the appellant) in respect of the decision, appealed against. In deciding those grounds it can pass appropriate orders. But, in our opinion, it is not open to the Tribunal itself to raise a ground or permit the party, who has not appealed, to raise a ground, which will work adversely to the appellant.’
The judicial principle pressed into service by the Division Bench of the Bombay High Court was later followed by another Division Bench of the Bombay High Court in the case of New India Life Assurance Co. Ltd. v. CIT [1957] 31 ITR 844, and the same view was also endorsed by the Apex Court in the case of State of Kerala v. Vijaya Stores [1979] 116 ITR 15. Their Lordships were considering the question in connection with the powers of the Sales Tax Appellate Tribunal which was similar to the provisions of section 33 of the Income Tax Act of 1922 and this is what Their Lordships observed:
‘The normal rule that a party not appealing from a decision must be deemed to be satisfied with the decision, must be taken to have acquiesced therein and be bound by it, and, therefore, cannot seek relief against a rival party in an appeal preferred by the latter, has not been deviated from in sub-s. (4)(a)(i) above. In other words, in the absence of an appeal or cross-objections by the department against the AAC’s order the Appellate Tribunal will have no jurisdiction or power to enhance the assessment. Further, to accept the construction placed by the counsel for the appellant on sub-s. (4)(a)(i) would be really rendering sub-s. (2) of s. 39 otiose, for if in an appeal preferred by the assessee against the AAC’s order, the Tribunal would have the power to enhance the assessment, a provision for cross-objections by the department was really unnecessary. Having regard to the entire scheme of s. 39, therefore, it is clear that on a true and proper construction of sub-s. (4)(a)(i) of s. 39 the Tribunal has no jurisdiction or power to enhance the assessment in the absence of an appeal or cross-objections by the department. It is true that the two Bombay decisions reported in[1945] 13 ITR 272 and [1957] 31 ITR 844, on which the High Court has relied, have been rendered in relation to s.33(4)of the Indian I.T. Act, 1922, but, in our View, the said provision of I.T. Act is in pari malaria with the provision of s. 39(4) of the Kerala General Sales Tax Act, 1963. Moreover, the Bombay High Court has pointed out in those decisions that s. 33(4) merely enacted what was the elementary principle to be found in the Civil Procedure Code that the respondent who has neither preferred his own appeal nor filed cross-objections in the appeal preferred by the appellant, must be deemed to be satisfied with the decision of the lower authority and he will not be entitled to seek relief against a rival party in an appeal preferred by the latter. In the first mentioned case, the elementary principle is stated at page 282 of the report thus:
“Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objections. But, if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to support the judgment of the first officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour.”‘