Income Tax Window is now open to file Income Tax return for FY 2019-20 and FY 2020-21 if one has missed filing it and for filing updated return if one has under reported income in the tax return filed for these years. With additional tax liability of 50% for FY 2019-20 and 25% for FY 2020-21 for filing the updated return the taxpayers can avoid penalty as well as prosecution.
GST payable on interest component of EMI of Credit Card loan: HIGH COURT OF CALCUTTA: Ramesh Kumar Patodia v. Citi Bank [WPO NO. 547 OF 2019 JUNE 24, 2022 ]
The Ministry of Finance has issued a Circular No. 179/11/2022-GST dated August 3, 2022 for Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 47th meeting held on 28th – 29th June, 2022 at Chandigarh.
Based on the recommendations of the GST Council in its 47th meeting held on 28th - 29th June at Chandigarh, clarifications, with reference to GST levy, related to the following are being issued through this circular:
Electric vehicles, whether or not fitted with a battery pack, attract GST rate of 5%:
Treated sewage water attracts Nil rate of GST:
CAG’s Performance Audit on Exemption of Charitable Entities reveals lack of effective monitoring; Recommends stronger IT system for cross-verification.
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✅Window is now open to file Income Tax return for FY 2019-20 and FY 2020-21 if one has missed filing it and for filing updated return if one has under reported income in the tax return filed for these years. With additional tax liability of 50% for FY 2019-20 and 25% for FY 2020-21 for filing the updated return the taxpayers can avoid penalty as well as prosecution.
✅ GST Council to decide taxation of online gaming, betting in September meet
✅It is advisable to complete DINKYC before 15 August, 2022 as portal will be closed from 15 August 2022.
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CBDT has issued a detailed standard operating procedures (SOP) for officials for dealing with the faceless scheme, in a move aimed at reducing litigation and confusion about the scheme. The board has mandated the officials to grant personal hearing to the assessee within 2-3 days if receiving such a request.
A ruling by the Mumbai Income Tax Appellate Tribunal this week has held that the provisions of the Minimum Alternate Tax, or MAT, do not apply to foreign companies, including foreign portfolio investors (FPIs).
Deduction of tax at source under section 194C is required to be made on any sum paid by assessee engaged in business of generation and distribution of power to clearing and forwarding agents and it includes reimbursement of expenditure. [Surendra Commercial & Exim (P) Ltd. v. ITO (2022) 141 taxmann.com 23 (Cal.)]
Income-tax payers will not be allowed to enroll in the government’s pension security scheme Atal Pension Yojana (APY) from October1. “From October 1, any citizen who is or has been an income tax payer, shall not be eligible to join APY,” the finance ministry said in the notification issued.
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✅Government modifies Companies (Accounts) Rules, 2014; mandates companies to keep the back-up of books of account on daily basis* rather than periodic.
✅ “Updated Return” u/s 139(8A) of Income Tax Act. - As you know that Finance Bill 2022 has introduced a new section 139(8A) of income Tax Act. Under this section, Taxpayers can file “Updated Return” within 2 years from the end of the relevant Assessment Year. Effective from 01/04/2022. Now the Taxpayer can file the Updated Return from Assessment Year 2020-21 & 2021-22 (F/A 2019-20 & 2020-21).
✅For Taxpayer with Annual Turnover More than Rs 5 crore & For Taxpayer who is not opting for QRMP Scheme having Turnover up to 5 crores. Return for the Month of JULY 2022 :
Due date 20-AUG
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Finance ministry is proposing to soon review the exemption-free new tax regime with a view to making it more attractive for individual income taxpayers. Government aims to establish a system where there are no exemptions and the complex old tax regime with exemptions and deductions is terminated. The Union Budget 2020-21 introduced a new tax regime.
High Court of Punjab & Haryana decided that No TDS on interest on compensation awarded by Motor Accident Claims Tribunal (MACT) prior to FA 2015 amendment; Cannot burden claimants with refund process. New India Assurance Company Ltd. v. Ravinder Kumar @ Vickey and others.
Allahabad High Court has quashed order u/s 147, Notice u/s 148 and consequential reassessment proceedings for AY 2017-18 for violation of principle of natural justice by imposing cost Rs. 50,00,000/- on erreing Revenue Officers and by giving certain directions to CBDT to put the faceless assessment mechanism in place in such a manner that no harassment is faced by general public and assesses and accountability is fixed on erring officers.
Payment of interest on late deposit of TDS is not allowable as deduction: Delhi ITAT
Govt modifies Companies (Accounts) Rules, 2014; mandates companies to keep the back-up of books of account on daily basis.
The Ministry of Corporate Affairs is going live with the MCA21 V3 system with 09 Company e-forms on 31 August 2022 at 12:00 AM. In view of the same, filings for the said 09 e-forms will be stopped on the current MCA21 V2 system from 15 August 2022, at 12:00 AM and the same will resume on MCA21 V3 system from 31 August 2022 at 12:00 AM.
As part of the revised process, for undertaking any e-filing service or DSC registration/ association service, it is a prerequisite that the user is registered as a “Business User” on the MCA21 portal.
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Finance Act 2022 had inserted a new Explanation 3 to the third proviso of Section 10(23C) to provide for accumulation-related conditions similar to Section 11. To incorporate such change, the CBDT has amended Rule 17 which provides for furnishing of Forms for the accumulation of income.
Income Tax Deduction u/s 80IA is allowed unit wise. Case Name : DCIT Vs Gujarat JHM Hotels Ltd. (ITAT Surat)
Gujarat High Court directed the department to grant refund of IGST already paid by the assessee on the amount of ocean freight charges.
Credit and Finance for MSMEs: Even as SMEs listed on the two SME exchanges in the country, BSE SME and NSE Emerge, have better profitability ratios, higher return on assets and asset utilisation ratios and also debt-equity ratio in comparison to the smallest 25 percent of firms listed on main boards.
Delhi High Court questioned why restaurants should recover service charges from consumers as an "additional" and "separate levy." Court remarked that a common man perceives service charge as a government levy and restaurants can increase their food prices to absorb this charge instead of recovering it in the form of an additional charge over and above the total bill.
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The importance of GOOD PEOPLE in our life is Just like the importance of HEARTBEATS. It's INVISIBLE but it silently SUPPORTS our life.
CBDT amends Rule 17 & Form 10 providing accumulation of income by entity approved u/s 10(23C) Notification No. 96/2022, dated 17-08-2022. Under the provisions of the Income-tax Act, trust or institution is required to apply 85% of its income during any previous year. If it is not able to apply 85% of its income during the previous year, it can accumulate such income for a period not exceeding 5 years.
Income tax department has worked out fresh checks and balances in its faceless assessment scheme to make it more robust. Tax officers said that some of the changes were implemented at the start of the financial year itself, when 20 committees were set up to address concerns over high-pitched assessment that some of the taxpayers had raised.
CBIC vide Instruction No. 03/2022-23(GST-Investigation) dated August 17, 2022 has issued guidelines on the issuance of Summons under section 70 of the Central Goods & Services Tax Act, 2017 (“the CGST Act”).
The Central Board of Indirect Taxes and Customs increased the threshold monetary limit for prosecution and arrest for customs violations. In baggage and outright smuggling cases, the threshold market value of goods or foreign currency has been increased from over Rs 20 lakh to over Rs 50 lakh for legal action.
Rejection of request for conversion of free shipping bills to advance authorization scheme shipping bills not justified: Case Name : Carboline India Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
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Rule 25B to be read after 25A
25B. PHYSICAL VERIFICATION OF THE REGISTERED OFFICE OF THE COMPANY - BY ROC
-ROC has to prepare Physical Verification Report of the Registered Office of the company in the given format.
-Report to be filed by ROC-
*Need to attach Photograph of the Registered Office of the company to his report
*Copy of Agreement/ownership/rent agreement/NOC of the Registered Office of the company from owner/tenant/lessor-Self attested ID-card of the person available, if any
-Independent two witness of the locality
-Registered Office if not found capable than ROC issue notice to Company and Directors.
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CBDT extended the time-limit for furnishing Form 67 for claiming Foreign Tax Credit (FTC), effective from 01.04.2022 [Notification No. 100 of 2022 dated 18.08.2022].
CBDT, vide Notification No. 98/2022 dated 17.08.2022, notifies Rule 40G and Form No. 29D for claiming refund under Section 239A; The application in Form No. 29D shall be accompanied by a copy of an agreement or other arrangement referred to in Section 239A and can be presented by the claimant himself or through a duly authorised agent.
CBDT has set up a monitoring cell to track the handling of high pitch cases by the tax official and to investigate complaints by taxpayers under the faceless scheme.
The move comes following an instruction from Allahabad High Court that in its order dated May 19 directed the Department of Revenue to investigate handling of complaints of taxpayers. In the order, the court asked the department to ensure establishing a monitoring cell to ensure regular monitoring of local committees under Principal Chief Commissioners.
CBIC vide Circular No. 14/2022- Customs dated 18.08.2022 has clarified the applicability of customs duty on display assembly of a cellular mobile phone.
If the display assembly is imported along with mere back support of metal or plastic then the entire display assembly is subjected to the concessional rate of BCD at 10%. These back support of metal or plastic has no essential function and only provides strength, protection and structural stability to the display assembly.
However, if the display assembly is imported with any other additional parts such as mechanics or any other items (sim tray, antenna pin, speaker net, power key, fingerprint etc.) then, the entire display assembly will be subjected to BCD at the rate of 15%.
MCA notifies Companies (Incorporation) Third Amendment Rules,2022. 25B. PHYSICAL VERIFICATION OF THE REGISTERED OFFICE OF THE COMPANY - BY ROC. ROC has to prepare a Physical Verification Report of the Registered Office of the company in the given format.
Need to attach a Photograph of the Registered Office of the company to his report. Copy of Agreement/ownership/rent agreement/NOC of the Registered Office of the company from owner/tenant/lessor-Self attested ID-card of the person available, if any. 2 independent witnesses of the locality. Assistance of the local police for such verification.
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Form 3CD- Clause 44: Templates
Clause 3 of Form 3CA or Clause 5 of Form 3CB
Qualification Type – Others
Situation- 1: Not providing information in Clause 44:
As informed by the assessee, the information required under clause 44 of Form 3CD has not been maintained in absence of any disclosure requirement thereof under the goods and service tax statute.
Further the standard accounting software used by Assessee is not configured to generate reports as required under this clause in absence of any prevailing statutory requirement. Therefore, it is not possible to determine the break-up of total expenditure of entities registered or not registered under the GST. In view of the above we are unable to verify and report the desired information in this clause.
Situation 2: Assesse not registered under GST and Not providing information:
The assessee is not registered under GST and as informed by the assessee, the information required
under clause 44 of Form 3CD has not been maintained in absence of any disclosure requirement thereof.
Further the standard accounting software used by Assessee is not configured to generate reports as required under this clause in absence of any prevailing statutory requirement. Therefore, it is not possible to determine the break-up of total expenditure of entities registered or not registered under the GST. In view of above we are unable to verify and report the desired information in this clause.
Situation 3: Providing information – however limitation on obtaining some information
As informed by the assessee, the information reported under clause 44 of Form 3CD is based on the
information extracted from accounting software/ relevant GST report. However this may not be accurate as the accounting software used by Assessee is not configured to generate report as required under this
clause in absence of any prevailing statutory requirement. In addition, the software/system does not
capture information relating to the entities falling under composition scheme or supply with ineligible
credit. Therefore, it is not possible for us to verify the break-up of total expenditure of entities registered
or not registered under the GST and unable to comment on accuracy of information provided therein.
Total expenditure reported under the clause includes capital expenditure however does not include depreciation, bad debt and expenditure which is not a supply as per GST.
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Direct Tax Committee of ICAI Hosted Guidance Note on Tax Audit and link is https://resource.cdn.icai.org/71267dtc200822-gn44ab.pdf.
Income tax department has exempted non-resident corporate entities and firms not having a permanent establishment or a fixed place of business in India from 5 per cent TCS on foreign remittances and tour packages.
ITAT allows depreciation in respect of closed units or non-functional undertakings. Case Name : Beeyu Overseas Ltd. Vs DCIT (ITAT Kolkata) Appeal Number : ITA No. 409/Kol/2020 Date of Judgement/Order : 01/08/2022.
CBIC told officials administering the GST not to issue summonses to the top management of companies at the first instance and said arrests can only be made after written permission from senior officials. CBIC issues detailed instructions to address concerns raised by businesses over the excessive use of summonses and arrest provisions in the law. Officials should initially call for evidence or documents.
Government has amended rules to ensure a transparent process for the physical verification of companies' registered addresses, including by way of having the presence of independent witnesses and clicking a photograph of the registered office at the time of the verification.
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As per guidance note on Tax audit issued by icai the members are suggested to mention the Assessee's and Tax Auditor's responsibilities under clause (3) of form no. 3CA or clause (5) of form number 3CB.
Hyderabad ITAT holds that limitation period of four year for rectification under 154(7) is applicable even to an intimation under Section 143(1); [Zintec Software (P) Ltd. v. DCIT – Date of Judgement : 17.08.2022 (ITAT Hyderabad)]
CBIC issued a notification to ensure that there are fewer errors and to enforce better compliance for the firms in India. Starting from October 1, 2022, businesses with a turnover exceeding Rs 10 crore will be required to generate e-invoices. Currently, e-invoicing is mandatory for firms with a turnover of more than Rs 20 crore.
Central Board of Indirect Taxes and Customs has issued a Notification No. 67/2022 Customs (N.T.) dated August 8, 2022 regarding Passenger Name Record Information Regulations, 2022. Every aircraft operator shall register with the proper officer in the specified FORM.
Blending, bottling & packing not taxable under ‘Business Auxiliary Service. Case Name : Commissioner of Central Excise & Service Tax Vs Hi-Tech Bottling Private Limited (CESTAT Kolkata)
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✅The Supreme Court on Tuesday (23rd August) struck down various provisions of the Benami Transactions (Prohibition) Act of 1988 and the 2016 amendments to the Act as unconstitutional.
✅ Empanelment of Members to act as Observers at The Examination Centres for The Chartered Accountants Examinations - November 2022
https://resource.cdn.icai.org/71268exam57307.pdf
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✅ Guidance on Clause 44 of Tax Audit
1. Break up of expenditure in aggregate is to be given and not head wise.
2. Depreciation, Bad debts etc. which are not expenses are not to be reported.
3. Transactions covered under Schedule III of CGST Act not to be reported in any column viz. Salary expenditure etc.
4. Expenditure on _Alcohol, petroleum crude, high speed diesel oil, motor spirit, natural gas and aviation turbine fuel_ are covered under meaning of exempt supplies.
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CBDT is reviewing the operation of its faceless tax assessment procedures to ensure field officers do not make aggressive tax demands and allow natural justice to take its course. The review follows an 11 August order by the Allahabad High Court giving instructions about instituting safeguards amid complaints over the system's alleged over-reliance on data rather than human interaction.
Rs. 50 lakhs cost imposed on the department in case of arbitrary demand and proceedings initiated on the pretext of Faceless Assessment under Income Tax. Allahabad HC rejects affidavit of Sri Shishir Kuamr Jha, Principal Chief Commissioner of Income Tax, U.P. (West) and Uttarakhand Region at Kanpur.
3. Revenue could not proceed to file an appeal against the order of ITAT if National Company Law Tribunal (NCLT) passed an order imposing a moratorium under Insolvency & Bankruptcy Code, 2016. PCIT v. Shubh Labh Steels (P) Ltd. [2022] 141 taxmann.com 190 (Cal.)]
The Supreme Court holds that amendments made to the Benami Act in the year 2016 apply prospectively, thus, upholds Calcutta HC ruling in Ganpati Dealcom. In view of this judgement, all the cases where Benami proceedings have been initiated in respect of transaction before 1st November,2016 shall be null and void.
A big relief to all such persons who were facing Benami Proceedings pertaining to the period prior to this date. It may however be noted that this will not give any relief to those persons who are facing Benami Proceedings in respect of demonetisation ( नोट बन्दी ) as demonetisation transactions are on or after 1st November,2016.
MCA has vide notification dt. 05.08.2022 made amendment in relation to maintaining books of accounts of the company. Relevant extracts of the notification are issued.
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🧑🏻🎓CBDT issued Notification No. 99/2022/F. No. 370142/9/2022-TPL dated 17-08-2022, superseding its earlier notification in this matter.
👨🏻🎓 Notification relates to Section 206C(1G) of the Income-tax Act, 1961. As per the said Section, he tour operator shall be required to collect tax (TCS) at the rate of 5% in respect of overseas tour programme package.
🧑🏻🎓 In this regard various representations were received by the Govt., that NR visiting India may not have a PAN, and therefore tax is required to be collected at higher rates. Further, such non-residents may find it difficult to furnish their tax returns and claim refunds.
👨🏻🎓 Based on the representations received, on 31-3-2022 CBDT specified that the provisions of the said section shall not apply to a non-resident individual buyer visiting India.
🧑🏻🎓 However, now in Aug 2022, CBDT have released the notification saying that, Section 206C(1G) of the Act shall not apply to a non-resident buyer who does not have a Permanent Establishment (PE) in India. Thus, now twin conditions need to be satisfied for the exemption to apply: a) The taxpayer (i.e., buyer) should be a non-resident; b) Such taxpayers shouldn't have a PE in India.
👨🏻🎓 Therefore, now more NR will be able to take benefit of the relaxation available under this Section. *Curious CA advice all readers that while suggesting/granting the exemption, the collector should collate documentary evidence to satisfy that the buyer is a non-resident and does not have a PE in India.*
🧑🏻🎓 If you find the update easy to understand and useful, do join our WhatsApp broadcast : https://bit.ly/2oG7TAR
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CBDT has directed field formation to verify all the information provided by the I-T portal before drawing any adverse inference and initiating proceedings against the taxpayers. The directive comes following a ruling by the Allahabad High Court that passed severe strictures and proposed to levy an exemplary cost of ₹50 lakh on revenue offices in a writ challenging reopening of assessment on wrong facts.
The Assessing Officer cant withdraw interest under section 244A(2) in rectification under section 154 when PCCIT/CCIT/PCIT/CIT has not decided the exclusion of period for interest. Otis Elevator Company (India) Ltd. v. DCIT (2022) 141 taxmann.com 391 (ITAT Mumbai)].
RBI had issued draft rules/ regulations regarding Overseas Direct Investment (‘ODI’)/ Overseas Portfolio Investment and had sought feedback on the same (‘Draft ODI Rules’). Pursuant to the Draft ODI Rules and the feedback received, the Central Government and the Reserve Bank of India, on 22 August 2022, released the new rules/ regulations/ directions on ODI.
Supreme Court ruled the amended Benami Act, which came into effect on November 1, 2016, applied only prospectively, besides declaring "unconstitutional" one of the provisions of the law dealing with a three-year jail term and a penalty.
SEBI has amended rules governing portfolio managers, under which they will not be allowed to invest clients' funds in unrated securities of their related parties or associates.
6. Empanelment Of Members to Act as Observers at The Examination Centres for The November -2022 Chartered Accountants Examinations.)
https://resource.cdn.icai.org/71268exam57307.pdf
7. Concurrent Audit of Various Zones in Bank of Baroda. Last Date:- Sep 09, 2022. Zones:- Ahmedabad 1 & 2, Baroda 1 & 2, Bengaluru, Bhopal 1 & 2, Chennai, Jaipur 1 & 2, Kolkata, Lucknow, Mangalore , Meerut, Mumbai 1 & 2, Delhi 1 & 2, Patna, Pune 1 & 2, Rajkot
https://www.bankofbaroda.in/-/media/Project/BOB/CountryWebsites/India/tenders/rfp-ciad-114-3-dated-20-08-2022-20-01.pdf
8. Supreme Court has said all details of the bidder winning a government contract need to be shared with the Goods and Services Tax (GST) jurisdictional officers concerned to enable them to correctly assess tax liability. The Supreme Court also held that it is the responsibility of the bidder to quote the correct Harmonised System of Nomenclature (HSN) code and the corresponding SGT rate.
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CBIC has notified that w.e.f. 1st October, 2022, the provisions of E-Invoicing shall be applicable on all the taxpayers having aggregate turnover of 10 Crores or more. This has been reduced from the prevailing limit of 20 Cr.
The Supreme Court has said all details of the bidder winning a government contract need to be shared with the Goods and Services Tax (GST) jurisdictional officers concerned to enable them to correctly assess tax liability. The Supreme Court also held that it is the responsibility of the bidder to quote the correct Harmonised System of Nomenclature (HSN) code and the corresponding SGT rate.
Recovery for financial creditors from the resolution of toxic assets under the Insolvency and Bankruptcy Code (IBC) stood at just 10.7% of their admitted claims in the June quarter. It barely improved from a record low of 10.2% between January and March, and registered the second worst quarterly performance since the IBC came into being in 2016.
RBI had issued draft rules/ regulations regarding Overseas Direct Investment (‘ODI’)/ Overseas Portfolio Investment and had sought feedback on the same (‘Draft ODI Rules’). Pursuant to the Draft ODI Rules and the feedback received, the Central Government and the Reserve Bank of India, on 22 August 2022, released the new rules/ regulations/ directions on ODI.
Online link to apply for EMPANELMENT OF MEMBERS TO ACT AS OBSERVERS AT THE EXAMINATION CENTRES FOR THE CHARTERED ACCOUNTANTS EXAMINATIONS NOVEMBER 2022: http://observers.icaiexam.icai.org
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The Income-tax department has collected around Rs 28 crore in taxes after about 1 lakh returns were filed by taxpayers under the newly introduced return filing form called ITR-U, that was notified this year as part of the Budget 2022-23.
CBDT said that online gaming players associated with just one gaming portal have been found to have netted as much as Rs 58,000 crore in the three years through FY22 as the gross winning amount. IT Deptt Having identified huge tax evasion in the thriving online gaming industry, the tax department wants the winners in such games to use the updated income tax returns (ITR-U) scheme to disclose their incomes and pay the right amounts of taxes with applicable interest.
The Supreme Court agreed to consider a plea seeking a review of its earlier judgment upholding the constitutional validity of anti-money laundering provisions, including the powers of arrest and seizure. The court said it would re-examine two provisions of the Prevention of Money Laundering Act (PMLA), one with respect to providing a copy of the Enforcement Case Information Report (ECIR) to the accused and another related to the burden of proof on the accused regarding innocence.
Direct tax collections (post-refunds) grew by a robust 33% in the year till August 24 of the current financial year, with both personal income tax (PIT) and corporate income tax (CIT) performing much better than anticipated.
Authority for Advance Ruling (AAR) judgement saying tax credit should be allowed on goods and services tax (GST) paid on upfront lease premium could give a breather to companies and even corporate individuals. Tax authorities have been disallowing the tax credit up until now.
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