Category: Income Tax

The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 (“the Act”) to inter alia provide that the Income-tax Settlement Commission (“ITSC”) shall cease to operate with effect from 01.02.2021. Further, it has also been provided that no application for settlement can be filed on or after 01.02.2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha. In order to dispose off the pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the “Interim Board”), vide Notification no. 91 of 2021 dated 10.08.2021. The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal.

It has been represented that a number of taxpayers were in advanced stages of filing their application for settlement before the ITSC as on 01.02.2021. Further, some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, the Hon’ble High Courts have given interim relief and directed acceptance of applications of settlement even after 01.02.2021. This has resulted in uncertainty and protracted litigation.

In order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, it has been decided that applications for settlement can be filed by the taxpayers by 30th September, 2021 before the Interim Board if the following conditions are satisfied:-

1. The assessee was eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and
2. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.

Such applications, subject to their validity, shall be deemed to be “pending applications” under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act.

It is clarified that taxpayers who have filed such applications shall not have the option to withdraw such applications as per the provisions of section 245M of the Act. Further, the taxpayers who have already filed application for settlement on or after 01.02.2021 as per the direction of the various High Courts and who are otherwise eligible to file such application, as per para 3 above, on the date of filing of the said application shall not be required to file such application again.

Legislative amendments in this regard shall be proposed in due course.

Refer YouTube link:

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For easing the process of authentication of electronic records in faceless assessment proceedings, the Government has amended Income-tax Rules, 1962 (‘the Rules’) vide notification no G.S.R. 616(E) dated 6^th September, 2021. The amended Rules provides that electronic records submitted through registered account of the taxpayers in the Income-tax Department’s portal shall be deemed to have been authenticated by the taxpayer by electronic verification code (EVC). Therefore, where a person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated by EVC for the purposes of section 144B(7)(i)(b) of the Income-tax Act, 1961 (‘the Act’).

However, under the existing provisions of section 144B(7)(i)(b) of the Act, this simplified process of authentication by EVC is not available to certain persons (such as companies, tax audit cases, etc.) and they are mandatorily required to authenticate the electronic records by digital signature. In order to provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also.  Hence, the persons who are mandatorily required to authenticate electronic records by digital signature shall be deemed to have authenticated the electronic records when they submit the record through their registered account in the Income-tax Department’s portal. Legislative amendments in this regard shall be proposed in due course.

Refer YouTube video link

https://www.youtube.com/watch?v=C6LwGDL0DEc

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

Notification No. 95/2021-Income Tax Dated:  31st August, 2021

G.S.R. 604(E).—In exercise of the powers conferred by the first proviso to clause (11) of section 10 and the first proviso to clause (12) of section 10 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement. (1) These rules may be called the Income-tax (25^th Amendment) Rules, 2021.

(2)    They shall come into force on 1^st day of April, 2022.

2. In the Income-tax Rules, 1962, after the rule 9C, the following rule shall be inserted, namely: ‒

“9D. Calculation of taxable interest relating to contribution in a provident fund or recognised provided fund, exceeding specified limit.-

(1)For the purposes of the first and second provisos to clauses (11) and (12) of section 10 , income by way of interest accrued during the previous year which is not exempt from inclusion in the total income of a person under the said clauses (hereinafter in this rule referred to as the taxable interest), shall be computed as the interest accrued during the previous year in the taxable contribution account.

(2) For the purpose of calculation of taxable interest under sub-rule (1), separate accounts within the provident fund account shall be maintained during the previous year 2021-2022 and all subsequent previous years for taxable contribution and non-taxable contribution made by a person.

Explanation: For the purposes of this rule,-

(a) Non-taxable contribution account shall be the aggregate of the following, namely:-

(i) closing balance in the account as on 31^st day of March 2021;

(ii) any contribution made by the person in the account during the previous year 2021-2022 and subsequent previous years, which is not included in the taxable contribution account; and

(iii) interest accrued on sub- clause (i) and sub- clause (ii),

as reduced by the withdrawal, if any, from such account;

(b) Taxable contribution account shall be the aggregate of the following, namely:-

(i) contribution made by the person in a previous year in the account during the previous year 2021-2022 and subsequent previous years, which is in excess of the threshold limit; and

(ii) interest accrued on sub- clause (i),

as reduced by the withdrawal, if any, from such account; and

(c) The threshold limit shall mean:

(i) five lakh rupees, if the second proviso to clause (11) or clause (12) of section 10 is applicable; and

(ii) two lakh and fifty thousand rupees in other cases.”.

[Notification No. 95/2021/ F. No. 370142/36/2021-TPL]

NEHA SAHAY, Under Secy. (Tax Policy and Legislation Division)

   On consideration of difficulties reported by the taxpayers and other stakeholders in electronic filing of certain Forms under the provisions of the Income-tax Act,1961 read with Income-tax Rules,1962 (Rules), Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for electronic filing of such Forms. The further details are as under:

1. The application for registration or intimation or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A required to be filed on or before 30^th June, 2021, as extended to 31^st August, 2021 vide Circular No.12 of 2021 dated 25.06.2021, may be filed on or before 31^st March, 2022;
2. The application for registration or approval under Section 10(23C), 12A or 80G of the Act in Form No.10AB, for which the last date for filing falls on or before 28^th February, 2022 may be filed on or before 31^st March, 2022;
3. The Equalization Levy Statement in Form No.1 for the Financial Year 2020- 21, which was required to be filed on or before 30^th June, 2021, as extended to 31^st August, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be filed on or before 31^st December, 2021;
4. The Quarterly statement in Form No. 15CC to be furnished by authorized dealer in respect of remittances made for the quarter ending on 30^th June, 2021, required to be furnished on or before 15^th July, 2021 under Rule 37BB of the Rules, as extended to 31^st August, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be furnished on or before 30^th November, 2021;
5. The Quarterly statement in Form No. 15CC to be furnished by authorized dealer in respect of remittances made for the quarter ending on 30^th September, 2021, required to be furnished on or before 15^th October, 2021 under Rule 37BB of the Rules, may be furnished on or before 31^st December, 2021;
6. Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30^th June, 2021, which was originally required to be uploaded on or before 15^th July, 2021, and subsequently by 31^st August, 2021, as per Circular No.12 of 2021 dated 25.06.2021, may be uploaded on or before 30^th November, 2021;
7. Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30^th September, 2021, which is required to be uploaded on or before 15^th October, 2021, may be uploaded on or before 31^st December, 2021;
8. Intimation to be made by Sovereign Wealth Fund in respect of investments made by it in India in Form II SWF for the quarter ending on 30^th June, 2021, required to be made on or before 31^st July, 2021 as per Circular No.15 of 2020 dated 22.07.2020, as extended to 30^th September, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be made on or before 30^th November, 2021;
9. Intimation to be made by Sovereign Wealth Fund in respect of investments made by it in India in Form II SWF for the quarter ending on 30^th September, 2021, required to be made on or before 31^st October, 2021 as per Circular No.15 of 2020 dated 22.07.2020, may be made on or before 31^st December, 2021;
10. Intimation to be made by a Pension Fund in respect of each investment made by it in India in Form No. 10BBB for the quarter ending on 30^th June, 2021, required to be made on or before 31^st July, 2021 under Rule 2DB of the Rules, as extended to 30^th September, 2021 vide Circular No. 15 of 2021 dated 03.08.2021, may be made on or before 30^th November, 2021;
11. Intimation to be made by a Pension Fund in respect of each investment made by it in India in Form No. 10BBB for the quarter ending on 30^th September, 2021, required to be made on or before 31^st October, 2021 under Rule 2DB of the Rules, may be made on or before 31^st December, 2021;
12. Intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India, for the purposes of sub-section (1) of section 286 of the Act, in Form No.3CEAC, required to be made on or before 30^th November, 2021 under Rule 10DB of the Rules, may be made on or before 31^st December, 2021;
13. Report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India, for the purposes of sub-section (2) or sub-section (4) of section 286 of the Act, in Form No. 3CEAD, required to be furnished on or before 30^th November, 2021 under Rule 10DB of the Rules, may be furnished on or before 31^st December, 2021;
14. Intimation on behalf of an international group for the purposes of the proviso to sub-section (4) of section 286 of the Act in Form No. 3CEAE, required to be made on or before 30^th November, 2021 under Rule 10DB of the Rules, may be made on or before 31^st December, 2021.

CBDT Circular No. 16/2021 in F.No.225/49/2021/ITA-II dated 29.08.2021 issued. The said Circular will be available on www.incometaxindia.gov.in.

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RM/KMNRelease Id :-1750167

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Under The Direct Tax Vivad se Vishwas Act 2020 (hereinafter referred to as “Vivad se Vishwas Act”), the amount payable by the declarant is stated in the table under section 3 of the Vivad se Vishwas Act.

As per the latest notification dated 25^th June 2021, the last date of payment of the amount (without any additional amount) has been notified as 31^st August 2021. Further the last date for payment of the amount (with additional amount) under Vivad se Vishwas Act has been notified as 31^st October, 2021.

Considering the difficulties being faced in issuing and amending Form no 3, which is a prerequisite for making payment by the declarant under Vivad se Vishwas Act, it has been decided to extend the last date of payment of the amount (without any additional amount) to 30^th September, 2021. Necessary notification to this effect shall be issued shortly.

It is, however, clarified that there is no proposal to change the last date for payment of the amount (with additional amount) under Vivad se Vishwas Act, which remains as 31^st October, 2021.

The Taxation Laws (Amendment) Act, 2021 (2021 Act), which received the assent of the President on the 13^th August, 2021, has, inter-alia, amended the Income-tax Act, 1961 (Income-tax Act ) so as to provide that no tax demand shall be raised in future on the basis of the  amendment to section 9 of the Income-tax Act made vide Finance Act, 2012 for any offshore indirect transfer of Indian assets if the transaction was undertaken before 28^th May, 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President).

The amendment made by 2021 Act also provides that the demand raised for offshore indirect transfer of Indian assets made before 28^th May, 2012 (including the validation of demand provided under Section 119 of the Finance Act 2012) shall be nullified on fulfillment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc. shall be filed and such other conditions are fulfilled as may be prescribed. The amount paid/collected in these cases shall be refunded, without any interest, on fulfillment of the said conditions.

The aim of the amendment made by the 2021 Act is to bring tax certainty and ensure that once specified conditions are fulfilled, the pending Income-tax proceedings  shall be withdrawn, demand, if any, raised shall be nullified, and amount, if any, collected shall be refunded to the taxpayer without any interest. To implement the amendment made by 2021 Act, draft rules have been prepared to amend the Income-tax Rules, 1962 which specify the conditions to be fulfilled and the process to be followed to give effect to the amendment made by the 2021 Act.

The draft notification containing the proposed rules is placed in public domain and can be accessed at www.incometaxindia.gov.in.

Suggestions/comments on the draft notification are invited from all stakeholders and the public and can be furnished electronically at the email address ustpl1@nic.in latest by 4^th September, 2021.

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