HAPPY NEW YEAR 2017: RESOLUTIONS

Posted on 1st Jan 2017 by Business So Simple in Miscellaneous

HAPPY NEW YEAR 2017: RESOLUTIONS

1. Whatever happened, happened for the good. Whatever is happening, is happening for the good. Whatever will happen, will also happen for the good.

2. You have the right to work, but never to the fruit of work.

3. Change is the law of the universe. You can be a millionaire, or a pauper in an instant.

4. The soul is neither born, and nor does it die

5. You came empty handed, and you will leave empty handed.

6. Lust, anger and greed are the three gates to self-destructive hell.

7. Man is made by his belief. As he believes, so he is.

8. When meditation is mastered, the mind is unwavering like the flame of a lamp in a windless place.

9. There is neither this world, nor the world beyond. nor happiness for the one who doubts.

10. We’re kept from our goal not by obstacles, but by a clear path to a lesser goal.

11. A person can rise through the efforts of his own mind; or draw himself down, in the same manner. Because each person is his own friend or enemy.

January 1, 2017 (New Year’s Day)

New Year’s Day, also called simply New Year’s or New Year, is observed on January 1, the first day of the year on the modern Gregorian calendar as well as the Julian calendar. In pre-Christian Rome under the Julian calendar, the day was dedicated to Janus, god of gateways and beginnings, for whom January is also named. As a date in the Gregorian calendar of Christendom, New Year’s Day liturgically marked the Feast of the Naming and Circumcision of Jesus, which is still observed as such in the Anglican Church and Lutheran Church. In present day, with most countries now using the Gregorian calendar as their de facto calendar, New Year’s Day is probably the most celebrated public holiday, often observed with fireworks at the stroke of midnight as the new year starts in each time zone. Other global New Years’ Day traditions include making New Year’s resolutions and calling one’s friends and family.

(Sources : https://en.wikipedia.org/wiki/New_Year’s_Day)

GST Updates (30 Dec 2016)

Posted on 30th Dec 2016 by Business So Simple in Miscellaneous

Looking at rolling out GST on July 1 if it doesn’t happen on April 1

December 29, 2016

Arjun Ram Meghwal, MoS Finance amd corporate affairs on Thursday told CNBC TV18 that the government is looking at rolling Goods and Services Tax (GST) on July 1, 2017, if it doesn’t happen on April 1. The GST Council will be meeting on January 3-4 with an agenda to vet the model GST and the compensation Bills for their legal correctness, and resolving the contentious issues of Integrated GST (IGST) administration and division of assessment powers between the Centre and states. In the last GST Council meeting, FM Arun Jaitley was asked whether he was still sticking to the self-imposed April 1, 2017 deadline for GST rollout, he said, “Our effort will be to do it as quickly as possible,” but added that he wouldn’t want to “hasten the process”, as discussions were underway.

Meanwhile, Speaking on demonetisation, Meghwal also told the business news channel that this decision is a radical reform and will help change the way of life. “The GDP will increase by 2% and consumption and investment will increase rapidly once the entire demonetisation proces is complete. It will also help increase the tax base.” He further added that the government doesn’t take any decision keeping political benefits in mind.

The Modi government is pitching hard for a cashless economy. Recently, the government decided that no service charge will now be levied for use of debit cards. Department of Economic Affairs Secretary Shaktikanta Das has said that till December 31, 2016, no service charges will be levied on debit cards and that the move is meant to ensure greater penetration of digital transaction. Meanwhile, to encourage digital transactions, the RBI has increased the doubled the limit on the balance that one can keep in e-wallets. The limit has been enhanced from Rs 10,000 to Rs 20,000.

The Narendra Modi government has come under severe criticism from the Opposition for its move to demonetise old Rs 500 and Rs 1000 notes. The reaction on the ground has, however, been mixed. While most people have lauded the move to check black money and corruption, many have said that the implementation, especially when it comes to availability of currency, should have been much better. Source – http://www.financialexpress.com [29-12-2016]

How To Resolve The Issue Of Dual Control In GST

December 29, 2016

There is no doubt that so far as possible, the taxable person (earlier termed as dealer or assessee) should face only one authority. It will be difficult for him/her to face two masters, as it is very much possible that two authorities may take entirely different views on same issue.

At the same time, it is obvious that the revenue of both central and state governments should be protected. Both the Centre and states have their sovereign powers. Hence, some golden mean is required to be found.

It is envisaged that rates of CGST and SGST will be same. Thus, broadly 50 per cent of revenue will go to the central government and 50 per cent will go to the state government.

Though IGST will be collected by the central government, it is an intermediate tax. It is a pass-through transaction. The final tax will be in form of CGST and SGST only.

However, it has to be noted that central government has taken the responsibility of compensating states for any revenue loss for five years. Thus, the central government needs to be more diligent than states to ensure proper tax collection.

Considering these factors, it is suggested that broadly, 55 per cent of tax revenue should be under control of central government and 45 per cent of tax revenue should be under the control of state government.

To start with, as a rule of thumb, a taxable person having business activities predominantly in one state should be under control of the state government. Taxable persons having multi-state businesses and those predominantly in the export field should be under the control of central government.

Industries and businesses peculiar to one state should be under control of the state government, i.e., jute in West Bengal, sugar in Maharashtra and UP, etc. The reason is that state officers already have deep knowledge of these businesses.

Businesses having national-level activities like banking, insurance, national couriers, telecommunication should be under control of central government.

Once such bifurcation is made, further refinement can be made on other reasonable criteria to achieve broadly the ratio of 55:45.

Once a bifurcation of the taxable person is made, it should be reviewed every three years. Frequent changes should be avoided.

However, that does not mean that there should be watertight compartments. It is obvious that officers of central government will be biased towards IGST and CGST while state government officers will be biased towards SGST.

To ensure that interest of both central and states are protected, the following measures should be taken:

Model GST Law provides for audits of assessee. If the audit team is led by central government authorities, one officer of state should be part of the audit team. Similarly, if audit is conducted by state government authorities, one officer of Centre should be part of the audit team.

Same principle should be followed while carrying out inspection, searches and seizures. This will ensure that in every audit, inspection, search and seizure, a one-sided view is not taken. A balanced view will be ensured.

There should be a coordination committee at state level of senior central and state authorities. Such committees may also be formed at zonal levels, even at district levels, wherever possible.

There should be a mechanism to refer the issue to GST Council through state-level committees if there is disagreement among members of the committee.

If these steps are taken and implemented in proper spirit, interest of all stakeholders – i.e. taxable persons, central government and state governments – will be protected. Source – http://profit.ndtv.co [28-12-2016]

Demonetisation should not be used as an excuse to delay GST

December 29, 2016

The latest GST council meetings have fallen short of expectation.

Lack of consensus on the issue of tax administration or ‘dual control’ means that the April 1, 2017 deadline for GST implementation looks unachievable. A few states also believe that GST should be deferred due to the ongoing demonetisation drive.

These states argue that they cannot absorb the impact of two ‘major disruptions’ demonetisation and GST simultaneously .This is interesting, because GST was hardly seen as a ‘disruption’ before the currency ban.

So, should demonetisation be a ground for delay in implementation of GST?

A closer look at facts suggest otherwise. At a conceptual level, one of the primary objectives of both demonetisation and GST is to check tax evasion. Demonetisation does it by bringing a larger part of economy under banking channels, GST is proposing to do it by tracking all business transactions through the GST Network (GSTN) system. So, GST should complement measures to curb black money.

Some economists make the point that small businesses are most impacted by demonetisation and they would not be able to align themselves with GST so quickly . There is hardly any merit in this argument. In GST, there is a proposal to exempt small businesses up to annual sales of Rs 20 lakh (10 lakh for northeastern states). Further, those in the range Rs 20-50 lakh would have the option to pay composition tax at a flat rate, without claiming credits and maintaining detailed paperwork. These small businesses will hardly be impacted by GST.

It’s relevant to point out that agricultural produce would be kept out of GST as well. Larger businesses were anyway expected to prepare for GST, with or without demonetisation. In fact they look forward to savings, which GST-led efficiencies are expected to bring about.

These businesses are used to making tax payment online, also mandatory under current excise and service tax laws. Further, they can make GST payment through debit and credit cards as well, which will further simplify the tax payment process.In any case GST is now likely to be delayed by at least 3 months or so, which gives businesses more time to prepare for it.

From state governments’ perspective, admittedly, demonetisation could lead to drop in tax revenues (primarily VAT) in the current year, due to lower sales that many companies are experiencing, particularly those dealing with FMCG or consumer products. However, such a revenue loss is fully protected by the Centre for a period of 5 years of GST implementation.

Further, the base year to be taken for arriving at the state tax revenues is 2015-16, before demonetisation. For every year thereafter, a minimum annual growth of 14% has been assumed. Therefore, even assuming that state revenues drop in 2016-17 due to demonetisation by say 20%, they would continue to get compensation on the basis of base year 2015-16 plus 14%.

It only means that the quantum of compensation might increase for the Centre due to less than normal revenue collection by states. Thus the Centre needs ways to collect additional revenue. In the last GST council meeting, a consensus has already been reached that alternative sources to fund the additional compensation should be explored by the Centre.

For the Centre, while excise and customs duty collections may drop initially (due to fall in demand after demonetisation), they could make up the shortfall by higher collection of income tax as a significant part of parallel economy is expected to come within the tax net, as we go forward.

For consumers, GST is decidedly a better system of taxation simple and transparent. There is an expectation that GST would bring down the prices of most products of general usage. The government’s proposal to introduce an ‘anti profiteering’ clause in the revised draft of GST laws would mean that businesses would be forced to pass on the benefit accruing to them on account of GST, even though implementation of such a provision could be a challenge. Drop in prices would spur demand, which is exactly what the doctor ordered to deal with demonetisation’s fallout.

So demonetisation should not delay GST, if anything it should expedite GST. Most definitely , it cannot be used as a scapegoat for derailing the GST bandwagon. Source – http://auto.economictimes.indiatimes.com [29-12-2016]

GST Council makes headway on bills, stuck on taxpayer control

December 24, 2016

The all-powerful GST Council today made a reasonable headway on supporting legislations for the new indirect tax regime but its rollout from April 1 looked virtually impossible as it postponed discussion on the critical issue of administration and control of tax payers. The panel, which met for the seventh time since the Constitutional Amendment to replace central and state taxes with a Goods and Service Tax was approved in mid-September, tweaked the periodicity of payment of compensation for loss of revenue to states for implementation of GST to bi-monthly instead of previously decided quarterly payment. Also, the Council decided to create the kitty for the compensation from any other tax besides the cess on luxury and sin goods it had previously approved, as states saw revenues being dented by slowdown in economic activity and resultant tax collections following demonetisation. The GST Council will meet again on January 3-4 and take up the issue of which part of tax payers should be controlled by the Centre and who should be governed by the states after a single tax will replace levies like central excise, service tax and VAT. The dual control is also part of the Integrated-GST legislation that Parliament needs to pass before the new regime is rolled out. But for this stumbling block, mirror legislations of Central-GST and State-GST, that have to be approved by Parliament and state assemblies respectively, neared finality with most clauses agreed upon. Finance Minister Arun Jaitley said the law to provide for compensation to the states for loss of revenue was also approved by the GST Council at its two-day meeting which ended today but a final draft with legal language would be approved at the next meeting. “I am trying my best,” he said, when asked about the April 1 rollout schedule. “I am not going to bind myself with anything. Our effort is to do it as quickly as possible and I think we are making a reasonable headway.” Three consecutive meetings of the GST Council have not been able to take up the issue of dual control. Some states like West Bengal and Kerala want a minimum turnover criteria be fixed to decide who control which assessee, a proposal the Centre is not agreeable to because states lack expertise on levies like service tax.

“If you ask me what are the principle residuary items left, the main item of course is the IGST and dual empowerment issue. The second is the legally vetted language which will be placed in the next meeting on January 3-4,” Jaitley said, adding that the Council will take up items in each tax bracket after that. Source – http://indiatoday.intoday.in [23-12-2016]

GST Updates ( 25 Dec 2016)

Posted on 25th Dec 2016 by Business So Simple in Miscellaneous

GST Council makes headway on bills, stuck on taxpayer control

December 24, 2016

Two-day meeting of GST Council begins today in Delhi

December 22, 2016

Two-day meeting of GST Council begins today in Delhi

The Goods and Services Tax (GST) Council will begin its two-day meeting in New Delhi today to consider the model laws and iron out differences on the issue of jurisdiction over assessees in the new indirect tax regime.

This will be the seventh meeting of the Council and Union Finance Minister Arun Jaitley will chair the meeting.

GST Council in its last meeting had cleared 20 chapters of the model GST law and today they will discuss the remaining seven chapters.

Earlier, the council have taken several important decision.

The decision includes the threshold limit of 20 lakh rupees exemption from levy of GST for normal states and 10 lakhs for the Special Category States.

Besides, to compensate states for five years for loss of revenue due to the implementation of GST, the base year for the revenue of the State would be 2015-16 and a fixed growth rate of 14 percent will be applied to it.

The government has time till September 16 next year to implement the GST Act as per the Constitution Amendment Bill passed by both the Houses with a two-thirds majority and by half of the states. Source – http://www.newindianexpress.com [22-12-2016]

GST Updates (20 Dec 2016)

Posted on 20th Dec 2016 by Business So Simple in Miscellaneous

Delhi govt starts registration of city traders under GST

The Delhi government has launched a process for enrollment under Goods and Services Tax regime on December 16, 2016. The Deputy Chief Minister, Delhi, Manish Sisodia, has formally initiated the procedure that would continue till December 31. There are currently around 3.48 lakh traders registered with the Trade and Taxes Department of Delhi who are eligible to get themselves registered under GST regime.

He said that “GST is currently in initial stage and it is our responsibility to properly shape it. Traders should come forward and tell us about their queries and concerns relating to GST so that I could raise them in the GST council”. He also demanded that the word- ‘dealers’ which exists in the current tax law should be replaced with ‘partners’ in the GST regime. His contention was that the traders collect tax from the people and give it to the State Government and, hence, they are ‘partners’ in collecting tax.

Government may call special session of the Parliament for GST-related bills

The controversy of the Parliament on demonetisation has put several important legislations including GST on hold. The last meet of winter session of the Parliament has ended with worst results. The Government is now considering for calling a special short session of the Parliament to discuss Central GST and Integrated GST Bills.

According to a report the government may call a meeting of the Cabinet committee of Parliamentary Affairs (CCPA) to discuss ways of getting these important bills passed in the Parliament.

CEA wants real estate, electricity charges to be part of GST

In an event at ASSOCHAM, Chief Economic Advisor, Arvind Subramanian said that the “GST constitutional amendment bill is the ‘mother of all achievements’. We should aspire for simple, clean rates that are lower rather than higher. This will help in fight against black money.”

He said that the Sale of land and real estate need to be part of the GST. That way the input tax credits can enter in the system. The Stamp duty can be kept separate. He further pointed that we need to bring electricity charges of this sector as part of GST.

Malaysia to share GST experience anti-terror module with India, says Najib

Prime Minister of Malaysia, Datuk Seri Najib Razak, recently said that “Malaysia is more than ready to share its experience with India on the implementation of the Goods and Services Tax (GST) and anti-terrorism measures”. He said that the information on GST was shared with a high-level delegation from India that visited Malaysia recently. Despite facing different challenges in terms of GST, he said both the countries shared a mutual resolve to provide a transparent and predictable tax regime.

‘Food processing sector may attract existing rates under GST’

Special Secretary, Food Processing Ministry GOI, recently said that the Food processing industry is unlikely to have any adverse impact in terms of taxation under the proposed GST regime as the sector will continue to be taxed at existing rates. The existing excise duty rate on food processing is six percent and is most likely to be maintained under GST. The official also said that the government would take more initiatives to make this sector more vibrant and put it on global map.

Exempt healthcare services by private hospitals from GST: IMA

The Indian Medical Association (IMA) has urged the government to exempt healthcare services offered by the private hospitals under the Goods and services Tax (GST). It stated that the exemption of GST to private sector would result in several benefits which include no increase in cost of healthcare being provided by the private sector, affordable healthcare services in India, eradication of any possibility of dis-incentivising future investments in the sector, etc.

At present, healthcare services provided by all types of clinical establishments are exempted from service tax under the mega-exemption notification, issued in June 2012, which are strictly defined to cover diagnosis, treatment and care for illness, injury or deformity

GST Rollout: If Not in April 2017, When?

The Centre’s aim of rolling out the Goods and Services Tax (GST) from April 1, 2017 has just got tougher. With the all-powerful GST Council yet to arrive at a consensus on any of the three GST laws namely, the Central GST Bill, the State GST Bill and the Integrated GST Bill. The government has missed the chance of getting the Parliament’s approval in the winter session.

The Council is also yet to decide on the list of items which would fall under the tax slabs of 5, 12, 18 and 28 percent. Finance Minister, Arun Jaitley had said that essential commodities, which include 50 percent of the goods in the current consumer price index basket will be taxed at zero percent under the GST.

Individual State legislatures will also have to ratify these bills before the new tax regime can be rolled out, making it only more difficult for the Centre to implement GST from the start of the next financial year.

Citing constitutional compulsion, Jaitley had sought to drive home the point that GST has to be rolled out before September 16 next year as the existing indirect taxes will come to an end by then and it would not be possible to run the country without revenue collection. All existing indirect tax laws of the Centre and the States will be void a year after the Constitution amendment for GST was notified in the official gazette.

Migration of traders to GST sluggish

The migration of traders and merchants registered under various State and Central tax regimes to the GST seems slow. The Pondicherry being the first State in the country to launch the Goods and Service Tax Network (GSTN) has enrolled about 3000 traders only. According to K. Sridhar, Deputy Commissioner of Commercial Taxes, as many as 15,000 traders in the Union Territory are currently registered with VAT and other tax regimes such as Central Excise. Of them, about 3,000 have enrolled themselves with the GST.

Presumptive rate u/s 44 AD for FY 2016-17 reduced to 6% (Receipt through banking channel/digital means)

Posted on 19th Dec 2016 by Business So Simple in Miscellaneous

Presumptive rate u/s 44 AD for FY 2016-17 reduced to 6% (Receipt through banking channel/digital means)

Refer Press release dated 19th Dec 2016:

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 19th December, 2016.

Press Release

Measures for Promoting Digital Payments & Creation of Less-Cash Economy

Under the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rupees Two Crore or less, the profit is deemed to be 8% of the total turnover.

In order to achieve the Government’s mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash.

Legislative amendment in this regard shall be carried out through the Finance Bill, 2017.

(Meenakshi J. Goswami)

Commissioner of Income Tax

(Media and Technical Policy)

Official Spokesperson, CBDT

Tax disclosure scheme that will open tomorrow will close on March 31, 2017

Posted on 16th Dec 2016 by Business So Simple in Miscellaneous

(By ECONOMICTIMES.COM | Updated: Dec 16, 2016, 05.28 PM IST )

NEW DELHI: Government today notified changes to income tax law for the new black money disclosure scheme ‘PM Garib Kalyan Yojana’. Revenue Secretary Hasmukh Adhia said that stringent penalties have been prescribed in the new provisions, adding that the declarations made under the new scheme will be kept secret.

“The scheme will start from Dec 17 and will run till March 31,” said Adhia, adding that government wants people to contribute to the welfare of poor via PM Garib Kalyan Yojan .

Adhia told reporters that those who fail to declare untaxed income, will have to pay minimum 77 percent and up to 100 percent in tax and fines.

Adhia informed that the government has plugged in existing loopholes of I-T Act via amendments.

There will be no immunity in criminal laws and the information will not be shared for any tax purpose. “We do not want tax officials to bother any one. We have information and I-T will use it. Financial Intelligence Unit is providing us with all tax related information,” said Adhia warning that those who have deposited money in bank accounts should not think that they have escaped by depositing Rs 2 lakh in 10 different banks

“We are getting data on suspicious deposits on a daily basis from banks. I-T department will probe on money deposited in bank accounts and clerance will be given only after deducting taxes from any such account,” said Adhia.

Adhia also said that the all agencies are getting daily information on deposits and payment of loans and added that people can inform government about those converting black money at blackmoneyinfo@incometaxindia.nic.in.

“There could be more steps ahead but we can’t disclose it now….We’ll also investigate where we find misuse of provisions have happened with multiple accounts,” said Adhia.

He also added that farmers having income more than 2.5 lakh will have to give PAN card.

CBDT Chairman Sushil Chandra also informed about the cash seizures and various actions being taken by the department. Here are highlights:

* Search and seizures in 291 cases after screening of data

* Survey 295 cases

* 3000 notices issued

* New currency notes of Rs 80 crore seized

* Rs 316 crore seized in cash

* Jewellery worth Rs 76 crore seized

* Total Rs 393 crore seized

* Admitted concealed income is about Rs 2600 crore

* Methods used for converting black money into white includes:

– Purchase of gold

– Back dating transactions

– Depositing cash in Jan ..

(By ECONOMICTIMES.COM | Updated: Dec 16, 2016, 05.28 PM IST )

GST Updates (15 Dec 2016)

Posted on 15th Dec 2016 by Business So Simple in Miscellaneous

CEA Arvind Subramanian calls GST “mother of all achievements”

December 15, 2016

Chief Economic Advisor Arvind Subramanian on Thursday told CNBC-TV18 that managing demonetisation remains a challenge for the next two months. “Macroeconomic conditions remain stable, inflation remains muted and current account deficit (CAD) is also narrow,” he said. He also said that the Indian economy is “well cushioned” to absorb the impact of US Federal Reserve’s rate hike. “India is seen as better equipped than its other emerging market peers to weather the impact of higher US interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion.”

Talking about GST he said, “The proposed Goods and Services Tax (GST) is the mother of all achievements”. “We should aspire for a simple structure for GST with lower rates”. We face the risk of missing a self-imposed deadline to launch the GST from April 2017, Subramanian said, after a meeting of officials ended last Sunday without fixing who would administer the tax. Subramanian, who headed a panel on the proposed tax structure, said that GST should also include real estate, land sales and electricity as well.

Amid concerns of missing the GST rollout deadline of April 1, the government, yesterday, came out with a report card detailing the efforts being made to reach a consensus on support legislations for timely implementation of the new indirect tax regime. “All efforts are being made to meet the necessary deadlines to ensure that GST is rolled out by April 1, 2017,” said the Finance Ministry’s report card on GST implementation. The GST Council, which took over the job of rolling out the new indirect tax regime after the Parliament passed the Constitutional amendment and half of the states ratified it, has taken major decision on fixing tax rates, compensation to states and threshold of exemption.

“At present, agenda items pertaining to GST related draft laws and provisions for cross empowerment to ensure single interface under GST are under consideration of the GST Council. The last GST Council meeting on December 11 could not find time to discuss the all important issue of cross-empowerment. Source – http://www.financialexpress.com [15-12-2016]

All efforts being made to implement GST from April 1: Government

December 15, 2016

All efforts being made to implement GST from April 1: Government

Amid concerns of missing the GST rollout deadline of April 1, the government today came out with a report card detailing the efforts being made to reach a consensus on support legislations for timely implementation of the new indirect tax regime.

“All efforts are being made to meet the necessary deadlines to ensure that GST is rolled out by April 1, 2017,” said the Finance Ministry’s report card on GST implementation.

The GST Council, which took over the job of rolling out the new indirect tax regime after the Parliament passed the Constitutional amendment and half of the states ratified it, has taken major decision on fixing tax rates, compensation to states and threshold of exemption.

The Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, has been “very cordial and all decisions till now have been taken by consensus.”

“As compared to the time taken in arriving at a consensus on the Constitutional Amendment Bill for GST, the subsequent events after the passing of the Bill indicate that the Government of India and the states have done remarkably well in taking all necessary steps for implementation of GST,” it said.

The government lost no time in implementing the Goods and Services Tax (GST) so far and a number of important decisions have been taken in six meetings of the Council, the report card added.

The Finance Ministry’s statement comes days after the GST Council for the third time failed to arrive at a decision on administering the new indirect tax regime which will have shades of both central and state levies.

“At present, agenda items pertaining to GST related draft laws and provisions for cross empowerment to ensure single interface under GST are under consideration of the GST Council.

“99 Sections the Model GST Law have already been considered by the Council and remaining Sections will be discussed in the next meeting of the Council scheduled for December 22-23, 2016,” itsaid.

The last GST Council meeting on December 11 could notfmdtimeto discuss the all important issue of cross-empowerment.

“Members of the Council are participating in the meetings with a very positive attitude and are working towards the roll-out of GST as per the deadline,” the statement added.

The GST Council in its first meeting had decided that GST would be rolled-out by April 1, 2017, itsaid.

Various timelines had been decided for different aspects of implementation of GST such as recommendation of the Model GST Laws by the GST Council and its passage by the Union Parliament and State Legislatures, the development of front-end Information Technology (IT) modules on the common GST portal and the back-end IT systems, it said.

Also included in the schedule are testing and integration of GST front-end and back-end IT systems of all stakeholders, training of both Central and state tax officials and sensitisation of trade, industry and consumers.

The statement said that the government is making efforts to meet the deadlines to roll out the new indirect tax regime from the next financial year.

Listing out the progress so far, the ministry said as soon as the President’s assent was received on the Constitutional Amendment Act for GST on September 8, 2016, the GST Council was created by the Cabinet within one week along with the Secretariat.

Under Article 279A of the Constitution, the GST Council has been entrusted with the power to make recommendations to the Union and states on various GST related issues, the threshold limit of turnover below which goods and services may be exempted from GST and the rates including floor rates with bands of GST.

Since notification of the GST Council on September 12, 2016, six meetings have been held.

During these meetings, number of important decisions have been taken paving way for timely rollout of GST, it said, adding the threshold limit for exemption from levy of GST has been fixed at Rs 20 lakh for normal states and Rs 10 lakh for Special Category States.

The threshold for availing the Composition scheme has been fixed at Rs 50 lakh while service providers have been kept out of the composition scheme.

To compensate states for 5 years for loss of revenue due to implementation of GST, the base year for the revenue of the state has been fixed at 2015-16 and a fixed growth rate of 14 per cent would be applied to it.

The Council has also approved the Draft GST Rules on registration, payment, return, refund and invoice, debit and credit notes.

All entities exempted from payment of indirect tax under any existing tax incentive scheme would pay tax in the GST regime and the decision to continue with any incentive scheme shall be with the concerned state or Central Government.

In case any state or Central government decides to continue any existing exemption/incentive scheme, it will be administered by way of a reimbursement mechanism.

The Council fixed bands of rates of goods under GST at 5, 12, 18 and 28 per cent. In addition, there would be a category of exempt goods.

Further, it was decided that a cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28 per cent for payment of compensation to the states. Source – http://economictimes.indiatimes.com [14-12-2016]

Traders can register themselves under the GST from Dec 16

December 15, 2016

Around 3.48 lakh traders of the city, registered with the Delhi government’s Trade and Taxes department, can register themselves under the upcoming Goods and Services Tax (GST) regime from December 16.

The exercise for the registration of city’s traders under the new tax law will continue till December 31.

The department today organised a workshop on front-end business on GST portal for the city traders at Delhi Secretariat in order make the process smooth.

“A self-training module is available on the gst.gov.in that could be used for understanding the process. All verifications of documents will be done online. If all documents are provided, the process will be completed in three days,” an official said.

According to the Trade and Taxes department, it would also train some traders at different market hubs who could further help members of their fraternity.

Official said that the second round of training for traders will be done on December 16. Besides, government is also associating different market and trade associations in the exercise.

On the occasion, Delhi Deputy Chief Minister Manish Sisodia, who also holds the Finance portfolio, said that the GST is the biggest tax reform of the country but he was apprehensive about its implementation.

The Deputy CM said that being Finance minister, he has been involved in the process at different stages, adding that however, he is worried about its implementation.

Sisodia urged all traders to come up with their suggestions.

“Our officers will be training one trader in each market, who could further help others in registering themselves under the new regime,” said an official. Source – http://www.moneycontrol.com [15-12-2016]

Revised return after De-monetisation of Currency (Press release 14 Dec 2016)

Posted on 14th Dec 2016 by Business So Simple in Miscellaneous

Revised return after De-monetisation of Currency (Press release 14 Dec 2016)

Delay in filing revised return due to circumstances beyond control of assessee

Posted on 14th Dec 2016 by Business So Simple in Miscellaneous

Delay in filing revised return to be condoned when delay occurred due to circumstances beyond control of assessee

December 13, 2016[2016] 76 taxmann.com 156 (Madras)

IT : Where assessee who had opted for voluntary retirement under Early Retirement Option Scheme on coming to know and on being advised that pursuant to a decision of Supreme Court would be entitled to exemption under section 10(10C) filed a revised return claiming deduction under section 10(10C), he would be entitled to exemption even though revised return had been filed beyong period stipulated under section 139(5) as default in complying with requirement being due to circumstances beyond control of assessee, Board would be entitled to relax requirement contained in Chapter IV or Chapter VI

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[2016] 76 taxmann.com 156 (Madras)

HIGH COURT OF MADRAS

S. Sevugan Chettiar

Principal Chief Commissioner of Income-tax, Chennai

T.S. SIVAGNANAM, J.

WRIT PETITION NO. 42385 OF 2016

DECEMBER 2, 2016

K. Krishnamoorthy for the Petitioner. J. Narayanaswamy and S. Rajesh for the Respondent.

ORDER

Mr. J. Narayanaswamy, learned Senior Standing Counsel accepts notice for the respondents. Heard both. By consent, the writ petition itself is taken up for final disposal.

2. The petitioner is a retired employee of the ICICI Bank and is presently aged 68 years. He is constrained to approach this Court in terms of the proceedings dated 4.8.2016 issued by the third respondent.

3. The issue lies in a narrow compass. The petitioner, upon retirement, filed his return of income for the relevant year and the assessment was finalized. Subsequently, the petitioner came to know that the Hon’ble Supreme Court, in the case of S. Palaniappan v. I.T.O. [Civil Appeal No. 4411 of 2010 dated 28.9.2015] held that a person, who has opted for voluntary retirement under the Early Retirement Option Scheme shall be entitled to exemption under Section 10(10C) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Following the said decision, the Central Board of Direct Taxes issued a circular dated 13.4.2016 stating that the judgment of the Hon’ble Supreme Court be brought to the notice of all officials in the respective jurisdiction so that relief may be granted to such retirees of the ICICI Bank under Early Retirement Option Scheme, 2003.

4. The petitioner, on coming to know of the same, filed a revised return by referring to the said decision and stating that only after the said decision came to his notice, he had been advised to file the revised return. However, this has been rejected vide the impugned proceedings dated 4.8.2016 by the third respondent by referring to Section 139(5) of the Act. In other words, the revised return was refused to be accepted as it is beyond the time stipulated under Section 139(5). Assailing the correctness of the order of the third respondent, the petitioner is before this Court.

5. The learned counsel for the petitioner has submitted that the petitioner is a senior citizen and the law having been laid down by the Hon’ble Supreme Court, it would bind the Assessing Officers and all the Authorities, apart from the fact that a circular has been issued by the Central Board of Direct Taxes, which also binds the Assessing Officers. Therefore, it is submitted that the relief may be granted to the petitioner.

6. The learned counsel for the petitioner also places reliance on the decision of the Madurai Bench of this Court in the case of K.R. Alagappan v. A.C.I.T. [W.P.(MD) No.3986 of 2007 etc. cases dated 3.11.2010], which was followed in the case of C. Navaneethakrishnan v. A.C.I.T. [W.P.(MD) No.3263 of 2012 etc. cases dated 10.9.2012].

7. Mr. J. Narayanasamy, learned Senior Standing Counsel for the Revenue has referred to Section 139(5) of the Act and contended that when the said provision stipulates the outer time limit, within which, the assessee is entitled to file a revised return of income, this has been rightly taken note of by the third respondent, as the third respondent is not entitled to entertain a revised return beyond the statutory time limit. It is further submitted that the petitioner can always move the Central Board for appropriate relief, which is entitled to consider the grant of exemption.

8. After hearing the learned counsel for the parties and perusing the materials placed on record, this Court is of the view that the technicality should not stand in the way while giving effect to the order passed by the Hon’ble Supreme Court. The Board also issued a circular on 13.4.2016 with a view to grant relief to the retirees of the ICICI Bank under the Early Retirement Option Scheme. Several persons, who had filed writ petitions before the Madurai Bench of this Court, have been granted the relief. In fact, in those orders, the Court took into consideration the decision of the Hon’ble Supreme Court and granted the relief.

9. The circular issued by the Central Board of Direct Taxes is in exercise of the powers conferred under Section 119 of the Act. The said provision deals with instructions to Subordinate Authorities. Sub-Section (1) of Section 119 of the Act states that the Board may, from time to time, issue such orders, instructions and directions to other Income Tax Authorities, as it may deem fit, for the proper administration of the provisions of the Act and such Authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. The Proviso carves out certain exceptions, under which circumstances, the Board will not issue instructions.

10. Clause (a) to Sub-Section (2) of Section 119 of the Act states that without prejudice to the generality of the power under Section 119(1), the the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of the Act as mentioned therein, general or special orders in respect of any class of income or fringe benefits or class of cases, setting forth directions or instructions as to the guidelines, principles or procedures to be followed by other Income-Tax Authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may be made if the Board is of opinion that it is necessary in the public interest. It is relevant to point out that one of the provisions, which are listed out under Clause (a) to Sub- Section (2) of Section 119 of the Act is Section 139 of the Act.

11. Admittedly, the case, which was considered by the Hon’ble Supreme Court related to an individual employee namely S. Palaniappan, who was also a similarly placed person as that of the petitioner. Thus, the Board, in its wisdom, while implementing the judgement in the case of S. Palaniappan, took a decision that such a benefit should be extended to the similarly placed persons treating them as class of cases. Therefore, the Board observed that the order should be communicated to all the Commissioners, so that relief can be granted to such retirees of the ICICI Bank. Thus, the petitioner cannot be non-suited solely on the ground that he had filed a revised return well beyond the period stipulated under Section 139(5) of the Act.

12. Furthermore, it is relevant to point out that Clause (c) to Sub- Section (2) of Section 119 of the Act states that the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, relax any requirement contained in any of the provisions contained in Chapter IV or Chapter VI-A of the Act, which deal with computation of total income and deductions to be made in computing the total income and such power is exercisable where the petitioner failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the conditions that (i) the default is due to circumstances beyond the control of the assessee and (ii) the assessee has complied with the requirement before the assessment in relation to previous year, in which, such deduction is claimed.

13. Thus, if the default in complying with the requirement was due to circumstances beyond the control of the assessee, the Board is entitled to exercise its power and relax the requirement contained in Chapter IV or Chapter VI-A. If such a power is conferred upon the Board, this Court, while exercising jurisdiction under Article 226 of The Constitution of India, would also be entitled to consider as to whether the petitioner’s case would fall within one of the conditions stipulated under Section 119(2)(c).

14. Considering the hard facts, the petitioner, being a senior citizen, cannot be denied of the benefit of exemption under Section 10(10C) of the Act and the financial benefit that had accrued to the petitioner, which would be more than a lakh of rupees. Therefore, this Court is of the view that the third respondent should grant the benefit of exemption to the petitioner.

15. Accordingly, the writ petition is partly allowed, the impugned order is set aside and the third respondent is directed to grant the benefit of exemption under Section 10(10C) of the Act and refund the appropriate amount to the petitioner, within a period of three months from the date of receipt of a copy of this order. Considering the facts and circumstances of the case, the prayer for interest is rejected. No costs.

Income Tax regulatory development ( 08 Dec 2016 to 13th Dec 2016)

Posted on 13th Dec 2016 by Business So Simple in Miscellaneous

1.INSTRUCTIONS TO SUBORDINATE AUTHORITY – FUNCTIONALITY FOR PROCESSING OF RETURNS FOR A.Ys. 2007-08 TO 2011-12 HAVING REFUND CLAIMS WHICH WERE NOT PROCESSED WITHIN TIME ALLOWED UNDER SECTION 143(1) DUE TO CERTAIN TECHNICAL OR OTHER REASON (INSTRUCTION NO.142 [F.NO.AST INST.NO.142/119(2)(a)/21/2017-17], DATED 9-12-2016)

SECTION 119, READ WITH SECTION 143, OF THE INCOME-TAX ACT, 1961 – INCOME-TAX AUTHORITIES – INSTRUCTIONS TO SUBORDINATE AUTHORITY – FUNCTIONALITY FOR PROCESSING OF RETURNS FOR A.Ys. 2007-08 TO 2011-12 HAVING REFUND CLAIMS WHICH WERE NOT PROCESSED WITHIN TIME ALLOWED UNDER SECTION 143(1) DUE TO CERTAIN TECHNICAL OR OTHER REASON

AST INSTRUCTION NO.142 [F.NO.AST INST.NO.142/119(2)(a)/21/2017-17], DATED 9-12-2016

Consequent to CBDT Instruction No. 18/2013 dated 17-12-2013, functionality for processing of returns for AY 2007-08 to 2011-12 having refund claims which were not processed within the time allowed u/s 143(1) due to certain technical or other reasons was made available to field formations vide AST Instruction No. 120.

2. Now, in exercise of the power u/s 119 of the I.T. Act, 1961, CBDT vide order dated 25-10-2016 has relaxed the time-frame prescribed in second proviso to sub-section(1) of section 143 for the returns-of-income having ‘claim of refund’ for AY 2014-15, 2013-14 and 2012-13 which were filed either u/s 139 or 142(1) of the Act. The cases for the above mentioned AYs may now be processed by 31-03-2017.

3. In pursuance of this, functionality to process such unprocessed returns has been made available in AST. Following are the validations for processing the returns under this functionality.

(i)		Return is valid and filed under permitted time limit u/s 139 or 142(1).
(ii)		Assessee has claimed refund in return of income.
(iii)		On computation, the resultant outcome is refund.
(iv)		Return processing has got time barred by limitation of time.
(v)		The returns pertain to AY 2012-13 to 2014-15.

4. To process such cases, AO has to fetch the requisite return through the path “AST–> Processing –> Returns”. Thereafter, AO has to choose the functionality u/s 119(2) and has to select check box of 119(2)(a) and then enter requisite details.

5. The complete procedure is elaborated in the user manual for the functionality which is available on ITD and i-Taxnet for the convenience of the users. This may be circulated amongst all officers working in your charge. With this, the various representations received from field formations in this regard stand disposed off.

6. In case of any technical difficulty faced, officers can immediately contact the ITBA helpdesk.

A.		URL of helpdesk – http://itbahelpdesk.incometax.net
B.		Help desk number – 0120-2772828 – 42
C.		Email ID – helpdesk_messaging@incometax.gov.in
D.		Help desk Timings – 8.30 A.M. – 7.30 P.M. (Monday to Friday)

2. Assessing Officers are advised not to reopen past assessments in cases merely on the ground that the current year’s turnover has increased

(CIRCULAR NO.40/2016(F.NO.225/326/2016/ITA.II), DATED 9-12-2016)

SECTION 147, READ WITH SECTION 119, OF THE INCOME-TAX ACT, 1961 – INCOME ESCAPING ASSESSMENT – GENERAL – DIRECTIONS UNDER SECTION 119

CIRCULAR NO.40/2016 (F.NO.225/326/2016/ITA.II), DATED 9-12-2016

Recent initiatives of the Government to curb the black economy in the country has encouraged people to shift towards digital mode of payment while making financial transactions. By adopting digital mode of payment, no financial transactions would remain undisclosed and consequently an enhanced turnover of business might get reflected in the books of accounts. Under the circumstances, an apprehension has been raised that increased turnover in the current year may lead to reopening of earlier years’ cases involving lower turnover u/s 147 of the Income-tax Act, 1961 (‘Act’) by the Assessing Officer causing undue harassment to tax payers.

2. It is hereby clarified that reopening of cases u/s 147 of the Act is feasible only when the Assessing Officer “has reason to believe that any income chargeable to tax has escaped assessment for any assessment year” and not merely on the basis of any reason to suspect. Mere increase in turnover, because of use of digital means of payment or otherwise, in a particular year cannot be a sole reason to believe that income has escaped assessment in earlier years. Hence, Assessing Officers are advised not to reopen past assessments in cases merely on the ground that the current year’s turnover has increased.

3. The above may be brought to the notice of all for necessary and strict compliance.

3. PROCEDURE FOR PURPOSE OF FURNISHING AND VERIFICATION OF FORM 27BA FOR REMOVING OF DEFAULT OF SHORT COLLECTION AND/OR NON-COLLECTION OF TAX AT SOURCE (NOTIFICATION 12/2016 [F.NO.DGIT(S)/CPC(TDS)/NOTIFICATION/2016-17], DATED 8-12-2016)

SECTION 206C OF THE INCOME-TAX ACT, 1961 – COLLECTION AT SOURCE – PROFITS AND GAINS FROM BUSINESS OF TRADING IN ALCOHOLIC LIQUOR, FOREST PRODUCE, SCRAP, ETC. – PROCEDURE FOR PURPOSE OF FURNISHING AND VERIFICATION OF FORM 27BA FOR REMOVING OF DEFAULT OF SHORT COLLECTION AND/OR NON-COLLECTION OF TAX AT SOURCE

NOTIFICATION 12/2016 [F.NO.DGIT(S)/CPC(TDS)/NOTIFICATION/2016-17], DATED 8-12-2016

1. As per first proviso to sub-section (6A) of section 206C of Income-tax Act, 1961, any person, other than a person referred to in sub-section (1D), responsible for collecting tax in accordance with the provisions of this section, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an assessee in default in respect of such tax if such buyer or licensee or lessee—

(i)		has furnished his return of income under section 139;
(ii)		has taken into account such amount for computing income in such return of income; and
(iii)		has paid the tax due on the income declared by him in such return of income,

and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed.

2. As per sub-rule (1) of Rule 37J of Income-tax Rules, 1962, the certificate from an accountant under the first proviso to sub-section (6A) of section 206C shall be furnished in Form 27BA to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems) in accordance with the procedures, formats and standards specified under sub-rule (2), and verified in accordance with the procedures, formats and standards specified under sub-rule (2).

3. In exercise of the powers delegated by the Central Board of Direct Taxes (Board) under sub-rule (2) of Rule 37J of Income-tax Rules, 1962 the Principal Director General of Income-tax(Systems) hereby authorizes the Income-tax authorities mentioned at Col. No. 1 to receive the form-type mentioned in Col. No. 2 to be filed in the mode specified at Col. No. 3 for the assessment years mentioned at Col. No. 4 and pertinent to defaults under sections of the Act mentioned at Col. No. 5:

1	2	3	4	5
Authorised A.O.	Form Type	Mode of furnishing Form	A.Y.	To be used exclusively for defaults under section
Field Assessing Officer(TDS)^[1]	27BA	Paper	Up to & including 2016-17	206(6A)
CPC-TDS	27BA	Electronic^[2]	Up to & including 2016-17	206CB
CPC-TDS	27BA	Electronic^[2]	Including & from 2017-18	206CB and/or 206(6A)

[1] The AO should ensure that interest on non-collection of the whole or any part of the tax or failure in payment after collection as required by or under this Act shall be paid before furnishing the statement in accordance with the provisions of the Act.

[2] Furnishing of Form 27BA in electronic shall be enabled with effect from 15-1-2017.

4. The procedure for electronic filing of Form 27BA is as follows:

1.1 Role of Collector:

STEPS	PLACE OF ACTION	ACTION
1	TRACES Portal	Get Details of Short Collection: Collector needs to submit request to get details of short collection.
2.	TRACES Portal	Enter No Collection transactions: Collector needs to enter details of Non-Collection transaction at TRACES, if any and submit transaction details at TRACES in the rows provided for this purpose.
3.	TRACES Portal	Submit Request: On submitting request, a Unique Request Number will be generated for further reference. The Short-Collection and/or Non-Collection request so submitted will be processed by TRACES and the successful transaction will be displayed to the Collector after certain time. A unique DIN[3] will be generated by TDSCPC for unique Short Collection transaction. Similarly a unique Alpha-Numeric String (combination of TAN, PAN and F.Y.) will be generated for No-Collection transaction. Both of these unique numbers and strings will be displayed after successful processing by TRACES. These unique DINs and Alpha-Numeric Strings will be communicated electronically to E-Filing Portal and available for further action by Collector.
4.	Offline	The Collector will communicate the DINs and/or Alpha-Numeric Strings generated in step no. 3 for each of the Short-Collection and/or Non-Collection transactions to the accountant identified for certifying Annexure A and obtain the membership no. of such accountant to be used in step no. 5.
5.	E-Filing Portal (Login as Collector)	Locate DIN on which Form 27BA effect is to be given: Locate and select relevant DIN in menu driven option for which request for Form 27BA is to be submitted. Locate No Deduction Transactions on which Form 27BA effect is to be given: Locate and select No- Collection transaction for which request for Form 27BA is to be submitted.
6.	E-Filing Portal	Authorize Membership Number of Accountant[4]: Collector, after ascertaining the membership number of the accountant who is to certify Annexure A of Form 27BA, needs to authorize such accountant by entering his membership number in respect of each of the Short-Collection and Non-Collection transactions(in one or more sessions) and submit these authorizations.
7.	E-Filing Portal	Certification from Authorized Accountant: On successful authorization by Collector, the Accountant so authorized on E-Filing Portal may fill in the relevant details in Annexure A to Form 27BA with respect to the Buyer in question and certify by digitally signing Annexure A. The details of unique DINs and Alpha-Numeric Strings will become visible to the authorized accountant(when he logs into his own account as a registered accountant on E-Filing Portal) only when Collector has authorized such an accountant with respect to any Short-Collection and/or Non- Collection transaction.
8.	E-Filing Portal	Submit Digitally signed Form 27BA: Once registered Accountant/Accountants certify DINs and/or Alpha-Numeric Strings, Collector needs to digitally sign the form and submit its final request. Consequently, these submitted records will be shared with the FAOs concerned.
9.	TRACES Portal	View Modified Status of default: Once request has been processed, short Collection will be re-calculated and Late Collection Interest will be generated accordingly, which can be viewed by Collector.
10.	NSDL\TRACES Portal	Make payment for Modified Late Collection Interest: Collector needs to pay Late Collection Interest amount, according to the modified computation.

[3] DIN is unique identification number of single buyer row.

[4] Accountant shall have meaning assigned to it in the Explanation to sub-section (2) of section 288 of the IT Act, 1961.

4.2 Role of Accountant at E-Filing:

1.		Accountant has to get himself registered at E-Filing Portal and share his membership number with the collector desiring to authorize him with respect to Short-Collection and/or Non-Collection.
2.		Receive DINs and/or Alpha-Numeric Strings with respect to each of the Short-Collection and/or Non- Collection from the Collector.
3.		After being so authorized by Collector and upon receiving DINs and/or Alpha-Numeric Strings from Collector; login to E-Filing Portal with Accountant credentials.
4.		Use DINs and/or Alpha-Numeric Strings to identify the buyer rows which are to be verified.
5.		Complete Annexure A to Form 27BA with respect to the concerned Buyer.
6.		Submit the Annexure A so completed by digitally signing it.

4.3 Role of e-filing:

For Collector

Validations

TRACES

1.		Provide view of Short-Collection and/or Non-Collection transactions to Collector as communicated to E-Filing Portal electronically by CPC-TDS.
2.		Allow Collector to locate and select Short- Collection and/or Non-Collection transactions and authorize Accountant(s) with respect to each of these transactions by entering membership number of Accountant(s).
3.		Allow Accountants so authorized to view Annexure A to Form 27BA on the basis of DIN and/or Alpha-Numeric String; complete the Annexure; and submit it by digitally signing it.
4.		Allow Collector to view Form 27BA including Annexure A to Form 27BA so submitted by authorized Accountant(s) and submit this Form 27BA by digitally signing it.

Check mandatory Compliance: ITR of buyer(PAN) should have been filed u/s 139 and no demand should be payable at the time of assessment.

Share digitally signed Form 27BA with CPC-TDS.

4.4 Role of TRACES:

For Collector

Backend Processing

1.		Display identified Short-Collection transactions for viewing of Collector.
2.		Provide option of adding Non-Collection transactions to Collector.
3.		Provide DIN and/or Alpha-Numeric String for each transaction after submission by Collector as per Step 3 of Para 4.1.
4.		Display updated status of submitted Form 27BA as received from E-Filing Portal.

Processing the request: Once Collector submits request of Form 27BA, TDS CPC will reprocess the statement and Short Collection will be modified.

4. INCOME TAX SLEUTHS UNEARTH INNOVATIVE METHODS OF LAUNDERING AND TRANSPORTATION OF CASH AT MUMBAI, NAGPUR AND AHMEDABAD (PRESS RELEASE, DATED 8-12-2016)

MISCELLANEOUS – INCOME TAX SLEUTHS UNEARTH INNOVATIVE METHODS OF LAUNDERING AND TRANSPORTATION OF CASH AT MUMBAI, NAGPUR AND AHMEDABAD

PRESS RELEASE, DATED 8-12-2016

Income tax investigations at Mumbai led to the revelation of a syndicate of ground level operators active in converting banned currency notes into legal tenders for a commission. As part of the operation to nab the culprits, Income Tax Investigation Directorate sent out a few decoy customers seeking to exchange banned currency notes into new notes. The syndicate, acting through its mediator, agreed to the exchange for a 35% commission. The exchange was to take place at the mediator’s residence. The mediator was caught red handed and new currency notes aggregating to Rs. 29.5 lakh was seized.

It has now emerged that the syndicate comprised of many ground level operators (GLOs) -mainly local youths led by a master aggregator and a mediator. The mediator would seek customers. The GLOs would withdraw new currency in their own names or names of friends and family within the prescribed weekly limits, pass it on to the aggregator for a commission and deposit the old notes in their own accounts or accounts of family or friends in small sums.

Another investigation into cash deposits in a bank account in Nagpur revealed that the account holder had no knowledge of the existence of her account where Rs. 3.29 crore had been deposited after 8th November, 2016. Enquiries by the Department revealed 6 more such accounts in her and parents’ names. The 7 accounts were opened and operated by unknown persons to launder cash of Rs.4.25 crore. Evidences gathered suggest that copies of PAN and other personal documents that she handed over to a friend few years back were used to fraudulently open these accounts in Kolkata, which were operated to channel suspicious funds to 8 beneficiaries, who are now being investigated.

In an interesting case at Ahmedabad, discrete intelligence gathered by the IT investigation team led to a survey at the premises of a transporter in the late hours of 3rd December, 2016. Twenty four cartons in the godown of the transporter meant for transport to Delhi were found. Lorry receipts declared these to contain fire crackers. When the cartons were opened and examined, two cartons were found to conceal currencies in the denomination of Rs.100 aggregating Rs.27 lakhs On interrogation, the consigner claimed that the cash was on account of sale of fire crackers being transported to Delhi for purchase of fire crackers. The cash was seized on 5th December, 2016