Amendments to Finance Bill, 2023
Finance Bill, 2023 inserted a new provision- Section 50AA for calculation of capital gains resulting from the transfer, redemption, or maturity of Market Linked Debentures (MLDs). Section 50AA also provided the capital gains from MLDs shall be deemed to be short-term capital gain.
Under the amendment to Finance Bill, the scope of this section has been expanded to cover specified mutual funds.
“specified mutual fund”: means a mutual fund where not more than 35% of its total proceeds is invested in the equity shares of domestic companies.
- The Finance Bill 2023 proposed to amend Section 206C(1G) with effect from 01-07-2023. The proposed amendments include:
- 5% TCS rate for remittances made under LRS and a 20% TCS rate for sale of Overseas Tour Program Packages (TPP)
- TCS is only required when the aggregate of remittance exceeds Rs. 7 lakhs and is for educational or medical purposes.
The Finance Bill (Lok Sabha) has amended Section 206C(1G)(a) to eliminate the phrase “out of India,” expanding the provision’s scope to cover remittances made under LRS, even within India. As a result, if a remittance is made under LRS to the GIFT city, the new TCS rates will apply.
- The Finance Bill 2023 inserted a proviso to Section 87A to allow a higher rebate If the total income of a resident individual is up to Rs. 7,00,000, the tax payable will be zero if the taxpayer opts for new tax regime.
The Finance Bill was amended the said proviso to Section 87A to allow marginal relief if the total income marginally exceeds Rs. 7,00,000
NOTIFICATION G.S.R. 227(E) [NO. 15/2023/F.NO. 370142/14/2022-TPL], DATED 28-3-2023
Vide this notification the Central Board of Direct Taxes (CBDT) notifies list of consequences that will apply to a person if his PAN becomes inoperative.
Important Judicial Precedents
Sunny Rashikbhai Laheri V. ITO [Gujarat HC – 148 Taxmann.com 438]
Reassessment notices issued under section 148 of old regime between 1-4-2021 and 30-6-2021 would stand beyond prescribed timeline of six years from end of assessment years 2013-14 and 2014-15, thus would be time barred under old regime and could not be issued as per amended provisions –
Rajeev Bansal V. UOI [Allahabad HC – 2023-TIOL-308-ALL-IT]
Whether reassessment proceedings initiated with notice u/s 148 (deemed to be notice u/s 148-A), issued between Apr 01, 2021 and June 30, 2021, can be conducted by giving benefit of relaxation/extension under the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act’ (TOLA)’ 2020 upto Mar 30, 2021, and then the time limit prescribed in Section 149(1)(b) is to be counted by giving such relaxation, benefit of TOLA from Mar 30, 2020 onwards to the revenue – NO: HC
Whether in respect of the proceedings where the first proviso to Section 149(1)(b) is attracted, benefit of TOLA’ 2020 will be available to the revenue – NO: HC
Whether the relaxation law under TOLA’ 2020 would govern the time frame prescribed under the first proviso to Section 149 as inserted by the Finance Act’ 2021, in such cases – NO: HC
Whether writ against black money act proceedings and penalty notices consequent thereto, cannot be entertained, if statutory appellate remedy was not exhausted – YES: HC
That considering the preliminary issue raised by the Revenue that the present writ petitions are not maintainable since the Assessee has the option of statutory remedy of appeal, it is observed that the assessment orders which have been challenged in these writ petitions or any other proceedings, including the show cause notices, penalty notices and demand notices are assailable in appeal before the authority prescribed u/s 15 and 17 of the Black Money Act. The assessee’s contention is that since the foreign asset was acquired out of income not taxable in India, the Black Money Act is not applicable thereto, thus, the Revenue had no jurisdiction to initiate proceedings against the Assessee under Black Money Act. Analysing Section 15(1)(b) and 15(1)(c) of the Black Money Act, it is observed that any person denying his liability to be assessed under Black Money Act or objecting to any penalty imposed by the Revenue, may appeal to the Commissioner of Appeals. Further, Section 17(1) envisages that CIT(A) has the power in an appeal against an order of assessment to confirm, reduce, enhance or annul the assessment, and also to consider and decide any matter which was not considered by the Revenue;
Thus, the assessee’s writ petition is not maintainable since the efficacious and statutory remedy of appeal before CIT(A) is available with the Assessee u/s 15 and 17 of the Black Money Act. When a statutory forum is created by law for redressal of grievances, a Writ Petition cannot be entertained ignoring the statutory dispensation.
[2023-TIOL-364-HC-J&K-BM_WP (C) No. 594 & 802/2021_ TABASUM MIR Vs. UOI AND ORS.]
Whether where any investment made in financial year immediately preceding assessment year, for which, assessment is being made, if remains unexplained, then AO can add that amount as unexplained investment – YES: ITAT
As rightly observed by Commissioner (Appeals), u/s 69, any investment made in the financial year immediately preceding the assessment year, for which, the assessment is being made, if remains unexplained, the Assessing Officer can add the amount as unexplained investment. As per the admitted factual position, the amount added under section 69 by the Assessing Officer represents the opening balance of investment as on 01.04.2008, i.e., the first day of the financial year preceding the assessment year under dispute. Thus, it is patent and obvious, the investments were not made in the financial year relevant to the assessment year under dispute. That being the case, addition u/s 69 could not have been made. Therefore, there is no infirmity in the decision of Commissioner (Appeals).
[2023-TIOL-341-ITAT-DEL _ITA No. 954/Delhi/2018_ ACIT, CC-1, Delhi Vs. SHRI KAMLESH GUPTA]
Whether delay in submission of the tax audit report is mere only technical breach of law, which does not warrant levy of penalty u/s 271B of the Act – YES: ITAT
The issue in the present appeal relates to the eligibility of penalty u/s 271B for failure of the assessee to get accounts audited in respect of the previous year relevant to the assessment year under consideration as required u/s 44AB and furnished to AO before specified due date i.e. due date for filing the return of income. It is pertinent to note that it obligatory on behalf of the assessee that tax audit report has to be got completed by specified date, as specified in clause (ii) of section 139(1) and tax audit report has to be furnished by such specified date. However, admittedly, in the present case, it is the case of the appellant that the tax audit report as required to be filed along with return of income though the tax audit report was obtained before the specified date. The submission of the assessee that the audit report was obtained before the specified date remains uncontroverted. The very object behind enactment of the provisions of section 44AB is only to enable AO to determine the correct taxable income in accordance with the provisions of the Act. The fact that the returned income was accepted by the AO goes to show that no prejudice was caused to AO on account of delay in submission of tax audit report. The delay in submission of the tax audit report is mere only technical breach of law, which, in our considered opinion, does not warrant levy of penalty u/s 271B of the Act. In the circumstances, we direct AO to delete the penalty of Rs.1,50,000/- levied u/s 271B of the Act.
[2023-TIOL-308-ITAT-PUNEITA No. 610/Pun/2022_AY: 2016-17_SEBASTIAN JOSEPH Vs. ACIT]
Whether requirement of furnishing the return electronically and sending it to the CPC as an acknowledgement of having furnished the return electronically is a mandatory requirement – NO: ITAT
Whether a defect in procedural requirement invalidate the valid return filed u/s 139(1)- NO: ITAT
In the instant case, the assessee furnished her original return electronically before the prescribed due date. The only reason assigned for declaring the original return as invalid is her non sending of acknowledgement of such return to the Central Processing unit of the Department. At the material time, requirement of furnishing the return electronically had another procedural requirement of taking a print out of such electronically filed return and sending it to the CPC as an acknowledgement of having furnished the return electronically. A cursory look of these two requirement transpires that whereas the first one of furnishing the return electronically is a mandatory one, the second one of sending acknowledgement of such filed return to the CPC is only directory. Non-compliance or late compliance of the second procedural requirement cannot invalidate the compliance of the first mandatory requirement, so as to make an otherwise valid return a non est. Since the procedural requirement of furnishing the acknowledgement of the electronically filed return is only a directory requirement, one cannot equate the non-submission of such acknowledgement on one hand with not filing of the return at all, so as to make both the cases as those of non-filing of return. in our considered opinion, this, being a procedural requirement, cannot invalidate the otherwise valid return filed u/s.139(1) of the Act. We order accordingly and hold that the assessee furnished original return within the time allowed u/s 139(1) of the Act.
[2023-TIOL-297-ITAT-PUNE_ITA No. 35/Pun/2022_AY: 2015-16_ANAGHA VIJAY DESHMUKH Vs. DCIT]
Owens-Corning INC Vs. DCIT [Mumbai ITAT – 2023-TII-50-ITAT-MUM-INTL]
Whether amount of lease rental on alloy which are used to refurbish the bushing cannot be again treated and taxed as royalty in the hands of the assessee by invoking the India-US DTAA and provisions of section 9(1)(vii) r/w Explanation 5 of the I-T Act – YES: ITAT
Bilcare Ltd. Vs. DCIT [Pune ITAT – 2023-TII-80-ITAT-Pune-TP]
Whether there can be no comparison between the price charged or profit realized by the assessee in domestic market from non-AEs and in the international markets from its AEs & in which case, internal TNMM is inapplicable – YES: ITAT
ACIT Vs. Gauri Tandon [Mumabi Trib. – 2023-TIOL-339-ITAT-MUM
Whether where assessee has claimed losses by booking cost of purchase of original shares and retain cost of additional shares due to split and bonus shares at NIL, there is no loss to Revenue – YES: ITAT