Direct Tax

Aadhaar Intimation for PAN Allotted via Enrolment ID

NOTIFICATION NO. 26/2025 [S.O. 1608(E)/F. NO. 370142/1/2025-TPL] Dated- 3 April 2025

Board notified that, every person who has been allotted PAN on the basis of Aadhar Enrollment ID for which application was filed prior to 1 October 2024 shall intimate his Aadhar number to the Principal Director General of Income-tax Systems (PDGIT) or Director General of Income-tax Systems (DGIT) or any other authorized person on or before 31 December 2025 or such other date specified by the Central Board of Direct Taxes (CBDT).

No TDS on Withdrawal under Notified Deposit Scheme

Notification No. 27/2025 [S.O. 1615(E)/F. NO. 370142/13/2025-TPL] dated 4 April 2025

The CBDT has notified that TDS shall not be deducted under Section 194EE of the Act, on withdrawals made by individuals from the National Savings Scheme on or after the date of publication of this notification, where deductions were previously claimed under Section 80CCA of the Act.

Income-tax (Tenth Amendment) Rules 2025 - Insertion of Rule 12AE and Form ITR B.

Notification No. 30/2025 [G.S.R. 221(E)/F.NO. 370142/29/2024-TPL] dated 7 April 2025

  1. CBDT has inserted the new rule 12AE, for filing the return of income under Section 158BC(1)(a) of the Act for search initiated under Section 132 or requisition made under Section 132A on or after 1 September 2024, shall be filed in Form ITR-B and shall be verified in the manner as specified below:
    1. Persons whose accounts are audited under Section 44AB of Act or company or political party shall furnish the return electronically under the digital signature.
    2. Persons not covered under the categories mentioned above shall furnish electronically under digital signature or by transmitting data electronically under electronic verification code.
  2. Further, CBDT notified that, The PDGIT or DGIT of Income-tax shall specify the procedures, formats and standards for transmission of data and will be responsible for implementing security, archival, and retrieval policies in furnishing return in specified manner
  3. In cases where claim of credit of tax payment other than self-assessment tax is made against undisclosed income for block period such credit may be allowed subject to satisfaction of assessing officer.

HUDCO Bonds Notified under Section 54EC

Notification S.O. 1644(E) [NO. 31/2025/F.NO. 225/06/2024/ ITA-II] dated 7 April 2025

  1. As per Section 54EC of the Act, an assessee can claim exemption of up to INR 5 million on long-term capital gains arising from the transfer of land, building, or both by investing in notified bonds.
  2. The Board has now notified that bonds issued by Housing and Urban Development Corporation Limited (HUDCO) on or after 1 April 2025 which are redeemable after 5 years are classified as 'long-term specified asset' for claiming exemption under Section 54EC of the Act.
  3. Further, CBDT has notified that the proceeds from such bonds shall be utilized only for those infrastructure projects which can service the debt out of the project revenues without being dependent on the State Governments for the service of debts.

Section 206C of the ITA – Collection of Tax at Source on Specified Goods

Notification S.O. 1825(E) [NO. 36/2025/F. NO. 370142/11/2025-TPL] dated 22 April 2025

  1. Section 206(1F), TCS on sale of goods was amended by Finance (No. 2) Act, 2024 to include other high value goods under the ambit of TCS. The CBDT has now notified that with effect from 22 April 2025, seller is required to collect tax at source on receipts of payment from sell of wrist watches, art pieces like antiques, paintings & sculptures, collectibles such as coins and stamps, yachts, rowing boats, canoes & helicopters, sunglasses, handbags & purse, shoes, sportswear and equipment such as golf kits and skiwear, home theatre systems, and horses used in horse racing or polo, if the value of such goods exceeds INR 1 million.
  2. Further, CBDT by issuing an FAQ clarified that TCS will be levied on sale of a single item of above specified goods which is of the value exceeding INR 1 million.

Disallowance of Expenditure for Settling Proceedings under Notified Laws

Notification S.O. 1838(E) [NO. 38/2025/F. NO 370142/11/2025-TPL] dated 23 April 2025

  1. The Central Government notified that, any expenditure incurred for settling proceedings initiated for any contravention or default under the following laws shall not be regarded as expenditure incurred wholly and exclusively for the purposes of business or profession and shall be disallowed under Section 37(1) of the ITA:
    1. The Securities and Exchange Board of India Act, 1992;
    2. The Securities Contracts (Regulation) Act, 1956;
    3. The Depositories Act, 1996; and
    4. The Competition Act, 2002.
  2. Further, CBDT by issuing an FAQ clarified that the amendment is effective from 1 April 2025 and shall accordingly apply from Assessment Year 2025-26 onwards. Further, relevant updates are also made in Form 3CD enabling the reporting of such expenditure.

Indirect Tax

Customs

CBIC introduces trade facilitative measures for transshipment and air cargo

Notification No. 30/2025-Customs (N.T.) dated 24 April 2025 read with Circular No. 15/2025-Customs dated 25 April 2025

The Central Board of Indirect Taxes and Customs (CBIC) has introduced key reforms to streamline air cargo handling, with a focus on reducing procedural costs and supporting digitization. The salient reforms are listed below:

  1. Waiver of INR 20 transhipment permit fee earlier charged on every application, to lower air cargo costs.
  2. Simplified and standard procedure for temporary import of Unit Load Devices (ULDs) for movement outside customs area, including those with tracking devices.
  3. Continuity bond allowed for repeated ULD imports/ exports, thereby reducing the paperwork.
  4. Tracking devices must follow aviation norms; Unique Identity Numbers to be declared.
  5. Digitized transhipment via the Indian Customs EDI Gateway (ICEGATE) and promotion of the all-India bond system.

New framework for post-export amendments to Shipping Bills under Instrument based Schemes

Notification No. 21/2025-Customs (N.T.) dated 3 April 2025 read with Circular No. 11/2025-Customs dated 03 April 2025

The CBIC has implemented the Export Entry (Post export conversion in relation to instrument based scheme) Regulations, 2025 w.e.f. 3 April 2025 with a revised framework for conversion of shipping bills and bills of export.

The revised framework has the following key automation features:

  • Amendments under Section 149 of the Customs Act.
  • Processing of provisional assessments in exports.
  • Re-transmission of relevant details post conversion to the concerned authorities.

The process has been fully digitalized. Officer-level approvals shall be needed only for sensitive data changes. Further, under these Regulations -

  • All forms of export entry are covered, i.e. exports via post/courier (Section 84), shipping bills (Section 50) and baggage exports (Section 83).
  • Amendment can be done for shipping bills filed under drawback or instrument-based schemes or a combination of both.
  • Application is allowed within 1 year from the date of clearance, i.e. the Let Export Order, and is extendable on merits up to another year with requisite approvals.
  • The conversion shall be permitted only if benefits are not claimed or duly reversed.
  • Further, the conversion will be allowed only if no investigation is in process, all scheme conditions are met, and proof existed at the time of export.

CBIC replaces ‘Certificate of Origin’ with ‘Proof of Origin’ for availing Trade Agreement benefits

Notification No. 14/2025-Customs (N.T.) dated 18 March 2025 read with Circular No. 14/2025-Customs dated 21 April 2025

CBIC has amended the compliance requirement under Customs Administration of Rules of Origin under Trade Agreements Rules, 2020 (CAROTAR) for availing the preferential duty benefits under Trade Agreements.

As per the change:

  • Importers must submit a self-certified Proof of Origin instead of Certificate of Origin from an authorized agency, while filing the bill of entry.
  • The Customs officers will focus on checking whether the said Proof is genuine and if the information provided is accurate.
  • If any discrepancies are found, the Customs officers can reject the preferential duty claim without verification.
  • The Proof of Origin may be verified during the Customs clearance or even after the goods have been imported.

Foreign Trade Policy

DGFT introduces ‘Mode of Export’ field in eBRC format for service exports

Trade Notice No. 02/2025-26 dated 21 April 2025

Effective 1 May 2025, the Directorate General of Foreign Trade (DGFT) has introduced a new mandatory field in the eBRC format titled ‘Mode of Export of Services’ with an aim to improve the granularity and accuracy of services export data, and to align India’s data collection policy with international norms under WTO General Agreement on Trade in Services (GATS).

The new field corresponds to the four modes of service trade mentioned in GATS, viz.:

  • Mode 1 (Cross-border): Services supplied (from India) remotely across borders without movement of individuals.
  • Mode 2 (Consumption abroad): Consumer travels to the service provider’s country (i.e. to India).
  • Mode 3 (Commercial presence): Service supplier (from India) establishes a commercial entity abroad.
  • Mode 4 (Presence of natural persons): Individual (from India) travels abroad temporarily to provide services.

Transfer Pricing

Time-barring of cases involving transfer pricing and non-resident cases – Roca Bathroom and Shelf drilling matter heard by Supreme Court

In the latest development having significant impact on the Indian Transfer Pricing litigation landscape (including cases involving non-resident) involving time limit of passing the final order in cases where the taxpayer were provided with an opportunity to file objections before the Dispute Resolution Panel (DRP) against the draft order, the Supreme Court (SC) has heard the matter for the appealed filed by the Revenue. In such cases the date of final order often exceeded the time limit provided under Section 153 where taxpayer filed objections before DRP (and at times even when the taxpayers didn’t file objections before DRP).

Background

The central issue in this case pertains to the interpretation of time limits for passing assessment orders under the ITA specifically the interplay between Section 144C (which deals with the Dispute Resolution Panel or DRP) and Section 153 (which prescribes general time limits for assessments).

The Madras High Court, in its 2022 ruling for Roca Bathroom Products (P) Limited8, held that the overall time limits prescribed under Section 153 apply to assessments involving the DRP process under Section 144C. This implies that the final assessment order, even after DRP proceedings, must be passed within the time frame stipulated in Section 153 and there is no additional time limit due to Section 144C.

Developments in Other Jurisdictions

Following the Madras High Court's decision, the Bombay High Court, in the case of Shelf Drilling Ron Tappmeyer Ltd. v. ACIT, concurred with this interpretation, reinforcing that the time limits under Section 153 prevail over those in Section 144C.

However, the Revenue challenged these decisions, leading to the filing of Special Leave Petitions (SLPs) before the SC. The Supreme Court directed that the Bombay High Court's decision in the Shelf Drilling case should not be cited as precedent in other matters until further orders. Considering this stay many cases have been piled up and held in abeyance in various courts and tribunals until the SC passes its order.

Current Status

The case has been heard by the SC bench comprising of Hon'ble Mrs. Justice B.V. Nagarathna and Hon'ble Mr. Justice Satish Chandra Sharma and judgment has been reserved. The SC Bench orally observed that the provisions will have to be interpreted in a ‘practical’ and holistic manner. The judgment is expected to be delivered soon by the SC which may unleash a flood of cases at lower courts. The taxpayers need to be mindful of the impact of the verdict to be delivered by SC.

8. [TS-359-HC-2022(MAD)-TP] - (2021) 127 taxmann.com 332 (Madras)

Tax Street April 2025