Tax Talk
Indian Developments

Direct Tax

CBDT issues instructions regarding implementation of judgment of hon'ble Supreme Court

[Dated 4 May 2022 (Union of India v. Ashish Agarwal)]

• Hon'ble Supreme Court, in its judgment dated 4 May 2022, has adjudicated on the validity of the issue of reassessment notices issued by the AOs during the period beginning on 1 April 2021 and ending on 30 June 2021, within the time extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and various notifications issued thereunder.
• Taking into account the decision of the Hon'ble Supreme Court, it is clarified that the judgment applies to all cases where extended reassessment notices have been issued. This is irrespective of the fact whether such notices have been challenged or not.
• With respect to the operation of new Section 149 of the Act, the judgment has clarified as under:
  • For AY 2013-14, AY 2014-15 and AY 2015-16: Fresh notice under Section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-section (I) of Section 149 as amended by the Finance Act, 2021.
  • AY 16-17, AY 17-18: Fresh notice under Section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new Section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year.
• The circular has also clarified the procedure required to be followed by the AOs to comply with the Supreme Court judgment.

CBDT introduces conditions for furnishing return of income by persons referred to in clause (B) of sub-section (1) of Section 139 in Rule 12AB

[Notification G.S.R. 307(E) [No. 37/2022/F.no.370142/01/2020-Tpl(Part1)]) dated 21 April 2022]

• In light of Section 139(1), read with Section 295 of ITA,1961, the CBDT had made the filing return of income mandatory for the following persons by way of insertion on rule 12AB.
• As per the rule, if any of the below conditions are fulfilled, the person will require the mandatory filing of a return:
  • If his total sales, turnover, or gross receipts, as the case may be in the business, exceeds INR 6 million during the previous year; or
  • If his total gross receipts in profession exceed INR 1 million during the previous year; or
  • If the aggregate of TDS deducted and TCS collected during the previous year exceeds INR 25,000 or more (except in the case of Individual resident senior citizens, the limit is INR 50,000 or more);
  • If his deposit in one or more savings bank accounts is INR 5 million or more during the previous year.

CBDT has introduced rule 12AC for updated return of income

[Notification G.S.R. 325 (E) [No. 48/2022/F. No.370142/18/2022-TPL (Part1)] dated 29 April 2022]

The return of income to be furnished by any person eligible to file such return under the sub-section (8A) of Section 139, relating to the assessment year commencing on the 1 April 2020 and subsequent assessment years, shall be in the Form ITR-U and be verified in the manner indicated therein.

CBDT introduces new Rule 114BA for mandatory PAN card applications and Rule 114BB for quoting mandatory PAN or Aadhaar number

[Notification G.S.R. 346(E) [No. 53/2022/F.No. 370142/49/2020-TPL] dated 10 May 2022]

• The board has notified certain persons, as mentioned below, who he needs to apply for PAN under rules 114BA:
  • The person making a Cash deposit or deposits aggregating to INR 2 million or more in a financial year in one or more accounts of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in Section 51 of that Act) or a Post Office.
  • The person making Cash withdrawal or withdrawals aggregating to INR 2 million or more in a financial year in one or more accounts of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in Section 51 of that Act) or a Post Office.
  • The person opening a current account or cash credit account with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in Section 51 of that Act) or a Post Office."
• The board has also notified certain transactions in which the person liable to obtain the PAN is required to quote the PAN or Aadhaar number, as the case may be under rules 114BB.