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Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 2nd October, 2021
PRESS RELEASE
CBDT notifies Rules for implementing the amendments made by the Taxation Laws(Amendment) Act, 2021
The Taxation Laws (Amendment) Act, 2021 (2021 Act), 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 28th May, 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President).
The 2021 Act also provides that the demand raised for offshore indirect transfer of Indian assets made before 28th 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 draft rules, to amend the Income-tax Rules, 1962, prescribing the specified conditions as referred above and providing the form and manner for furnishing of undertaking for withdrawal of pending litigation, claiming no cost, damages, interest, etc. were circulated in public domain on 28th August, 2021, inviting suggestions/comments from all stakeholders by the 4th of September, 2021.
After examining the stakeholder comments and incorporating several suggestions contained therein, the rules for implementing the 2021 Act have been published in the Official Gazette vide Notification No. GSR 713(E) dated 1st October, 2021 wherein the following rules have been inserted to the Income-tax Rules, 1962:
Rule 11UE which provides for the specified conditions in order to be eligible to claim relief under 2021 Act; and
Rule 11UF which provides the form and manner of furnishing the undertaking for withdrawal of pending litigation, claiming no cost, damages, etc.
The notification containing the above rules can be accessed at www.incometaxindia.gov.in.
(Surabhi Ahluwalia)
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
F.No. 299/22/2021-Dir (Inv. III)/174
Government of India T
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
Civic Centre, New Delhi
Dated the 28.09.2021
*****
ORDER
Subject: Order under section 119(2)(b) of the Income Tax Act, 1961 for filing applications for settlement before the Interim Board for Settlement - reg.
The Finance Act, 2021 has amended the provisions of the Act to inter alia provide that the Income-tax Settlement Commission (lTSC) 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.
2. Meanwhile, in order to avoid genuine hardship to number of taxpayers who were in the advanced stages of filing their application for settlement before the ITSC as on 01.02.2021 and also due to the hardship faced during the covid pandemic by the tax payers, the Central Board of Direct Taxes (referred to as the "Board") had provided relief vide Press Release dated 07.09.2021 thereby allowing asses sees eligible to file application for settlement on 31.01.2021 to file such applications till the extended period of 30.09.2021.
3. In view of the above, the Board in exercise of its power under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 (the Act), in order to avoid genuine hardship to assessees authorizes the Commissioner of Income-tax, posted as Secretary to the Settlement Commission prior to 01.02.2021, to admit an appl ication for settlement on behalf of the Interim Board filed after 31.01.2021 ,which is the date mentioned in sub-section (5) of section 245C of the Act for filing such application, and before 30.09.2021 and treat such applications as valid and process them as "pending applications" as defined in clause (eb) of section 245A of the Act.
4. The above relaxation is available to the applications filed:-
(i) by the assessees who were 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
(ij) where the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.
5. The Hindi version of the order shall follow.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 21st September, 2021
PRESS RELEASE
Income Tax Department conduct`s searches in Delhi, Punjab and West Bengal
The Income Tax Department carried out a search and seizure operation on 18.09.2021 on a leading business house of India involved in manufacture of textile and filament yarn having corporate offices in Delhi, Punjab and Kolkata.
During the course of the search operation, many incriminating documents, loose sheets, diaries, digital evidences etc have been recovered which indicate involvement of the group in routing of unaccounted funds back in its Indian entities, possession of foreign bank accounts unreported to the Department. Substantial evidence of transactions outside the books of accounts, cash transactions in land deals, bogus expenses debited in books of accounts, unaccounted cash expenditure, accommodation entries taken from entry operators have been gathered.
The group has maintained unaccounted funds of about Rs. 350 crore in its foreign bank accounts and has also routed these funds back into its business through shell entities in tax havens. The modus operandi detected was related to investment by foreign entities, under control of the group, in Foreign Currency Convertible Bonds, issued by its main concern, and subsequently under the garb of defaulting on payments, converting it into shares of the company. It was also seen that foreign companies and trusts were being paid management fees for managing the unaccounted funds. Though there is a specific requirement of disclosing foreign assets owned/managed in the form of companies and bank accounts in Schedule FA in Income Tax Returns, the same has not been disclosed by the group to the Department.
Details of accounts related to unexplained personal expenditure in cash were found to be meticulously maintained in one of the main offices of the company. Evidence has been gathered that cash of about Rs. 100 crore was generated by debiting bogus expenditure in company accounts and cash transactions in land deals.
The search operation is still continuing and further investigations are in progress.
Surabhi Ahluwalia
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Income Tax Department conducts searches in Nagpur
The Income Tax Department carried out a search and seizure operation on 17.09.2021 in the case of a prominent public figure in Nagpur and his family members. The group is having wide business interest spanning the fields of Education, Warehousing and Agri-business in Nagpur and other parts of Maharastra. More than 30 premises were covered in the search and survey operations spread across Nagpur, Mumbai, New Delhi and Kolkata.
During the course of the search and seizure operation, many incriminating documents, loose sheets and other digital evidences were found and seized. These evidences clearly indicate the involvement of the group in unaccounted financial transactions made outside the regular books of accounts including inflation of expenses, money laundering, bogus donation receipts, unaccounted cash expenses etc. Evidence for receipt of bogus donation in the hands of the Trust run by the assesse group through money laundering, using Delhi based companies to the extent of Rs.4.00 crore has been found. This clearly substantiates the laundering of the unaccounted income of the assessee routed as donation to the Trust. Further, specific evidences have been unearthed which reveal that three Educational Institutions of the Trust have indulged in inflation of expenses in which salaries paid to the employees were partly collected back in cash. Such evidences were found for several financial years amounting to more than Rs.12 crore. During the search, it was also detected that the Trust, apart from suppression of receipts, has paid substantial amounts to brokers for arranging admissions. Such payments, to the tune of about Rs.87 lakh have been paid in cash and are completely unaccounted.
Evidence found during the search clearly indicates concealment of income to the extent of about Rs.17 crore. Several bank lockers found during the course of the search operation have been put under prohibitory orders. The evidence gathered during the search is being examined and further investigations are in progress.
(SurabhiAhluwalia)
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Central Government relaxes provisions of TDS u/s 194A of the Income-tax Act, 1961 in view of the section of 10(26) of the Act
The Central Government in exercise of the powers conferred by sub-section(1F) of section 197A of the Income-tax Act, 1961(“the Act”) notified that no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the ‘payer’) located in a specified area to a member of Scheduled Tribe (hereinafter the ‘receiver’) residing in any specified area as referred to in s.10(26) of the Act, subject to the following conditions:
(i) the payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;
(ii) the payer reports the above payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the Act;
(iii) the payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.
For the purposes of the said notification, ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act,1934.
Notification no. 110/2021 dated 17th September, 2021 has been issued. It is available on www.incometaxindia.gov.in and also on www.egazette.nic.in .
(SurabhiAhluwalia)
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT