Background: – The Central Board of Direct Taxes (CBDT) had recently amended the Rules relating to the manner of furnishing the return of income for companies for Assessment Year 2010- 11 and on wards. Under the revised Rules, all companies (including foreign companies) were required to file their return of income under Digital Signature. Accordingly, companies were required to obtain a Digital Signature Certificate (DSC) for the purposes of filing their tax return in India.
Further, the tax authorities also issued a procedure for registration of the DSC and uploading of tax returns as per which the Permanent Account Number (PAN) was required to be obtained by the authorized signatory of the company. The procedure also provided that the DSC should be encrypted with the PAN of the authorized signatory.
In view of the above, companies were facing hardship, since the process of obtaining a PAN being time consuming, they could have missed the deadline of filing the tax returns by the due date (30 September 2010 for assessment year 2010- 11).
Pursuant to representations made, the CBDT has now provided a clarification relaxing the requirements of PAN encrypted DSC as under:
1. In case of non-resident signatories of foreign companies, the requirement of a PAN encrypted DSC is no longer required. Accordingly, the signatory may register the DSC without PAN encryption and use the same DSC while uploading the return.
2. The relaxation is only for foreign companies under the jurisdiction of respective International Taxation wards or circles of the Income Tax Department.