Direct Taxes Updates- February 2020

A. Summary of Income Tax Notifications and Circulars for February 2020

1. Notification No. 11/2020 dated 13/02/2020– CBDT notifies (Rule 114AAA) prescribing that PAN will become inoperative if a person, who has been allotted PAN as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under section 139AA(2), has failed to intimate the same on or before the 31st day of March, 2020.

2. Notification No. 10/2020 dated 12/02/2020

Forms (Form 10IC and Form 10ID) for exercise of lower Income Tax Rate option (Section 115 BAA- new tax rate for domestic companies & 115 BAB for new manufacturing companies for FY 19-20 onwards).

3. Notification 11/2020 dated 07/02/2020

Procedure of PAN allotment through Common Application Form (CAF) along with registration of Foreign Portfolio Investors (FPIs) with SEBI under Department of Economic Affairs and KYC for opening Bank and Demat Account has been notified.

4. Circular No. 06/2020 dated 19/02/2020

Authority for Con-donation of delay u/s 119(2)(b) of the IT Act, 1961 in filing of Return of Income for AY 2016-17, 2017-18 and 2018-19 and Form No. 9A and Form No. 10

5. ITBA- Assessment – Demand Adjustment by AO u/s 245 Instruction No.13 dated 19/02/2020

Functionality for Demand Adjustment u/s 245 by AO in ITBA (Income Tax Business Application) has been issued

6. ITBA-ITR Processing Instruction No – 10 dated 18/02/2020

Steps to clear the pendency of processing of Paper Returns or E-returns transferred by CPC-ITR due to verification of relief claimed u/s 90/90A or 91 of the Income Tax Act, 1961

7. F.No. 225/297/2019/ITA.II dated 10/02/2020

CBDT notifies that the Principal Director General of Income-tax (Systems), New Delhi for furnishing information respecting assessees to Securities and Exchange Board of India (‘SEBI’)

8. Press release dated 04/02/2020

No TDS by Mutual funds on income in the nature of Capital Gains

B. Income Tax Compliance calendar – March 2020

C. Summary of Important Income Tax Judgments – February 2020.

1. Nokia India Pvt. Ltd. Vs DCIT (ITAT Delhi)

No disallowance for non-deduction of TDS u/s 194H and 194J in absence of principal- agent relationship & Technical Services

2. Lucknow Development Authority Vs ACIT (ITAT Lucknow)

ITAT stays tax demand  because the assesse has a prima facie case in its favour

3. PCIT Vs Vodafone Shared Services Ltd. (Gujarat High Court)

Interest on borrowing for acquisition of Capital Assets allowable u/s 36(1)(iii)

4. A.K. Industries Vs ACIT (ITAT Kolkata)

Disallowance u/s 40 (a)(ia) not applicable to Short Deduction of TDS

5. DCIT Vs Magarpatta Township Development and Construction Company Limited (ITAT Pune)

License fees received for use of IT parks  assessable as Business Income

6. Tariqrashid M. Munshi Vs ITO (ITAT Ahmedabad)

ITAT held that assessee deserve to be penalized for non-appearance before the CIT (A) and Assessing Officer and imposes penalty of Rs. 5000/- upon the assessee and instructed him to deposit the same in the Income Tax Office before the commencement of his proceedings before the AO.

7. Omega Corrugators Pvt. Ltd Vs ITO (ITAT Mumbai)

No penalty under section 271(1)(c ) for genuine omissions in Income Tax Returns