Taxsutra Analysis of Finance Act, 2015 amendments effective from 1st June, 2015

Key Changes / Amendments effective from 1^st June, 2015 :

1. Section 132B:

The asset seized u/s. 132 or requisitioned u/s132A may be adjusted against the amount of liability arising on an application made before the Settlement Commission u/s. 245C (1).

2. Section 151 :

No notice shall be issued u/s. 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. Further no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice.

3. Section 153C :

Where the Assessing Officer is satisfied that,

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,

a person other than the person referred to in sec.153A, then, the books of account or documents or assets, seized or requisitioned, shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if that Assessing Officer is satisfied that the books of account or documents or assets, seized or requisitioned, have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sec 15 (1).

4. Section 154 :

A new clause (d) is inserted in sec. 154 (1) so as to provide that an income-tax authority may amend an intimation issued u/s. 206CB (1).

5. Section 156 :

Where any sum is determined to be payable by the assessee or the deductor or the collector u/s.143 (1) or u/s. 200A(1) or u/s.206CB (1), the intimation under those sections shall be deemed to be a notice of demand for the purposes of this section.

6. Section 158AA :

A new section 158AA is inserted in the Income-tax Act relating to procedure when in an appeal by revenue on an identical question of law is pending before Supreme Court.

• Sub-section (1) seeks to provide that where the Commissioner or Principal Commissioner is of the opinion that any question of law arising in the case of an assessee for any assessment year is identical with a question of law arising in his case for another assessment year which is pending before the Supreme Court, he may, instead of directing the Assessing Officer to file appeal to the Appellate Tribunal, direct the Assessing Officer to make an application to the Appellate Tribunal, stating that an appeal on the question of law arising in the relevant case may be filed when the decision on the question of law becomes final in the other case.

• Sub-section (2) seeks to provide that the Commissioner or Principal Commissioner shall direct the Assessing Officer to make an application under subsection (1) only if an acceptance is received from the assessee to the effect that the question of law in the other case is identical to that arising in the relevant case; and in case no such acceptance is received, the Commissioner or Principal Commissioner shall proceed in accordance with the provisions contained in section 253 (2) or sec 253(2A).
  

• Sub-section (3) seeks to provide that where the order of the Commissioner (Appeals) referred to in sub-section(1) is not in conformity with the final decision on the question of law in the other case, the Commissioner or Principal Commissioner may direct the Assessing Officer to appeal to the Appellate Tribunal against such order and, save as otherwise provided in this section, all other provisions of Part B of chapter XX shall apply accordingly.
  

7. Section 192 :

• Sub-section (2D) is inserted in Sec 192 to provide that the person responsible for making the payment referred to in sec. 192(1) shall obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.

• A new section 192A is inserted so as to provide that notwithstanding anything contained in any other provisions of this Act, the trustees of the Employees’ Provident Fund Scheme, 1952 framed u/s. 5 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, or any person authorized under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent.

• Further provided that no deduction u/s. 192A shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payment to the payee is less than thirty thousand rupees.

• Further provided that any person entitled to receive any amount on which tax is deductible u/s. 192A shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate.

8. Section 194A :

• A proviso is inserted after the existing proviso to the said clause (i) of sec. 194A (3) so as to provide that the amount referred to in the first proviso shall be computed with reference to the income credited or paid by the banking company or the co-operative society or the public company, as the case may be, where such banking company or the co-operative society or the public company has adopted core banking solutions.

• The existing provisions of clause (v) of sec 194A(3) provide that the provisions of sec 194A (1) shall not apply to income credited or paidby a co-operative society to a member thereof or to any other cooperative society.

• The said sub-clause is amended so as to provide that the provisions of sec 194A (1) shall not apply to income credited or paid by a co-operative society (other than a co-operative bank) to a member thereof or to such income credited or paid by a co-operative society to any other co-operative society.

9. Section 194-C :

No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less than ten goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.

10. Section 194-I :

No deduction shall be made under the section where the income by way of rent is credited or paid to a business trust,being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directlyby such business trust.

11. Section 194-LBA :

• Where any distributed income referred to in sec.115UA, being of the nature referred to in clause (23FCA) of sec. 10, is payable by a business trust to its unit holder being a resident, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates of ten per cent.
  

• Where any distributed income referred to in section 115UA, being of the nature referred to in clause 23FCA) of section 10, is payable by a business trust to its unit holder, being a non-resident (not being a company), or a foreign company, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.

12. Section 194-LBB :

Where any income other than that proportion of income which is of the same nature as income referred to in clause (23FBB) of section 10, is payable to a unit holder in respect of units of an investment fund specified in clause (a) of the Explanation 1 to section 115UB, the person responsible for making the payment shall, at the time of credit of such income to the account of payee, or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.

13. Section 194-LD :

The concessional rate of five per cent withholding tax on interest payment in respect of investments in Government securities and rupee denominated corporate bonds shall now be available on interest payable before the 1st day of July, 2017.

14. Section 195 :

The person responsible for paying to a non-resident, not being a company, or to a foreign company,any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of suchsum,in such form and manner, as may be prescribed.

15. Section 197A :

Sub-sections (1A) and (1C) Sec. 197A provide that no deduction of tax shall be made under the sections referred to in the said sub-sections in the case of a person specified therein, if such person furnishes to the persons responsible for paying any income of the nature referred to in specified sections, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previousyear in which such income is to be included in computing his total income will be nil.

Sub-section (1A) and sub-section (1C) of sec. 197A is amended to include the reference of sec. 192A and sec. 194DA also in the said sub-sections.

16. Section 200 :

In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sec 192(1À) hasbeen paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.

17. Section 200A :

Sub-section (1) of Sec. 200A is amended to provide that statement of tax deduction at source or correction statement made u/s. 200 shall be processed and sum deductible under Chapter XVII shall be computed after also taking into account the fee, if any, payable in accordance with the provisions of section 234E. The sum payable or refundable shall be determined after adjusting the aforesaid computed sum against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee.

18. Section 203A :

Sub-section (3) is inserted in sec 203A to provide that the provisions of the said section shall not apply to a person notified by the Central Government in this behalf.

19. Section 206C :

Sub-section (3A) is inserted in sec. 206C to provide that in case of an office of the Government, where the amount collected under sub-section (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of the Central Government without the production of a challan by the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever namecalled, who is responsible for crediting such tax to the credit ofthe Central Government, shall deliver orcause to be delivered tothe prescribed income-tax authority, or to the person authorized by such authority, a statement in such form, verified in suchmanner, setting forth such particulars and within such time as may be prescribed.

20. Section 206CA :

Sub-section (3A) is inserted in sec 206C to provide that in case of an office of the Government, where the amount collected under sub-section (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of the Central Government without the production of a challan by the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorized by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed.

21. Section 206CB :

Sub-section (3B) is inserted in sec . 206to provide that the person referred to in proviso to sub-section(3) may also deliver to the prescribed authority under the said proviso, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under the said proviso in such form and verified in such manner, as may be specified by the authority.

22. Section 220 :

Sub-section (2C) is inserted in sec. 220 to provide that notwithstanding anything contained in subsection (2) of section 220, where interest is charged u/s. 206C (7), on the amount of tax specified in the intimation issued u/s. 206CB (1) for any period, then, no interest shall be charged under the said subsection (2) on the same amount for the same period.

23. Section 234B :

A new sub-section (2A) is inserted in sec. 234B so as to provide that :-

• Where an assessee has made an application u/s. 245C (1) for any assessment year, he shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section.

• Where as a result of an order of the Settlement Commission u/s. 245D (4) for any assessment year,the amount of total income disclosed in the application u/s.245C (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed u/s. 245(1)

Sub-section (3) is inserted in Sec. 234B to provide that the period for which the interest is to be computed will begin from the 1st day of April next following the financial year and end on the date of determination of total income u/s. 147 or sec. 153A.

24. Section 245A :

Clause (iv) of the said Explanation to clause (b) of section 245A is amended to provide that the proceeding for assessment shall be deemed to have commenced from the date on which a return of income for that assessment year is furnished u/s. 139 or in response to notice u/s. 142 and concluded on the date on which the assessment is made, or on the expiry of two years from the end of relevant assessment year in case where no assessment is made.

25. Section 245D :

Sub-section (1) of sec 245H is amended and after the words “subject to such conditions as it may think fit to impose”, the words “for the reasons to be recorded in writing” shall be inserted.

Sub-section (1) of section 245HA is amended to provide that where in respect of any application for Settlement made u/s. 245C, an order u/s. 245D(4) has been passed not providing for the terms of settlement then, the proceedings before the Settlement Commission shall abate on the day on which the order u/s.245D (4) was passed not providing for the terms of settlement.

26. Section 245HA :

Sub-section (1) of section 245HA is amended to provide that where in respect of any application made under section 245C, an order u/s. 245D (4) has been passed not providing for the terms of settlement then, the proceedings before the Settlement Commission shall abate on the day on which the order u/s. 245D (4) was passed not providing for the terms of settlement.

27. Section 245K :

Sec. 245K is amended to provide that any person related to the person who is barred on subsequent application for settlement also cannot make any application subsequently before the Settlement Commission. The expression “related person” with respect to a person has also been clarified to mean:-

• Where such person is an individual, any company in which such person holds more than fifty per cent. of the shares or voting power at any time, or any firm or association of person or body of individual in which such person is entitled to more than fifty per cent of the profits at any time, or any Hindu undivided family in which such person is a karta;
  

• where such person is a company, any individual who held more than fifty per cent of the shares or voting power in such company at any time before the date of application before the Settlement Commission by such person;
  

• Where such person is a firm or association of person or body of individual, any individual who was entitled to more than fifty per cent of the profits in such firm, association of persons or body of individuals, at any time before the date of application before the Settlement Commission by such person

• Where such person is an undivided Hindu family, the karta of that Hindu undivided family

28. Section 246A :

Clause (a) of sub-section (1) of sec.246A is amended to provide that the collector may prefer an appeal to the Commissioner (Appeals) against an intimation issued u/s.206CB (1).

29. Section 253 :

Sub-section (1) of sec. 253 is amended by insertion of a new clause (f) so as to provide that an assessee aggrieved by the order passed by the prescribed authority under sub-clause (vi) or sub-clause (via) of clause (23C) of sec. 10 may prefer an appeal to the Appellate Tribunal.

30. Section 255 :

Sub-section (3) of the sec 255 is amended to provide that a single member Bench may dispose of a case where the total income as computed by the Assessing Officer does not exceed fifteen lakh rupees.

31. Section 263 :

Sub-section (1) of sec. 263 is amended to insert an Explanation so as to provide that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, :-

• The order is passed without making inquiries or verification which, should have been made;
• The order is passed allowing any relief without inquiring into the claim;
• The order has not been made in accordance with any order, direction or instruction issued by the Board under section 119;
• The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.

32. Section 269SS:

The said section is substituted so as to provide that no person shall take from any person, any loan or deposit or specified sum, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit or specified sum is twenty thousand rupees or more.“Specified sum” is defined as any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property whether or not the transfer materializes.

33. Section 269T :

The said section is amended so as to provide that any loan or deposit or specified advance shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the person specified in the said section, if the amount of such loan or deposit or specified advance is twenty thousand rupees or more. Further “specified advance” is defined as any sum of money received, as an advance or otherwise, in relation to transfer of an immovable property and becomes repayable if the negotiations do not result in transfer of such immovable property.

34. Section 271D :

The said section is amended to provide that if a person accepts any loan or deposit or specified sum referred to in sec. 269SS in contravention of the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so accepted.

35. Section 271E :

The said section is amended to provide that if a person repays any loan or deposit or specified advance referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified advance so repaid.

36. Section 271I :

New section 271-I is inserted to provide that if a person, who is required to furnish information u/s. 195(6), fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees.

37. Section 272A :

A new clause (m) is inserted in sec 272A (2) to provide that if any person fails to deliver or cause to be delivered a statement within the time as may be prescribed u/s. 200 (2A) or u/s. 206C (3A), then, such person shall pay, by way of penalty, a sum of one hundred rupees for every day of such default.Further, first proviso to sec. 272A(2) is amended to provide that the amount of penalty for failure to file statements u/s.200 (2A) or u/s. 206C (3A) shall not exceed the amount of tax deductible or tax collectible, as the case may be.

38. Section 288 :

The Explanation u/s. 288 (2) is substituted to provide that the expression “accountant” means a chartered accountant as defined in clause (b) of Sec. 2 (1) of the Chartered Accountants Act, 1949 who holds a valid certificate of practice u/s. 6 (1) of that Act.

Further it is provided that the accountant shall not include the following persons (except for the purposes of representing an assessee u/s. 2(1)):-

• In case of an assessee, being a company, the person who is not eligible for appointment as an auditor of the said company in accordance with the provisions of Sec. 141 (3) of the Companies Act, 2013.

• in any other case, (i) the assessee himself or in case of the assessee, being a firm or association of persons or Hindu undivided family, any partner of the firm, or member of the association or the family; (ii) in case of the assessee, being a trust or institution, any persons referred to in clauses (a),(b), (c) and (cc) of sub-section (3) of section 13; (iii) in case of a person other than persons referred to in sub-clause (i) and (ii), the person who is competent to verify the u/s. 139in accordance with the provisions of the section 140; (iv) any relative of any of the persons referred to in sub-clauses (i),(ii) and (iii); (v) an officer or employee of the assessee; (vi) an individual who is a partner, or who is in the employment, of an officer or employee of the assessee; (vii) an individual who, or his relative or partner is holding any security of or interest in the assessee. It is also provided that the relative may hold security or interest in the assessee of the face value not exceeding one hundred thousand rupees; an individual who, or his relative or partner is indebted to the assessee. It is also provided that the relative may be indebted to the assessee for an amount not exceeding one hundred thousand rupees; an individual who, or his relative or partner has given a guarantee or provided any security in connection with the indebtedness of any third person to the assessee. It is also provided that the relative may give guarantee or provide any security in connection with the indebtedness of any third person to the assessee for an amount not exceeding one hundred thousand rupees; (viii) a person who, whether directly or indirectly, has business relationship with the assessee of such nature as may be prescribed; (ix) a person who has been convicted by a court of an offence involving fraud and a period of ten years has not elapsed from the date of such conviction.

Sec 288 (4) is now amended to provide that a person who has been convicted by a court of an offence involving fraud shall not be qualified to represent an assessee u/s. 288(1)for a period of ten years from the date of conviction.

39. Section 295 :

The sec 295(2) is amended to provide that the Board may, by rules, provide the procedures for the granting of relief or deduction, as the case may be, of any income tax paid in any country or specified territory outside India, u/s. 90 or sec. 90A or sec. 91, against the income-tax payable under this Act.

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