Income Tax Law Updates

Notification/Circular:

CBDT INSTRUCTION NO. 1/2022 [F. NO. 279/MISC/M-51/2022-ITJ] Dt.09-05-2022 

Recently, the Supreme Court has upheld the validity of section 148 notices issued under old provisions and asked Assessing Officers to proceed with the reassessment following new provisions. To implement the judgement of the Supreme Court in a uniform manner, the Central Board of Direct Taxes (CBDT) has issued instructions that shall be required to be taken into consideration by AOs.

CBDT CIRCULAR F. NO. 225/81/2022/ITA-II dated 11-05-2022

The CBDT vide above circular has issued guidelines for compulsory selection of returns for Complete Scrutiny during the financial year 2021-23. Income tax authorities are directed to select the cases based on these guidelines by 30-06-2022.

NOTIFICATION NO. 53/2022/F.NO. 370142/49/2020-TPL] dated 10-05-2022 

CBDT vide above has notified transactions wherein it is mandatory for a person to obtain PAN. The board has notified new Rules 114BA & 114BB and amended Rule 114. A person, depositing/withdrawing cash aggregating to Rs. 20 lakh or more in a FY, with one or more bank/post office, shall be required to apply for allotment of PAN atleast 7 days before entering into such transactions. PAN is also mandatory for opening a current account or cash credit a/c.

Case Laws/Judgement:

Shivam Water Treaters Pvt. Ltd. Vs ACIT (ITAT Ahmedabad) Appeal Number : ITA No.1320/Ahd/2014 Date of Order 06-05-2022 

Hon’ble ITAT held that the depreciation is an allowance and not an expenditure which has to be allowed in pursuance to the provisions of section 32 of the Act irrespective of its use by the director or the company. Further the assessee cannot be denied the depreciation merely on the reasoning that the cars were registered in the name of the directors. It is for the reason that there is no dispute raised by the Revenue as far as the payments for the purchase of the car is concern. Thus, we are interpreting that the payments made by the assessee, as reflected in the books of accounts, amounts to beneficial ownership of the assessee and eligibility to claim depreciation.

Gulshan International Pvt. Ltd. Vs ACIT (ITAT Delhi) Appeal Number : I.T.A. No. 5345/DEL/2017 Date of Order 09/05/2022 

Hon’ble ITAT held that mere disallowance of depreciation in question would not lead to imposition of onerous penalty under Section 271(1)(c) of the Act, more particularly where the quantum disallowance of depreciation itself is highly debatable in view of the undisputed facts of beneficial ownership by the assessee-company. The order of the CIT(A) confirming penalty on this score is accordingly set aside and the penalty imposed by the Assessing Officer on this score stands cancelled.

Goods and Services Tax Law Updates:

AAR/Case Laws/Judgement:

M/s Rajasthan Co-operative Dairy (RCDF) Vs Commissioner, Central Excise, Jaipur [CESTAT New Delhi, ORDER NO. 50402/2022 dated 09-05-2022]

The Hon’ble CESTAT held that no service tax is payable on the services rendered by the Rajasthan Co-operative Dairy Federation (RCDF) to its milk unions members. The nature of relationship between the appellant and the milk unions continues to that of the club to its members. Therefore, no service tax is payable on the services rendered by the appellant to the milk unions.

In Re: Baranj Coal Mines Private Limited [MAHARASHTRA-AAR GST] Dated 04-05-2022

Hon’ble AAR Maharastra pronounced the ruling that the activity of developing and operating the Mine & excavating coal & delivering to Karnataka Power Corporation Limited for generation of power is supply of service and Will be chargeable @ 18% as Support Services to Mining under Heading 9986.

Sanchita Kundu & Anr. Vs Assistant Commissioner of State Tax (Calcutta High Court) Appeal Number : W.P.A. 7231 of 2022 With W.P.A. 7232 of 2022 Date of Order 05-05-2022 

The Hon’ble High court held that GST ITC cannot be denied on Genuine Transactions with suppliers whose GST registration was cancelled after the transaction. The HC held that if it is found upon verification and considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration as to whether facts of the petitioners are similar to the judgements of the Supreme Court and various High Courts and of this Court upon which petitioners intend to rely and if it is found similar to the present case in that event the petitioners shall be given the benefit of input tax credit in question.