Income Tax Law Updates

Notification/Circular:

NOTIFICATION NO. 65/2022 dated 17-06-2022

The Central Board of Direct Taxes (CBDT) vide above Notification has exempted deduction of tax at source under section 194-I on payment of lease rent or supplemental lease rent made to a unit located in the International Financial Services Center (IFSC) for the lease of an aircraft. The exemption is available subject to the fulfilment of certain conditions.

Notification No. 62 /2022/F. No. 370142/20/2022-TPL Dated 14th June, 2022

CBDT Notified Cost Inflation Index FY 2022-23 (AY 2023-24) is 331: The Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary Notification No. 62 /2022/F. No. 370142/20/2022-TPL Dated 14th June, 2022 the Cost Inflation Index for Financial Year 2021-22 which is 331.

CBDT Circular No. 12 of 2022 dated 16-06-2022: Guidelines for removal of difficulties under sub-section (2) of section 194R of the Incometax Act, 1961.

CBDT Notification No. 01 of 2022 dated 9-6-2022 [Directorate of Income Tax (Systems)] 

​Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961: To facilitate Tax Deductors and Collectors in identification of Specified Persons as defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in exercise of powers conferred under section 138(1)(aXi) of Income-tax Act, 1961 (Act), has issued Order via F.No. 225/67/2021/ITAII dated 21.06.2021 , directing that Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information to the “Tax Deductor/Tax Collector”, having registered in the reporting portal of the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of section 206AB and 206CCA of the Act through the functionality “Compliance Check for Section 206AB& 206CCA”.

Case Laws/Judgement:

Nipika Agarwal Proprietress of S.N. Trading Vs Assistant Commissioner of State Tax (Calcutta High Court) Date of Order 09-06-2022

Hon’ble High Court held that Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise where the assessee was not in a position to show certain evidences which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities.

CIT Vs Sanjay Agrawal (ITAT Raipur) Date of Order 09-06-2022 

Hon’ble ITAT held that insignificant mistakes in accounts cannot lead to rejection of books of accounts u/s 145(3) is supported by the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Padamchand Ramgopal (1970) 76 ITR 719 (SC). In its aforesaid order, it was, inter alia, observed by the Hon’ble Supreme Court that insignificant mistakes in the accounts cannot justify rejection of books of accounts of the assessee under Sec. 145(3) of the Act. Accordingly, in the backdrop of our aforesaid observations, we are of the considered view that in the absence of pointing out of any specific defect in the books of accounts of the asseseee there was no justification for the AO to have rejected the same by triggering the provisions of Sec. 145(3) of the Act.

Goods and Services Tax Law Updates:

AAR/Case Laws/Judgement:

M/s Power Finance Corporation Ltd. Vs Commissioner (Appeal) (CESTAT Delhi) Date of Order 09-06-2022

The Hon’ble CESTAT held that the appellant is not entitled to Cenvat Credit on the services used for corporate social responsibility. [Para 17 of Order]

Union of India, IVL Dhunseri Petrochem Industries Pvt. Ltd. …..Appellant V/s MCPI Private Limited, Adani Wilmar Limited Order dated 15-06-2022

Hon’ble High Court held that No IGST is leviable on ocean freight, for services provided by a person, located in a non taxable territory, by way of transportation of goods on a vessel from a place outside India up to Customs station of clearance in India.

In re Crown Craft India Private Ltd. (GST AAR Rajasthan) RAJ/AAR/2022-23/03 Date of Order 19-05-2022 

Hon’ble AAR pronounced the ruling that No GST liability on movement between two units working under the same GSTIN. Being the same GSTIN of both the units (present & new unit), there is no occurrence/constitution of ‘supply’ in respect of movement of raw material, semi-finished, finished, capital goods between these two units within the state. Therefore, no liability of GST would arise for such movement between two units working under the same GSTIN.

Updates from Other Laws:

RBI Notification RBI/2022-23/73CO.DPSS.POLC.No.S-518/02.14.003/2022-23 dated 16-06-2022

RBI vide Notification dated 16-06-2022 has decided to increase the Additional Factor of Authentication (AFA limit from Rs.5,000/- to Rs.15,000/- per transaction. The e-mandate framework prescribes an AFA, inter alia, while processing the first transaction in case of e-mandates / standing instructions on cards, prepaid payment instruments, and Unified Payments Interface.