Income Tax Law Updates:
Notification/Circulars:
CBDT Circular No. 01/2023 dated 06-01-2023
Extension of time limit for compliance to be made for claiming any exemption under Section 54 to 54GB of the Income-tax Act, 1961 (‘Act’) in view of the then-Covid-19 pandemic.
CBDT Notification No.01/2023 dated 5-1-2023 [DGIT(S)/ ADG(S)-21ReportingPortal/ 2021/ 180]
Addendum to Notification 2 of 2021 Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income (Abolishing the limit of Rs 5,000.
CBDT Circular No. 25/2022-Income Tax F. No. 225/129/2022/ITA- II Dated 30-12-2022
Clarification for the purposes of clause (c) of Section 269ST of the Income-tax Act, 1961 in respect of dealership/distributorship contract in case of Co-operative Societies.
Office Memorandum F.No.1/4/2019-NS dated 30-12-2022
Revision of interest rates on Small Savings Schemes for Q4 of FY 2022-23. Interest rates of small saving schemes for January 23 to March 23.
Case Laws/Judgements:
Hon’ble ITAT held that the premium paid to BTMU in respect of currency swap contracts cannot be termed as interest covered under Section 36(1)(iii) of the Act, however, there cannot be any dispute that this is an expenditure incurred by the assessee wholly and exclusively for the purpose of its business, as, such expenditure is having a direct nexus with the finance cost on external borrowings. That being the case, it is otherwise allowable as deduction under Section 37(1) of the Act. Accordingly, we delete the disallowance. [Para 13]
Revenue Appeal dismissed. Para 17: “In our view, merely because the suppliers have not appeared before the Assessing Officer or the CIT(A), one cannot conclude that the purchases were not made by the respondent-assessee. The Assessing Officer as well as CIT(A) have disallowed the deduction of Rs.1.33 crores on account of purchases merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them.”
Hon’ble High Court dismiss the appeal of assessee by holding that in the light of the constant view of this Court and Hon’ble Apex Court, it is apparent that the Assessing Authority had rightly rejected the books of accounts on the basis of high consumption of electricity after dealing with each aspect of the case and recording a categorical finding as to the production of flour made from the wheat during the relevant period of assessment year in question. In M/s Melton India, Gautambudh Nagar (supra), the Apex Court had held that where the production does not increase with the high consumption of electricity, inference is drawn as to the evasion of sales tax by the Assessee by not disclosing the sale. Considering the facts and circumstances of the case, I find that no ground for interference is made out in the order of the Tribunal. Both the revisions lack merits and are hereby dismissed.
Hon’ble High Court that there is change of opinion by the Assessing Officer to reopen the assessment for the Assessment Year 2013-2014, more particularly, when the issues raised in the reopening assessment were already considered during the assessment proceedings under section 143(3) of the Act, 1961. The Assessing Officer cannot have any jurisdiction to issue the notice under section 148 of the Act, 1961 for reopening the assessment for the year under consideration more particularly, when the assessment is sought to be reopened beyond a period of four years.
Hon’ble High court held that De hors such search warrant, validly issued to authorise the search, the question of initiating proceedings under Section 153A of the Act simply did not arise. Since the issue has turned purely on facts, the Court is unable to find any error having been committed by the ITAT in concluding that the entire assessment proceedings under Section 153A of the Act against the Respondent-Assessee were invalid.
ACIT Vs Dhar Construction Company (ITAT Guwahati) Date of Order : 02/01/2023
Hon’ble ITAT held that considering the provisions of Explanation 2 to Section 15 of the Act which includes salary, bonus, commission or remuneration received by partner under the head ‘salary’ and considering the provisions of section 192 of the Act which talks about the salary given u/s. 15 of the Act, thus, we are inclined to confirm the findings of the ld. CIT(A) that there is no requirement under the provisions of the Act for deduction of tax at source by the partnership firm on salary, bonus, commission or remuneration etc or whatever name called given or credited to a partner of a firm.
Updates from Other Laws:
Circular No. NPC1/UP1/0C/161/2022-23 Dated:10th, January 2023
Extension to UPI circular NPCl/UPI/OC No.60/208-19 Crediting/Debiting Non-Resident (NR) accounts in UPI: Non-Resident account types like NRE/NRO accounts having international mobile numbers shall be allowed to get on-boarded/transact in UPI.
The Hon’ble Supreme Court allowed the appeal and held that the impugned judgement and order dated 11.08.2017 passed by the Division Bench of the High Court of Madhya Pradesh at Indore in Writ Appeal No. 268 of 2017 is set aside and the judgement and order passed by the learned Single Judge is hereby restored. It is observed and held that so far as recoveries under the SARFAESI Act with respect to the secured assets would prevail over the recoveries under the MSMED Act to recover the amount under the award / decree passed by the Facilitation Council. It is rightly observed by the learned Single Judge that if respondent No.1 is aggrieved by the order passed by the District Magistrate under Section 14 of the SARFAESI Act, it will be open for him to initiate proceedings under Section 17 of the SARFAESI Act which be considered in accordance with law and on its merits and subject to the provisions of Section 17 and the provisions of the SARFAESI Act.
Weekly Newsletter Income Tax and Other Law [January, 2023] Income Tax Law; Corporate Law, Personal Finance
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