Intimation issued by AO is appealable where fee is charged for delay in filing of TDS returns

Facts:

a) The issue arising in this appeal was against the intimation issued under section 200A in charging fees payable under section 234E.

b) The CIT(A) held that no appeal was maintainable against the order of AO passed under Section 200A while processing the TDS returns and charging fees under Section 234E. The ITAT held as under:

1) The Legislature recognizes that a deductor who has filed his TDS return, which, in turn, has been processed by the AO and intimation is generated under which, if any amount is found to be payable, then such intimation is also appealable under section 246A since the demand issued by the AO is deemed to be a notice of payment under section 156.

2) Since the intimation issued by the AO was appealable order under section 246A(1)(a) of the Act, therefore, the CIT(A) should have examined the legality of adjustment made under intimation issued under section 200A.- [2016] 74 taxmann.com 6 (Pune - Trib.)

Fee for delay in filing TDS return not permissible in an intimation with retro-effect: Pune ITAT

Facts:

a) The issue raised in this appeal related to charging of fees payable under section 234E prior to amendment to section 200A(1)(c) [vide Finance Act, 2015 w.e.f. 01.06.2015], while processing the TDS returns.

b) The assessee also pointed that the Legislature had inserted clause (c) in section 200A(1) of the Act specifically w.e.f. 01.06.2015 and there was nothing to suggest that the said amendment was clarificatory or retrospective in nature. Hence, in respect of TDS statements filed for the period prior to 01.06.2015, late fees under section 234E could not be levied in the intimation issued under section 200A.

The ITAT held in favour of assessee as under:

1) Where the TDS return could not be filed before the prescribed authority within stipulated time, the assessee was liable to levy of fees under section 234E.

Monthly maintenance charge payable by tenant is part of actual rent: High Court

The substantial question of law that arose before the High Court was as under:

Whether maintenance charges could be included as part of rent?

The High Court held as under:

1) If the maintenance charges are not included in the rent, it would enable an assessee to avoid paying tax on the true annual value of the property.

2) The amount of rent would also be dependent upon the common facilities of a building. The better the facilities, the higher the rent. It can hardly be suggested that the annual value of a property which provides several common amenities such as a swimming pool, gymnasium, security car, parking and elevators would be the same as the annual value of a property in the same area but without these facilities.

3) Where the agreement provides that the owner shall pay the amounts for the common facilities, maintenance charges, etc., it is obvious and reasonable to presume that the same is factored into the rent payable by the lessee or the licencee. In that event the same cannot be added to the rent agreed to be paid. However, if the maintenance charges, etc., are stipulated to be payable by the licencee or the lessor it must form a part of the rent for the purpose of computing the annual value of the property. -SUNIL KUMAR GUPTA V. ASTT. CIT - [2016] 73 taxmann.com 374 (Punjab & Haryana)

Interest paid to partners can't be disallowed under sec. 14A in hands of firm: Pune ITAT

Facts:

a) A partnership firm was engaged in the business of manufacturing of chemicals. It had claimed deduction of interest paid on partner’s capital.

b) While making assessment, the Assessing Officer observed that investment in mutual funds was made out of interest bearing funds which also included interest bearing partner's capital.

c) The Assessing Officer was of the view that assessee had incurred expenditure including interest expenses which were attributable to earning tax-free dividend income from investment in mutual funds. Thus, the expenditure so incurred on interest was required to be disallowed.

d) Further, the CIT(A) confirmed the action of the Assessing Officer.Aggrieved-assessee filed the instant appeal before ITAT.

The ITAT held in favour of assessee as under:

1) Interest and salary received by the partners are treated on a different footing by the Act and not in its ordinary sense of term. The Section 28(v) treats the passive income accrued by way of interest as also salary received by a partner of the firm as a 'business receipt' unlike different treatments given to similar receipts in the hands of entities other than partners.

CBEC releases draft Rules and Formats of Returns and Refund under GST

On September 26, 2016, the CBEC has unveiled the draftrules and forms under GST on Registration, Invoice and Payment. Now, CBEC releases another draft rules and formats for Returns and Refund. Key highlights of rules and forms are as under:

1. The registered taxable person is required to file details of outward supplies in Form GSTR-1 electronically. The recipient will receive GSTR 2A on the basis of details furnished by supplier in GSTR 1.

2. The recipient will file details of inward supplies in GSTR 2 electronically on basis of details contained in GSTR 2A. The recipient shall specify the details of inward supplies for which he is not eligible for input tax credit and quantum of such ineligible input credit.

3. The registered taxable person, other than composition dealer,shall file monthly return in GSTR-3. Part of this return will be electronically generated from GSTR 1, GSTR 2, electronic credit ledger, electronic cash ledger and electronic liability register. Part B has to be filled to discharge liability or to claim refund. The refund claimed in Part B shall be deemed to be an application filed for refund.

CBEC releases draft GST Rules and Forms

With enactment of 101st Constitution Amendment Act, the road to GST is clear. The Govt. had already unveiled draft model law on GST. Today, CBEC released draft rules and forms under GST on Registration, Invoice and Payment. Key highlights of rules and forms are as under:

Registration Rules

1. The application of registration will be examined by proper officer and he will approve and grant registration within 3 common working days.

2. If the application is found deficient, then applicant will be intimated within 3 common working days. Thereafter, applicant has to furnish required clarification, information or documents sought within 7 working days electronically. If proper officer is satisfied with details provided by applicant, he will grant registration within 7 common working days from receipt of such details. Otherwise, he will reject application and inform electronically to applicant.

3. The registration certificate must be displayed at principal place of business and at every additional place of business and GSTIN must be displayed in the name board at the entry of place.

4. The person obtaining registration as casual dealer is required to make advance deposit of estimated tax liability for the period for which registration is sought.

SEBI proposes foreign portfolio investors to directly trade in corporate bonds without a broker

SEBI board has met in Mumbai and took the following important decision:

1) FPIs permitted to trade directly in Corporate Bonds: With an aim to deepen corporate bonds market by attracting more overseas funds, SEBI has decided to allow wellregulated Foreign Portfolio Investors (FPIs) to trade directly in these securities without any broker.

2) Amendment in InvIT and REIT regulations: In order to facilitate growth in Infrastructure and Real Estate, SEBI has allowed Infrastructure Investment Trusts (InvIT) and Real Estate investment Trust (REIT) to invest in a two-level special purpose vehicle structure through Holding Company (Holdco) subject to sufficient shareholding in the Holdco and the underlying SPV and other safeguards.

Mumbai ITAT grants interest on tax refund even if refund was less than 10% of gross tax

Facts:

a) The assessee claimed interest under section 244A. The Assessing Officer held that, since the refund determined was less than 10 per of gross tax, no interest would be payable to the assessee under section 244A and thus, he rejected the rectification application.

b) On appeal, the Commissioner (Appeals) affirmed the order of the Assessing O􀁹icer. The Tribunal held in favour of assessee as under:

1) There was no proper justification on the part of the revenue to withhold the amount of refund beyond the date of issuance of intimation/order under section 143(1).

2) Upto the date of passing order/intimation under section 143(1), no interest shall be payable by the department to the assessee because of clear provisions of law on the statute in this regard, but for the period of delay in issuing the refund after the date of passing of the order under section 143(1), the assessee is entitled for interest.

3) Thus, the Assessing Officer was directed grant the interest under section 244A for the period falling between the date of passing of order under section 143(1) and actual date of granting of refund, at the rate of interest as would have been applicable if the refund amount would have been for an amount more than 10 per cent of the gross tax. - [2016] 73 taxmann.com

228 (Mumbai - Trib.)

CBEC releases FAQs on GST

With the enactment of 101st Constitution Amendment Act, the road to GST is clear. The Govt. had already unveiled draft model law on GST.

The National Academy of Customs, Excise & Narcotics (‘NACEN’) is conducting a mammoth capacity building exercise to train about 60,000 indirect tax officers of the Centre and State so that officers are well equipped to implement GST when it is rolled out. Now the NACEN has released FAQs on Registration, Valuation, Refund, and Input Tax credit,etc.

The FAQs have been prepared and reviewed by a team of officials from both Centre and States. These FAQs compilation covering 24 topics with over 500 questions, will be an effective tool in disseminating knowledge on GST to Tax officials, Trade and Public. This is the first version based on the Model GST Law which has been released in the public domain. NACEN will bring out updated versions of the FAQ, as and when relevant statutes are enacted and rules are framed.

To read FAQ’s on GST, click here.

Order not barred by limitation when it was ready to be served upon assessee before limitation period

The issue before the High Court was as under:

Whether the Tribunal erred in law in holding that the assessment order under section 143(3) received by the assessee was barred by limitation and as such perverse?

The High Court held in favour of revenue. The aggrieved-assessee filed the SLP in Supreme Court against such order. The Apex Court dismissed the SLP.

The observations of the High Court are given hereunder:

1) A representative of the assessee, on his own volition and without intimation to the Department, visited the office and found the assessment order ready to be served upon him.

2) The probability of the order being made and ready to be collected by the representative of the assessee before the period of limitation, could not also be ruled out. Thus, assessment order was not barred by limitation. - BINANI INDUSTRIES LTD. V. CIT - [2016] 73 taxmann.com 191 (SC)