28 May 2016

CBDT Ciruclars

CBDT Circular No. 20/2016 dated 27-5-2016
Extension of time-limit for e-filing of CIT(A) appeals to mitigate taxpayers' inconvenience
  • Appeal due on or before May 15, 2016 can be filed upto June 15, 2016 without being treated as delayed appeals
  • EVC functionality for verification of e-appeals was made operational from May 12, 2016 for individuals and from May 19, 2016 for other persons
  • The word limit for filing grounds of appeal and mapping of jurisdiction of CIT(A) also caused grievance in some cases
  • CBDT Press Release dated 27-5-2016
    Implementation of General Anti Avoidance Rule Provisions- Issuance of Guidance Note-Comments of the Stakeholders
    CBDT Clarification dated 26-5-2016
    Clarifications for implementation of FATCA and CRS

    CBDT issues FATCA/CRS clarification, allows account holders' self-certification through internet banking platform

     CBDT issues further clarifications for implementation of FATCA and CRS pursuant to consultation held with Financial Institutions (FI); Considering the difficulty of physically obtaining self-certification from account holders, CBDT now provides an "alternative" channel, allows FIs to obtain account-holders' self-certification  through internet banking platform from the user account where the customer has transaction rights; Regarding Tax Identification Number ('TIN') or other functional equivalent of it, CBDT reiterates that TIN is not required to be collected by FIs if it is not issued by the relevant country in which the person is a tax resident including the cases where person is eligible to obtain TIN, but has not obtained the same, however in such cases CBDT suggests that FIs should make note of it and seek TIN once it is obtained; With regards to valuation guidelines to determine account balance/value of a custodial account for the purpose of reporting, states that the valuation of securities may be done at the values "regularly communicated by Depository (CDSL/NSDL) to the depository participants/brokers"; Lastly in respect of the procedure for furnishing report under FATCA and CRS draws attention to Notification No. 4 dated April 6, 2016 and user manual for registration, upload & view of Form 61B

    CBDT : Charitable trusts' temporary receipts beyond threshold won't result in cancellation of Sec 12AA registration

    CBDT issues beneficial circular, clarifies that where charitable trust engaged in 'advancement of object of general public utility' crosses the threshold of 20% or Rs. 25 lakhs for prescribed commercial activities under proviso to Sec. 2(15), it shall not be mandatory to cancel the Sec. 12AA registration; CBDT Circular adds a condition that there should not be any change  in  the  nature   of activities of  the institution; CBDT Circular notes the background that such charitable institute could be treated as a charitable institution in one year and not a charitable  institution  in the other  year  depending  on  the aggregate value  of receipts from commercial activities; CBDT clarifies that "The temporary excess of receipts beyond the specified cut-off in one  year may  not  necessarily  be the  outcome of alteration  in the  very nature of the  activities of the  trust orinstitution  requiring cancellation  of registration  already granted to the trust or institution"; CBDT further states that "If  in   any particular   year,    the   specified    cut-off   is exceeded,   the  tax  exemption  would   be denied   to  the  institution   in  that year   and cancellation   of  registration    would  not   be mandatory  unless   such  cancellation becomes necessary  on  the ground(s)   prescribed under the  Act."; CBDT notes that in view of the introduction of special  provisions  relating   to  tax  on  accretedincome under Chapter  XII-EB  in the  Act vide  Finance  Act,  2016, cancellation  of  registration  granted  u/s 12AA  may lead   to  a charitable  institution  getting  hit  by sub-section (3) of Sec. 115TD  and  becoming liable  to tax  on  accreted income & resulting into a hardship; CBDT therefore states that officers should not cancel registration merely because proviso to Sec. 2(15) comes into effect; CBDT further states that "The   process   for cancellation   of registration   is  to  be  initiated  strictly    in  accordance with   section 12AA(3)   and  12AA(4)  after  carefully examining the  applicability of these  provisions"
    Beneficial CBDT Circular No. 21/2016 dated 26-5-2016
    No cancellation of Sec 12AA registration where charitable trusts' temporary receipts crosses threshold u/s 2(15)
    • Where charitable trust engaged in 'advancement of object of general public utility' crosses the threshold of 20% or Rs. 25 lakhs for prescribed commercial activities under proviso to Sec. 2(15), it shall not be mandatory to cancel Sec. 12AA registration.
    • However, there should not be any change in the nature of activities of the institution.
    • The temporary excess of receipts beyond the specified cut-off in one year may not necessarily be the outcome of alteration in the very nature of the activities of the trust or institution requiring cancellation of registration already granted to the trust or institution.
    • If in any particular year, the specified cut-off is exceeded, the tax exemption would be denied to the institution in that year and cancellation of registration would not be mandatory unless such cancellation becomes necessary on the ground(s) prescribed under the Act.
    • Cancellation of registration granted u/s 12AA may lead to a charitable institution getting hit by sub-section (3) of Sec. 115TD and becoming liable to tax on accredited income & resulting into a hardship.
  • The process for cancellation of registration is to be initiated strictly in accordance with section 12AA(3) and 12AA(4) after carefully examining the applicability of these provisions



    ·         CBDT/ GoI Invites Comments and Inputs of the Stakeholders for Issuance of Guidance Note on Implementation of Provisions of General Anti Avoidance Rule (GAAR)
    ·         The provisions of General Anti Avoidance Rule (GAAR) are contained in Chapter X-A of the Income-tax Act, 1961 (the Act). The GAAR provisions shall be effective from assessment year 2018-19 onwards, i.e.financial Year 2017-18. The necessary procedures for application of GAAR and conditions under which it shall not apply, have been enumerated in Rules 10U to 10UC of the Income-tax Rules, 1962. 
    ·         Several stakeholders and industry associations have represented that guidelines for implementation of GAAR be issued so that there is adequate clarity in this regard. 
    ·         The general public and stakeholders are therefore requested by the GoI to provide their inputs on the provisions of GAAR in respect of which further clarity is required, from its implementation perspective. For the exercise to be meaningful, it is essential that reference to hypothetical situation be avoided. If the input relates to interpretation of a specific real world structure or arrangement, the structure should be such as that, which commonly occurs in the sector and involves clarification of general principles of application. Further, in relation to such structure, the particular provision and apprehensions or doubts along with basis thereof may also be provided with all the relevant facts. 2560185
    ·         The inputs may be provided on or before 30.06.2015 electronically on e-mail ID gaar-dor@gov.in and/or by post at the following address:
    ·         "Comments for Guidance Note on GAAR", The Director (Tax Policy & Legislation)-I, Room No. 147-D, Central Board of Direct Taxes, North Block, New Delhi – 110001.

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