The Ministry of Finance has issued an important Press Release on the retrospective amendments in Finance Bill 2012. In particular it was stated that the retrospective changes proposed are “not substantive but clarificatory in nature” and only “reiterated the intent of the legislation“. It was also stated that “tax cases which have already been assessed and finalized up to April 1, 2012 cannot be reopened“. It was emphasized that “Indian tax laws are very clear that the companies making capital gains from the assets located in India will have to pay taxes either in the country of their origin or in India” and that “It is not a case of double taxation but ensuring that companies that are liable to pay tax must pay some tax“. On the issue of categorization of software sales as royalties, it was stated that that discussions had been held in the past between the tax authorities in USA and they had “agreed to disagree” on such characterization.

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Minutes of the Meeting held on 18.04.2012 with the Managing Committee of ITAT Bar Association Mumbai

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Vide Order dated 9.3.2012, Shri. G. E. Veerabhadrappa, the Hon’ble President of the Tribunal, has withdrawn the reference to the 5 Member Special Bench of the Tribunal in the case of Tandon information Soluations Pvt. Ltd, ITA No. 6591/M/07 for the A.Y.2003-04.

The Question which had been referred to the Special Bench was:

“Whether or not, on the facts and in the circumstances, deduction u/s 10A is to be allowed without setting off of brought forward losses of earlier year?”

The appeal is now posted before the Division Bench on 19.04.2012 to consider the assessee’s request for withdrawal of the appeal.

The Ministry of Finance has vide letter dated 4.4.2012 invited applications for appointment to the post of “Income Tax Ombudsman”. The post of “Income Tax Ombudsman” carries a pay scale of Rs.75500-80000. Interested candidates are requested to forward their application by 30.5.2012 indicating their preferred location.

Vide Order No. 4/FT&TR/2012 dated 10.4.2012 read with Corrigendum dated 11.4.2012 the CBDT has reconstituted the Dispute Resolution Panel (DRP) comprising of three Commissioners of Income Tax/Directors of Income Tax as Members of DRPS at Delhi, Mumbai & Ahmedabad who shall perform such duties in addition to their regular duties with immediate effect and until further order

Vide Order No. 67 of 2012 dated 13.4.2012 the CBDT has posted several Assistant Commissioners of Income Tax (Probationers) in the pay scale of Rs. 15,600-39, 100 (Plus Grade pay of Rs. 5,400 in PB-3), on completion of training at National Academy of Direct Taxes, Nagpur, in the Region of CClT(CCA)/Station/Charge indicated-against each with immediate effect and until further orders

CIRCULAR NO. 01/2012 [F.No. 276/34/2011-IT(B)], DATED 9-4-2012

Government of India,
Ministry of Finance,
Department of Revenue,
Central Board of Direct Taxes,

1. Section 203 of the income-tax Act, 1961 (“the Act”) read with the Rule 31 of the Income-tax Rules, 1962 (“the Rules”) provides for furnishing of certificate of tax deduction at source (TDS) by the deductor to the deductee specifying therein the prescribed particulars like amount of TDS, permanent account number (PAN), tax deduction and collection account number (TAN), etc. The relevant form for such TDS certificate is Form No. 16 in case of deduction under section 192 and Form No. 16A for deduction under any other provisions of Chapter XVII-B of the Act TDS certificate in Form No. 16 is to be issued annually whereas TDS certificate in Form No. 16A is to be issued quarterly.

2. For deduction of tax at source made on or after 01.04.2011, Circular No. 03/2011 dated 13.06.2011 stipulated mandatory issue of TDS certificate in Form No. 16A generated through TIN Central System and which is downloaded from the TIN website (www.tin-nsdl.com) with the unique TDS certificate number in cases of company Including a banking company to which the Banking Regulation Act, 1949 applies and any bank or banking institution, referred to in section 51 of that Act or a cooperative society engaged in carrying the business of banking. For other deductors, such stipulation was optional, Moreover, pursuant to the issue of the said circular, a deductor issuing Form No. 16A generated through TIN Central System and which is downloaded from the TIN website had an option to authenticate such TDS certificate by using digital signature.

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In response to the 2011 update of the UN Model Convention which was launched on 15.3.2012, the CBDT has addressed a letter dated 12th March 2012 in which it has registered its objections to the provisions in the UN Model Convention. In particular, the CBDT has stated:

3.2 Even though OECD Transfer Pricing Guidelines do not address the concerns of developing countries, paragraph 3 of the proposed UN Model Convention Commentary of Article 9 indicate that former non-governmental Group of Experts (year 1999) had stated that all the countries including developing countries will follow the OECD principles as set out in the OECD Transfer Pricing Guidelines for the reasons that these guidelines represent internationally agreed principles. The former expert group had also recommended that the Guidelines should be followed for application of the arm’s length principles. However, it has been clarified in the new commentary that views expressed by the former Group of Experts have not yet been considered fully by the Committee of Experts as indicated in the Records of its annual session. India believes that the Committee of Experts do not have jurisdiction to decide the critical issue of whether the OECD Transfer Pricing Guidelines agreed by Governments of developed countries should be followed by the Governments of the developing countries when these Governments are not party to the OECD Transfer Pricing Guidelines. India does not believe that decision of former Group of Experts can be interpreted that subsequent revision of OECD Guidelines (after 1999) will automatically become the internationally agreed standards and United Nations guidance will automatically change without participation and agreement by non-OECD countries. India believes that taking such decision was not within the purview of non-governmental Committee of Experts (1999) and should be revoked immediately.

 

3.3. …. India believes that OECD Transfer Pricing Guidelines cannot be imported to UN guidance particularly when such recommendations of the group in 1999 is not considered by the present committee and is beyond the scope of non-governmental committee….

 

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4. India further believes that in the revision of UN Model Convention, which is due to be released on 15th March, 2012, concerns of developing countries have not been taken into consideration, as it has been developed by Group of Experts and sub-committees having non-governmental representatives and disproportionate representations from OECD countries. India will submit its detailed comments once the revised UN Model Convention is made public.

 

5(ii) … It is inconceivable as to how a standard developed by Government of only 34 countries can be accepted by Government of other countries as ‘standard’ of sharing of revenue on international transactions between source and resident country particularly when it only take care of the interest of developed countries and has seriously restricted the taxing powers of source country.

Vide Order No. 65 dated 3.4.12 passed by the CBDT in continuation to Order No. 8 of 1012 dated 12.1.2012 the President is pleased to grant Proforma Promotion the several Additional Commissioner of Income Tax, who are on deputation to ex-cadre posts mentioned against each of them to the grade of Commissioner of Income Tax, CBDT in the Pay Band-4 Rs. 37,400-67,000/- Plus Grade Pay of Rs. 10,000/- w.e.f. 17.1.2012 i.e. the date on which their junior was promoted.

Professionals like Chartered Accountants and Lawyers are liable to pay profession tax in the State of Maharashtra. Registration of Profession Tax (PTEC/PTRC) is mandatory from 1/4/2012.

To aid the process of e-registration/ e-enrollment, the Sales-tax department department has issued a useful guide dealing with all the issues that will arise during the process and how to resolve those.

The Guide will be very useful for all professionals. Click here for a ready referencer of Profession Tax.