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Our honorable FM Smt. Nirmala Sitharaman presented the Union Budget 2022-23 in Parliament today (1.2.2022) at 11 am, quoting the undermentioned Shlok from the Mahabharata.

दापयित्वाकरंधर्म्यंराष्ट्रंनित्यंयथाविधि।

अशेषान्कल्पयेद्राजायोगक्षेमानतन्द्रितः॥११॥

“The king must make arrangements for Yogakshema (welfare) of the populace by way of abandoning any laxity and by governing the state in line with Dharma, along with collecting taxes which are in consonance with the Dharma.”

Mah.

"Dear FM, decrypt the crypto, walk the talk concerning new re-assessment regime, ensure audi alteram partem in faceless assessments & penalty and provide level-playing field to firms & LLPs, in the upcoming Union Budget 2022-23.

This year’s Union Budget 2022-23, slated to be presented on February 1, 2022, is expected to have some very large-scale ramifications for the block chain technology-based Cryptocurrencies and Non-Fungible Tokens (NFTs). Though it is clear that cryptocurrencies shall not be considered as legal tender or currency, but still a precise clarity about their disclosure requirements & taxability by way of insertion of specific legislative provisions in the Income Tax Act itself is desirable to bring much needed certainty.

Section 10AA of the Income Tax Act, 1961, contains legislative provisions for deduction available to units established in Special Economic Zones (SEZs), in respect of profits derived by such units or establishments from the export of goods manufactured or services provided by them, subject to the fulfilment of certain specified conditions. 

In this article, a Practical Case Study on eligibility or otherwise of an assessee u/s 10AA of the Income Tax Act, is shared below, for the benefit of our Readers. 

Facts of the Case: The assessing authority, National Faceless Assessment Centre, has made an addition of Rs. 5,00,00,000/- in the regular assessment order u/s 143(3), of M/s .

‘‘Arth’-Shastri’, well yes Friends, presently, the official twitter handle of our Income Tax Department, is tweeting some insightful tweets with ‘‘Arth’’ as the student and ‘Shastri’ as the guru.

Thus, while penning down this article, ‘‘Arth’’ and ‘Shastri’, came up as a natural choice of characters, for me also, to present some real-life practical case studies, demonstrating the paradox of ‘Procedure Over Substantive Law and Legislative Intent’, widely prevailing and duly evident in the Intimation Orders u/s 143(1), being generated mechanically, by the faceless CPC robot, now a days.

So, ‘Picture’ this….

‘‘Arth’&r.

Remember the Case of Lakshya Buddhiraja? 

Well yes Friends, it was this case only, where the Faceless Appeal Scheme of CBDT, has been challenged on the grounds of violation of Principles of Natural Justice for the very first time. In this case, the discretionary power vested in the appellate authorities, for granting personal hearings to the appellants through video conferencing, in the Faceless Appeal Scheme, 2020, was being challenged.

This case travelled upto the hon'ble Supreme Court, and the hon'ble Apex Court in its judgement (CBDT vs. Lakshya Budhiraja & Anr.)  dated 1.10.2021 in transfer petition (civil) no. 1445-1446/2021, has deferred the matter for final adjusication for three months, on the submission .

The hon’ble Delhi High Court, hearing a batch of 1346 writ petitions, (leading case being ‘Mon Mohan Kohli vs. ACIT & ANR. in W.P.(C) 6176/2021), challenging the initiation of re-assessment proceedings, on or after 1.4.2021, pursuant to issue of notices under the old section 148, in its landmark judgement dated 15.12.2021, have quashed the respective old 148 notices and have allowed all the 1346 petitions. 

For ready reference of our Readers, the Copy of the said Judgement is enclosed as a PDF File attachment below:

The Key Findings & Observations of the hon'ble Delhi High Court are being summarised below: 

(1) THE LEGISLATURE HAS PERMITTED RE-ASSESSME.

Friends, in this Taxalogue, our founder director Sh. Mayank Mohanka, FCA, discusses and addresses, all the practical and legal aspects of the critical issue of legal sanctity and validity of the reassessment notices issued under the old section 148 on or after 1.4.2021.

In current times, the most buzzing and critically debated and talked about tax issue, having PAN India relevance and some very high value stakes, doing rounds in all the tax circles and the coveted corridors of the hon’ble High Courts, is the issue of legal sanctity and validity of the reassessment notices issued under the old section 148 on or after 1.4.2021.

Till date, the two hon’ble High Courts viz. the Chhattisgarh High Court (single Judge Bench) and the Allahaba.

The Lok Sabha on August 9 passed The Limited Liability Partnership (Amendment) Bill, 2021, which seeks to encourage the startup ecosystem and facilitate greater ease of doing business for the law-abiding corporates in the country, amending the Limited Liability Partnership Act, 2008.

On August 4, the Bill was passed in the upper house of the Parliament (Rajya Sabha) after it was introduced by Minister of State for Corporate Affairs Rao Inderjit Singh amid protests by the opposition parties over the Pegasus snooping row and farm laws. The Bill has received the Presidential Assent on August 13, 2021 and is now called as "The Limited Liability Partnership (Amendment) Act 2021"

This is the first time that amendments have been proposed in the law that was enacte.

The Finance Act, 2021 has inserted two new sections 206AB and 206CCA in the Income-tax Act 1961 w.e.f. 1.7.2021. These sections mandate tax deduction or tax collection at higher rate in case of certain non-filers / "Specified Persons". Higher rate is twice the prescribed rate or 5%, whichever is higher.

"Specified Person" means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under section 139(1) has expired; and the aggregate of tax deducted at source and tax collected at source in his case is Rs. 50,000 or more in ea.

As anticipated, the Apex body CBDT has come up with a Circular No. 13 of 2021 bearing folio no. 370142/26/2021-TPL, (enclosed as per PDF file below), containing clarificatory guidelines on newly inserted provisions concerning applicability of TDS on Purchase of Goods u/s 194Q of the Income Tax Act, applicable w.e.f. 1.7.2021.

In this Taxalogue, all the significant clarifications/guidelines as contained in the captioned CBDT Circular No. 13 of 2021, concerning the practical implementation of the provisions of section 194Q w.e.f. 1.7.2021, have been explained with practical illustrations.

However, before proceeding towards the captioned CBDT Circular, it is desirable and worthwhile to first understand the newly inserted provisions on T.

Remembering Interesting Anecdotes of the Glorious History of ICAI on The CA Day!!

The Chartered Accountants Act, 1949 came into force on July 1, 1949. Since then, July First of every year is celebrated as the "Chartered Accountants Day". Today, on this 73rd CA Day, Team TaxAaram wishes all the esteemed members of this glorious CA profession and all the aspiring CAs, a very Happy Chartered Accountants (CA) Day. 

There are some very interesting anecdotes concerning the glorious history of ICAI. The same are being shared here for the benefit of all young professionals.

The Institute of Chartered Accountants of India (ICAI) is the national 

Understanding New TDS Provision on Purchase of Goods u/s 194Q with Practical Examples

Team TaxAaram has prepared some practical illustrations for clear and easy understanding of the new provision of TDS on purchase of goods, contained in section 194Q. These are shared below for ready reference and benefit of our Readers.

Practical Examples on Section 194Q

1. Mr. Goodly purchases goods worth Rs. 15 lakhs on 30.6.2021. He purchases goods worth Rs. 50 lakhs on 1.7.2021. His turnover in previous financial year 2020-21 was 11 crores. 

Is Mr. Goodly required to deduct TDS u/s 194Q & if yes, on what amount & at what rate?

Ans..