CBDT removes Cyprus from list of Notified Jurisdictional Area with Retrospective effect from Nov 2013

In a big relief to investors and Indian companies, the Central Board of Direct Taxes (CBDT) yesterday clarified that, it has removed Cyprus from the list of ‘notified jurisdictional area’ with retrospective effect from November 1, 2013. “For removal of doubts, it is hereby clarified that Notification No. g6/2013 has been rescinded with effect from the date of issue of the said notification, thereby, removing Cyprus as a notified jurisdictional area with retrospective effect from 01.11.2013”, the Circular stated. The CBDT had classified the island nation as a notified jurisdictional area (NJA) by way of Notification 86/2013 on grounds that Cyprus was not providing information requested by tax authorities under the taxation treaty. Following the notification, all payments made to Cyprus attracted a 30 per cent withholding tax and Indian entities receiving money from there were required to disclose the source of funds. The said Notification No. 86/2013 was subsequently rescinded vide Notification No. 114 dated 14.12.2016 and Notification No. 119 dated 16.12.2016 with effect from the date of issue of the notification. In some cases a view has been taken by the Income-tax authorities that the rescission of Notification No. 86/2013 was not with retrospective effect from November 1, 2013, the CBDT circular also stated. Recently Finance Ministry has notified revised Agreement between India and Cyprus for the Avoidance of Double Taxation and the Prevention of Fiscal evasion (DTAA) with respect to taxes on income, along with its Protocol. The revised DTAA will enable source based taxation of capital gains on shares, except in respect of investments made prior to 1st April, 2017. In addition, the DTAA will also bring into effect updated provisions as per international standards and in accordance with the consistent position of India.

Linking Aadhaar with PAN

Linking Aadhaar with PAN.
As you are all aware linking of Aadhaar number with PAN is made mandatory for filing of Income Tax Returns now.
Many people are facing difficulty in this regard.As the name appearing on Aadhaar card did not match exactly as appearing on PAN card I also faced difficulty in linking. The best solution is to modify your name on the Aadhaar Crad.
The following procedure on my laptop and successfully changed the name on the Aadhaar card and linked the Aadhaar number and PAN successfully and without any difficulty.
You will be able to generate my eAadhar card.
Every thing was done from home , not visiting any Aadhaar centre. Please note that this is possible only if your mobile number is recorded on your Aadhaar card.
The Procedure/ Steps I followed are as under. You may also try.
1] Take a xerox copy of your PAN card on a full white sheet of paper.
2]Self attest it with your signature.
3]Write your name and Aadhaar number on the Xerox copy.
4]Scan the Xerox sheet.
5]Open the UIDAI website.
6]Enter Aadhaar Number.
7]Enter the OTP you receive n proceed.
8]Select the option change/update Aadhaar Details.
9] Change /modify your name as appearing on PAN.
10]Upload the scanned Xerox copy.
Normally within a day or two the change /modification is effected.
Once the change is effected you can easily link Aadhaar number and PAN.
A new card is issued .It may take a few more days.
If you are in a hurry you you can download eAadhar card .
If you visit UIDAI website only 3-4 steps are needed. Enter Aadhaar number,name as modified, pincode etc.
You get OTP. Enter the OTP. Then Download the eAadhaar.

[2017] 79 taxmann 459 (Ahmedabad - Trib.), Burt Hill Design (Pvt.) Ltd. vs. DDIT(International taxation)

[2017] 79 taxmann 459 (Ahmedabad - Trib.), Burt Hill Design (Pvt.) Ltd. vs. DDIT(International taxation)

IT/ILT : Where payment made by assessee-company in pursuance to secondment agreement with US-company consist of income which was chargeable, and had been charged, to tax in India under head 'income from salaries', assessee could not be said to have any tax withholding obligations under section 195

FACTS

• The assessee, engaged in the business of providing information technology enabled services, is subsidiary of Burt Hill Inc USA. During the relevant period, under a secondment agreement with the assessee, BH Inc had placed certain employees at the disposal, and control, of the assessee.

• The income tax authorities during the course of survey proceedings found that the assessee has made remittances to BH Inc, in respect of reimbursement of payroll costs, without any deductions on account of tax withholdings.

• It was explained by the assessee that these are reimbursements plain and simple, and that these payments did not involve any profit element taxable in the hands of BH Inc. It was also explained the payments were in the nature of salaries, and that the assessee had duly discharged his tax withholding obligations from these salaries to the extent the recipients were taxable in India. The details of tax payment by the seconded employees were also furnished.

• The Assessing Officer was of view that since employees were of BH Inc, the payment was infact in the nature of payment for services rendered by these employees. The Assessing Officer proceeded to hold that the work done by these employees of BH Inc has resulted in creation of a service PE and that the entire amount so paid to BH Inc, being attributable to the PE, is taxable on gross basis, in the absence of details of expenditure of pe, @ 40%. Accordingly, demands under section 201 r.w.s. 195 were raised.

HELD

• the payment made to Burt Hill Co Inc USA consists of income which is chargeable, and has been charged, to tax in India under the head 'income from salaries'. Whether the seconded employees continue to be in employment of the foreign entities or not is wholly irrelevant for this purpose. What is relevant is that the income embedded in the payments in question is taxable in India under the head 'Salaries', and if that be so, there are no tax withholding obligations under section 195. The income embedded in the impugned payments being in the nature of income chargeable to tax under the head 'income from salaries', the assessee cannot be said to have any tax withholding obligations under section 195 and therefore, impugned tax withholding demands, under section 201 r.w.s 195, are wholly devoid of any legally sustainable merits.

Leave Travel Concession / Leave Fare Concession provided to Nationalized Bank Employees for Travelling Abroad is subject to TDS: ITAT Bengaluru

April 13, 2017 | By : by : Tax Scan Team In Syndicate Bank v. ACIT (TDS), the Income Tax Appellate Tribunal (ITAT), Bengaluru bench held that the Leave Travel Concession (LTC) and Leave Fare Concession provided to the employees of nationalized banks are not covered under section 10(5) of the Income Tax Act in cases where foreign destination is involved and the Bank should deduct TDS on reimbursement of expenditure incurred by the bank. The assessee, a nationalized Bank provided Leave Travel Concession (LTC) and Leave Fare Concession to its employees. On verification of the TDS compliance by the assessee-bank, the assessing officer found that the assessee had not deducted tax from source for the amount paid to employees for travel outside India and therefore, treated the assessee-bank, an assessee-in-default u/s 201(1) r/w 201(1A). the Officer was of the view that the assessee-Bank had erroneously allowed LFC exemption under section 10(5) of the Income Tax Act to its employees since the travels also included a leg outside India and travel by long circuitous route which was not in accordance with the provisions of Section 10(5) of the Income Tax Act read with Rule 2B of Income Tax Rules. The first appellate authority sustained the impugned order and found that the assessee intentionally not paid TDS on reimbursement incurred on LTC/LFC. On appeal, the assessee contended that on perusal of section 10(5) r/w Rule 2B, it is clear that the exemption is not limited to travel only within India and is applicable to a case involving foreign leg in the tour and therefore, there is nothing wrong in granting exemption under section 10(5) to its employees at the time of deduction of tax at source. Rebutting the above arguments, the Revenue contended that as per section 10(5), reimbursement of travel concession or assistance to an employee was exempt which was incurred for travel of the individual employee or his family members to any place in India. It is the contention of the Department that nowhere in this clause, it has been stated that even if the employee travels to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. Rejecting the appeal filed by the assessee-Bank, the division bench said that the AO had rightly treated the assessee-bank as an assessee-in-default.“In the present case, the employees of the assessee-Bank have travelled outside India and raised claims of their expenditure incurred and there is no dispute that the assessee-Bank may not be aware with the plan of travel of its employees initially, however, at the time of settlement of LTC/LFC bills, the employees should have placed comprehensive details before the assessee-Bank as to where they have travelled/visited and raised the claims, that means to say, the assessee-Bank was well aware of the fact that its employees have travelled in foreign countries too by availing LTC/LFC for which they were not entitled for exemption u/s. 10(5) of the Act. Such being the scenario, the assessee-Bank cannot now plead that it was under the bona-fide belief that the amounts claimed were exempt u/s. 10(5) of the Income Tax Act.” Recently, the Jaipur bench of the ITAT, while hearing an appeal filed by the State Bank of India, had delivered a similar view. In that case, the bench said that Rule 2B of the Income Tax Rules is very clear in intent that that the said provisions are applicable in connection with proceeding on leave to any place in India and the appellant has in fact bent the interpretation of the said provisions in such a way which goes totally against the intent and spirit of these provisions.

Unique Pin code 560500

A *unique PINCODE 560500* has been allotted to Centralized Processing Centre (CPC), Income Tax Department located in Bengaluru by the Department of Post. Taxpayers can henceforth address their mails to “Centralized Processing Center, Income Tax Department, Bengaluru 560500” for the purpose of submission of ITR-V forms and other documents which require physical mode of transmission.

www.incometaxindia.gov.in

Jurisdiction of Re-Assessment Proceedings can be Questioned at any Stage

In Teena Gupta v. CIT, a division bench of the Allahabad High Court ruled that the jurisdiction of re-assessment proceedings under the Income Tax Act can always be raised at any stage. A Notice dated 11.05.2000 was issued against the assessee without specifying the assessment year.Following the same, a notice under Section 142(1) of the Act dt. 13.6.2000 was issued in respect of assessment proceedings for the assessment year 1997-98. In the meanwhile, the order confirming the notice dt 11.05.2000 was passed ex-parte against the assessee. The assessee questioned the validity of the notice on ground of non-disclosure of the assessment year. On second appeal, the Tribunal rejected the claim of the assessee by holding that the assessee has not raised this ground during the pre-assessment stage.  Further, relying on the pre-assessment notice dated 13.06.2000, the Tribunal upheld the validity of the re-assessment.Aggrieved by the order of the ITAT, the assessee approached the High Court for relief. A bench comprising of Justices Bahrati Sapru and Saumitra Dayal singh allowed the appeal and said that it is settled law that the reassessment notice is a jurisdictional notice and it is equally settled law that ground of lack of jurisdiction may be raised at a subsequent stage as well. “In the instant case the reassessment order was admittedly an exparte order and, therefore, there was no occasion for the assessee to have conceded to the reassessment proceedings.” Relying on the decision in Smt Prabha Rani Agarwal Vs. Income Tax Officer and another, the bench held that the issue of validity of reassessment proceedings is a jurisdictional issue which goes to the root of the matter. “The Tribunal ought to have examined the ground no.3 raised in the assessee’s appeal on its merit without being prejudiced by the facts that the reassessment order has been passed on the ex-parte basis in which the proceedings the assessee has not objected to the initiation of the reassessment.”

Income Tax Dept asks Companies to Furnish Reports on issuing Bonds, Debentures, Shares etc by 31st May

Recently, in an advisory issued to Companies, the Income Tax Department required them to furnish SFT in respect of certain specified transactions. The Companies/ Institutions issuing bonds or debentures, on receipt from any person for acquiring anybody or debentures for Rs. Ten lakh or more shall give report to the Department. In case of a Company issuing shares, sale of shares worth ten lakh or more must be reported. This is applicable to share application money also. In case of a listed Company purchasing its own shares under section 68 of the Companies Act are directed to furnish reports on buy back of shares from any person for an amount of Rs ten lakh or more. Respective heads of the Companies are required to furnish the statement online in respect of the above transactions in Form 61A on or before 31st AY 2017. It is said that “the transactions listed above are in addition to other transactions specified in Rule 114E which may be reportable by eligible companies.”

Income Tax Dept asks Companies to Furnish Reports on issuing Bonds, Debentures, Shares etc by 31st May

Recently, in an advisory issued to Companies, the Income Tax Department required them to furnish SFT in respect of certain specified transactions. The Companies/ Institutions issuing bonds or debentures, on receipt from any person for acquiring anybody or debentures for Rs. Ten lakh or more shall give report to the Department. In case of a Company issuing shares, sale of shares worth ten lakh or more must be reported. This is applicable to share application money also. In case of a listed Company purchasing its own shares under section 68 of the Companies Act are directed to furnish reports on buy back of shares from any person for an amount of Rs ten lakh or more. Respective heads of the Companies are required to furnish the statement online in respect of the above transactions in Form 61A on or before 31st AY 2017. It is said that “the transactions listed above are in addition to other transactions specified in Rule 114E which may be reportable by eligible companies.”

Mandatory Quoting of Aadhaar for filing ITR: SC Likely to Hear Petition on Monday

Recently, the Finance Act, 2017 has been passed by the Parliament making Aadhaar mandatory for citizens to file their income tax returns from the Assessment Year 2017-18 by linking the same to their PAN card. A petition challenging the constitutional validity of the said provision has filed before the Supreme Court. The petitioner, Binoy Viswam, Ex-Minister, Kerala, an executive member of CPI filed a petition through advocate Sriram Parakkat questioning the introduction of the new provision in the Income Tax Act to link Aadhaar card with PAN card. According to the petitioner, he did not have an Aadhaar card on the legitimate expectation that the said scheme “was not mandatory” in view of the earlier SC’s orders. In its earlier ruling, the Apex court held that Aadhaar should be voluntary and no benefits can be denied for want of it. According to the petitioner, the scheme itself, was voluntary and the card is to be obtained only on the consent of the individual. Now, due to the new provision in the Finance Act, inserting a new provision, i.e, section 139AA of the Income Tax Act, 1961, he is being forced to obtain an Aadhaar card, which would resulted in complete violation of his right to privacy. Non-Enrolment of Aadhaar by July 2017 under the new law would render the PAN of the defaulting individual invalid, attracting serious consequences under the Income Tax Rules. The petition is likely to come up for hearing soon. However, no interim relief has been passed by the Court till now.It might tag the petition with other pending cases in which the validity of the notification backing Aadhaar has been challenged on the ground that it violates the right to privacy. A Constitution Bench of the Supreme Court is already seized of petitions challenging the validity of Aadhaar on the ground of violation of right to privacy. The Apex Court had last month said that Aadhaar number was not mandatory for welfare schemes. “As all of you already know, the Aadhaar Act itself is a violation of privacy and biometric information of an individual is taken and there’s no safeguard against its misuse. Even before we filed this petition, many others including Jairam Ramesh had challenged the Constitutional validity of the Aadhaar Act. Those petitions are placed before a Constitutional Bench of 7 Judges. In the event of referring to a constitutional bench, Supreme Court had issued an interim order saying that aadhaar can only be voluntary and cannot be mandatory. At this juncture, in blatant disregard to the orders of the Supreme Court, and even to the objects of the very Aadhaar Act, 139AA was inserted in to income tax Act as an amendment to Income Tax Act Sec 139 AA means that without an Adhaar, one cannot file income tax, secondly 139AA means that if you don’t have an Adhaar, your pan card will be invalidated. This I find to be unconstitutional in many ways,” Adv. Sriram Parakkat, the counsel for the petitioner said. “Senior Advocate Kapil Sibal had agreed to appear in this case. It’s likely to be listed on Monday,” 

Block all Accounts that do not provide Self Certification by April 30 for FATCA: CBDT to Financial Institutions

The Inter-Governmental Agreement (IGA) with USA for implementation of FATCA entered into force on 31st August 2015. Under the alternative procedure provided in Rule 114H(8) of the Income-tax Rules, 1962, the financial institutions need to obtain self-certification and carry out due diligence in respect of all individual and entity accounts opened from 1st July 2014 to 31st August 2015. Such self-certification and documentation was required to be obtained by the financial institutions by 31st August 2016, otherwise they were required to close the accounts and report the same if found to be a “reportable account” as per the prescribed due diligence procedure for pre-existing account. In view of the difficulties highlighted by stakeholders in following the provision for “closure” of financial accounts, it was informed vide Press Release dated 31st August 2016 that the financial institutions may not close the accounts by 31st August 2016 in respect of which self-certifications have not been obtained under the alternative procedure and a revised time line shall be notified in due course. The financial institutions were also advised to continue to work on completing the required due diligence, including obtaining self-certifications. Queries are being received from the financial institutions regarding the revised time lines for completion of due diligence. The financial institutions are advised that all efforts should be made by the financial institutions to obtain the self-certification. The account holders may be informed that, in case self-certifications are not provided till 30 April 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts. The transactions by the account holder in such blocked accounts may, thereafter, be permitted once the self-certification is obtained and due diligence completed.

CBDT issues PAN and TAN within 1 day to improve Ease of Doing Business

In order to improve the Ease of Doing Business for newly incorporated corporates, CBDT has tied up with Ministry of Corporate Affairs (MCA) to issue Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) in 1 day. Applicant companies submit a common application form SPICe (INC 32) on MCA portal and once the data of incorporation is sent to CBDT by MCA, the PAN and TAN are issued immediately without any further intervention of the applicant. The Certificate of Incorporation (COI) of newly incorporated companies includes the PAN in addition to the Corporate Identity Number (CIN). TAN is also allotted simultaneously and communicated to the Company. Till 31st March 2017, 19,704 newly incorporated Companies were allotted PAN in this manner. During March, 2017, of the 10,894 newly incorporated companies, PAN was allotted within 4 hrs in 95.63% cases and within 1 day in all cases. Similarly, TAN was allotted to all such companies within 4 hrs in 94.7 % cases and within 1 day in 99.73% cases. CBDT’s initiative in starting of a business is expected to significantly improve the ranking of India in the Ease of Doing Business Study conducted by World Bank by reducing the number of processes of registration before various authorities under law, reducing the time taken for allotment of the registration number (CIN, PAN, TAN) and making the entire registration process for new companies much simpler. CBDT has also introduced the Electronic PAN Card (E-PAN) which is sent by email, in addition to issue of the physical PAN Card, to all applicants including individuals where PAN is allotted.  Applicant would be benefited by having a digitally signed E-PAN card which they can submit as proof of identity to other agency electronically directly or by storing in the Digital Locker (https://digilocker.gov.in).

Jurisdiction of Re-Assessment Proceedings can be Questioned at any Stage: Allahabad HC

In Teena Gupta v. CIT, a division bench of the Allahabad High Court ruled that the jurisdiction of re-assessment proceedings under the Income Tax Act can always be raised at any stage. A Notice dated 11.05.2000 was issued against the assessee without specifying the assessment year.Following the same, a notice under Section 142(1) of the Act dt. 13.6.2000 was issued in respect of assessment proceedings for the assessment year 1997-98. In the meanwhile, the order confirming the notice dt 11.05.2000 was passed ex-parte against the assessee. The assessee questioned the validity of the notice on ground of non-disclosure of the assessment year. On second appeal, the Tribunal rejected the claim of the assessee by holding that the assessee has not raised this ground during the pre-assessment stage.  Further, relying on the pre-assessment notice dated 13.06.2000, the Tribunal upheld the validity of the re-assessment.Aggrieved by the order of the ITAT, the assessee approached the High Court for relief. A bench comprising of Justices Bahrati Sapru and Saumitra Dayal singh allowed the appeal and said that it is settled law that the reassessment notice is a jurisdictional notice and it is equally settled law that ground of lack of jurisdiction may be raised at a subsequent stage as well. “In the instant case the reassessment order was admittedly an exparte order and, therefore, there was no occasion for the assessee to have conceded to the reassessment proceedings.” Relying on the decision in Smt Prabha Rani Agarwal Vs. Income Tax Officer and another, the bench held that the issue of validity of reassessment proceedings is a jurisdictional issue which goes to the root of the matter. “The Tribunal ought to have examined the ground no.3 raised in the assessee’s appeal on its merit without being prejudiced by the facts that the reassessment order has been passed on the ex-parte basis in which the proceedings the assessee has not objected to the initiation of the reassessment.”

Cash Seized during Search can be Adjusted against Advance Tax liabilty: Punjab & Haryana HC

In Pr. Commissioner of Income Tax v. Sh. Surinder Kumar Khindri, the division bench of the Punjab and Haryana High Court held that the cash seized during search can be adjusted against the advance tax liability of the assessee since the same amount to existing liability as per specific provision of Section 132B of the Income Tax Act, 1961. Coming to the facts of the case, an amount of  Rs. 99,00,000/- was seized from the residence and bank lockers of the assesseee during the course of search. The assessee requested the Assessing Officer to adjust the seized amount towards his expected advance tax liability which was denied on ground that the advance tax liability does not constitute an existing liability under the relevant provisions of the Income Tax Act and the seized amount can be adjusted only against the regular tax liability.Subsequently, the assessee filed income tax returns and the department initiated penalty proceedings against him on ground of non-payment of taxes on the surrendered income. The first appellate authority as well as the ITAT accepted the plea of the assessee and therefore, the Revenue preferred an appeal before the High Court. Before the High Court, the Revenue reiterated the above arguments and relied on the decision of the Madha Pradesh high Court in the case of Ramjilal Jagannath and Others Vs. Assistant Commissioner. Rejecting the submissions of the Revenue, the bench noticed that the issue had been already settled by the same Court in the case of Commissioner of Income Tax Vs. Ashok Kumar. Aligning with the findings of the lower authorities, the division bench comprising Justice Ajay Kumar Mittal and Justice Ramendra Jain held that the amount seized was adjustable against the advance tax liability.

Mandatory Quoting of Aadhaar For PAN Applications & Filing Return of Income

Section 139AA of the Income-tax Act, 1961 as introduced by the Finance Act, 2017 provides for mandatory quoting of Aadhaar / Enrolment ID of Aadhaar application form, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1st July, 2017. It is clarified that such mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident individual is entitled to obtain Aadhaar. Resident as per the said Act means an individual who has resided in India for a period or periods amounting in all to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment. Accordingly, the requirement to quote Aadhaar as per section 139AA of the Income-tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016

http://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF_News/Press-Release-Aadhaar-5-04-2017.pdf 

Demonenization - Cash transactions above 2 lakhs during the window-period must be shown in the IT Return

All cash payments of over Rs 2 lakh for paying loans and credit card bills during the 50-day period after the note ban will have to be disclosed in the new one-page Income Tax return (ITR) form. The new ITR forms for filing of returns for the Assessment Year 2017-18 (financial year (FY) 2016-17) had been recently notified by the IT Department wherein a new column have been provided for declaration for any deposit of over Rs 2 lakh in bank accounts made during November 9 and December 30, 2016, after the old Rs 500 and Rs 1,000 notes were demonetised. While all credit cards are linked to permanent account number (PAN) of the holder, almost all loans by scheduled banks are also provided on furnishing of PAN. The tax department will collate the data it has of cash payments made in excess of Rs 2 lakh with the returns filed. Post-demonetisation, the government had provided a 50-day window beginning November 9, 2016, to deposit the junked notes in bank accounts. For those with unaccounted cash, it gave them one last opportunity to come clean by depositing 50 per cent of it as tax and parking another 25 per cent in a zero- interest bearing deposit for four years. Revenue Secretary Hasmukh Adhia had last week told PTI that the new column of cash deposits made during November 9, 2016, and December 30, 2016, was a one-time feature in the ITR and would not be there in the ITR from next year onwards. The ITR, he had said, would evolve or change every year depending on the need. While coming out with new ITRs, the Central Board of Direct Taxes (CBDT) had also rationalised them and cut down the number of forms to seven from earlier nine. While all taxpayers will have to now mandatorily link Aadhaar with their PAN cards, ITR1 (Sahaj) form has been shortened from 7 page to 1 page to enable filing of returns by people with income up to Rs 50 lakh by July 31.

Read more at: http://www.taxscan.in/demonenization-cash-transactions-2-lakhs-window-period-must-shown-return/6609/

Aadhar attach income tax website

Aadhar number is mandatory for filling of Income Tax Return, please ensure your name as per Aadhar and PAN is same. Also update your mobile no and date of birth on Aadhar card.

Hyderabad HC directs IT Dept to relax PMGKY Rules to help doctors to avail the benefit of the Scheme

The Hyderabad High Court has directed the Income Tax authorities to relax some of the conditions of the recent Pradhan Mantri Garib Kalyan Yojana, introduced by the Central Government post-demonetization. A division bench comprising Justice V. Ramasubramanian and Justice J. Uma Devi was hearing a petition filed by a lady doctor who wanted to utilize the scheme, sought for a direction to the I-T authorities not to prohibit her in any manner from utilisation of the seized cash for the purposes of making deposits under Section 199F of the Income Tax Act 2016 in RBI bonds under the scheme. The petitioner urged that when she attempted to utilise the scheme, she realized that there are far too many hurdles to avail it and she now has to borrow Rs 83 lakh and deposit it in the bank to remain eligible to utilise the scheme. While allowing the plea, the bench noted the petitioner has a current balance of Rs 7.5 crore after paying advance tax and making other payments and I-T authorities were treating this money as seized currency. The scheme mandates deposit 30 per cent of the seized currency towards tax and 10 percent as penalty and the declarant have to pay cess that is equivalent to 33 per cent of the money. In the present case, the petitioner paid as tax which works out to Rs 5.58 crore, which would leave her with Rs 1.92 crore. As per the existing rules, the petitioner has to keep 25 percent of the seized currency as deposit in RBI Bonds and the money available with banks falls short by Rs 83 lakh to utilise the scheme. The bench directed the I-T officials to treat the seized currency as tax, cess, penalty etc instead of asking her to get all this from outside while seizing her existing cash. The bench directed the petitioner to deposit Rs 83 lakh from outside to complete the RBI bond transaction.

Read more at: http://www.taxscan.in/hyderabad-hc-directs-dept-relax-pmgky-rules-help-doctors-avail-benefit-scheme/6601/