Respected Professional Colleagues
Wish you a Very Bright Joyful & Colourful Holi. May this festival of colours brings a lot of colours in your life.
With the advent of spring, new beginning arise, new leaves sprout, flowers bloom and happy birds sound. We experience rejuvenation and upliftment of spirit. Holi is a time to rejoice and experience the Creators blessings. Holi-days are now going by and the closure of the year is at the fag end.
Now will start the scrutiny notice period. CBDT has issued Instruction No. 3 of 2017 dated 21-2-2017 containing Standard Operating Procedure (SOP) to be followed by Assessing Officers in verification of cash transactions relating to demonetisation.
Post demonetisation of ₹ 500/- and ₹ 1,000/- notes on November 8, 2016, it is stated that several malpractices have been noticed. The Income Tax Department is enquiring/seeking information and analysing instances of deposits to identify cases involving risk of tax evasion. Based upon vast amount of information of cash deposit collected and analysed by CBDT, a number of persons have been identified in whose case the cash transactions did not appear to be in line with their profile available with the Income Tax Department. In such cases, it has been decided to undertake online verification of select transactions through Jurisdictional Assessing Officers. Income Tax Department has recently sent letters to 18 lakh persons, who had deposited more than ₹ 5 lakh in cash in aggregate in their bank accounts.
Income Tax Department has enabled online verification of these transactions to reduce compliance cost for persons under verification; the information is made available in the e-filing window of the PAN holder who can view the information using the link “Cash Transactions 2016” under “Compliance” section of the portal. E-mail and SMS are also sent to the persons under verification for submitting online response on the e-filing portal. In cases where online response has not been submitted even after service of letter, the ITS profile of such PAN holders may be viewed to access information reported in earlier returns and under TDS/AIR/CIB. In case the cash deposit is not in line with the earlier return or information profile of the person under verification, necessary facts may be collected inter alia by exercising the powers u/s. 133(6) with the approval of prescribed authority as mentioned in para 7.2 of the Instruction dated 21-2-2017. In case any notice is received u/s. 133(6) of the Income-tax Act, it is suggested that the same should be properly and immediately complied with giving necessary particulars. Otherwise it may lead to even survey u/s. 133A of the Income-tax Act. During survey, if there is a suspicion of backdating or fictitious cash transactions, reference can also be made to the Investigation Wing as well in appropriate cases. As per para 9 of the said Instruction, if the transaction being loan received/repaid in cash above the permissible threshold comes to notice, the Assessing Officer may also consider initiation of penal proceeding under the relevant provisions.
CBDT in para 5 of this Instruction has stated that it should be clearly understood that this exercise relates to preliminary verification of information only and the same should not be construed as conducting scrutiny or indepth authentication. The entire process envisages end to end e-verification in which the concerned person would be required to electronically file his response on e-filing portal which shall be examined and monitored electronically by the Tax Department through online verification platform. It has been the endeavour of CBDT to identify and target the potential cases through e-verification so that possible instances of grievances arising from the process of verification are minimised.
In view of the said Instruction, it is advisable for taxpayers dealing with the assessees to make proper and timely compliance where cash has been deposited and information appears on the e-portal or any notice or sms or e-mail has been received from the Income Tax Department, in order to escape the effect of harsh provisions.
Friends, in the last communiqué I had sought your co-operation for compliance to be made before the Charity Commissioner. As informed, Mr. Ravi has already sent the consent letters to all the executive members in the respective years through e-mail to be returned back duly signed. It appears that many of our brothers and sisters have not complied with the same. I understand that you might not have spared the time from your busy schedule or that it might have escaped from your sight. I once again remind all of you i.e. the NEC members to send these consent letters duly signed to our head office so that the compliance may be made before the Charity Commissioner. This herculean task cannot be completed without your active co-operation and therefore I request you to send these consent letters as early as possible.
Friends, I may inform you that your Federation has sent representation to the Hon’ble Prime Minister and the Finance Minister for the pious cause of Advocates and Tax Practitioners to include their name in section 53(4) of the Revised GST Draft Law. We had also met the learned Attorney General Mr. Mukul Rohatgi to advance our cause. We have also sent Post Budget Memorandum to the Hon’ble Finance Minister. My special thanks to Mr. Narayan Jain, the Chairman & Mr. V. P. Gupta, the Convenor Direct Taxes Committee for this purpose.
Friends, I also remind you of National Tax Conference to be organised by West Zone at Vallabh Vidya Nagar, Anand, Gujarat on 22nd & 23rd April, 2017. Many legal luminaries will throw the light on the subject and impart the legal knowledge. You are cordially invited to Gujarat and make the event successful.
Education is not what you learn, it is what you do with what you learn. Education requires relaxation and rejuvenation. Friends, it gives me an immense pleasure to inform you that the Federation has organised a Sri Lanka Tour from 3rd June to 9th June, 2017 for holding an International Tax Conference. A detailed programme is given in AIFTP Times and also being published in this volume of Journal. Even on whatsapp, frequent messages are being sent. You all are invited to make the event memorable.
I once again express my warmest regards and wish you a Very Happy Holi followed by Navratras and Ram Navmi.
With Best Wishes
Prem Lata Bansal