Section 6 of the Income-tax Act, 1961 (the Act) contains provisions relating to residency of a person. The status of an individual as to whether he is resident in India or a non-resident or not ordinarily resident, is dependent, inter-alia, on the period for which the person is in India during a year.

Various representations have been received stating that there are number of individuals who had come on a visit to India during the previous year 2019-20 for a particular durationand intended to leave India before the end of the previous year for maintaining their status as non-resident or not ordinary resident in India. However due to declaration of the lockdown and suspension of international flights owing to outbreak of Novel Corona Virus (COVID-19), they are required to prolong their stay in India. Concerns have been expressed that they may involuntarily end up becoming Indian residents without any intention to do so.

In order to avoid genuine hardship in such cases, the CBDT has decided vide circular no 11 dated May 8, 2020, that for the purposes of determining the residential status under section 6 of the Act during the previous year 2019-20 in respect of an individual who has come to India on a visit before 22^nd March, 2020 and:

• has been unable to leave India on or before 31st March 2020, his period of stay in India from 22^nd March, 2020 to 31^st March, 2020 shall not be taken into account; or
• has been quarantined in India on account of Novel Corona Virus (Covid-19) on or after 1^st March, 2020 and has departed on an evacuation flight on or before 31st March, 2020 or has been unable to leave India on or before 31^st March, 2020, his period of stay from the beginning of his quarantine to his date of departure or 31^st March, 2020, as the case may be, shall not be taken into account; or
• has departed on an evacuation flight on or before 31^st March, 2020, his period of stay in India from 22^nd March, 2020 to his date of departure shall not be taken into account.

Further, as the lockdown continues during the Financial Year 2020-21 and it is not yet clear as to when international flight operations would resume, a circular excluding the period of stay of these individuals up to the date of normalisation of international flight operations, for determination of the residential status for the previous year 2020-21 shall be issued after the said normalisation.

For latest Notification Refer Govt Website Click Here

The Central Board of Direct Taxes (CBDT) has said today that there is some report circulating on social media regarding suggestions by a few IRS officers on tackling COVID-19 situation.

It is unequivocally stated that CBDT never asked IRS Association or these officers to prepare such a report. No permission was sought by the officers before going public with their personal views and suggestions on official matters, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter.
It is reiterated that the impugned report does not reflect the official views of CBDT/Ministry of Finance in any manner.
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CBDT takes further steps to ensure transparency in Tax Administration by bringing in concept of DIN

With a view to bringing greater transparency in the functioning of the tax-administration and improvement in service delivery, almost all notices and orders of Income Tax Department are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (CBDT) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as “communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.

In order to prevent such instances and to maintain proper audit trail of all communication, the CBDT has, vide Circular No.19/2019 dated 14.08.2019 laid down parameters specifying the manner in which any communication issued by any income-tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person will be dealt with. All such communication issued on or after the 1st of October, 2019 shall carry a computer-generated Document Identification Number (DIN) duly quoted in the body of such communication.

CBDT has also specified exceptional circumstances where the communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner / Director General of Income-Tax concerned. In cases where manual communication is required to be issued, the reason for issue of manual communication without DIN has to be specified alongwith the date of obtaining written approval of the Chief Commissioner / Director General of Income-Tax in a particular format. Any communication which is not in conformity with the prescribed guidelines shall be treated as invalid and shall be deemed to have never been issued. Further, CBDT has also laid down the timelines and procedure by which such communication issued manually will have to be regularised and intimated to the Principal Director General of Income-tax (Systems).

In addition to the above, in all pending assessment proceedings, where notices were issued manually, prior to issuance of the above referred Circular, all such cases would be identified and the notices so sent would be uploaded on ITBA by 31st October, 2019.

This is another step taken by CBDT towards better delivery of taxpayer services while ensuring accountability in official dealings.

13 AUG 2019

There have been reports in the media about Income Tax notices being issued to Durga Puja Committees in Kolkata recently. The reports also mention that Income Tax notices were sent to the Durga Puja Committee Forum in the last few weeks. It is unequivocally stated that the said reports are factually incorrect and are strongly denied. It is a fact that no notice was issued to the Durga Puja Committee Forum by the Department during this year.

However, as the Department had been getting information that several contractors who were doing work for the Puja committees were not paying due taxes, therefore notices under section 133(6) of the Income Tax Act, 1961 were issued in December, 2018 to about 30 committees, calling for details of tax deducted at source on payments made to contractors and event managers etc. engaged by the committees for the Puja events, including the TDS statement. This was part of an exercise carried out by the TDS wing of the Department to ensure that the contractors and event managers pay their due taxes in time. Many of the committees complied and furnished evidence of tax deducted at source as well as deposit of the same into the Government account.

It is also pertinent to state that several committees requested the Department to organise educative sessions to explain the provisions of TDS to the committees. Taking a cue from the same, one such outreach programme was organised on the 16th of July, 2019 for the Durga Puja Committees at their own request. Nearly eight (8) members of the Forum attended the outreach programme voluntarily and were educated about the provisions of TDS. Their doubts pertaining to TDS provisions were also clarified.

It is reiterated that the aforesaid exercise is in no manner whatsoever against the Puja Committees, but has been undertaken to ensure that the contractors and event managers pay their due taxes correctly within the stipulated time.