◆ The Congress has looted Rs 48,20,69,00,00,000 (nearly Rs 5 trillion) from the public in 70 years of its rule.
◆ That money could have been utilised for so many useful areas of security and development.
◆ Using this much amount, 24 INS Vikrant, 300 Rafale jets, and 1,000 Mangal Missions could have been made or purchased. But the country has to bear the cost of Congress’ corruption, and it lagged behind in the race of progress.
◆ Keeping the whole 70 years aside, if we only look at the last tenure of 2004-14, it was a ‘Lost Decade.
◆ This was only the “trailer” of Congress’s corruption, the “movie” is still not over.

In a significant blow to Congress, the Income Tax Department has issued a notice of around Rs 1,700 crore to the party, compounding its financial concerns ahead of the 2024 Lok Sabha elections.

■ This development comes following the Delhi High Court’s dismissal of the party’s petition contesting reassessment proceedings for four assessment years.
■ The fresh demand covers assessment years 2017-18 to 2020-21 and includes penalties and interest.
■ The Congress is currently awaiting the reassessment of its income for three additional assessment years, with the deadline set for Sunday.
■ The tax department has already recovered Rs 135 crore from Congress bank accounts in Delhi, pertaining to tax arrears and interests for the assessment year 2018-19. This action was taken after the party was denied exemption due to failure to meet prescribed conditions.
■ On Thursday, the Delhi High Court dismissed Congress’s petitions contesting the income tax reassessment proceedings for the financial years 2017-18 to 2020-21.
■ The court indicated that both Congress and the Income Tax Department were in agreement regarding the conclusion of the challenge presented in these petitions, aligning with the court’s previous decision on the party’s challenge to reassessment proceedings for the years 2014-2017.
■ The court on March 22 had rejected Congress’s pleas contesting tax reassessment proceedings for the assessment years 2014-15, 2015-16, and 2016-17.

However, it left open the question of whether the asserted delay in commencing proceedings would have a detrimental impact on the assessment itself, to be addressed at a later stage.

The Securities and Exchange Board of India (SEBI) has put forward two proposed exemptions to the additional disclosure framework for foreign portfolio investors (FPIs).

• This move aims to ease regulatory compliance burden on FPIs and encourage foreign investments in the Indian capital markets.

The proposed exemptions include

• allowing FPIs to avoid disclosing the total number of voting rights held in listed Indian companies on a quarterly basis,
• as well as exempting them from providing a consolidated statement of their offshore funds that invest in India.

Currently, FPIs are required to make these disclosures as part of SEBI’s regulations pertaining to FPIs. However, SEBI believes these requirements may be burdensome and increase compliance costs for FPIs without significant benefits in terms of risk assessment or monitoring.

The proposed exemptions are part of SEBI’s ongoing efforts to streamline regulations and make them more investor-friendly.

SEBI believes that reducing the disclosure burden will attract more foreign investments, enhance market liquidity, and facilitate ease of doing business in India.

These proposals are open for public comments until a specified date, following which SEBI will evaluate the feedback and finalize the amendments to the regulations.

In summary, SEBI has proposed two exemptions to the additional disclosure framework for foreign portfolio investors, aiming to reduce compliance burdens and attract more foreign investments in the Indian capital markets.

1. The Central Board of Direct Taxes ( CBDT ) Chairman, Nitin Gupta, has announced that, the income tax department will autonomously clear pending petty tax demands for approximately 80 lakh taxpayers.
2. This initiative follows the government’s proposal, as outlined in the interim Budget, to withdraw direct tax demands up to Rs 25,000 for the fiscal year 2009-10 and up to Rs 10,000 for the financial years 2010-11 to 2014-15.
3. CBDT Chairman assured that the income tax department would erase these demands, relieving taxpayers of any action. The process is designed to be non-adverse to the assessee, and taxpayers won’t be contacted regarding this matter. However, details of the demands will be available on the individual taxpayers’ e-filing portal for review. If any issues arise, the department will address them promptly.
4. He highlighted that the CBDT would issue a “speaking order” to explain the process comprehensively. If taxpayers encounter problems related to demand cases, the department will address rectifications, pending appeals, or refund issues.
5. Approximately 80 lakh taxpayers are expected to benefit from this measure, involving an amount of about Rs 3,500 crore. The base figure of the demand, irrespective of the interest accumulated over the years, would be considered in determining eligibility for this initiative.

Introduction:
1. In my earlier posts, I have already mentioned about the introduction of clause (h) in Sec 43B of the Income Tax Act vide Finance Act 2023, which provides a deduction of the sum payable to Micro Enterprise or Small Enterprise (“MSME”) otherwise allowable only on a payment basis.

2. As per this amendment, any sum payable by an assessee to MSME supplier beyond the time limit specified in section 15 of the Micro Small and Medium Enterprises Development Act, 2006 (“MSMED Act”) shall be allowed as a deduction in the year in which actual payment has been made.

3. If a buyer is entering into an agreement with an MSME supplier, the due date of payment cannot exceed 45 days from the date of actual delivery of goods or rendering of services as the case may be. Where there is no written agreement, the due date will be the 16th day of actual delivery.

Some more important points to remember:

1. As per O.M. 5/2(2)/2021-E/P & G/Policy dated 02-07-2021, wholesale and retail trader are entitled for Udyam registration only for the benefit of Priority Sector Lending only. So, purchase from traders would be outside the purview of these amendments.

2. In case any defect in goods or deficiency in service is noticed, then an objection in writing should be made within 15 days. Date of removable of objection by the vendor should also be kept in record as counting of due date will start from this date.

3. In Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. (unit2) & Anr. (2003) 6 SCC 401, Hon. Supreme Court has held that the MSMED Act is a special act and overrides any general act like the Arbitration Act. It further held that if the supplier on the date of transaction is not holding the registration/memorandum and is not covered under the MSMED Act, it can’t claim benefits with subsequent registration. Thus, status of the supplier has to be checked on the date of transaction.

4. As per the memorandum No. No.2(18)/2007-MSME(pol), dt. 26-08-2008, it is not only enough to obtain Udyam Registration but necessary to print the said number on the tax and other invoices and letter heads etc. along with GST number and also include a declaration to the effect of its validity similar to that of declaration under the GST law.

5. As per section 2(e) of MSMED Act, 2006 “enterprise” means an industrial undertaking or a business concern or any other establishment, by whatever name called. Thus an individual carrying out a business without an office may not classify as a MSME.

Team- Intellex Strategic Consulting Private Limited
www.startupstreets.com, www.intellexCFO.com, www.intellexconsulting.com, www.growfranchisees.com

According to the Income Tax Appellate Tribunal (ITAT), expenses incurred by companies for Employee Stock Ownership Plan (ESOP) compensation are allowable as expenses. The ITAT ruled that these expenses are incurred for the purpose of retaining talent and staff for the benefit of the company.

ESOPs are a form of compensation commonly used by companies to incentivize and retain their employees. Under an ESOP, employees are granted the option to purchase company shares at a predetermined price. When employees exercise these options, the company incurs an expense related to the difference between the market price and the exercise price of the shares.

The ITAT’s decision implies that companies can treat these ESOP compensation expenses as a deductible expense while calculating their taxable income. The rationale behind this ruling is that such expenses are necessary for retaining talented employees, which ultimately benefits the company.

This decision by the ITAT provides clarification and affirms the tax deductibility of ESOP compensation expenses. It recognizes the importance of ESOPs in attracting and retaining skilled employees, thereby motivating companies to implement such schemes.

1) Don’t avoid the receipt of the SCN. If such notice is being served, there is no point in avoiding receiving it. First, it has to be received and then contested/replied. A non-receipt is considered a service.

2) If the service of notice is time barred, it could be suitably replied with substantiating evidence.

3) You can challenge the validity and legality of SCN served on you on the basis of facts, time, or even jurisdiction.

4) SCN is always issued in writing. There is nothing like a verbal GST notice.

5) SCN must mention amount demanded any SCN without amount is not valid. Also, the amount of the proposed penalty should be mentioned.

6) Order passed cannot be more than the amount specified in Notice.

7) Even where you have submitted a detailed and convincing reply to SCN, you should seek the option of personal hearing and carve to alter or amend or modify your reply to show cause at any stage during adjudication proceedings.

I hope this small post will help you.

The Gujarat High Court recently made a significant ruling stating that the issuance of an Income Tax Section 148 reopening notice in the name of a deceased person is illegal. The case in question bears the name “Late Madhuben Kantilal Patel Through Legal Heir And Son Kalpeshbhai Kantilal Patel Vs Union Of India.”

The court examined the matter and subsequently upheld that the reopening notice, which was issued by the Income Tax Department, was unlawful in the context of a deceased individual. The legal heirs and son of Madhuben Kantilal Patel filed the case against the Union of India, seeking a declaration that the reopening notice is invalid under such circumstances.

This ruling by the Gujarat High Court bolsters the legal protection for the rights of deceased individuals, ensuring that they cannot be subjected to taxation procedures. The court’s decision emphasizes the need for proper legal processes and respects the rights of the deceased and their legal heirs.

It is worth noting that this particular case and ruling pertain to the Gujarat jurisdiction. The legal principles established in this ruling may have implications for similar cases in other regions of India, but specific circumstances and jurisdictional differences should be considered.

In summary, the Gujarat High Court has declared that the issuance of an Income Tax Section 148 reopening notice in the name of a deceased individual is illegal. The case, involving the legal heirs and son of Madhuben Kantilal Patel, serves as an important precedent in protecting the rights of deceased individuals and their legal heirs in matters related to taxation.

Before amendment in Finance Bill 2024
TCS needs to be collected by Authorized Deal who receive amount for remittance under L.R. Scheme of R.B.I. @ 20% irrespective of amount. Similarly Tour Operators also have to collect TCS @ 20% on Foreign Tours Irrespective of amount. If remittance is for the purpose of education or medical treatment, then TCS is 5% if payment is upto Rs.7 Lakhs in a financial yer.

Now after amendment in Finance Bill 2024
TCS by Authorized Dealer under LRS Scheme:
Now there would be no TCS collected by A.D. Under LRS Scheme if payment is less than 7 Lakhs in a financial year. TCS would be 5% if amount is amount exceeds 7 Lakhs in a financial year and purpose of foreign remittance is education or medical treatment. If any other purpose and amount is more than 7 lakhs in a financial year, then TCS would be 20%.

TCS on Overseas Tour Packages
Now TCS would be 5% for Foreign Tour Operation up to 7 Lakhs. And TCS would be 20% if more than 7 Lakhs in a financial year.

Changes in ISD Definition
‘(61) “Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9, for or on behalf of distinct persons referred to in section 25, and liable to distribute the input tax credit in respect of such invoices in the manner provided in section 20;’

Manner of distribution of credit by Input Service Distributor.
“20. (1) Any office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services
liable to tax under sub-section (3) or sub-section (4) of section 9, for or on behalf of distinct persons referred to in section 25, shall be required to be registered as Input
Service Distributor under clause (viii) of section 24 and shall distribute the input tax credit in respect of such invoices.

(2) The Input Service Distributor shall distribute
the credit of central tax or integrated tax charged on
invoices received by him, including the credit of central
or integrated tax in respect of services subject to levy of tax under sub-section (3) or sub-section (4) of section 9 paid by a distinct person registered in the same State as
the said Input Service Distributor, in such manner, within such time and subject to such restrictions and conditions as may be prescribed.

(3) The credit of central tax shall be distributed as central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit, in such manner as may be prescribed.”.

Insertion of new section 122A.
Penalty for failure to register certain machines used in manufacture of goods as per special procedure.

Regards

Income Tax amendments:
1. Time limit for tax incentives for eligible startups, units in IFSC and certain Sovereign Welfare and Pension Funds, expiring in March 2024, have been extended for one more year till 31.3.2025.

2. Petty Disputed Income Tax Demands upto Rs 25000 upto FY 2009-10 and of upto Rs 10,000 for FYs from 2010-11 to 2014-15, to be waived off by the Government. This is expected to benefit around 1 crore taxpayers.

3. The recent changes in TCS on LRS remittances and foreign tour packages announced in various press releases, have been incorporated in Legislative section 206C(1G), through amendments in the existing language of this section. There is no reduction in TCS from 20% to 5%.

4. The time limit for incorporation of Faceless Scheme for Income Tax Appellate Tribunals has been extended for one more year till 31.3.2025.

5. The threshold time limit for the benefit of reduced corporate tax rate u/s 115BAB of 15% plus surcharge, in case of a newly setup manufacturing Companies up to 31.3.2024, has unfortunately not been extended further. So new manufacturing Companies which are incorporated on or after 1.4.2024 will be taxed at 22% and not 15%, if they opt for the new regime.