The Nomura India Business Resumption Index inched up to 73.7 for the week ending August 16, over the previous week’s reading of 72.3. This came after the NIBRI, a weekly tracker of the pace at which economic activity normalises, stagnated at the 70-mark for three weeks through July.
The economy sustained an increasing pace of recovery through August so far after a prolonged period of plateauing trends in July, according to a Nomura note on Monday.
The Nomura India Business Resumption Index (NIBRI) inched up to 73.7 for the week ending August 16, over the previous week’s reading of 72.3.
This came after the NIBRI, a weekly tracker of the pace at which economic activity normalises, stagnated at the 70 mark for three weeks through July.
While this indicated an improved momentum in August over the moderation in July, the rising spread of infections continued to hinder recovery.
“Nevertheless, the recovery is uneven, and the risk of reversal in momentum from a second wave of COVID-19 cases joining a ‘rolling wave’ in traditional safer states (in the south and the east) remains high,” the note said.
Mobility indicators such as the Google workplace and retail and recreation mobility data resumed an uptrend in August after a prolonged period of flat growth, Nomura said.
However, this was still materially below pre-pandemic levels, it added.
There was a steady pick up in the labour participation rate 42.2% as against 40.6% in the previous week.
On the other hand, the unemployment rate showed a steady uptrend rising to 9.1% compared to the 8.2% recorded last week, which grew from 7.2% reported the week before that.
The deterioration was spread both over rural and urban areas, the note said.
Power demand also showed a steady trend albeit in the opposite direction with a steep weekly contraction of 6.4% over the 0.8% contraction of the week earlier, it said.
Faceless e-assessment will have no human interface and it’s purpose will be to eliminate instances of “undesirable practices” on the part of tax officials.
The Central Board of Direct Taxes (CBDT) on Thursday revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. The Government notified that now, the e-Assessment scheme shall be called Faceless Assessment.
Now, the National e-Assessment Centre shall intimate the assessee for the conduct of faceless assessment in case wherein notice has been issued by AO.
The Board has also extended its scope to cover best judgment assessments.
E-Assessment was a roadway towards a paperless, faceless assessment stripping away at bureaucratic layers. E-Assessment was earlier tried and tested by the Income-tax Department, before going forth with the E-Assessment Scheme, 2019.
The Board notified that in the notification dated September 12, 2019, in the opening portion, for the word “E-assessment”, the words “Faceless Assessment” shall be substituted. The Board notified the procedure for the faceless assessment wherein the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment.
Promoting a transparent and fair tax regime, Prime Minister Narendra Modi unveiled ‘taxpayers’ charter’, enshrining rights of assesses in a statute under the Income tax law. With the launch of ‘Transparent Taxation — Honoring the Honest’ platform, Modi also unveiled faceless appeal and expanded the scope of faceless assessment, eliminating physical interface between taxpayers and tax authority.
Step wise process for Faceless Assessment, scope extended to cover best judgement assessment:
Introduction
The Central Board of Direct Taxes (CBDT) has revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. Now, e-assessment scheme shall be called Faceless Assessment.
The National e-Assessment Centre shall intimate the assessee for conduct of faceless assessment in case wherein notice has been issued by AO. The Board has also extended its scope to cover best judgment assessments.
What was the E-assessment Scheme, 2019?
Finance Minister Nirmala Sitharaman had announced the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019.
This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings. The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system.
The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E- assessment Scheme 2019 & gave directions for its implementation.
E-assessment Scheme, 2019 to be now called as “Faceless Assessment”
Step wise process for Faceless Assessment
By the Notification issued by CBDT on 13th August, 2020, “E-assessment” will be now called as “Faceless Assessment”. Faceless assessment shall be made as per the following procedure:-
Step 1 – Issue of Notice on Assessee
National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre
Step 2 – Case to be assigned to Assessment Unit
1.National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system
2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-
a. obtaining such further information, documents or evidence from the assesse or any other person
b. conducting of certain enquiry or verification by verification unit
c. seeking technical assistance from the technical unit
3. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit
4. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system
5. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system
6. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any.
Step 3 – Draft Assessment Order
1.National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-
a. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or
b. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or
c. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;
2. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-
a. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or
b. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;
3. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be
4. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit
5. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre
6. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be
7. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice
8. The National e-assessment Centre shall,-
a. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
b. in any other case, send the response received from the assessee to the assessment unit;
9. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre
Step 4 – Final Order and Completion of Assessment
The National e-assessment Centre shall, upon receiving the revised draft assessment order:-
a. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or
b. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee
c. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3
2. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:
a. imposition of penalty
b. collection and recovery of demand
c. rectification of mistake;
d. giving effect to appellate orders
e. submission of remand report, or any other report to be furnished, or any representation to be made, or any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the case may be
f. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;
3. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.
Faceless assessment facility was extended to the entire country on 13th August, 2020, ending territorial jurisdiction and individual discretion, where an officer was the whole and sole to the assessee. Scrutiny will be allotted on a random basis. Assessment of a taxpayer in Delhi could well be carried by an officer sitting in Pune. It will put an end to needless litigation. Best Judgements Assessments under Section 144 will be also now covered under Faceless Assessment.
What is the meaning of Best Judgement Assessment?
The Best Judgment Assessment is a procedure under the Income Tax Act to comply with the principles of natural justice. Vide Section 144 of the Income Tax Act, 1961 the Assessing Officer is under an obligation to make an assessment of the total income or less to the best of his judgment in the following cases:
If the person fails to file a return required under section 139(1) and he has not filed a revised return.
If any person fails to comply with all the terms and conditions stipulated under a notice under section 142 or fails to comply with the directions requiring him to get his accounts audited in terms of section 142(2A).
If any person, after having filed a return fails to comply with all the terms of a notice under section 143(2) requiring his presence or production of evidence and documents; or
If the Assessing officer is not satisfied about the correctness and the completion of the accounts of the assessee if no method of accounting has been regularly employed by the assessee.
While Faceless Assessment and Taxpayers Charter came in force already, Faceless Appeal will be available from September 25, 2020. Under the Faceless Appeals system introduced by the government, appeals will be randomly allotted to any officer across the country and the identity of the officer deciding the appeal will remain unknown. The decisions will be team-based.
Very Important update for Charitable Trusts and Exempt Institution registered under section 80G, 12A or section 12AA : New – Fresh Registration Required : Last Date 31.12.2020
All Charitable trusts and exempt institution which are already registered under section 80G, 12A or section 12AA of Income Tax Act, 1961 will now be required to obtain FRESH REGISTRATION by December 31, 2020.
Provisions of registration under section 80G, 12AA or section 12A will be redundant from 31st December, 2020 and a new section 12AB will come into force with effect from 01st January 2021.
All the existing registered trusts under the erstwhile section 80G, 12A or section 12AA would move to new provision section 12AB.
The new section 12AB proposes to change the registration process by prescribing the time frame for processing the application and validity of such a registration certificate so granted under the new section 12AB.
An order granting registration or approval shall be passed within 3 months of the application. Such registration or approval shall be valid for 5 years.
Similarly, charitable trusts and exempt institutions which already have Section 80G certificate will now be required to reapply for registration or approval by December 31, 2020.
Banks cannot open a current account for a customer, who has already availed himself of credit facilities from the banking system.
The Reserve Bank of India set new conditions for banks to open current accounts for large borrowers in order to strengthen credit discipline. Use of multiple operating accounts by borrowers—both current well as cash/overdraft accounts—has been observed to be prone to vitiating credit discipline, the RBI said its Statement on Developmental and Regulatory Policies on Thursday.
“The checks and balances put in place in the extant framework, for opening of current accounts, are found to be inadequate,” it said, adding that the central bank has revised its guidelines to bring in appropriate safeguards
The revised norms are also expected to bring in the requisite discipline in collective actions by creditors for speedier resolution of stress in the accounts of borrowers, it said.
The purpose of the revised guidelines is to ensure that borrowers route their payments to and from a current account with a bank that has the largest exposure to the borrower, instead of having multiple current accounts across banks.
Here are the revised guidelines:
Opening Current Accounts
For a borrower with an existing CC or OD Facility The bank cannot open a current account for the borrower and all transactions have to be routed through the cash credit or overdraft account.
For a borrower with No existing CC or OD Facility Banks can open a current account if the total exposure to the borrower is less than Rs 5 crore. As and when the exposure goes beyond Rs 5 crore, the borrower has to inform the bank and, thereafter, it will be governed differently.
Credit Facilities of Rs 5 Crore to Rs 50 Crore
Any lender can open a current account, while non-lending banks can only open a collection account.
Credit Facilities of more than Rs 50 Crore
Any lender can open a current account, while non-lending banks can only open a collection account. Credit Facilities of more than Rs 50 Crore Banks have been mandated to create an escrow mechanism and only the escrow-managing lender or agent can open the current account for the borrower.
The balances in such accounts cannot be used as a margin for availing any non-fund based credit facilities. While there is no prohibition on the amount or the number of credits in ‘collection accounts’, any debits will be limited to the purpose of remitting the proceeds to the escrow account.
The banks should not route any withdrawal transaction from term loans availed by the borrower through current accounts and, instead, funds from term loans should be remitted directly to the supplier of goods and services.
Expenses incurred by the borrower for day-to-day operations should be routed through the cash credit/overdraft account, if the borrower has one; else, it should be routed through a current account.
Conditions to avail CC Or OD Facility When a bank’s exposure to a borrower is less than 10% of Aggregate Banking System Exposure
The CC and OD facility can be availed but it can only be used for credits. Any debit transaction can only be to remit funds to the borrower’s CC or OD account held with a bank which has an exposure of 10% or more of the banking system’s total exposure to the borrower.
When a bank’s exposure to a borrower is more than 10% of Aggregate Banking System Exposure
Banks can provide the borrower with a CC/OD facility. If the borrower has availed loans from more than one bank and more than one bank has an exposure of 10%, the bank to which the funds are to be remitted may be decided mutually between the borrower and the banks.
All large borrowers that have a working capital facility bifurcated between a loan component and a cash credit component need to maintain the balances at individual banks in all cases, including consortium lending.
“The RBI has been concerned about diversion of funds. Therefore, the norm that RBI has put in place is that if a bank opens a current account, they receive a no-objection-certificate from the lending bank, so that the lending bank knows another current account is being opened for its loan customer,” said Rajiv Anand, executive director, Axis Bank.
These conditions have been put in place to bring in credit discipline and ensure that the issue if diversion of funds is much better managed than it is today, he said.
According to Ajay Shaw, partner, DSK Legal, the new conditions are aimed at ensuring that large borrowers do not use multiple accounts and route money to and from them.
“The RBI is insisting that all current accounts should be unified and for large borrowers there should be an escrow or trust and retention mechanism, with a waterfall, to ensure that there is a control of cash-flows.”
In an extreme case, if a borrower had an escrow account in a consortium loan and another lender is brought in, the borrower would then route all payments to the new lender and not to others, he said.
The RBI, according to Shaw, is trying to avoid these situations. “Banks will need to review all their current accounts and they have already begun informing their clients to close accounts and to maintain only one,” he said.
The Central Board of Direct Taxes (CBDT) on Wednesday (July 29) extended the deadline for filing income tax returns for 2018-19 fiscal till September 30 due to corona virus COVID-19 pandemic.
The Central Board of Direct Taxes (CBDT) on Wednesday (July 29) extended the deadline for filing income tax returns for 2018-19 fiscal till September 30 due to coronavirus COVID-19 pandemic.
“In view of the constraints due to the Covid pandemic & to further ease compliances for taxpayers, CBDT extends the due date for filing of Income Tax Returns for FY 2018-19 (AY 2019-20) from 31st July, 2020 to 30th September, 2020,” the Income Tax Department said in a tweet.
It is to be noted that this is the third extension given by the Centre to taxpayers to file both original and revised tax returns for 2018-19 fiscal.
In March, the Centre had extended the due date from March 31 to June 30 due to corona virus COVID-19 pandemic. Later in June, the date was again extended by a month till July 31.
If an individual fails to file the belated ITR, if due, by the deadline (i.e., September 30, 2020), then he/she will not be able to file the income tax return for the financial year 2018-19.
The CBDT has said that an individual can also file a revised ITR for FY2018-19 within this deadline.
The Central Board of Direct Taxes (CBDT) has issued refunds worth Rs 71,229 crore in more than 21.24 lakh cases upto 11th July, 2020, to help taxpayers with liquidity during COVID-19 pandemic, since the Government’s decision of 8th April, 2020 to issue pending income tax refunds at the earliest.
Income tax refunds amounting to Rs. 24,603 crore have been issued in 19.79 lakh cases to taxpayers and corporate tax refunds amounting to Rs. 46,626 crore in 1.45 lakh cases have been issued to taxpayers during COVID-19.
It is stated that the government has laid great emphasis on providing tax related services to the taxpayers without any hassles and is aware that during these difficult times of COVID-19 pandemic, many of the taxpayers are waiting to see that their tax demands and refunds reach finality as quickly as possible.
It is further emphasized that all the refund related cleaning up of the tax demands are being taken up on priority and is likely to be completed by 31st August, 2020.
Also, all applications for rectifications and for giving effect to appeal orders are to be uploaded on the ITBA.
It has been decided to do all the work of rectification and appeal effect on ITBA only.
It is reiterated that taxpayers, for quick processing of their refunds, should provide immediate response to the emails of I-T Department.
A quick response from the taxpayer in this regard would facilitate the I-T Department to process their refunds expeditiously.
Many taxpayers have submitted their responses electronically for rectification, appeal effects or tax credits. These are being attended to in a time bound manner.
All refunds have been issued online and directly into the bank accounts of the taxpayers.
-Through this one time relaxation scheme, ITR for FY 2014-15 to FY 2018-19 can be verified, on or before 30th September 2020. – All such verified ITRs shall be processed on or before 31st December 2020. – ITRs can be verified digitally through EVC or by sending duly signed a copy to CPC Bangalore.
The Central Board of Direct Taxes (CBDT) on Monday notified the one-time relaxation for verification of tax return for the Assessment Year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20, which are pending due to non-filing of ITR- V form and processing of such returns.
It has been brought to the notice of CBDT that a large number of electronically filed ITR still remains pending with the Income-Tax Department for want of receipt of a valid ITR-V Form at CPC, Bengaluru from the taxpayers concerned.
In law, consequences of non-filing the ITR-V within the time allowed is significant as such a return is/can be declared Non-est in law. Thereafter, all the consequences for non-filing a tax return, as specified in the Income-tax Act,1961 follow.
“The CBDT, in the exercise of powers under section 119 of the Act, in case of returns for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 which were uploaded electronically by the taxpayer within the time allowed under section 139 of the Act and which have remained incomplete due to non-submission of ITR-V Form for verification, hereby permits verification of such returns either by sending a duly signed physical copy of ITR-V to CPC, Bengaluru through speed post or through EVC/OTP modes as listed in para 1 above.
Such verification process must be completed by 30.09.2020,” the circular said.
However, the circular clarified that this relaxation shall not apply in those cases, where during the intervening period, the Income Tax Department has already taken recourse to any other measure as specified in the Act for ensuring filing of a tax return by the taxpayer concerned after declaring the return as Non-est.
“CBDT also relaxes the time-frame for issuing the intimation as provided in the second proviso to sub-section (1) of Section 143 of the Act and directs that such returns shall be processed by 31.12.2020 and intimation of processing of such returns shall be sent to the taxpayer concerned as per the laid down procedure.
In refund cases, while determining the interest, provision of section 244A (2) of the Act would apply,” the circular said.
