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    Act RulesBills
    Rate of income-tax in case of companies - Budget 2017-18 - Income Tax Rates - For the Assessment Yea...
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    Firm income-tax rate continues unchanged, with surcharge for higher-income firms and marginal relief available.
    The rate of income-tax applicable to every firm continues at the same level as for the preceding assessment year for assessment year 2018-19. For firms with total income exceeding one crore rupees, a surcharge is levied at twelve per cent, and marginal relief is available where applicable.
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    Co-operative society tax rates remain unchanged for the assessment year; surcharge applies to higher incomes and marginal relief provided.
    Rates of income-tax for co-operative society taxpayers remain the same as in the prior assessment year under the First Schedule of the Finance Bill, 2017. A surcharge applies to societies with higher income and marginal relief is provided to mitigate surcharge impact at threshold points.
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    Income-tax rate structure revised for salaries, advance tax and special cases with senior citizen slabs and surcharge.
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    The statutory definition of supply under the Model GST Law comprises three categories: supplies for consideration in the course or furtherance of business (sale, transfer, barter, exchange, licence, rental, lease or disposal); importation of services regardless of consideration or business purpose; and specified supplies made without consideration as listed in Schedule I. Clause (a) targets domestic, consideration-based transactions; clause (b) treats importation of services as separately taxable; and clause (c) assimilates certain gratuitous transactions into the tax net via Schedule I.
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    Classification of floating vessels as immovable property may exclude their sale from GST law taxation.
    The tribunal held that ships and vessels afloat are not 'goods' but are akin to immovable property because they cannot be severed from the waters; ships are goods only before launch, during breaking up, or when specifically the subject of a sale. As immovable property lies outside the GST domain under the constitutional allocation, this classification raises the question whether GST would apply to sale or supply of floating vessels-a point pending higher judicial scrutiny.
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    Foreign tax credit conversion uses telegraphic transfer buying rate on the last day of preceding month.
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    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - Documents to be furnished for availing FTC
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    Foreign Tax Credit documentation: verified income statement plus certificate and payment or deduction proof to claim credit.
    Foreign Tax Credit eligibility requires a verified statement of foreign income and foreign tax paid in the prescribed form, plus a certificate or statement specifying the nature of the income and tax deducted or paid issued by the foreign tax authority, the person who deducted the tax, or signed by the taxpayer, accompanied by a tax challan or online payment acknowledgement for payments and proof of deduction where tax was withheld.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) in case of MAT/ AMT
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    Foreign tax credit allowed against MAT/AMT like normal tax, but any excess over normal provisions is ignored.
    Foreign tax credit under Rule 128 of the Income tax Rules, 1962, is allowable against tax payable under MAT or AMT in the same manner as under the normal provisions; any foreign tax credit available against MAT/AMT that exceeds the credit allowable under normal provisions is ignored when computing MAT/AMT credit.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - Lower of the tax payable under the Act and DTAA
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    Foreign tax credit: credit limited to lower of domestic tax and foreign tax; treaty excess is disregarded.
    Rule 128 of the Income tax Rules, 1962 limits Foreign Tax Credit to the lesser of domestic tax chargeable on the doubly taxed income and the foreign tax actually paid, and directs that any foreign tax paid in excess of the tax payable under the applicable DTAA be ignored for credit computation.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - Cases in which no FTC benefit would be available
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    Foreign Tax Credit denial: no credit for domestic interest, fees or penalties and for disputed foreign taxes.
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    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) shall be allowed if evidence & undertaking furnished within 6 months ...
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    Foreign Tax Credit requires evidence of settlement, proof of payment and an undertaking within six months of dispute resolution.
    Foreign Tax Credit (FTC) is allowed for disputed foreign tax only if, within six months from the end of the month in which the dispute is finally settled, the assessee furnishes evidence of settlement, evidence that the tax liability has been discharged by the assessee, and an undertaking that no refund in respect of that amount has been or will be claimed.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - Meaning of foreign tax
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    Foreign tax definition determines FTC scope: DTAA-covered taxes apply, otherwise income-tax-type foreign levies qualify for credit.
    Definition of foreign tax for Foreign Tax Credit under Rule 128: where a DTAA exists, foreign tax is the tax covered by that DTAA; where no DTAA exists, foreign tax is the tax payable under the foreign country's law in the nature of income-tax as defined in the statutory explanation, including excess profits tax or business profits tax charged on profits by central or local authorities.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - Benefit on proportionate basis
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    Foreign tax credit proportionate allocation ensures foreign tax relief is apportioned when income is taxed across multiple years.
    Foreign tax credit under the Income tax Rules operates on a proportionate allocation principle when the same income is taxable in more than one year; the credit entitlement must be apportioned across the years in which the income is offered to tax so that relief for foreign taxes corresponds to the portion of income taxed in each year.
    Act RulesIncome Tax
    Foreign Tax Credit (‘FTC’) - FTC benefit in the year in which income offered to tax
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    Foreign tax credit allowed when foreign tax corresponds to income offered or assessed to tax in India in the same year.
    Foreign tax credit is available to Indian residents for tax paid in a foreign country or specified territory, and is allowed only in the year when the corresponding income is offered to tax or assessed to tax in India, creating a temporal link between domestic taxation of the income and recognition of the foreign tax credit.

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      Income Tax

      Validity of Notices / orders without DIN. The Critical Role of Procedural Compliance in Tax Administration: Analysis of a Supreme Court Stay

      19 January, 2024

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      Deciphering Legal Judgments: A Comprehensive Analysis of Case Law

      Reported as:

      2024 (1) TMI 276 - SC Order

      This legal commentary will delve into the intricate layers of a legal dispute involving the Income Tax Appellate Tribunal's (ITAT) order [2022 (11) TMI 34 - ITAT DELHI], its confirmation by the High Court [2023 (4) TMI 579 - DELHI HIGH COURT], and the subsequent stay granted by the Supreme Court. The core issue revolves around the non-compliance with the mandatory requirement of quoting the Document Identification Number (DIN) in an assessment order issued by the tax authorities.

      Legal Background and Tribunal's Decision The appeal in question, as per the records, was preferred against an order dated 15th October 2019, framed under sections 147/144C(13)/143(3) of the Income-tax Act 1961 (the Act)​​. The focal point of the appellant's challenge was the non-quoting of the mandatory DIN in the final assessment order, as mandated by the Central Board of Direct Taxes (CBDT) Circular No. 19/2019 dated 14th August 2019​​. The ITAT, after scrutinizing the records, concluded that the final assessment order was indeed passed without quoting the DIN, a fact which was undisputed​​.

      The Circular in question explicitly required that any communication from the tax authorities, including assessment orders, must bear a computer-generated DIN from 1st October 2019 onwards. This measure was instituted to ensure an audit trail and transparency in tax administration communications. The Circular allowed manual issuance of such communications only under exceptional circumstances, detailed within the Circular, and with the necessary approval from relevant authorities. Moreover, any communication not adhering to these stipulations was deemed invalid and treated as if it had never been issued​​.

      In the present case, the ITAT [2022 (11) TMI 34 - ITAT DELHI] found the assessment order non-compliant with these stipulations, as it lacked the mandatory DIN and did not fall under the outlined exceptional circumstances. Consequently, the Tribunal adjudicated in favor of the assessee, declaring the impugned order invalid and treating it as null and void​​.

      High Court's Confirmation of ITAT's Decision The High Court [2023 (4) TMI 579 - DELHI HIGH COURT], upon hearing the appeal against the Tribunal's decision, focused on whether the absence of a DIN could render the assessment order legally unsustainable. The High Court acknowledged the mandatory nature of the DIN requirement post-1st October 2019 and recognized the purpose of this mandate as maintaining a proper audit trail for tax administration communications​​.

      It was noted that the appellant/revenue failed to demonstrate any 'exceptional circumstances' that could justify the non-allocation of DIN, as set out in the CBDT Circular. The Court also referred to Paragraph 4 of the Circular, which explicitly states that any communication not conforming to the specified requirements shall be treated as invalid and deemed never to have been issued​​.

      Thus, the High Court concurred with the Tribunal's view, finding no substantial question of law that warranted interference. The Court upheld the decision of the Tribunal, effectively confirming that the final assessment order dated 15th October 2019 was unsustainable due to non-compliance with the DIN requirement​​.

      Supreme Court's Intervention The Supreme Court, upon hearing the counsel for the petitioner and the respondent, granted an interim stay on the impugned order dated 20th March 2023, as well as the order of the ITAT dated 19th September 2022​​. This stay indicates the Supreme Court's intention to examine the matter further, potentially exploring legal nuances not adequately addressed in the earlier proceedings.

      Legal Analysis This case presents a compelling example of the intersection of procedural compliance and substantive legal adjudication. The central issue is the rigid adherence to procedural requirements (DIN allocation) and its legal implications on the validity of an assessment order. This scenario underscores the principle that procedural law, often seen as secondary to substantive law, can critically determine the fate of a case. The mandatory requirement of DIN allocation was instituted for greater transparency and accountability in tax administration. Its non-compliance, as this case demonstrates, can lead to the invalidation of otherwise substantive administrative actions.

      The case also highlights the evolving nature of tax administration in the digital era, emphasizing the increasing reliance on technology for governance and accountability. The DIN requirement, a product of this technological integration, represents a shift towards more transparent and traceable administrative processes.

      Conclusion and Further Legal Implications The final outcome of this case, pending the Supreme Court's detailed analysis, will have significant implications for tax administration and the interpretation of procedural requirements in legal proceedings. A decision that upholds the stringent necessity of procedural compliance, like DIN allocation, would reaffirm the principle that procedures are not mere formalities but essential elements that uphold the integrity and transparency of administrative processes.

       

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      2024 (1) TMI 276 - SC Order

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