DTRTI NEWSLETTER Issue No.40/Chennai March 08, 2019

TRAINING NETWORK RELATED NEWS

While Shri Visakh, IRS, DCIT gave an insight into the Prohibition of Benami Property

Transactions Act, 1988, Smt. R. Malini, ITO, DTRTI unfolded the provisions relating to

Income tax Settlement Commission during the Induction Course for Direct Recruit ITIs

Shri S. Krishnamurthy, IRS, ACIT

conducting a workshop on PGBP during

the Induction course for DR Inspectors

Shri R.K. Ganesan, Inspector

delivered the vote of thanks during the special program on ASK

CONTENTS Training network related news

Topic for the week – ITBA-ITR Processing Instructions

From the Editor’s Desk – TDS obligation of purchaser of immovable property

Crossword Puzzle – Legal Phrases-5

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TOPIC FOR THE WEEK - ITBA-ITR PROCESSING INSTRUCTIONS ITBA-ITR Processing Instruction No.6 rolled out by DIT(Systems) with the prior

approval of Pr.DGIT (Systems) on Processing of Returns of AY 2017-18 and Issue

of notice for prima facie adjustment under 143(1)(a) (PFA notice)

With effect from AY 2017-18 amendments

have been done in the Act with regard to

processing of cases under section 143(1).

Provision of section 143(1D) has been

amended, as per which all the returns are

required to be processed. Section 241A

allowing withholding of refund

determined under section 143(1) in cases

where notice u/s.143(2) is issued, is also

introduced. ITBA functionality accordingly

has been modified/enhanced and

intimated to field formation vide ITBA

Processing Instruction No.5 dated

14.12.2018.

2. Further, provision of 143(1)(a) was

amended w.e.f 01.04.2017 as per which

certain adjustments on income or loss

submitted by assessee in ITR are

allowed. As per the proviso to the

section, no such adjustment is allowed

unless notice for such adjustment is

given to the assessee. The assessee is

allowed to submit response within a

period of 30 days of issue of notice. The

functionality for the same is provided

in System, the details of which are given

in following para.

3. (i) Notice for adjustment under

143(1)(a) in e-filed returns –

All E-filed ITRs pushed by CPC to AO for

processing either due to the fact that

a. the case was selected for scrutiny or

b. where taxpayer has claimed Foreign Tax

Credit

are required to be submitted to CPC with

necessary data entries in respect of

specified fields as described in ITBA

Processing Instruction No 3 dated

08/11/2017. Such cases will be examined

by CPC and notice to assessee for the

purpose of prima facie adjustment, if any,

will be given by CPC centrally in all such

cases. The AO is not required to issue

notice of adjustment in such cases. The

taxpayer will submit their reply

electronically through the e-filing portal

which will be considered by CPC before

final processing u/s 143(1)(a).

(ii) Since the returns of AY 2017-18

filed in FY 2017-18 are required to be

processed by 31.03.2019, it is

requested that any action pending with

AO for E-filed ITRs may be disposed off

on priority preferably before 28th Feb

2019 so that CPC has sufficient time to

process the cases under 143(1)(a).

(iii) Notice for adjustment under

section 143(1)(a) in paper returns -.

a. As per the process described in ITBA

Processing Instruction No 1 dated

30.03.2017, the data of paper ITR cases is

required to be entered in ITBA through

ITR module and submitted by AO to CPC.

b. Paper Returns for AY 2017-18 were

allowed only for certain categories of

assessee as per Rule 12. Non-Disclosure of

salary Income /any other Income for

which TDS is coming in 26AS, such paper

returns are primarily fall under the scope

of adjustments.

c. The CPC will analyze the data for the

purpose of adjustment under 143(1)(a)

and issue notice to assessee intimating

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him nature of adjustment to be made and

the notice of any prima facie adjustment to

taxpayer will contain the detail of

jurisdictional AO to which the assessee is

required to submit his response. The

notice to assessee will also be sent through

email, if the same is available. Sample of

the PFA notice is at Annexure on Page 5

of this Instruction.

d. The CPC will send an email to AOs on

their designation based email id to inform

that PFA notice has been issued along with

copy of the PFA notice in each case so that

the AO is aware of the nature of

adjustment/discrepancy in the ITR.

e. The complete details of such notices

issued by CPC is also available in ITBA in

MIS – ITR – PFA notice issued path:

ITBA—>ITR Processing Module—>

MIS—>Dashboard—>Time Barring

Paper Returns Pending for Response on

143(1)(a).

f. The return is caught under PFA will be

visible to AO in view RRR screen under the

return type as PFA for necessary action.

g. The description of the adjustment under

PFA are also available in view RRR – PFA

reasons by clicking relevant buttons.

h. The 26AS details will be available to AO

in 360o profile for analysis of case.

(iii) Action to be taken by AO after

response of taxpayer is received

Once the response of assessee is received,

the same is to be analysed by AO and

following actions can be taken.

A) E-filed Return

a. Taxpayer Agrees or Partially Agrees for

Adjustment at e-filing and submits revised

return. This is treated as a fresh ITR and

same rules will apply as far as PFA is

concerned and AO will follow the same

procedure for processing u/s 143(1).

b. Taxpayer disagrees for Adjustment at e-

filing. Response will be verified by CPC and

accordingly return will be processed with

or without adjustment as mentioned in

Para 3(i) above.

c. No response received within 30 days

from date of issue of notice. CPC will carry

out the adjustment and process the return

as mentioned in Para 3(i) above.

d. Return filed u/s 142(1) cannot be

revised and therefore, CPC will decide

based on response submitted by taxpayer

as mentioned in Para 3(i) above.

B) Paper Return

a. Response of PFA notice can be

submitted either with or without Revised

Return. Where justification is given by

taxpayer, the AO can either do correction

of data entry in ITR and ITR data

resubmitted to CPC on the basis of

response submitted by taxpayer to AO.

Where revised return is furnished within

the time limit under the Income Tax Act,

the same may be entered and submitted

for processing to CPC. The Original paper

ITR will be treated as closed in view of the

revised ITR filed. AO should consider the

data in the revised ITR and assure that the

taxpayer has included the income

proposed for prima facie adjustment or

has provided an acceptable explanation for

partial or non- inclusion. On the basis of

modified data or the revised return

submitted by AO the ITR will be processed.

Intimation to taxpayer will be issued by

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CPC as per the extant procedure.

b. If the assessing officer comes to

conclusion that no adjustment in the case

is warranted, he can click on the button

“No PFA” in Part A General and submit the

data to CPC. Based on AO’s request, the

CPC will not apply any rule for Prima Facie

Adjustment and return will be processed.

The process described in (a) & (b) can be

carried out simultaneously.

c. Issue PFA notice: If AO wishes to issue

the PFA notice the same can be done by

pressing the button “Issue PFA notice”

which is available at the bottom of screen

along with other buttons. As per provision

of Act, assessee is required to respond to

notice within 30 days of the date of issue

of notice, therefore, 30 days period will

come by default as period of compliance

by assessee. The AO is required to submit

the modified data or the revised return to

CPC again after obtaining the response

from the taxpayer as per process in para

(a) & (b).

d. If AO does not submit modified data or

the revised return as a consequence of

non-responsiveness of the taxpayer within

30 days of issue of notice, the return will

be processed with adjustments as

provided under section 143(1)(a) by CPC

on the basis of PFA notice issued.

4. As all the returns of AY 2017-18 are

required to be processed by 31.03.2019,

therefore,

a. All data of paper returns should be

submitted to CPC for processing by

28.02.2019 so that CPC can apply the rules

to identify cases for any PFA before

processing ITR.

b. The response of assessee to AO on the

notices issued under PFA should be

submitted to CPC expeditiously well before

time barring date.

c. If any paper ITR is not submitted to CPC

as on 28.02.2019, it will be the

responsibility of AO to issue PFA notice.

For all such cases CPC will process the ITR

as if the AO has completed the PFA notice

process and the data submitted is final

without the requirement of any

adjustment.

Training material including user manual,

help content and frequently asked

questions (FAQs) are available on the ITR

Module Home Page and on ITBA Portal

Online Training on ITBA. Users can refer

these in case of any issues.

5. Users are advised to contact helpdesk in

case of any issues in respect of the ITBA.

a. URL of helpdesk -

http://itbahelpdesk.incometax.net

b. Help desk number – 0120-2811200

c. Email ID –

helpdesk_messaging@incometax.gov.in

d. Help desk Timings – 8.30 A.M. – 7.30

P.M. (Monday to Friday)

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- 399

The learned will long (for more learning), when

they see that while it gives pleasure to themselves,

the world also derives pleasure from it

.

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LEARN THE SUBJECT THROUGH A PUZZLE-(LEGAL PHRASES-5)

1 2 3

4 5 6

7

8

9

10

11 12

13 14

15 16 17

18 19

20 21

22

23

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ACROSS:

3. In the matter of; concerning (2, 2)

4. Genuine, in good faith (4,4)

10. In absence; a legal proceeding

conducted without the presence of one

party (2, 8)

11. Reason or justification for existence (6,

5)

13. A prerogative writ of Supreme

Court to call for the records of the inferior

court or a body acting in a judicial or quasi

judicial capacity. An essential feature of a

writ of ______________ is that the control over

judicial or quasi-judicial tribunals or

bodies is exercised not in an appellate but

supervisory capacity (10)

18. In the matter of (2)

20. A matter not yet decided (3, 4)

21. It appears; it seems. A point is not

decided directly but may be inferred (6)

22. On equal footing; Simultaneously and

equally; with equal steps; that is to say

proceeding side by side at the same place

(4, 5)

23. A disability whereby a party is precluded from alleging or proving in legal

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proceedings that a fact is otherwise than it

has been made to appear by the matter

giving rise to that disability. It is often

described as a rule of evidence, but the

whole concept is viewed as a substantive

rule of law (8)

DOWN:

1. From within (2, 5)

2. Thus; in brackets after a word or

expression in a quoted passage. It

indicates that the quotation is exact and

the original is being faithfully reproduced

even though incorrect or apparently so (3)

3. Between; among themselves (5, 2)

5. As a matter of grace or favour (2, 6)

6. We command; a writ issue by a higher

court to a lower one, ordering that court or

related officials to perform some

administrative duty. Often used in the

context of legal oversight of government

agencies (8)

7. A mere assertion unsupported by

evidence (6, 6)

8. A retroactive law; after the fact; from a

thing done afterward (2, 4, 5)

9. Of the same mind; agreed (2, 4)

12. In bad faith (4, 4)

14. Everywhere (6)

15. In proportion (3, 4)

16. 16. The relationship of one or two persons

or things to the other, when facing or

situated opposite to each other; face to

face (3, 1, 3)

17. Until (7)

19. Leaf of a paper etc., numbered only on front (5)

Please e-mail your answers to

chennai.adg.dtrti@incometax.gov.in.

And the first correct entry will be rewarded. Answers will be published in the next issue

FROM THE EDITOR’S DESK TDS obligation of purchaser of immovable property

(compiled & provided by Smt. Shoba Kanakraj, ITO, DTRTI)

(A) If the seller is a resident (Sec 194IA)

Person responsible to deduct:

The purchaser(transferee) of an

immovable property (other than

agricultural land) (whether built up or

under construction) of value Rs.50 lakhs

or more has the responsibility under the

IT Act to deduct tax at 1 percent from the

sale consideration payable to the seller,

provided the seller is a Resident in India.

Due date for deposit of TDS :The

due date of payment of TDS on transfer of

Immovable property is on or before

30 days from the end of the month in

which deduction is made. (If payment is

accompanied by Income tax challan).

Duties of the deductor of buyer

(i) PAN of the buyer and the seller is

mandatory to make e payment of TDS on

sale of property. TAN (Tax deduction &

collection account number) is not needed.

(ii) To make an online payment of tax from

the e-tax payment option, the buyer is

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required to fill an online form 26QB . The

PAN of the buyer and the seller, details of

the property total consideration payable

and payment details must be furnished.

(iii)Payment options: TDS needs to be paid

on the amount paid/payable to the seller.

The buyer can make the payment using the

e -tax payment option. The tax payment

can be made via net banking portal or by

visiting authorized bank branches. Once

the payment is made an acknowledgement

number is generated. On entering the

acknowledgement details at a later date

one can generate the submitted Form

26QB for records.

Link for TDS payment can be made

by the buyer on the following link

https://onlineservices.tin.egovnsdl.com

/etaxnew/tdsnontds.jsp

Certificate of TDS (Form 16B): Once

tax payment is made Form 16B (TDS

certificate to be issued by the buyer to the

seller can be downloaded from the website

of Central processing cell of TDS(CPC-TDS)

at www.tdscpc.gov.in

If the seller is a Non resident (Section

195)

If the seller qualifies as non-

resident in India, not being a company,

during the relevant financial year, the

buyer is required to deduct TDS at

specified rate of 20% (plus applicable

surcharge and health and education cess)

in case of long-term capital gain (LTCG)

and 30% (plus applicable surcharge and

health and education cess) in case of short-

term capital gain (STCG).

Any immovable property held for a

period of more than 24 months is

classified as a long-term capital asset. In

case of a long-term capital asset, taxable

capital gain will be net sale proceeds less

indexed cost of acquisition (i.e. adjusted as

per cost of inflation index or CII) less

indexed cost of improvement.

The jurisdictional Assessing officer (ACIT/

ITO) can be approached by the seller to

calculate the taxable capital gain on sale of

immovable property and/or obtain a

lower or nil tax deduction certificate. To

obtain Tax Exemption Certificate / Lower

Tax Deduction Certificate under section

195 is the sole responsibility of NRI Seller.

If such certificate is not obtained the buyer

is supposed to deduct TDS on the entire

transaction value.

If the taxable amount of capital gain

is nil, there will be no TDS implications.

There are penal consequences if there is a

default in deposit of TDS. Hence the

importance of knowing the residential

status and ensuring the taxable amount of

capital gain is calculated accurately. In

addition to Nil or Lower deduction

certificate from the jurisdictional

Assessing officer, obtaining an affidavit-

cum-declaration for residential status and

taxable capital gain from the seller can be

considered.

As part of TDS compliance on

purchase of immovable property from a

non-resident, points to be noted by the

buyer:

i. Buyer should Obtain a Tax Deduction &

Collection Account Number (TAN) in

addition to his PAN. The sellers (NRI) PAN

is required. In case of non-availability of

PAN of the NRI, additional details of NRI

such as Tax Identification Number(TIN),

Permanent Address, Country of residence,

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Email and Contact details are needed to be

furnished in Form 27Q. The seller or any

person with a Special power of Attorney

from the seller, should be present at the

time of registration of the transaction.

ii. Deduct TDS at appropriate rate and

deposit TDS with the income-tax

authorities within seven days from the end

of the month in which the payment or

credit has been made.

iii. File Form 27Q (contains details of

payments made and TDS deducted on

payments made to NRI by the deductor)

within 31 days from the end of the quarter

(31st May for the quarter ending March) in

which the payment or credit has been

made.

iv. Issue Form 16A within 15 days from the

date of filing the withholding tax return.

इस I am directed to

May be sought

In accordance with the guidelines

Specimen

–

I am directed to forward herewith the

agenda for the meeting. इ

।

Financial approval may be sought from

the competent authority.

।

Please ensure proper arrangements are

made in accordance with the guidelines.

उ गई ।

A specimen of form is enclosed herewith. इ । ..

Shri T. N. Guruprasad, ITO and Shri R. Sundar, AO gave an overview of the functioning of

ASK Centres during the special program on ASK for AOs

Published by: Team DTRTI, Chennai