MEMO - MEMORANDUM REGARDING DELEGATED LEGISLATION - Finance Bill, 2022

MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 4 seeks to amend section 10 of the Income-tax Act relating to incomes not included in total income. Clause (23C) of the said section provides for exemption to the income of certain entities. Sub-clause (b) of clause 4 of the Bill provides for amendment to the provisions of clause (23C) of section 10 of the Income-tax Act. Explanation 3 to the third proviso of clause (23C) of the said section provides for the form and manner in which the person referred to therein shall furnish a statement for the purposes of determining the amount of application under this proviso. It is proposed to amend the tenth proviso to the said clause (23C) of the said section. Clause (a) of the said proviso provides for form, manner and place for keeping and maintaining the books of account and other documents to be provided by rules. Clause (b) of the said proviso provides for the form and manner in which the report of such audit shall be signed and verified by the accountant and setting forth such particulars, as may be provided by rules. Clause 6 seeks to amend section 12A of the Income-tax Act relating to conditions for applicability of sections 11 and 12. Clause (b) of sub-section (1) of the said section 12A provides that the provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless, inter-alia, where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be provided by rules. It is proposed to substitute the said clause to provide that in addition to the condition requiring the trust or institutions, having income exceeding the maximum amount not chargeable to tax, to get their accounts audited, such trusts shall also be required to keep and maintain books of account and other documents in such form and manner and at such place, as may be provided by rules. Clause 31 seeks to amend section 115TD of the Income-tax Act relating to tax on accreted income. The proposed sub-section (2) of the said section provides that the accreted income for the purposes of sub-section (1) means the amount by which the aggregate fair market value of the total assets of the specified person, as on the specified date, exceeds the total liability of such specified person, computed in accordance with the method of valuation, as may be provided by rules. Clause 38 seeks to amend section 139 of the Income-tax Act relating to return of income. It is proposed to insert a new sub-section (8A) in the said section to provide that any person, whether or not he has furnished a return under sub-section (1), sub-section (4) or sub-section (5), for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income or the income of any other person in respect of which he is assessable under the Income-tax Act, for the previous year relevant to such assessment year, in the prescribed form, verified in the manner and setting forth such particulars as may be provided by rules, at any time within twenty-four months from the end of the relevant assessment year. Clause 54 seeks to insert a new section 170A of the Income-tax Act relating to effect of order of tribunal or court in respect of business reorgainsation. It is proposed to provide that notwithstanding anything to the contrary contained in section 139 in case of business reorganisation, where prior to the date of order of a High Court or tribunal or an adjudicating authority, as the case may be, any return of income had been furnished by the successor under the provisions of section 139 for any assessment year relevant to the previous year to which such order applies, such successor shall furnish a modified return within a period of six months in such form and manner as may be provided by rules. Clause 66 seeks to insert a new section 239A in the Income-tax Act relating to refund for denying liability to deduct tax in certain cases. The proposed new section provides that where under an agreement or other arrangement, in writing, the tax deductible on any income, other than interest, under section 195 is to be borne by the person by whom the income is payable, and such person claims that no tax was required to be deducted on such income, he may file an application before the Assessing Officer for refund of such tax deducted and such application shall be filed by such person only after having paid such tax to the credit of the Central Government within a period of thirty days from the date of payment of such tax, in such form and manner as may be provided by rules. Indirect Taxes Clause 100 seeks to amend clause (c) of sub-section (2) of section 29 of the Central Goods and Services Tax Act so as to provide by rules continuous tax periods for which return has not been furnished, which would make a registration liable for cancellation, in respect of any registered person, other than a person specified in clause (b) thereof. Clause 103 seeks to substitute a new section for section 38 of the Central Goods and Services Tax Act. Sub-section (1) seeks to empower the Central Government to make rules to specify other supplies as well as the manner, time, conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement and to do away with two-way communication process in return filing. Clause 105 seeks to substitute a new section for section 41 of the Central Goods and Services Tax Act so as to do away with the concept of claim of eligible input tax credit on a provisional basis and to provide for availment of self-assessed input tax credit subject to such conditions and restrictions as may be provided by rules. Clause 109 seeks to amend section 49 of the Central Goods and Services Tax Act to insert sub-section (12) so as to empower the Central Government to make rules to specify maximum proportion of output tax liability which may be discharged through the electronic credit ledger. Clause 110 seeks to substitute a new sub-section for sub-section (3) of section 50 of the Central Goods and Services Tax Act so as to provide for levy of interest on input tax credit wrongly availed and utilised, and to provide by rules the manner of calculation of interest in such cases. 2. The matters in respect of which rules or regulations may be made or notifications or order may be issued in accordance with the provisions of the Bill are matters of procedure and detail and it is not practicable to provide for them in the Bill itself. 3. The delegation of legislative power is, therefore, of a normal character.