LATEST CHANGES IN INCOME TAX RULES

[Mr. M. GOVINDARAJAN]

 The Central Board of Direct Taxes recently issued the following Notifications-

• Notification No. 37/2023 - G.S.R. 432 (E), dated 12.06.2023 - The Income Tax (Ninth Amendment) Rules, 2023;
• Notification No. 38/2023 - S.O. 2569 (E), dated 12.06.2023 - e-advance ruling (amendment) Scheme, 2023;
• Notification No. 39/2023 - S.O. 2571(E), dated 12.06.2023 - declaration of cost inflation index;
• Notification No. 40/2023 - S.O. 2624 (E), dated14.06.2023 - effect to the e-Appeals Scheme, 2023;
• Notification No. 41/2023 - S.O. 2625 (E), dated 14.06.2023 - amendment to Notification No.359, dated 30.03.1988;
• Notification No. 42/2023 - S.O. 2661 (E), dated 15.06.2023 - Designation of Special Court in the State of Jharkhand.

Notification No. 37/2023

Vide this Notification the Board amended the Income Tax Rules, 1962 which came into effect from 12.06.2023.  The amendment Rules substituted Rule 44 (E) for the existing one and also brought amendment to Rule 44F.  The amendment also substituted some existing forms.

The newly substituted Rule 44(E) prescribes as to who will verify the application in Form No. 34C, 34D, 34DA, 34E and 34EA and the statements and documents accompanying the said Forms, for-

• Individual;
• Hindu Undivided Family;
• Company;
• Firm;
• Association of persons; and
• Another person.

The newly substituted Rule 44F, after substituting the word ‘Board’ for the term ‘Authority’, provides that the copy of the advance ruling pronounced by the Board to be sent to the applicant and to the Commissioner having jurisdiction over his case, shall be certified to be true copy thereof by the Commissioner or Deputy Commissioner, Board for Advance Rulings, as the case may be.

The following forms are substituted by new forms by the amendment-

• Form No 34C - Rule 44E - Form of application by a non-resident applicant for obtaining an advance ruling under section 245Q(1) of the Income-tax Act, 1961;
• Form No. 34D - Rule 44E - Form of application by a resident applicant for seeking an advance ruling in relation to a transaction undertaken or proposed to be undertaken by him with a non-resident, under section 245Q(1) of the Income-tax Act, 1961;
• Form No. 34DA - Rule 44E -  Form of application by a resident applicant for seeking an advance ruling, in relation to a transaction which has been undertaken or is proposed to be undertaken, under section 245Q(1) of the Income-tax Act, 1961;
• Form No. 34E - Rule 44E - Form of application by a resident falling within such class or category of persons as notified by Central Government for obtaining an advance ruling under section 245Q(1) of the Income-tax Act, 1961;
• Form No. 34EA  - Rule 44E - Form of application by a person for obtaining an advance ruling under section 245Q(1) of the Income-tax.

Notification No. 38/2023

This notification brought amendment to e-advance ruling scheme, 2022.  This notification came into effect from 12.06.2023.  Para 6 of the scheme provides for e-advance ruling scheme.  The notification brought amendment for para 6 (c)(iv) by substituting a new sub para.  The newly substituted para 6(c)(iv) provides that the Board for Advance Rulings shall, after considering the response as referred to in clause (iii), and after providing an opportunity of being heard (through video conferencing or video telephony) under sub-section (5) of section 245R of the Act on the request of the applicant, subject to the provisions of clause (v), if applicable, pronounce the advance ruling on the question specified in the application and send a copy thereof to the applicant and the authority to whom the reference has been made.

Clause (v) provides that if the Members of a Board for Advance Rulings differ in opinion on any point or points, the Board for Advance Rulings shall refer such point or points to the Principal Chief Commissioner of Income-tax (International Taxation), who shall nominate one Member from any other Board for Advance Rulings and such point or points shall be decided according to the opinion of the majority of the Members.

Notification No. 39/2023

This notification made an insertion for the cost inflation index for the year 2023-24.  The cost inflation index for the financial year 2023 - 24 is 348.  This will come into effect from 01.04.2024 and apply to assessment year 2024 - 25 and subsequent assessment years.

Notification No.40/2023

Vide this Notification the Central Board of Direct Taxes specified the Additional Income Tax Officer/Joint Income Tax Officer as Income Tax Authorities for each headquarter viz. Hyderabad (4 appellate authorities), Vishakapatnam, Bhubaneswar,  Patna, Ranchi, Ahmadabad, Surat, Vadodara, Aurangabad, Pune, Nagpur, Thane, Jaipur, Udaipur, Jodhpur, Chennai, Madurai, Coimbatore, Kochi, Trivandraum, Lucknow, Varanasi, Pragyaraj, Noida, Agra, Kanpur, Kolkata, Guwahati, Kolkata, Siliguri, Bengaluru, Panaji, Mysore, Gwalior, Indore, Bhopal, Raipur, Gurugram, Panchkula, Faridabad, Ludhiana, Chandigarh, Delhi, Mumbai,   The said notification came into effect from 14.06.2023.

Notification No. 41/2023

Vide this Notification the Central Board of Direct Taxes amended the Notification No.7816, dated 30.03.1988.  This notification notified the sub ordinate officers and the controlling officers to such subordinate officers.  This notification added some officers to this list.  Clause (ba) has been newly inserted and clause © has been substituted for a new clause.

The newly inserted clause (ba) provides that (ba) Joint Commissioners of Income-tax (Appeals) or Additional Commissioners of Income-tax (Appeals) shall be subordinate to the Chief Commissioners of Income-tax within whose jurisdiction they perform their functions.

The newly substituted clause (c) provides that Additional Directors or Additional Commissioners or Joint Directors or Joint Commissioners of Income-tax shall be subordinate to the Directors or Commissioners of Income-tax within whose jurisdiction they perform their functions or other income-tax authority under whom they are appointed to work and to any other income-tax authority to whom the Director or the Commissioner of the Income-tax, as the case may be, or other income-tax authority is subordinate. 

This notification also substituted clause (g) for a new clause which provides that nothing in this notification shall have the effect of-

•  requiring any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or
• interfering with the discretion of the Commissioner of Income-tax (Appeals) or Additional Commissioners of Income-tax (Appeals) or Joint Commissioners of Income-tax (Appeals).

Notification No. 42/2023

Vide this Notification the Central Government, in consultation with Chief Justice of the High Court of Jharkhand designated the following Courts in Jharkhand as Special Courts for the purposes of Section 280A of the Income Tax Act, 1961 and Section 84 of Black Money (Undisclosed Foreign Income and Assets) and imposition of Tax Act, 2015-

• Special Court (Economic Offences), Ranchi for the areas - Ranchi, Lohardaga, Gumla, Simdega, Khunti, Palamau, Latehar, and Garhwa.
• Special Court (Economic Offences), Jamshedpur for the areas - East Singhbhum, West Singhbhum, and Seraikella Kharsawan.
• Special Court (Economic Offences), Dhanbad for the areas - Dhanbad, Bokaro, Giridih, Hazaribagh, Ramgarh, Koderma, Chatra, Dumka, Deoghar, Godda, Pakur, Jamtara, and Sahebganj.