WHY TO WASTE VALUABE TIME OF CBDT AND TAXPAYERS AND PRACTIONERS? - THERE APPEARS NO CHAGE IN THE NEW RULE 30 OF INCOME TAX RULES RELATIG TO PAYMENT OF TDS.

[C.A. DEV KUMAR KOTHARI]

Links:

Income-tax (First Amendment) Rules, 2010 issued vide Notification No. 9/2010 Dated 18-2-2010 has amended I.T.Rules vide S.O. 424 (E). Old Income Tax Rule 30.

Suspended amended Rule 30 which was earlier inserted by the Income-tax (Eighth Amendment) Rules, 2009 but its application was suspended vide Press release No. 402/92/2006-MC (14 of 2009), dated 30-6-2009,

Changes in law can be vital:

We know that while interpreting statutory provisions, even a punctuation mark can make difference. Therefore, if there is any amendment in section of Act or any relevant Rules, we need to examine what are the changes, how those changes make difference on provisions, how those changes are having a bearing on settled legal position, what future course of action is required and how the past pattern is changed etc. Therefore, a close study is required. It is felt that now-a-days, just to show that draftsmen of ministries and also rule making authorities are working very hard, new provisions are substituted in entirety without making any significant change in existing provision. The changes can be made effective by insertion or omission of few words, punctuation marks etc. However, instead of that simple exercise entire provision is substituted. This require close study to find out where any change is made. This has also impact on interpretation of law in future. Because once a provision is substituted, general notion is that there is change in legal position. Therefore, in future courts will also have to examine difference between old and new law. Therefore, at all level there will be more requirement of time to understand changes.

Beginning of the year 2010 with new Rules:

As usual issuing new rules is a regular phenomenon for the sCBDT. Some times for a minor change in any provision entire Rule is substituted, instead of making out amendment be way of insertion or omission. The First Amendment Rule issued in the year 2010 is relating to Rules for TDS.

New Rules:

Income-tax (First Amendment) Rules, 2010 issued vide Notification No. 9/2010 Dated 18-2-2010 has amended I.T.Rules vide S.O. 424 (E).

The amendment are in exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961). The amendment Rules say inter alia thas:

the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called Income-tax (First Amendment) Rules, 2010.

(2) They shall come into force from the 1st day of April, 2009.

2. In the Income-tax Rules, 1962, -

(a) for rules 30, 31 and 31A the following rules shall be substituted, namely:-

Scope of this write-up:

Scope of this write-up is restricted to Rule 30 relating to payment of TDS. In the table given blow in left large column the New Rule as notified by the above referred notification is reproduced and in the right large column the Rule as in force earlier is reproduced. In the third column remarks are given about changes if any. When any meaningful change or any change is not noticed, the word "same" is written in the remarks column.  

New Rule 30	Old Rule 30 which was in force**	Remarks
"Time and mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of section 192.	Time and mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of section 192.	Same
30. (1) All sums deducted in accordance with the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194LA, section 195, section 196A, section 196B, section 196C and section 196D shall be paid to the credit of the Central Government-	30. (1)All sums deducted in accordance with the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194LA, section 195, section 196A, section 196B, section 196C and section 196D shall be paid to the credit of the Central Government-	Same
(a) in the case of deduction by or on behalf of the Government, on the same day;	(a) in the case of deduction by or on behalf of the Government, on the same day;	same
(b) in the case of deduction by or on behalf of persons other than those mentioned in clause (a),-	(b) in the case of deduction by or on behalf of persons other than those mentioned in clause (a),-	same
(i) in respect of sums deducted in accordance with the provisions of section 193, section 194A, section 194C, section 194D, section 194E, section 194G, section 194H, section 194-I, section 194J, section 195, section 196A, section 196B, section 196C and section 196D	(i) in respect of sums deducted in accordance with the provisions of section 193, section 194A, section 194C, section 194D, section 194E, section 194G, section 194H, section 194-I, section 194J, section 195, section 196A, section 196B, section 196C and section 196D	same
(1) where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H or the income by way of rent referred to in section 194-I or the income by way of fees for professional or technical services referred to in section 194J or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, within two months of the expiration of the month in which that date falls;	(1) where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H or the income by way of rent referred to in section 194-I or the income by way of fees for professional or technical services referred to in section 194J or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, within two months of the expiration of the month in which that date falls;	same
(2) in any other case, within one week from the last day of the month in which the deduction is made; and	(2) in any other case, within one week from the last day of the month in which the deduction is made; and	same
(ii) in respect of sums deducted in accordance with the other provisions within one week from the last day of the month in which the deduction is made:	(ii) in respect of sums deducted in accordance with the other provisions within one week from the last day of the month in which the deduction is made :	same
Provided that the Assessing Officer may, in special cases, and with the approval of the Joint Commissioner-	Provided that the Assessing Officer may, in special cases, and with the approval of the Joint Commissioner-	same
(a) in cases falling under sub-clause (i), permit any person to pay the income-tax deducted from any income by way of interest, other than income by way of interest on securities or any income by way of insurance commission or any income by way of commission or brokerage referred to in section 194H quarterly on July 15, October 15, January 15 and April 15; and	(a) in cases falling under sub-clause (i), permit any person to pay the income-tax deducted from any income by way of interest, other than income by way of interest on securities or any income by way of insurance commission or any income by way of commission or brokerage referred to in section 194H quarterly on July 15, October 15, January 15 and April 15; and	same
(b) in cases falling under sub-clause (ii), permit an employer to pay income-tax deducted from any income chargeable under the head "Salaries" quarterly on June 15, September 15, December 15 and March 15.	(b) in cases falling under sub-clause(ii),permit an employer to pay income-tax deducted from any income chargeable under the head "Salaries" quarterly on June 15, September 15, December 15 and March 15.]	same
(1A) All sums paid under sub-section (1A) of section 192 shall be paid to the credit of the Central Government-	[(1A) All sums paid under sub-section (1A) of section 192 shall be paid to the credit of the Central Government-	same
(a) in the case of payment on behalf of the Government, on the same day;	(a)  in the case of payment on behalf of the Government, on the same day;	same
(b) in all other cases, within one week from the last day of each month on which the income-tax is due under sub-section (1B) of section 192.	(b)  in all other cases, within one week from the last day of each month on which the income-tax is due under sub-section (1B) of section 192.]	same
(2) The person responsible for making the deduction from any income chargeable under the head "Salaries" or, the person who pays tax, referred to in sub-section (1A) of section 192 or, in cases covered by sub-section (5) of section 192, the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorized bank accompanied by an income-tax challan :	(2) The person responsible for making the deduction from any income chargeable under the head "Salaries" or, [the person who pays tax, referred to in sub-section (1A) of section 192 or, in cases covered by sub-section (5) of section 192, the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank accompanied by an income-tax challan	same
Provided that where the deduction or payment, as the case may be, is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without the poduction of a challan.	Provided that where the deduction or payment, as the case may be, is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without the production of a challan.	same
(3) The person responsible for making deduction under sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194K, 195, 196A, 196B, 196C and 196D shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorized bank accompanied by an income-tax challan, provided that where the deduction is made by or on behalf of Government the amount shall be credited within the time and in the manner aforesaid without the production of a challan.	(3) The person responsible for making deduction under sections 193, 194, 194A, 194B, 194BB, 194C,194D, 194E, 194EE, 194F, 194G, 194H, 194-I,194J, 194K, 195, 196A , 196B , 196C and 196D shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank] accompanied by an income-tax challan, provided that where the deduction is made by or on behalf of Government the amount shall be credited within the time and in the manner aforesaid without the production of a challan.

From the above table, author could not find any change leave aside any meaningful change in entire Rule 30. Then the question arises why a new Rules is substituted with exactly the old Rule.

In effective Rule 30 by the Income-tax (Eighth Amendment) Rules, 2009,

** It appears that earlier Rule 30 was substituted by the Income-tax (Eighth Amendment) Rules, 2009, with effect from 01.04.2009 however then it was deferred in its application and kept in abeyance Vide Press release No. 402/92/2006-MC (14 of 2009), dated 30-6-2009 and then a date was to be finalised by the CBDT However, it appears that the same was not finalized and notified by CBDT and yet a new Rule was again framed on the lines of existing Rule in force. The said Rule 30 which appears to have not been made effective read as follows:

Time and mode of payment to Government account of tax deducted at source or tax paid under Chapter XVII-B.

30. (1) All sums deducted in accordance with the provisions of Chapter XVII-B shall be paid to the credit of the Central Government-

(a) within two months from the end of the month in which the amount is credited by the payer to the account of the payee if the crediting is on the date up to which the accounts of the payer are made; and

(b) in any other case, within one week from the end of the month in which the-

(i) deduction is made; or

(ii) income-tax is due under sub-section (1A) of section 192.

(2) Notwithstanding anything contained in sub-rule (1), the Assessing Officer may permit, in special cases,-

(a) quarterly payment of the amount on June 15, September 15, December 15 and March 15 if the amount is deducted from any income chargeable under the head "Salaries"; and

(b) quarterly payment of the amount on July 15, October 15, January 15 and April 15 if the amount is deducted from any income by way of-

(i) interest, other than interest on securities;

(ii) insurance commission; or

(iii) commission or brokerage referred to in section 194H.

(3) No permission under sub-rule (2) shall be granted without the prior approval of the Joint Commissioner.

(4) The person responsible for making deduction, or payment of tax, under Chapter XVII-B shall, within the time specified in sub-rule (1), or sub-rule (2),-

(a) electronically furnish an income-tax challan in Form No.17; and

(b) pay the amount so deducted to the credit of the Central Government by electronically remitting it into the Reserve Bank of India, State Bank of India or any authorised bank.

(5) For the purposes of this rule, the amount shall be construed as electronically remitted to the Reserve Bank of India or of the State Bank of India or of any authorised bank, if the amount is remitted by way of-

(a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorised bank; or

(b) credit or debit card.

*********

It seems that the aforesaid amendment and drafting of Rule was very simple and easy to understand. The present amendment made in 2010 is in fact without any change or amendment and is totally same and complex as the earlier Rule was.

In view of changed circumstances it appears that the now redundant amendment of Rule 30 vide the Income-tax (Eighth Amendment) Rules, 2009 is a proper and better drafting of the Rules and it could be adopted and made effective with necessary modification, if any, required.

Suggestion to the draftsmen:

It is suggested and requested to the officers working in the Ministry of Finance and Ministry of Law to adopt such means of drafting the changes are made effective in a meaning full manner. The drafting of provisions should be simple. In case of need to substitute entire provision, a new provision can be substitute, however, when there is no change at all or the changes are of few words being inserted or omitted, then the amendment can be shown as such with a set of new draft of the amended provisions.