K.VAITHEESWARAN ADVOCATE & TAX CONSULTANT

‘VENKATAGIRI’

Flat No.8/3 & 8/4, Ground Floor,

No.8 (Old No.9), Sivaprakasam Street,

T. Nagar, Chennai - 600 017, India

Tel.: 044 + 2433 1029 / 4048

402, Front Wing,

House of Lords,

15/16, St. Marks Road,

Bangalore – 560 001, India

Tel : 080 22244854/ 41120804

Mobile: 98400-96876

E-mail : vaithilegal@gmail.com, vaithilegal@yahoo.co.in

www.vaithilegal.com

BUDGET 2017 ANALYSIS OF DIRECT TAX PROPOSALS

No change in tax slabs The rate of income tax for individuals and HUF within the slab of 2.5

lakhs to Rs. 5 lakhs reduced from 10% to 5%. Additional surcharge of 10% on the tax payable by a person having total

income exceeding Rs. 50 lakhs but not exceeding Rs. 1 crore. Existing surcharge of 15% on income exceeding Rs. 1 crore to continue. Domestic companies having annual turnover of less than Rs. 50 crores,

tax rate reduced to 25%. This is to give a boost to MSMEs. However, there is no reason why it should be confined to companies. Firms, proprietary concerns and professionals in that segment should have also been given the same benefit.

Maximum amount of rebate under Section 87A reduced to Rs.2500. Rebate available only to resident individuals whose total income does not exceed Rs. 3,50,000 w.e.f. 01.04.2018

Explanation 5 to Section 9 clarifies that an asset or capital asset, being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India.

Indirect Transfer Provisions will not apply to an asset or capital asset mentioned in Explanation 5, held by a non-resident by way of investment, directly or indirectly, in a Foreign Institutional Investor and registered as Category-I or Category-II FPI under the SEBI (Foreign Portfolio Investors) Regulations, 2014.

This amendment is with retrospective effect from 01.04.2012. The indirect transfer provisions is the development following the Vodafone

decision. While Vodafone is yet to see relief, exceptions are being created based on various representations.

The CBDT issued Circular No.41/2016 in the context of indirect transfer which created some element of discomfort and was kept on hold. The Finance Bill, 2017 has now introduced a benifical clarificatory amendment.

Section 9A provides that in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund.

An eligible investment fund shall not be said to be resident in India merely because the eligible fund manager undertaking fund management activities on its behalf is located in India.

Section 9A(3)(j) provides that the monthly average of the corpus of the fund shall not be less than Rs. 100 crores and a proviso provided that if the fund is incorporated in the previous year, the corpus shall not be less than Rs. 100 crores at the end of such previous year.

A Retrospective amendment w.e.f. 01.04.2016 is being introduced to insert another proviso to provide that 9A(3)(j) will not apply to fund which has been wound up in the previous year.

The amendment is to address the concerns of the stake holders since it would be difficult to maintain the average of the corpus in the year of winding up of the fund.

Exemption to partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under – Insertion of Section 10(12B)

Any income received by any person on behalf of Chief Minister’s Relief Fund or the Lieutenant Governor's Relief Fund in respect of any State or Union Territory shall not be included for computing the total income w.r.e.f. 01.04.1998 – Amendment to Section 10(23C)

Any amount credited or paid out of income of any fund or trust or institution or any university or other educational institution or any hospital or other medical institution to any trust or institution registered under section 12AA, being voluntary contribution made with a specific direction that they shall form part of the corpus of the trust or institution, shall not be treated as application of income.

Section 10(38) provides that income from the transfer of long term capital asset being equity shares in a company or unit in a equity oriented fund or unit of a business trust is exempt where such transaction is chargeable to STT.

The amendment introduces a proviso w.e.f 01.04.2018 to provide that the exemption is not available if the transaction of acquisition other than acquisition notified by the Central Government of such equity share is entered into on or after 01.10.2004 and the transaction is not chargeable to STT.

The effect of the amendment is that to qualify for the exemption, the acquisition of equity shares should have suffered STT unless excluded by the Government.

The amendment endorses the Delhi High Court’s decision in the case of Uday Punj Vs. CIT (348 ITR 98) wherein it was held that if the transaction is not on the stock exchange but by a purchase before the listing of the company’s share, the exemption is not available. However, in the said case, the transfer was on 04.11.2005 while the Company filed application for listing on 30.12.2005 and hence the Court held that the shares were not listed securities at the time of the transaction.

SLP dismissed by Supreme Court.

In the absence the Central Government providing for exclusions, the amendment will have significant impact on some transactions such as Shareholders of an unlisted company acquiring shares on account of merger with a listed

company.

Employee stock options / sweat equity

Demerger transactions

Acquisition of shares through various modes when the Company was unlisted and subsequent listing

Conversion of shares

Bonus/ Rights shares

Can the goal post be changed since the amendment would affect persons who have already acquired shares?

Is the amendment taking away a vested right? Since the amendment is effective from AY 2018-19, sale of such shares upto

31.03.2017 would be exempt and sale of such shares from 01.04.2017 would be taxable. Would this not result in forcing sale of shares ?

Benefit under Section 11 and 12 are available subject to fulfilment of certain conditions given under Section 12A.

Where a trust or an institution has been granted registration under section 12AA or under section 12A and, subsequently, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, it shall be required to obtain fresh registration by making an application within 30 days from the date of such adoption or modifications of the objects

The procedure for registration as per Section 12AA will also be applicable.

This amendment confirms the decision of the Mumbai Tribunal in the case of BCCI Vs. ITO (2012) 19 ITR (Trib) 91.

Section 12A amended to introduce a condition of furnishing a return under Section 139(4) within the time allowed

Section 11 amended to provide that contribution to any other trust or institution under Section 12AA with a direction that it shall form part of the corpus shall not be treated as application of income

The provision nullifies the decision of the Mumbai Tribunal in the case of Tewari Charitable Trust Vs. DIT (2014) 30 ITR (Trib) 705.

Scope of Section 133A (Survey) widened to include any place, at which an

activity for charitable purpose is carried on.

Amendment to Section 13A. Donations of Rs.2000/- or more can be received only by account payee

cheque / bank draft / e-payment / electoral bonds. Political party has to furnish a return on or before the due date under

Section 139(4) to qualify for exemption. Political party is not required to furnish the name and address of the donors

who contribute by way of electoral bond. Section 31(3) of the RBI Act inserted to enable the Central Government to

authorize any scheduled bank to issue electoral bond. Section 29C(1) of the Representation of People Act amended to provide that

the provision shall not apply to contributions received by way of an electoral bonds.

The Supreme Court in the case of Common Cause Vs. Union of India (1996) 222 ITR 260 held that

Political parties have to file a return of income and various political parties have not filed their returns;

The IT Department have for a long period of time failed to take appropriate action against the defaulting political parties;

Government of India should initiate investigation and take action including penal action under Section 276CC;

Government of India should appoint an inquiring body to find out why the mandatory provisions of filing of return was not followed by the political parties and why no action was taken;

Section 23 amended to provide that if property is held as stock in trade and the property or part is not let out during the whole or any part of the previous year, annual value for the period up to 1 year from the end of the financial year in which the competition certificate is obtained, shall be taken to be nil.

Amendment effective from 01.04.2018. The Delhi Bench of the Tribunal in the case of DLF Ltd.(2016-TS-5387-ITAT) had

held that where there was an intention to let out the properties but tenant could not be obtained, annual letting value would be Nil and notional rent cannot be estimated.

Insertion of Section 71(3A) from 01.04.2018. Set-off of loss under the head "Income from house property" against any

other head of income shall be restricted to Rs. 2 lakhs for any assessment year. However, the unabsorbed loss shall be allowed to be carried forward for set-off in subsequent years in accordance with the existing provisions of the Act.

This amendment will affect a number of individuals and even though carry forward would be available, there would be only accumulation of losses. Further, Section 71B provides for an outer limit of 8 assessment years. This amendment can apart from affecting the salaried class, would also affect the housing sector.

No deduction under Section 35AD if the expenditure exceeding Rs. 10000 paid to one person in a day is in cash.

Section 43 proposed to be amended to provide that where any capital asset in respect of which deduction allowed under section 35AD is deemed to be the income of the assessee in accordance with Section 35AD(7B), the actual cost shall be the actual cost to the assessee, as reduced by an amount equal to the amount of depreciation calculated under Section 32 as would have been allowable had the asset been used for the purposes of business since the date of its acquisition.

Provision amended to reduce the threshold from Rs. 20,000 to Rs. 10,000.

Giving effect to the digital shift, provision will not apply where the payment is made through use of electronic clearing systems in addition to the existing permitted payments of account payee cheques, drafts etc.

Similar amendments to Section 40A(3A) to reduce the amount from Rs. 20,000 to Rs. 10,000.

Where assessee incurs any expenditure for acquisition of any asset in respect which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account, exceeds Rs. 10,000, such expenditure shall be ignored for the purposes of determination of actual cost of such asset.

Restriction on usage of cash introduced even in respect of purchase of assets and consequent depreciation claims.

Section 269ST is proposed to be inserted to provide that no person shall receive an amount of more than Rs. 3 lakhs in cash, in aggregate from a person in a day; or

in respect of a single transaction; or

in respect of transactions relating to one event or occasion.

Contravention will lead to penalty of equal amount through new Section 271DA.

Amendment effective from 01.04.2017.

This is in line with the Government’s plan of TEC India (Transform, Energize and Clean India).

The amendment will reduce the appetite for cash transactions since the penalty is equal to the amount of transaction.

Various scenarios have been covered through the provision

Receipt from one person of an amount of Rs. 3 lakhs or more in aggregate is covered.

Receipt of Rs. 3 lakh or more for a single transaction is covered. The word transaction is quite wide and would cover supply of goods and services and even gift.

Where there is an occasion or an event (say a wedding), receipt on different dates by a contractor aggregating to more than Rs. 3 lakhs is also covered.

Section 269ST as proposed refers to the ‘recipient’ and there is no penalty for the person making the payment.

The provision refers to mere receipt and does not distinguish between business or personal

The provision does not exclude the possibility of a 269SS transaction also being hit by 269ST

Section 269 ST does not apply to receipts by Government,

any banking company,

post office savings bank or

co-operative bank,

in respect of transactions of the nature referred to in section 269SS; and

such other specified persons or class of persons.

Amendment to Section 36(1)(viia)(a) to increase the limit of deduction in respect of provision for bad debts by Indian scheduled bank or a non-scheduled bank or a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, from 7.5% to 8.5% w.e.f. 01.04.2018.

Benefit of Section 43D extended to co-operative banks other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank.

Consequently, interest on any loan or advances from a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank to be allowed as deduction if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year.

Section 44AD provides for a presumptive method of taxation whereby a sum equal to 8% of the turnover or gross receipts of the assessee shall be deemed to be profits and gains from business or profession.

In order to implement the digital initiatives, the presumptive amount is 6% in respect of the amount of the total turnover or gross receipts which is received by an account payee cheque or bank draft or use of ECS through a bank account during the previous year or before the due date specified in Section 139(1), in respect of that previous year.

This amendment is effective from 01.04.2017

The holding period of immovable property being land or building or both reduced from 36 months to 24 months.

Base year for indexation changed from 01.04.1981 to 01.04.2001. Any transfer, made outside India, of a capital asset being rupee

denominated bond of an Indian company issued outside India, by a non-resident to another non-resident will not be regarded as transfer under Section 47.

Conversion of preference share of a company into equity share shall not be regarded as transfer. Period of holding of such shares shall be computed from the date from which preference shares of the company were held.

Scope of Section 54EC expanded to include any other bonds notified by the Central Government.

Cost of acquisition of the units in the consolidated plan of mutual fund scheme referred to in Section 47(xix) shall be the cost of units in consolidating plan of mutual fund scheme and period of holding shall include the period for which the units were held by the assessee.

Cost of acquisition of the shares of Indian company referred to in section 47(vic) in the hands of the resulting foreign company shall be the same as it was in the hands of demerged foreign company.

Appreciation of rupee against foreign currency at the time of redemption of rupee denominated bonds to be ignored for the purposes of computation of full value of consideration.

Provision similar to Section 50C introduced in respect of shares of a Company other than quoted shares.

Where the consideration is less than the Fair Market Value (FMV) determined in accordance with the prescribed manner, the FMV shall be deemed to be the full value of consideration for the purposes of computing income under the head "Capital gains".

Quoted share means the share quoted on any recognised stock exchange with regularity from time to time where the quotation of such share is based on current transaction made in the ordinary course of business.

Double impact since if say the consideration is Rs.50/- and the FMV is Rs.100/-, the seller will have to pay capital gains tax based on Rs.100/-while the buyer will also have a tax impact on account of Section 56 as amended by Finance Bill, 2017 on the differential amount.

Joint Development Agreements Litigation and various decisions on when transfer takes place. Introduction of Section 45(5A) w.e.f.01.04.2018. Capital Gains in the hands of the land owner being an individual or HUF in

the previous year in which the completion certificate of the whole or part of the project is issued by the Competent Authority.

Competent authority means the authority empowered to approve the building plan by or under any law for the time being in force.

The land owners share in the project would be valued based on the stamp duty value on the date of issue of certificate as increased by consideration received in cash.

Transfer of share in the project by the Assessee prior to issue of completion certificate to have tax consequences.

Section 194IC provides for a 10% TDS in respect of any monetary consideration payable under the JDA.

An individual or Hindu undivided family who was the owner of land as on 02.06.2014, and has transferred such land under the land pooling scheme notified under the provisions of Andhra Pradesh Capital Region Development Authority Act, 2014, capital gains arising from following transfer shall not be chargeable to tax under the Act: Transfer of capital asset being land or building or both, under land pooling scheme.

Sale of LPOCs by the said persons received in lieu of land transferred under the scheme.

Sale of reconstituted plot or land by said persons within two years from the end of the financial year in which the possession of such plot or land was handed over to the said persons.

Corresponding amendment made to Section 49. This is with retrospective effect from 01.04.2015

Sum of money or property received by an individual or HUF without consideration or with inadequate consideration in excess of Rs.50,000/- is currently taxed as income from other sources under Section 56(2)(vii) subject to exceptions.

Section 56(2)(x) is introduced w.e.f.01.04.2017 in order to provide that receipt of sum of money or property by any person without consideration or inadequate consideration in excess of Rs.50,000/- shall be taxed under income from other sources.

Scope of exceptions widened by including the receipt by certain trusts or institutions and receipt by way of certain transfers not regarded as transfer under Section 47.

Section 40(a)(ia) which provides for disallowance of expenditure for non-deduction of TDS extended to expenditure claims under income from other sources.

The benefit of carry forward and set off of losses extended to eligible start-ups where a change in shareholding has taken place in a previous year in the case of a private eligible start-up company, loss shall be carried forward and set off against the income of the previous year, if all the shareholders continue to hold those shares on the last day of such previous year;

and

such loss has been incurred during the period of seven years beginning from the year in which such company is incorporated

Deduction can be claimed by an eligible start-up for any 3 consecutive assessment years out of 7 years (previously 5 years) beginning from the year in which such eligible start-up is incorporated.

Can impact start-ups since in the initial years, there would be number of changes in share-holding pattern.

The limit of deductions for individuals other than employees for contribution to NPS has now been increased from 10% to 20% - Section 80CCD

Phasing out deduction under Section 80 CCG by providing that no deduction under section 80CCG shall be allowed from assessment year 2018-19

No deduction under Section 80G available in respect of donations exceeding Rs. 2000 made in cash w.e.f. 01.04.2018

It is proposed to amend Section 80IBA to provide the following relaxations w.e.f. 01.04.2018: The size of residential unit shall be measured by taking into account the "carpet area" as

defined in RERA, 2016 and not the "built-up area".

The restriction of 30 square meters on the size of residential units shall not apply to the place located within a distance of 25 kms from the municipal limits of the Chennai, Delhi, Kolkata or Mumbai.

The condition of period of completion of project for claiming deduction under this section shall be increased from existing 3 years to 5 years.

Where a term is defined in a DTAA, the meaning assigned in the DTAA will have to be used.

If it is not defined in the DTAA, but defined in the IT Act, it shall have the same meaning as assigned to it in the IT Act and any explanation given to it by the Central Government.

Concept of secondary adjustments introduced through Section 92CD w.e.f. 01.04.2018.

The assessee shall make secondary adjustment where a primary adjustment to transfer price

has been made suo moto by the assessee in his return of income;

made by the AO has been accepted by the assessee;

is determined by an advance pricing agreement entered into by the assessee under section 92CC;

is made as per the safe harbour rules framed under section 92CB; or

is arising as a result of resolution of an assessment by way of the mutual agreement procedure under a DTAA,

This will apply if the amount of primary adjustment made in any previous year does not exceed Rs. 1 crore is made in respect of an assessment year commencing on or before the 01.04.2016.

Where as a result of Primary adjustment there is an increase in the total income or reduction in the loss of the assessee, the excess money which is available with its AE, if not repatriated to India within the prescribed time, shall be deemed to be an advance made by the assessee to such AE and the interest on such advance, shall be computed in prescribed manner.

In line with BEPS Action Plan 4 where an Indian company, or a PE in India pays interest exceeding Rs. 1 crore, in respect of any debt issued by a non-resident, being an AE of such borrower, the deduction shall be limited to 30% of EBITDA of the borrower in the previous year or interest paid or payable to AE for that previous year, whichever is less.

Debt shall be deemed to be treated as issued by AE if it provides an implicit or explicit guarantee to the lender or the AE deposits a corresponding and matching amount of funds with the lender.

Provisions not applicable to banking or insurance companies. Carry forward of disallowed interest expense upto 8

assessment years.

Section 92BA covers specified domestic transactions. As a measure of relief, clause (i) is proposed to be omitted. Domestic TP will not apply to expenditure referred to in Section

40A(2)(b) w.e.f. 01.04.2017 Domestic TP would therefore be applicable only where there is a

tax arbitrage such as Section 80A / 80IA / 80IA (10) / 10AA read with 80 IA(8) or 80IA (10).

Section 115BBDA provides for tax on dividends from domestic companies where the recipient is a resident individual or HUF or firm and the dividend is in excess of Rs. 10 lakhs.

Provisions made applicable to all resident assessee except domestic company and certain funds, trusts, institutions referred to in Section 10(23C) w.e.f 01.04.2018.

Changes in calculation of book profits in the context of MAT for companies requiring compliance of IndAS.

Carry forward of MAT credit and AMT credit for 15 years instead of 10 years.

Where Foreign Tax Credit (FTC) allowed against AMT exceeds the amount of such tax credit admissible against the tax payable by the assessee on its regular income then, while computing the amount of credit under this sub-section, such excess amount shall be ignored.

Where total income of the assessee includes any income from transfer of carbon credit, such income shall be taxable at a concessional rate of 10% (plus applicable surcharge and cess) on the gross amount of such income.

No expenditure or allowance in respect of such income shall be allowed under the Act.

This amendment has overruled the Karnataka HC decision in the case of Subash Kabini Power Corporation Limited (TS-236-HC-2016).

The Allahabad High Court in the case of Dr. Sushil Rastogi Vs. Director, Investigation (IT Department) (2003) 260 ITR 249 held that the reasons recorded under Section 132 were only generalities based on rumours.

Explanation to Section 132(1) (w.r.e.f. 01.04.1962), Section 132(1A) (w.r.e.f. 01.10.1975) and Section 132A (w.r.e.f. 01.10.1975) inserted to declare that the 'reason to believe' or 'reason to suspect', which is the basis of initiation of search or seizure operations or proceedings, shall not be disclosed to any person or any authority or the Appellate Tribunal.

The AO, on being satisfied that for protecting the interest of revenue it is necessary so to do, may attach provisionally assessee’s property with the prior approval of Principal Director General or Director General or Principal Director or Director.

Provisions for attachment shall cease to have effect after the expiry of six months from the date of order of such attachment.

For valuation of the property disclosed in a search and seizure operation, the AO could make reference to valuation officer to provide a valuation in respect of the said property.

Entities enjoying exemption under certain provisions mandated to file returns.

The time for filing revised return reduced. Revised return to be filed by the end of the relevant assessment year or before the completion of assessment, whichever is earlier.

Fee for delay in furnishing of return from AY 2018-19 in a case where the return is not filed within the due dates specified under Section 139(1). The proposed fee structure is as follows:—

a fee of Rs. 5000 shall be payable, if the return is furnished after the due date but on or before the 31st December of the assessment year;

a fee of Rs. 10000 shall be payable in any other case.

Where the total income does not exceed Rs. 5 lakhs, the fee amount shall not exceed Rs. 1000.

Corresponding change is proposed to Section 140A and 143(1) Concept of ‘fee’. Fee indicates rendering of services as against a fine or

penalty. Disputes with reference to Section 234E in Courts.

Section & Description AY Old New

Assessment Order 143 or 144

2018-19 21 months 18 months

Assessment Order 143 or 144

2019-20 onwards 12 months

An order of assessment,

reassessment or re-computation

147 for notices under 148

2019-20 onwards 12 months from the end

of FY in which notice is

served

Order of fresh assessment in

pursuance of an order under

sections 254 or 263 or 264

2019-20 12 months from the end

of FY in which order

received

Where an order under section 250

or 254 or 260 or 262 or 263 or 264

requires verification or where an

opportunity of being heard is to be

provided to the assessee,

12 months

TDS on rentals even for assesses not falling under tax audit. Section 194-IB proposed to be inserted w.e.f. 01.04.2017 to

provide that an individual or a, responsible for paying to a resident any income by way of rent exceeding Rs. 50,000 / month shall deduct TDS at the rate of 5%. The deductor is not required to have a TAN.

TDS can be done at the time of credit of rent for the last month of the previous year or the last month of tenancy in case it is vacated during the year.

Where TDS is required as per 206AA, deduction cannot exceed the rent payable for the last month of the previous year or the last month of tenancy, as the case may be.

Section 194IC provides for a 10% TDS in respect of any monetary consideration payable under the JDA.

TDS under Section 194J reduced from 10% to 2% in case a payee is engaged in the business of operation of a call centre.

194LA relating to payment of compensation on acquisition of certain immovable property proposed to be amended w.e.f. 01.04.2017 to provide that TDS shall not be applicable where such payment is made in respect of any award or agreement which has been exempted from the levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

5% TDS w.e.f. 01.04.2018 on interest income payable by the specified company on borrowings made by it in foreign currency from sources outside India under a loan agreement or by way of issue of any long-term bonds including long-term infrastructure bonds, the borrowings can be made before the 01.07.2020 instead of 01.07.2017. The said section will also apply to rupee denominated bond issued outside India before 1st July, 2020 also w.r.e.f. 01.04.2016.

Concessional TDS of 5% on interest payment in respect of investments in Government securities and rupee denominated corporate bonds to be made available on interest payable before 01.07.2020.

TCS at 1% for transactions in cash for all goods and services where the amount is in excess of Rs. 2 lakhs.

Special limit of Rs. 5 lakhs for jewellery withdrawn and jewellery would also qualify for the Rs. 2 lakhs limit.

TCS not applicable for sale of motor vehicle to the following buyers:

the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or

local authority as defined in the Explanation to clause (20) of section 10; or

public sector company which is engaged in the business of carrying passengers.

TCS at twice the rate where PAN is not furnished. The provisions of this Section will not apply to a non resident not having a PE in India – Section 206CC

Section 271J is proposed to be inserted w.e.f. 01.04.2017 to provide that if an accountant or a merchant banker or a registered valuer furnishes incorrect information in a report or certificate under any provisions of the Act or the rules made thereunder, the AO or the Commissioner (Appeals), may direct him to pay a penalty of Rs. 10,000 for each such report or certificate.

AAR for indirect taxes merged with AAR for income tax. From AY 2017 – 18 onwards where refund of any amount becomes due to the

assessee under Section 143(1) and the AO is of the opinion that grant of the refund may adversely affect the recovery of revenue, he may, for the reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, withhold the refund up to the date on which the assessment is made.

Section 244 amended to provide for simple interest on refund due to deductor pursuant to orders under Section 250, 254, 260 or 262.

Scope of Section 133 widened and powers extended to Joint Director or Deputy Director or Assistant Director.

Time limits for completion of assessments in respect of search cases modified. CBDT empowered to make a scheme for centralised issuance of notice calling for

information and documents for the purpose of verification of information in its possession, processing of such documents and making the outcome thereof available to the AO for necessary action, if any.

K.VAITHEESWARAN ADVOCATE & TAX CONSULTANT

‘VENKATAGIRI’

Flat No.8/3 & 8/4, Ground Floor,

No.8 (Old No.9), Sivaprakasam Street,

T. Nagar, Chennai - 600 017, India

Tel.: 044 + 2433 1029 / 4048

402, Front Wing,

House of Lords,

15/16, St. Marks Road,

Bangalore – 560 001, India

Tel : 080 22244854/ 41120804

Mobile: 98400-96876

E-mail : vaithilegal@gmail.com, vaithilegal@yahoo.co.in

www.vaithilegal.com