Month: August 2019

Tax officials propagated that the Income Tax Department has introduced a modification in the process of issuing refunds to the taxpayer. The department used to issue refunds to taxpayers either in their bank accounts or through account payee cheques, depending on the category of taxpayers. But from this assessment year, tax refunds will be issued only through e-mode, directly in the bank accounts of taxpayers which must be linked with their PAN.

Tax department comes up with this change with the motive of ensuring direct, abrupt and secure tax refund. Bank account linked with PAN is a pre-requisite for this. The bank account can be either savings, current, cash or overdraft.

Tax official while communicating with the public also added that taxpayers can make sure if their bank account is linked with their PAN by logging on to the e-filing website of the department: https://www.incometaxindiaefiling.gov.in

In case the PAN is not coupled with the bank account then taxpayers are required to link it by visiting their home bank branch followed by its validation over the income tax return e-filing website of the I-T Department.

If your bank is unified with the e-filing portal, pre-validation can be done easily & directly via EVC (Electronic Verification Code) and net-banking route. On the other hand, if your bank account is not integrated with the e-filing portal, then the income tax department will certify the bank account itself from the details filled up by you.

It has also become mandatory to link PAN with the Aadhar-PAN in order to file an ITR (Income Tax Return) and deadline for the same is 31st March 2019.

PAN is a 10-digit alphanumeric number allotted by the IT Department to a person, firm or entity. Aadhaar is assigned by the Unique Identification Authority of India (UIDAI) to an Indian resident, containing a 12-digit number generated on the basis of some factors like demographics and biometric data specific to each individual.

Read Also: Solved! Name Mismatch Problem (Aadhaar and PAN Card) for ITR Filing?

Aadhaar card is as significant as a PAN card for an Indian citizen

While updating the data at the beginning of this month, the I-T Department witnessed that only 23 crores PAN were linked with Aadhaar and the remaining 19 crores PAN are still needed to be linked.

An onset of Tax Audit spell is buzzing alarm for CAs to update their knowledge about different clauses of the Form 3CD and form a check list to move in tune with Tax officials.

C.A.s may prepare and follow a step-by-step procedure which is in compliant with the I.T. rules and regulations to stay in good books of Tax authorities and avert the circumstances to be penalised.

The main purpose behind the implementation of Tax Audit was to ease the troublesome and baffling assessment process for the tax authorities. A tax auditor is responsible for the verification of the details and responding to different clauses of 3CD in the most efficient way he can while ensuring accuracy and fairness.

It doesn’t matter whether an auditor or client or both get the data ready which is needed to accomplish the tax audit, the responsibility of the accuracy of the information presented in 3CD or annexures exists with the auditor inescapably, until & unless he doesn’t prove himself innocent or evidence that he has done the allotted assignment with ultra care and efficiency.

Read Also: Best 5 Business Opportunity for Chartered Accountants in India

Here, we are not going to confer upon how tax audit is done but we shall know the consequences of furnishing incorrect details in tax audit/ Statutory reports or certificates. We shall know whether C.A. gets penalised or he bears no responsibility for that. So let’s move on with a simple question- Does C.A. hold any liability for furnishing wrong details in a tax audit by the assessing officer?

Section 271 J added in the act from April 1st. 2017 has the answer. Here, we have presented a brief study of the section:

Section 271J is about the penalty imposition on professionals for furnishing inaccurate or wrong information in a certificate or statutory report.

Without prejudice to the provisions of this Act, when the Assessing Officer or the Commissioner (Appeals), during any prosecution or proceedings under this Act, discovers that an accountant/ a registered valuer/ merchant banker has furnished incorrect or false information in any certificate or report issued under any provision of this Act or the rules formed under that, the Assessing Officer or the Commissioner (Appeals) may levy a penalty of INR 10,000 on such accountant/ registered valuer/ merchant banker for each such certificate or report.

Explanation with the Reference of Section 271J

• “accountant” signifies an accountant referred to in the Explanation below sub-section (2) of section 288;
• “merchant banker” refers to Category I merchant banker registered with the Securities and Exchange Board (SEBI) of India formed u/s 3 of the SEBI Act, 1992 (15 of 1992);
• “registered valuer” refers to a person stated in clause (oaa) of Section 2, Wealth-tax Act, 1957 (27 of 1957).

The noteworthy points elicited from the definition of the act

• The Chartered Accountant who has attested a certificate or report under the Income Tax Act must present before the assessing authorities to substantiate the rational reason behind the disappointing delivery of the results wherever it’s client assessment is under process. This may also involve travelling of C.A. from one city to another to get him/herself present before the assessing officer.
• This section has been added from April 1st, 2017 but also takes into consideration the certificates and reports signed before this date.
• This section begins with “without prejudice to the provisions of this Act”.

Key Considerations:

• The penalty can be imposed on Chartered Accountant only by Assessing Officer or CIT(Appeal). No other authority has the right to levy this penalty.
• As the section 271J is “without prejudice to the provisions of the Act”, if the C.A. is accountable to any other penalty or prosecution pursuits under the Act, he will continue to be responsible under those provisions.
• The penalty can be imposed on if the proceedings conclude that information furnished was inaccurate or false.

Recommendations:

The Judicial elucidation of “without prejudice to the provisions of this Act” has been illustrated in the below-mentioned cases:

• A.P. State Financial Corporation V. Gar Re-Rolling Mills, AIR 1994 SC 215
• CIT v. Punjab National Bank [2001] 116 Taxman 310 (Delhi).

Wrapping up:

• The ligature does not hold any intention to delay the processing of any request or submission made before any forum or department or court.
• There is, without prejudice to the provisions of this Act, right to – try to resolve any issue by taking up parallel or alternative mechanism without any disruption or delay in the proceedings taking place at the same time regarding the same matter.
• The importance of “without prejudice to the provisions of this section” is that the authority of the assessing officer to proceed u/s 143(2), even after the intimation u/s 143(1) (a), was perpetuated and wasn’t abducted. The process has not been shortened but preserved.

Implications Under the Rules of the Institute of Chartered Accountants:

• A Chartered Accountant in practice who has been penalized by I.T. Department under section 271 J, can be castigated by the Institute of Chartered Accountants of India (ICAI) also on the ground of professional violation under the Chartered Accountants Act, 1949.
• Penalty u/s 271J is leviable irrespective of the fact that penalty can/cannot be imposed on the associated assessee who also used the same false information.

After uploading of return in electronic mode, a New functionality of electronic verification code (EVC) of the Income Tax return has been introduced vide Notification No. 2/2015, dated 13/07/2015. This facility can be used as an alternative for submission of ITR-V to CPC- Bangalore.

Mode and Process of Generating and Validating IT Returns through EVC

• Through Aadhar Number
• Generation of EVC on mobile or e-mail
  • a) Through Net banking
  • b) Through Email id and Mobile Number
  • c) Through Bank Account Number
  • d) Through Demat Account Number
• e-Verify through available EVC

Through OTP Generated by Aadhar Card Linking

If the assessee has Aadhar Number then he has to link Aadhar No. by Clicking on “Profile Setting” on ITD portal and then click on Link Aadhar Card.

Step 1

Step 2

Step 3

Step 4

Step 5

After successful linking of Aadhaar Number, you can e-verify your return through Aadhaar OTP

2. I do not have EVC and I would like to Generate EVC to e-Verify My Return

After uploading of return in electronic mode assessee has to choose an option from e-Verify drop-down option.

“I do not have an EVC and I would like to generate EVC to e-verify my return” by clicking on this option four modes will be available:

• EVC —> Through Net banking
• EVC —> To registered Email id and Mobile Number
• EVC —> Through Bank Account Number
• EVC —> Through Demat Account Number

Note:

• A) In case of refund claimed in uploaded return, the user can generate EVC through Internet banking not on registered Email Id and mobile No.
• In Case Assessee’s Total Income is more than five lakhs Rs he will not be eligible to e-Verify his return through registered Email Id and mobile No

EVC —> To registered Email id and Mobile Number

After selecting this option a code will be sent by ITD to registered mail id and Mobile No. The assessee has to submit this code for e-verification.

After Submitting EVC, the user can download ITR Acknowledgment

EVC —> Through Net banking

Step 1 —> Go to ITD Login —> View Return Form —> Click on e-Verify option

Step 2 —> By clicking on that option following screen will be appeared

Earlier there were only two options, EVC through Net Banking or EVC through Email Id and Mobile Number

The Assessee who don’t have Internet banking facility can verify their return through Prevalidating Bank Account Number.

But for this function assessee must have the bank account in Punjab National Bank, State Bank of India, ICICI Bank or United Bank of India, then the only assessee can e-Verify return.

Generation of EVC through Bank Account Number

Step-1

Step-2

Step-3 —> Assessee have to fill all the required Details like Select Bank from the drop down box Fill account Number with IFSC code and Mobile Number and Email Id and click on Pre-validated Button

Step-4 —> Successful Pre-validation of Bank Account Number

Step 5 —> Generation of EVC to e-verify ITR

After successful Validation of Bank Account Number, assessee have to click on Generate EVC option in e-file Menu of ITD login and he will get a code on his registered mobile Number. After furnishing code return will be e-verified by ITD.

EVC generation Through Demat Account Number:

If you have Demat Account Number then you can use this facility to e-Verify your return.

For this function you have to follow such simple steps:

Step 1 —> Login to e-filling website –> Click on View Return Form and select e-verification option.

Step 2 —> Choose Generate EVC through Demat Account Number from available options.

The following screen will be available.

Step 3 —> After selecting Demat Account option user have to pre-validate his Demat Account Number

Step 4 —> Fill following particulars to verify your Demat Account Credentials and click on Pre-Validate option after submitting details user have to select Generate EVC like assessee has done in step-5 then return will be E-verified.

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Recommended:

TDS/TCS Filing Due Dates

The Income Tax Department allows individuals to claim the refund for depositing extra tax. An individual can claim the same online using the Income Tax Department’s e-filing portal, www.incometaxindiaefiling.gov.in. Income Tax regulations mandate the Filing of income tax for individuals earning an annual income of Rs.2.5 lakh or more. For Senior citizens (individuals with age between 60-80 years) and very senior citizens (individual with age above 80 years), the limits are Rs.3 lakh and 5 lakh respectively.

Simple Steps to Claim the Income Tax Refund Online:

Step 1: Log in to the Income Tax’s e-filing portal www.incometaxindiaefiling.gov.in. with your user id, password, and captcha.

Step 2: Go to ‘My Account’ tab on the top left side of the screen near the ‘Dashboard’ tab and choose the ‘Service Request’ option. Select “New Request” under request type field and choose “Refund Reissue” as Request category

Step 3: All the refund failures for each AY will be displayed. Click on submit to request refund issue for a particular year.

Step 4: Fill in the details like Bank Account No., Account Type, IFSC Code, Bank Name and Address.

The refund will be credited to your bank account after successful processing.

Read Also: Easy 5 Methods to Verify Income Tax Return Online & Offline

Steps to View Refund/Demand Status

Step 1: Log in to the Income Tax e-filing portal www.incometaxindiaefiling.gov.in with your user id, password and captcha.

Step 2: Go to ‘My Account’ tab and and click on “View e-filed Returns/forms”. You can check the refund status by clicking on acknowledgment number of relevant A.Y.

Taking a step towards the ease of the taxpayers, the Income Tax Department has launched E-filing lite services. This favourable approach by the tax government will prove to be of great help for taxpayers in e-filing of returns. The feature is initiated on the link www.incometaxindiaefiling.gov.in. Tax Authority says, “the department is glad to inaugurate e-lite filing which is the easy version of online ITR filing and will attract more taxpayers on the portal”.

To access the e-lite feature one may click on the ‘e-lite button‘ flashing on the homepage of the website. E-filing portal has a login button on the homepage to facilitate all the services. The tax official says “the new tab for lite is provided on the e-filing website which will direct the registered taxpayer to only the valid links of ITR and Form 26AS after login. The taxpayer can also file his/her previous returns and easily download XML format files.”

He further stated that e-lite edition is exclusive to make ITR Filing easy and is immune from other settings such as e-proceedings, e-exemptions, compliance, schedule and profile settings. However, these options are available in the standard edition.

The last date of filing ITR for FY 2018-19 has been extended by the government from earlier 23rd July 2019 to current 31st August 2019. Taxpayers who have not filed the ITR yet can still file the return by 31st August from the respective e-filing portal or by using lite services.

To be noted: The lite version of e-filing has fewer features than the standard version.

In July 2019, the central and state governments managed to collect the revenue of INR 1,02,083 crore as Goods and Service Tax (GST). Comparatively, it is 5.8% more over the similar month last year, as described from an official.

In the current fiscal, it is the third chance when the combined central and state GST collection crosses INR 1 trillion milestones. There is an agreement between the central and state government if the GST collection of states accounts below a fixed 14% annual growth every year, the union government has the responsibility of compensating shortfall in revenue, within the first five years of GST regime. Collected revenue in July is the result of transactions made in June. In April 2019, the government recorded an annual growth of 10 per cent in GST collection, post which it remains low at 6.6 and 5.8% in subsequent months.

The GST collection of INR 1.02 trillion in July 2019 is the contribution of INR 17,912 crore from the union government, INR 25,008 crore from states, INR 50,612 crore from Integrated GST (IGST) on inter-state sales and INR 8,551 crore from the GST cess. For the revenue shortfall in FY19 and the growth rate remained below 14% till now in FY20, kept the central government busy in compensating states and a question arises how would be the state revenue position will be handled if the trend continues. The average collection of combined central and states was INR 93,114 crore monthly in last fiscal against an INR 1 trillion target of monthly.

In case if this shortfall remained to continue, the union government has to find new resources for compensating states revenue shortfall. Likewise collection from cesses and surcharges on several other taxes.

The Controller General of Accounts (CGA), the government’s internal auditor, revealed the total tax revenue of central government in the June quarter registered a growth of 2.7% to collect INR 1.86 trillion as against to similar time duration last year.