C K P and Co. Chartered Accountants

ॐ त्र्यंम्बकम् यजामहे, सुगन्धिपुष्टिवर्धनम्।
उर्वारुकमिव बन्धनान्, मृत्योर्मुक्षीय मामृतात्।।

*Important Extension of Due Dates of Filing Income Tax Returns*

1) Last date for Filing Return u/s 139(1) for Non-Tax Audit Cases extended to 31st December, 2021
2) Last date for Filing Tax Audit Report – Extended to 15th January, 2022
3) Last date for Filing Audit Report where International Transactions/Specified Transactions – Extended to 31st January, 2021
4) Last date for Filing Return which was originally 31st October, 2021 – Now extended to 15th February, 2022
5) Last Date for Filing Return which was originally 30th November, 2021 – Now extended to 28th February, 2022
6) Last Date for Filing Belated/Revised return for AY 2021-22 – Now extended to 31st March, 2022 (originally 31st December, 2021).

ITAT SURAT:- ASHISH NATVARLAL VASHI VERSUS THE INCOME TAX OFFICER, WARD-1, NAVSARI. No.- ITA No. 3522/AHD/2016
Dated.- April 19, 2021

Reopening of the assessment under section 147/148 - addition on account of unexplained cash deposit in bank account u/s 69A - assessee has not filed his return of income - HELD THAT:- The amount deposited in the bank account may be out of sale proceeds of investments, property or agricultural income of the assessee which may be exempted under the Income Tax Act. Of course, it may be desirable, from the point of view of revenue authorities, to examine the matter in detail, but then reassessment proceedings cannot be resorted to only to examine the facts of a case, no matter how desirable that be, unless there is a reason to believe, rather than suspect, that an income has escaped assessment.

Just to reopen the assessment, based on the cash deposits would not make the Revenue’s case strong, because mere fact that these cash deposits have been made in a bank account, which according to us do not indicate that these deposits constitute an income which has escaped assessment. Such cash deposit may be out of past savings.

The above reasons recorded for reopening the assessment do not make out a case that the assessee was engaged in some business and has not been filed return of income. Therefore, the cash deposit in the bank account could not be basis for holding the view that income has escaped assessment. The assessee may have deposited the cash out of his sale of capital asset, sale of property and sale of investment etc. Therefore, reasons recorded by the Assessing Officer are not valid and hence the reassessment proceedings initiated based on the reasons recorded is bad in law.

Assessing Officer in the reasons recorded proceeded on the erroneous footing that the assessee has not filed return of income at all and when it is not in dispute that the assessee did file the return of income for the assessment year under consideration, which was duly acknowledged by the department, then, it has to be held that the entire reasoning thus proceeded on the wrong premises that the assessee had never filed the return. This, itself would be sufficient to annual the notice of reopening the assessment. Besides, mere cash deposit in the bank account would not disclose escapement of income.

The assessee might have deposited the cash out of his sale of capital asset, sale of property and sale of investment, agricultural income etc. Therefore, we are inclined to hold the reassessment proceedings under section 147 of the Act as bad in law and hence, we quash the reassessment proceedings. - Decided in favour of assessee.

Amendments in CGST, IGST and UTGST Acts, 2017:

Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature.

I. AMENDMENTS IN THE CGST ACT, 2017:

a. A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration.

b. A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.

c. Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional.

d. Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.

e. Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1st July, 2017.

f. Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax.

g. An explanation to sub-section (12) of section 75 of the CGST Act is being inserted to clarify that “self-assessed tax” shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39.

h. Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder.

i. Section 129 of the CGST Act is being amended to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty.

j. Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit.
k. Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to any matter dealt with in connection with the Act.

l. Section 152 of the CGST Act is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned.
m. Section 168 of the CGST Act is being amended to enable the jurisdictional commissioner to exercise powers under section 151 to call for information.
n. Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017.

II. AMENDMENTS IN THE IGST ACT, 2017:

Section 16 of the IGST Act is being amended so as to:
(i) zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply is for authorised operations;
(ii) restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services; and
(iii) link the foreign exchange remittance in case of export of goods with refund

VERY IMPORTANT DECISION EVERY ONE SHOULD READ...............
.....................The Hon’ble Allahabad High Court in the matter of Ansari Construction vs. Additional Commissioner, CGST (Appeals) & Ors. [Writ Tax No. 626 of 2020 dated November 24, 2020] set aside ex-parte order seeking to cancel assessee’s registration for failure to file return for continuous 6 months as well as the order dismissing revocation application and affirming cancellation of registration and noted that the assessee had filed all returns and cleared all dues. Further, ordered the Assistant Commissioner to pay a cost of Rs. 10,000/- from his own salary for unnecessarily harassing the assessee.

GST update:

Revised Requirement of declaring HSN for gonods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:

a. HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;

b. HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;

c. Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.

CBDT Notification No. 92/2020 dated 31.12.2020 for extention under VsVS to 31.1.2021for filing declaration.

CBDT Notification No. 93/2020 dated 31.12.2020 under section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 making following further extensions:

(1) Furnishing of TDS Statement of 3rd Qtr. of 2020-21(which is otherwise due on 31.1.2021) is extended to 31.3.2021.

(2) Furnishing of TCS Statement of 3rd Qtr. of 2020-21(which is otherwise due on 15.1.2021) is extended to 31.3.2021.

(3) Completion of Audit under any provision of Income Tax Act, 1961 for FY 2019-20 relevant for AY 2020-21is extended to 14.1.2021.

(4) Furnishing of report of Audit under any provision of the Income Tax Act, 1961for FY 2019-20 relevant for AY 2020-21(including TAR of 44AB, Trust Form 10B, Trust Form 10 for set apart etc.) is extended to 15.1.2021.

(5) Furnishing of return if income for AY 2020-21 by Companies, Audit cases under any provision of Income Tax Act, Audit cases under any law for the time being in force, Partner of a firm whose accounts are required to be audited under the Income Tax Act, Partner of a firm whose accounts are required to be audited under any other law for the te being in force, cases where section 92E applies) is extended to 15.2.2021.

(6) All assessees who were required to furnish return of income for AY 2020-21 on or before 31.7.2020, i.e. non audit returns, is extended to 10.1.2021.

Note: If a return due on or before 10.1.2021 is not furnished by 10.1.2021, late fee shall be charged under section 234F as follows:

(a) if total income does not exceed Rs. 5 lakh - Rs. 1000/-

(b) if total income exceed Rs. 5 lakh - Rs. 10000/-

In continuation of aforementioned post, please note that -

(7) As per recent extensions, for FY 2019-20 relevant for AY 2020-21 assessee is required to get his accounts audited / obtain audit report under Income Tax Act, e.g. section 44AB, section 12A(b) etc., up to 14.1.2021.

(8) report of such audit is required to be furnished by 15.1.2021.

*1. Notification 93/CT -2020*

- Waives late fees payable for delay in filing of GSTR 4 for FY 2019-20 by *Composition Dealers in the UT of Ladakh* from 01.11.2020 to 31.12.2020

*2. Major changes made vide Notification No. 94/CT-2020*

▪️ *Rule 36(4)* : limit of 10% is now reduced to 5%. Mere uploading of invoice in GSTR-1 will not suffice but return has to be mandatorily filed by supplier.

*Effective from 01 Jan 2021*

▪️ *New Rule 86B inserted* :

Taxpayers whose Taxable Turnover exceeds 50 lakhs in a tax period shall mandatorily pay at least 1% of tax from cash ledger even though balance is available in credit ledger.

This restriction is not applicable to normal taxpayers subject to few conditions, Govt. Depts, PSU, Local Auth & Stat. bodies.

*Effective from 01 Jan 2021*

▪️ *New Rule 59(5) inserted* :

Taxpayers now not allowed to file GSTR 1 if they have not filed their GSTR 3B for preceding two months, likewise if the taxpayer has opted for QRMP scheme and has not furnished GSTR 3B of previous Qtr., then subsequent filing of GSTR 1/ IFF shall not be allowed.
*Effective from 22 Dec 2020*

3. If there is significant difference in the comparison of GSTR-1 & 3B then proper officer shall suspend your registration and shall send a SCN to cancel your registration.

4. Deemed registration time extended to 7 days and 30 days from earlier 3 days.

5. Opportunity of being heard is no longer available for cancellation of registration.

Allahabad High Court rap “callous” taxman for “harassment” of a taxpayer under GST framework

Coming down hard on the indirect tax department the Allahabad High Court said the tax department harassed a taxpayer by cancelling his registration and slapped a fine of Rs 10,000.

The high court also revoked the cancellation of registration of the taxpayer on account of “non filing of Goods and Services Tax (GST) returns for 6 months. The court was hearing a writ petition filed by Ansari Construction.
“This case highlights the callous manner in which the assessee (Ansari Construction) has been harassed by the respondents,” the court observed in the case.

The indirect tax department had issued show cause notice to the construction company for not filing GST returns. However, the tax department later accepted that the returns were filed and no dues were pending.

“The show cause notice was completely vague and did not even point out as to what ground the reply was proposed to be sought, the petitioner appeared and apprised that all the returns have already been filed,” the court observed.

“Since cancellation of GST registration directly impacts an assessee's right to do business, the Allahabad High Court rightly observed that the GST authorities can cancel registration only in accordance with provisions of the GST law and not otherwise. Where compliance with GST provisions is established by the taxpayer, GST registration cancellation should duly be revoked,”
Ansari Construction had dragged the tax department to court after the show cause notice was issued and the company’s GST registration was cancelled.

The court also asked the tax officer to pay Rs 10,000. In view of the specific findings recorded above to the effect that the petitioner was unnecessarily harassed, the writ petition is allowed with a cost of Rs. 10,000/- to be paid to the petitioner within 30 days by the respondent no. 2 (tax officer) from his own salary,” the high court ruled.

Blocking of E-Way Bill facility enabled w.e.f. 01 Dec 2020 for all type of taxpayers (irrespective of turnover) for default in furnishing GSTR-3B for two or more consecutive tax periods.