1. Approval u/ss. 35(i)(ii) and 35(i)(iii) – Rules 5C and 5D

1. Form No. 3CF-I is prescribed for application for approval by Scientific Research Association u/s. 35(i)(ii).
    

2. Form No. 3CF-II is prescribed for application for approval by a university, college or other Institutions u/s. 35(i)(ii) or 35(i)(iii).

Relevant guidelines are also given in Rules 5C and 5D.

[Notification No. 309/2006 dated 30th October, 2006 (156 Taxman (St.) 99) (286 ITR (St) 109) (205 CTR (St) 125)]

2. Audit Report for claiming deduction u/ss. 35D and 35E – Rule 6AB

An assessee other than a company or a co-operative society shall furnish report of audit of the accounts required u/ss. 35D(4) and 35E(6) in Form No. 3AE.

[Notification No. 288/2006 dated 19th October, 2006 (156 Taxman (St.) 83) (286 ITR (St) 65)]

3. Disallowance u/s. 40A(3) – Rule 6DD

The words “a crossed cheque drawn on a bank or by a crossed bank draft” is substituted by the words “an account payee cheque drawn on a bank or account payee bank draft” in Rule 6DD.

[Notification No. 314/2006 dated 9th November, 2006 (157 Taxman (St.) 3)]

4. Filing of Return of Income by the coffee growers – Rule 7B

1. An individual, whose 25% of the income from growing and curing of coffee and income under all other heads does not exceed basic exemption limit is not required to file his return of income.
    

2. An individual, whose 40% of income derived from growing, curing, roasting and grounding of coffee with or without mixing chicory or other flavouring ingredients and income under other hands does not exceed basic exemption limit is not required to file return of income.

[Circular No. 10/2006 dated 16th October, 2006 (156 Taxman (St.) 59) (205 CTR (St.) 59) (286 ITR (St) 57)]

5. Return of Income and the Return of Fringe Benefits – Rule 12

Form No. 3A being return of income and the return of fringe benefits is substituted.

[Notification No. 288/2006 dated 19th October, 2006 (156 Taxman (St.) 83) (205 CTR 83) (286 ITR (St) 65)]

6. Guidelines for Non-resident PAN applicants – New PAN application

1. An application by an Indian citizen residing outside India or foreign citizen or other than an individual having no office in India shall fill the PAN application as under:

1. Assessing Officer code of International Taxation Directorate should be given
    

2. A foreign residential/Office address can be provided by individuals, if they do not have Indian address.
    

3. Individuals can indicate any address (residential or office – whether Indian or foreign) as communication address.
    

4. Additional courier charges shall be payable, if the address for communication is a foreign address.
    

5. A valid e-mail ID must be provided in item No. 7.
    

6. Providing details of Representative Assessee (RA) is not mandatory. But, if provided, proof of identity and proof of address of RA needs to be given.
    

7. Applicant himself should sign the application though details of RA are provided.

2. Indian citizen located outside India shall submit copy of passport as proof of identity and copy of passport/copy of bank account statement in country of residence as proof of address.
    

3. Foreign citizen located in India shall submit copy of passport as proof of identity and copy of passport/copy of Bank Account statement in India as proof of address.
    

4. Foreign citizen located outside India shall give copy of passport attested by Indian embassy in the county where applicant is located as proof of identity and copy of passport/bank statement of country of residence duly attested by such Indian embassy as proof of address.

[(156 Taxman (St.) 110)]

The above guidelines will also apply for change requested in PAN.

[(156 Taxman (St.) 109)]

7. Certificate for Lower/Non Deduction at Source – Section 197

All Assessing Officers are directed to ensure that all certificates u/s. 197(1) are issued strictly as prescribed under Rule 28AA or 28AB. No certificate u/s. 197(1) shall be issued, which are not covered by the said rules in any circumstances. The Assessing Officer shall also obtain prior administrative approval of the Range Jt. CIT/Addl. CIT.

[Instruction No. 8/2006 dated 31st October, 2006 (157 Taxman (St.) 4) (206 CTR (St) 1)]

8. Procedure for issue of refunds

The steps recently taken to prevent fraudulent encashment of refunds include:

1. Introduction of issue of refunds directly to the bank account of the tax-payer through the Electronic Clearance Scheme.
    

2. Mandatory quoting of bank account details on the refund vouchers with effect from 1-1-2006.
    

3. Cross-verification of high value refunds by the clearing bank from the issuing officer in the Income-tax Department.

Therefore, tax-payers must quote their bank account details correctly in their tax returns so that they get their refunds quickly and safely.

[Press Release dated 3rd November, 2006 (157 Taxman (St.) 5) (206 CTR (St) 8)]

9. Waiver of interest – u/ss. 234A, 234B and 234C

The CBDT has directed CCIT and DGIT to consider following instances to reduce or waive interest u/s. 234A, 234B or 234C provided the assessee has filed return of income and paid entire income tax due on assessed income.

1. Where the books of account and other incriminating documents have been seized during search and seizure u/s. 132 and the assessee is unable to furnish the return of income for the previous year in which the action has taken place, waiver of interest u/s. 234A will be considered.
    

2. Any income under any head of income, other than ‘Capital Gains’ is received or accrued after due date of payment of the first or subsequent instalments of advance tax, which was neither anticipated nor was in the contemplation of the assessee, and the advance tax on such income is paid in the remaining instalment/s for the purpose of reduction or waiver of the interest chargeable under section 234C.
    

3. Where any income was not chargeable to income-tax on the basis of any order passed by the High Court within whose jurisdiction he is assessable to income-tax, and as a result, he did not pay income-tax on such income in any previous year, and subsequently, in consequence of any retrospective amendment or the decision of the Supreme Court, or a decision of a larger Bench of the jurisdictional High Court (which has become final), in any assessment or reassessment proceedings, the advance tax paid by the assessee during such financial year is found to be less than the amount of advance tax payable on his current income, and the assessee is chargeable to interest under section 234B or section 234C.
    

4. Where a return of income could not be filed due to unavoidable circumstances and such return of income is filed voluntarily by the assessee or his legal heirs without detection by the Assessing Officer, waiver of interest u/s. 234A will be considered.

[Order F. No. 400/129/2002-IT(B), dated 26th June, 2006 (156 Taxman (St.) 62) (205 CTR (St.) 81)]

10. Grievances out of Scrutiny selection on Annual Information Return

The CBDT have laid down the following guidelines for dealing with grievances arising out of cases selected for scrutiny based on information contained in Annual Information Returns (AIR).

1. All cases selected for scrutiny will be displayed by the 15th of the following months.
    

2. Queries will be specific and to the point.
    

3. It shall be mentioned in the scrutiny notice that written reply along with supporting documentary evidence will be sufficient compliance to the scrutiny notice.
    

4. It shall be affixed on the scrutiny notice that ‘Personal attendance not essential’.
    

5. If the information and supporting evidence received is sufficient, personal attendance of the tax-payer shall not be insisted upon.
    

6. Chief Commissioners and Commissioners may also hold open house meetings in this regard.
    

7. Drop Boxes shall be provided for such tax-payers who wish to file their grievances in writing.
    

8. Steps shall be taken to redress such written grievances expeditiously.

[Press Release dated 26th October, 2006 (157 Taxman (St.) 1)]

11. DTAA with Kingdom of Saudi Arabia

Double Tax Avoidance Agreement with Kingdom of Saudi Arabia has been notified.

[(156 Taxman (St.) 63) (286 ITR (St) 87)]