1. Meaning of the expression ‘the produce of animal husbandry’ – Rule 6DD(f)(ii)

Vide Circular No. 4/2006 dated 29th March, 2006, it was clarified that the expression ‘the produce of animal husbandry’ used under rule 6DD(f)(ii) would include ‘livestock and meat’ and in a case where payment exceeding rupees twenty thousand is made to a producer of the products of animal husbandry (including livestock, meat, hides and skins) otherwise than by a crossed cheque drawn for the purchase of such produce, no disallowance should be attracted under section 40A(3) read with rule 6DD.

It was further clarified that the above exception will not be available in respect of payment for the purchase of livestock, meat, hides and skins from a person who is not proved to be the producer of these goods and is only a trader, broker or any other middleman by whatever name called.

The Board has further clarified that any person, who buys animals from the farmers, slaughters them and then sells the raw meat carcasses to the meat processing factories or to the traders/retail outlets would be considered as producer of livestock and meat.

The benefit of rule 6DD shall be available to the above referred person subject to furnishing of the following:–

1. a declaration from the person receiving the payment that he is a producer of meat;
    

2. a confirmation that the payment, otherwise than by an account payee cheque or account payee bank draft, was made on his insistence; and
    

3. a further confirmation from a veterinary doctor certifying that the person specified in the certificate is a producer of meat and that slaughtering was done under his supervision.

[Circular No. 8/2006, dated October 6, 2006 (156 Taxman (St) 25) (286 ITR (St) 35)]

2. Mode of investment or deposit by charitable or religious trust or institutions – Rule 17C

In rule 17C, clause (v) is inserted with effect from the 26th day of November, 1999, that permits investment made by a recognized stock exchange referred to in section 2(f) of the SCRA, 1956, (hereafter referred to as investor) in the equity share capital of a company (hereafter referred to as investee)

1. which is engaged in dealing with securities or mainly associated with the securities market;
    

2. whose main object is to acquire the membership of another recognized stock exchange for the sole purpose of facilitating the members of the investor to trade on the said stock exchange through the investee in accordance with the directions or guidelines issued under the SEBI Act, 1992 and
    

3. in which at least fifty-one per cent of equity shares are held by the investor and the balance equity shares are held by members of such investors.”

[Notification No. 267/2006 dated 14th September, 2006 (286 ITR (St.) 25)].

3. New Return Forms for Assessment Year 2006-07

The CBDT have notified following new return forms for Assessment Year 2006-07:–

1. Form No. 2F vide Notification S.O. No. 848(E) effective from 1st June, 2006 to be used by resident individual/ Hindu undivided Family (HUF) –

1. not having Income from ‘business or profession’ or agricultural income or ‘capital gains’ (except long-term capital gains from transactions on which securities transaction tax paid); or
    

2. not claiming relief under section 89 in respect of arrears or advance of salary;
    

3. not owning more than one house property.

2. Form No. 1, Form No. 2, Form No. 3 has been substituted and Form No. 3B has been notified vide Notification S.O. No. 1163(E) effective from 24-7-2006.
    

3. Form No. 3B is a return of fringe benefits applicable to those who are required to furnish the return of income and also the return of fringe benefits but have filed the return of income in Form No. 1/No. 2/No. 2D/No. 3A for the Assessment Year 2006-07 before the above notification or opts to file the return of income in Form No. 2D. This will also apply to those who are not required to furnish the return of income but are required to furnish the return of fringe benefits.

These Forms are available at http//incometaxindiaefiling.gov.in. If a taxpayer intends to file a return for any earlier assessment year he will have to use the old forms.

These return forms have been designed to make them amenable for electronic filing. The tax-payer who does not use a digital signature, a two step-procedure has been prescribed for furnishing these forms electronically without digital signature. First step is to transmit the details of the return and schedules thereto electronically (without digital signature) to the designated web-site and thereafter to file a paper Return. The date of the electronic transmission and acknowledgement number given electronically by the Income-tax Department for such transmission has to be filled in the paper return. However, if the return is furnished electronically under the digital signature, it will not be necessary to furnish the paper return.

Apart from procedure mentioned in above paras, an assessee may also file, at his option, an e-return in accordance with following schemes:–

1. Electronic Furnishing of Return of Income Scheme, 2004 [Notified vide S.O. No. 1073(E) dated 30-9-2004].
    

2. Furnishing of Return of Income Internet Scheme, 2004. [Notified vide S.O. No. 1074(E) dated 30-9-2004]

All corporate tax-payers have to furnish the return for Assessment Year 2006-07 electronically after 24-7-2006. However, for other class of tax-payers, it is optional to furnish an e-return.

Further, these forms are not to be accompanied by any attachment/annexure.

Following clarifications are hereby issued In respect of certain issues arising from furnishing the returns in above mentioned forms:-

1. The report of audit under section 44AB is not to be attached with the return and not to be furnished separately. However, an assessee should get the report of audit from an accountant before the due date of the furnishing of the return. The assessee should retain the report with himself. It may be furnished in original during the assessment proceedings. No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date. However, if the audit report has not been obtained before the due date, provisions of section 271B shall be attracted.
    

2. While processing the return under section 143(1), the credit for Tax Deducted at Source (TDS)/ Tax Collected at Sources (TCS) shall be allowed on the basis of details furnished in the relevant schedules of these returns as if the TDS/TCS certificates have been filed.
    

3. These returns are not to be accompanied with any other document including any statutory form or report of audit (other than the report under section 92E) which is otherwise required to be furnished before the due date or along with the return for making any claim. The provisions of the law shall be deemed to have been complied with in respect of the requirement of the filing of the attachments or documents or reports along with the return. No penalty shall be initiated/levied for not furnishing such documents. All these documents should be retained by the tax-payers and be furnished in original during the scrutiny proceedings.
    

4. The report as required under section 92E of the Income-tax Act shall continue to be furnished before the date specified in rule 10E.
    

5. In the case of the old forms, the assessee could enclose documents, furnish reasons and make disclosures in support of claims made by him. However, it is not possible to do so in case of new forms as these are annexure-less. Accordingly, the assessee may, in pursuance to the first notice issued under section 143(2), avail of the opportunity to file documents, furnish reasons and make disclosures in support of various claims made by him in the return filed in new form.
    

6. In case, a return is furnished under digital signature, the date of such furnishing shall be the date of furnishing the return. In case, a return is furnished under two step procedure as explained in para 2 or in accordance with the Scheme mentioned at para 3(i), the date of furnishing the e-return will be the date of furnishing the return only if –

1. paper return has been filed within fifteen days from the date of filing the e-return or within one month from the date of issue of this Circular, whichever is later; and
    

2. paper return tallies with the e-return.

In case condition in (i) or (ii) above is not satisfied, the paper return shall be taken to be the return and date of filing the paper return shall be taken as the date of filing the return.

7. The e-Return has to be filed at http://incometaxindiaefiling.gov.in. The paper return, if any, in respect of such e-returns shall be filed either at separate counter(s) to be set up for this purpose at each local income-tax office (whether on network or not) or at designated postal offices.
    

8. The tax-payers who have filed the returns in the old forms (other than Form No. 2D) even after the notification of the new forms, the tax-payers should resubmit the return in new forms in accordance with the new procedure.
   The returns filed electronically shall be processed on priority basis.

[Circular No. 9/2006, dated October 10, 2006 (156 Taxman (St) 26) (286 ITR (St) 53)]

4. Centrally processing of returns furnished with post offices/electronically

The Board has decided to process the following returns centrally:

1. Returns furnished at post offices.
    

2. Returns furnished under the Electronic Furnishing of Return of Income Scheme, 2004.
    

3. Returns furnished under the Furnishing of return of Income Internet Scheme, 2004.
    

4. Returns furnished under two step-procedure. First step is to transmit the details of the return and schedules thereto electronically without digital signature and thereafter to furnish a paper return.
    

5. Returns furnished under digital signature.

For centralized processing of above-mentioned returns, procedure has been outlined.

[Instruction No. 7/2006 dated 10th October, 2006 (156 Taxman (St) 54)]

5. Extension of Due date for filing of returns u/s. 139(1)

The due date for filing of return of income-tax and fringe benefits and for obtaining the report of audit u/s. 44AB in case of all companies (other than the companies assessed in the State of Gujarat) for assessment year 2006-07 is extended till 30-11-2006.

[F. No. 133/38/2006 – TPL(Pt.) dated 24th October, 2006]