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Direct Taxes
Statutes, Circulars and Notifications
 

  1. Eligible Investments/Deposits – Section 80C

Investments/Deposits mentioned below are notified to be eligible for deduction u/s. 80C for the assessment year 2006-07.

  1. Public Provident Fund (Notification No. 222 of 2005 dated 3rd November, 2005. (199 CTR (St.) 6) (148 Taxman (St) 37) 279 ITR (St) 7
     

  2. N.S.C. VIII issues (Notification No. 223 of 2005 dated 3rd November, 2005. (199 CTR (St.) 7) (148 Taxman (St) 37) 279 ITR (St) 7
     

  3. ULIP of LIC Mutual Fund (Notification No. 224 of 2005 dated 3rd November, 2005. (199 CTR (St.) 7) (148 Taxman (St) 38) 279 ITR (St) 7
     

  4. New Jevan Dhara, New Jeevan Dhara I, New Jeevan Akshay, New Jeevan Akshay II, (Notification No. 225 of 2005 dated 3rd November, 2005. (199 CTR (St.) 7) (148 Taxman (St) 38) 279 ITR (St) 8
     

  5. Equity Linked Savings Scheme, 2005. (Notification No. 226 of 2005 dated 3rd November, 2005 (199 CTR (St.) 7) (148 Taxman (St) 38)
     

  6. UTI – Retirement Benefit Pension Fund. (Notification No. 227 of 2005 dated 3rd November, 2005 (148 Taxman (St) 38) 279 ITR (st) 8

  1. Equity Linked Savings Scheme, 2005

The CBDT has clarified that investments made on or after 1st April, 2005 in plans which are in accordance with ELSS 1992 or ELSS 1992 as amended in 1998 are also eligible for tax benefit u/s. 80-C of the Income-tax Act, 1961.

{PIB Press Release dt. 11th November, 2005 (199 CTR (St.) 24)} 279 ITR (St) 9

  1. Equity Linked Savings Scheme, 2005

Equity Linked Savings Scheme, 2005 has been notified.

(148 Taxman (St) 34)

  1. Guidelines for approval – Section 80C – Rule 20

Consequential amendments has been carried out in Rule 20 in view of insertion of section 80-C relating to deduction from gross total income in lieu of section 88 relating to rebate from tax.

{(Notification No. 221 of 2005 dated 3rd November, 2005 (278 ITR (St.) 30) (148 Taxman (St) 34)}

  1. Procedure for Selection of Cases for Scrutiny for Corporate Assessees

The procedure for selection of cases of Corporate Assessees during the current financial year 2005-06 would be as under:

  1. Compulsory Scrutiny

  1. All search and seizure cases
     

  2. All survey (Section 133A) cases
     

  3. All returns where deduction claimed under Chapter VI-A is Rs. 25 lakh or more in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 10 lakh or more for other places.
     

  4. All cases where the refund claimed is Rs. 50 lakh or more in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 20 lakh or more for other places.
     

  5. All cases where addition/disallowance sustained by the CIT(A) in the appeal decided in the financial year 2004-05 amounts to Rs. 10 lakh and above in Delhi, Mumbai, Chennai, Kolkata, pune, Hyderabad, Bangalore and Ahmedabad and Rs. 5 lakh or more in other places
     

  6. In cases of non residents, the refund limit for selecting a case for scrutiny shall be decided by the DGIT (International Taxation).
     

  7. All public sector undertakings and banks
     

  8. All NSE-500 companies and BSE –A group companies listed on Bombay Stock Exchange as on 31st March, 2005.
     

  9. All cases of companies liable to pay tax under S. 115JB with book profit exceeding Rs. 50 lakh.
     

  10. Cases of universities, educational institutions, hospitals, nursing homes and other institutions for rehabilitation of patients (other than those, which are substantially financed by the Government), the aggregate annual receipts of which exceed Rs. 10 crore in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad, and Rs. 5 crore or above in other places.
     

  11. Cases where total value of international transactions (as defined under S. 92B of the IT Act) Exceeds Rs. 5 crore.
     

  12. All non-banking financial companies/investment companies having paid-up capital of more than Rs. 10 crore.
     

  13. All cases of stockbrokers (including sub-brokers) where brokerage received is disclosed at Rs. 1 crore or above and income declared is less than 10% of such brokerage.
     

  14. All cases of stockbrokers (including sub-brokers) in which bad debts of Rs. 10 lakh or more have been claimed.
     

  15. Cases of amalgamated companies claiming set off of loss under S. 72A of the IT Act.
     

  16. Cases where the value of international transaction (Section 92B) exceeds Rs. 5 crore.
     

  17. All cases of deduction under S. 10A and/or 10B of the IT Act with export turnover exceeding Rs. 10 crore.
     

  18. All cases of contractors whose gross contractual receipts exceed Rs. 5 crore and net income declared is less than 5% of gross contractual receipts.
     

  19. All returns filed in pursuance to notice u/s. 148

  1. If a case does not fall in the categories specified above but the CCIT/DGIT (International Taxation)/DGIT (Exemptions), of his own motion or on the matter having been brought to his notice by an authority below, is satisfied that the case needs to be taken up for scrutiny, the CCIT/DGIT (International Taxation)/DGIT (Exemptions), for reasons to be recorded in writing, may direct the Assessing Officer to take up the case for scrutiny.
     

  2. In addition to above, selection of cases out of returns processed on AST will be made through a Computer Assisted Scrutiny. The selection will be made centrally at RCCs on the basis of selection criteria determined by the Board.
     

  3. Lists of cases picked up for scrutiny during each month shall be submitted by the Assessing Officer to the CIT and Addl. CIT, Range by 15th of the following month.

{Instruction No. ……of 2005 dated October, 2005 (199 CTR (St) 1)}

  1. Procedure for Selection of Cases for Scrutiny for Non-Corporate Assessees

The procedure for selection of cases of Non-Corporate Assessees during the current financial year 2005-06 would be as under:

  1. Compulsory Scrutiny

  1. All search and seizure cases
     

  2. All survey (Section 133A) cases
     

  3. All returns where deduction claimed under Chapter VI-A or refund claimed is Rs. 10 lakh or more in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 5 lakh or more for other places.
     

  4. In cases for non residents, the refund limit for selecting a case for scrutiny shall be decided by the DGIT (International Taxation).
     

  5. All cases where addition/disallowance sustained by the CIT (A) in the appeal decided in the financial year 2004-05 amounts to Rs. 5 lakh and above in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 1 lakh or more in other places has been

  6. All returns of local authorities
     

  7. All cases of banks and non-banking financial institutions with deposits of Rs. 5 crore and above.
     

  8. Cases of universities, educational institutions, hospitals, nursing homes and other institutions for rehabilitation of patients (other than those, which are substantially financed by the Government), the aggregate annual receipts of which exceed Rs. 10 crore in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad, and Rs. 5 crore or above in other places.
     

  9. All cases where exemption is claimed under s. 11 of IT Act and the gross receipts exceed Rs. 5 crore.
     

  10. All cases where total value of International Transactions (as defined under s. 92B of the IT Act) exceeds Rs. 5 crore.
     

  11. All cases of stockbrokers (including sub-brokers) where brokerage received is disclosed at Rs. 50 lakh or above and income declared is less than 10 % of such brokerage.
     

  12. All cases of stockbrokers (including sub-brokers) where there are claims of bad debts of Rs. 5 lakh or more.
     

  13. All cases of professional with gross receipts of Rs. 50 lakh or more and income declared is less than 20% of gross professional receipts.
     

  14. All cases of deduction under s. 10A and/or 10B of the IT Act with export turnover exceeding Rs. 5 crore.

  15.  

  16. All cases of contractors whose gross contractual receipts exceed Rs. 2 crore and net income declared is less than 5% of gross contractual receipts.
     

  17. All returns filed in pursuance to notice u/s. 148

  1. If a case does not fall in the categories specified at para 2 above but the CCIT/DGIT (International Taxation)/DGIT (Exemptions), of his own motion or on the matter having been brought to his notice by an authority below, is satisfied that the case needs to be taken up for scrutiny, the CCIT/DGIT (International Taxation)/DGIT (Exemptions), for reasons to be recorded in writing, may direct the Assessing Officer to take up the case for scrutiny.
     

  2. In addition to above, selection of cases out of returns processed on AST will be made through a Computer Assisted Scrutiny. The selection will be made centrally at RCCs on the basis of selection criteria determined by the Board. Separate instructions in this regard will be issued by the DIT (Systems)
     

  3. Lists of cases picked up for scrutiny during each month shall be submitted by the Assessing Officer to the CIT and Addl. CIT, Range by 15th of the following month.

{Instruction No. …… of 2005 dated October, 2005 (199 CTR (St) 3)}

  1. Monetary limit for filing of appeal

The Board has decided that appeals will henceforth be filed only in cases where tax effect exceeds the revised monetary limits given below.

Income tax Tax effect

  1. Appeals before Appellate Tribunal Rs. 2,00,000
  2. Appeals under section 260A Rs. 4,00,000
  3. Appeals before the Supreme Court Rs. 10,00,000

It has also been decided that in cases involving question of law of importance as well as in cases where the same question of law will repeatedly arise, either in the case concerned or in similar cases, should be separately considered on merits without being hindered by the monetary limits.

{Instruction No. 2 of 2005 dt. 24-10-2005 (148 Taxman (St) 26) (198 CTR (St) 41)}

  1. The Taxation Laws (Amendment) Ordinance, 2005

The Taxation Laws (Amendment) Ordinance, 2005 has been published making various amendments to the Income-tax Act, 1961.

[(148 Taxman (St) 27)] 279 ITR (St) 1

  1. Pattern of investments by Provident Funds etc. – Rule 67

Manner of investment given in the Table to Rule 67 has been modified.

[Notification No. 220/2005 dated 3rd November, 2005 (148 Taxman (St) 30) (278 ITR (St) 26)]

  1. DTA with Portuguese Republic is – Amended

[148 Taxman (25) 1] 278 ITR (st) 8

  1. Date for filing of Annual Information Return u/s 285

– Extended to 30-11-2005 278 ITR (St) 19.
 

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