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Click here to read and download ITAT order copy reported in [TS-9184-ITAT-2018(Pune)-O]
Editorial Note: [TS-6418-ITAT-2018(Bangalore)-O] : ITAT: Allows co-operative society’s Sec. 80P claim on interest income (on fixed, savings, current and other deposits); Distinguishes Totgars ruling - Bengaluru ITAT allows Sec. 80P benefit to assessee-society (engaged in providing credit facilities to the members) with respect to interest earned on deposits made in cooperative societies / banks during AYs 2011-12 and 2012-13; Accepts assessee’s stand that interest income earned by it by making the deposits in cooperative society / banks would be an activity relatable to its business and would therefore be eligible for Sec. 80P deduction; Distinguishes Revenue’s reliance.
Ministry of Finance
Task Force to Review Direct Tax Legislation
Dated: 18 DEC 2018
The Government had constituted a Task Force to draft a New Direct Tax Law vide Officer Order in F.No. 370149/230/2017 dated 22.11.2017 under the Convenorship of Shri Arbind Modi, the then Member (Legislation), CBDT with original term of six months for submission of report to the Government which was extended by a period of three months.
However, on superannuation of Shri Arbind Modi, the Task Force has been reconstituted vide Office Order in F.NO. 370149/230/2017 dated 26.11.2018 with the following Members:
i. Shri Akhilesh Ranjan, Member (Legislation), CBDT-Convener;
ii. Shri Girish Ahuja, practicing Chartered Accountant and non-official Director State Bank of India;
iii. Shri Rajiv Memani, Chairman & Regional Managing Partner of E&Y;
iv. Shri Mukesh Patel, Practicing Tax Advocate, Ahmedabad;
v. Ms Mansi Kedia, Consultant, ICRIER, New Delhi
vi. Shri G. C. Srivastava, Retd. IRS (1971 Batch) and Advocate.
The terms of reference of the Task Force remains unchanged and is to draft an appropriate direct tax legislation keeping in view:
i) the direct tax system prevalent in various countries;
ii) the international best practices;
iii) the economic needs for the country and;
iv) any other matter connected thereto.
The task force is required to submit its report to the Government by February 28, 2019.
This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a Question in Rajya Sabha today.
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DSM/RM/KA
F. No. 279/Misc/M-93/2018-ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes
Judicial Section
New Delhi,
Dated: 11th December 2018
To,
All Pr. Chief Commissioners of Income tax
Madam/Sir,
Sub:- Clarification w.r.t para 10 of Circular 3 of 2018 -Reg.
Instructions were issued vide CBDT Circular No. 3 of 2018 dated 11.07.2018, to the effect that SLPs/appeals should not be filed in cases where the tax effect does not exceed the monetary limits specified under para 3 of the said Circular. It was also clarified therein that appeal should not merely be filed because the tax effect in the case exceeds the monetary limits prescribed in the said Circular.
2. In para 10 of the said Circular read with Board's letter issued vide F. No. 279/Misc.l42/2007-ITJ(Pt) dated 20.08.2018, it has been unambiguously and expressly provided that adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect:
(a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or
(b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or
(c) Where Revenue Audit objection in the case has been accepted by the Department, or
(d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account.
(e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI).
(f) Cases where prosecution has been filed by the Department and is pending in the Court."
3. The direction that appeals be 'contested on merits' in itself implies that there should not be any mechanical filing of appeals in these cases. It is therefore reiterated that the import and intent of para 10 of Circular 3 of 2018 is that even on issues mentioned in the said para, appeals against the adverse judgements should only be filed on merits.
4. The above may be brought to the notice of all concerned. This issues with the approval of Member (A&J)
(AbhisheK Gautam)
DCIT OSEr(ITJ-l), CBDT
Tel: 011-23741832
Press Information Bureau
Government of India
Ministry of Finance
10 DEC 2018
Streamlining of National Pension System (NPS)
Decision
The Union Cabinet in its Meeting on 6th December, 2018 has approved the following proposal for streamlining the National Pension System (NPS).
· Enhancement of the mandatory contribution by the Central Government for its employees covered under NPS Tier-I from the existing 10% to 14%.
· Providing freedom of choice for selection of Pension Funds and pattern of investment to central government employees.
· Payment of compensation for non-deposit or delayed deposit of NPS contributions during 2004-2012.
· Tax exemption limit for lump sum withdrawal on exit has been enhanced to 60%. With this, the entire withdrawal will now be exempt from income tax. (At present, 40% of the total accumulated corpus utilized for purchase of annuity is already tax exempted. Out of 60% of the accumulated corpus withdrawn by the NPS subscriber at the time of retirement, 40% is tax exempt and balance 20% is taxable.)
· Contribution by the Government employees under Tier-II of NPS will now be covered under Section 80C for deduction up to Rs. 1.50 lakh for the purpose of income tax at par with the other schemes such as General Provident Fund, Contributory Provident Fund, Employees Provident Fund and Public Provident Fund provided that there is a lock-in period of 3 years.
Background
The new entrants to the central government service on or after 01.01.2004 are covered under the National Pension System (NPS). The Seventh Pay Commission (7th CPC), during its deliberations, examined certain concerns regarding NPS and made recommendations in the year 2015. The 7th CPC recommended for setting up of a Committee of Secretaries in this regard. Accordingly, a Committee of Secretaries was constituted by the Government to suggest measures for streamlining the implementation of NPS in the year 2016. The Committee submitted its report in the year 2018. Accordingly, based on the recommendations of the Committee, draft Cabinet Note was placed before the Cabinet for its approval.
Implementation strategy and targets
The proposed changes to NPS would be made applicable immediately once time critical decisions are taken in consultation with the other concerned Ministries / Departments.
Major impact
· Increase in the eventual accumulated corpus of all central government employees covered under NPS.
· Greater pension payouts after retirement without any additional burden on the employee.
· Freedom of choice for selection of Pension Funds and investment pattern to central government employees.
· Benefit to approximately 18 lakh central government employees covered under NPS.
· Augmenting old-age security in a time of rising life expectancy.
· By making NPS more attractive, government will be facilitated in attracting and retaining the best talent.
Expenditure involved
The impact on the exchequer on this account is estimated to be to the tune of around Rs. 2840 crores for the financial year 2019-20, and will be in the nature of a recurring expenditure. The financial implications on account of provisions regarding payment of compensation for non-deposit or delayed deposit of NPS contributions during 2004-2012, would be in addition to the amount indicated above.
No. of beneficiaries
Approximately 18 lakh central government employees covered under NPS would be benefitted from the streamlining of the National Pension System.
States/districts covered
Pan India.
Details and progress of scheme if already running
Presently, the new entrants to the central government service on or after 01.01.2004 are covered under the NPS. NPS is being implemented and regulated by Pension Fund Regulatory and Development Authority in the country.
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DSM/RM/KA