However, it’s important to consider when to enter overseas markets. Your new business will grow rapidly if you enter new markets at the appropriate moment. Consider these important concerns before opting to expand your business internationally.

1. Are You Prepared for International Trade?

It is one thing for your Products / services to be well-liked in your community, but quite another for them to be in high demand overseas.

Examine the new markets you plan to enter to determine whether they are a good fit for the goods or services you are providing.

2. Which Difficulties Do You Think You’ll Face?

Being aware of the difficulties involved in doing business internationally enables you to plan ahead. The inability to obtain regulatory permissions, localizing Products / services to fit the new target market, and getting an advantage over your competition are a few problems you can face.

Money is the main obstacle that most businesses have while trying to grow. Most businesses discover that they cannot afford the expenses of global expansion, although too late. In this situation, you must first decide how you will handle marketing, pay your employees, and create goods or services to meet demand.

3. How critical is it to begin international expansion?

Even while a business is ready to grow, it may not be quite ready to do so yet. The reason for this is because even if you could be more than capable of outpacing other companies within your own nation, you might not be prepared to take on the global titans just yet.

More important than financial stability is your ability to fit in and cater to a whole different market. When you have something special and useful to give, along with a strong worldwide network, you are in a better position.

4. Is it possible to strike a balance between value and growth?

Most businesses discover in the beginning of their expansion that in order to create long-term value, they must forgo their short-term growth. Is it sensible to expand internationally right now, or would it be preferable to hold off until after the company has grown significantly?

No two businesses are the same; some seem prepared to enter new markets in their first year of operation, while others take much longer. Ultimately, it all comes down to finding your competition, building your networks, and weighing your odds.

The present is the ideal moment for a successful worldwide expansion.

Entering foreign markets is a significant choice. Before opening branches in potential markets, startups should thoroughly evaluate and comprehend the commercial and regulatory landscapes of such areas. Regarding when to enter new markets, if you’ve done your homework on your target market, product/service features, tie-ups or partnerships with local brands (which aren’t required but are a plus), and you have a well-considered revenue stream, you’ll be set to launch this year.

The post Overseas Expansion this year or next year. When is the right time…? appeared first on SK Patodia & Associate LLP.

1.Income Tax Circular for filing Appeal by the IT Department- Exception to Monetary Limit

CBDT, vide Notification No. 5/2024 dated 15th March, 2024 overrides previous limit for IT department appeals, ensuring filing in specific cases regardless of tax impacts.
For detailed information please refer our article on the same by referring the link:

https://www.linkedin.com/posts/skpatodia.in_incometax-circular-latestupdate-activity-717583364907281203qrpO?utm_source=share&utm_medium=member_ios
Income Tax Circular on Application of Income in case of Charitable Trust

CBDT, vide Notification No 3/2024 dated 06th March, 2024 clarifies on the amendment related to application of income in case of charitable trust.
For detailed information please refer our article on the same by referring the link:

https://www.linkedin.com/posts/skpatodia.in_incometax-incometaxapplication-incometaxreturn-activity-7171400923536060416-meV0?utm_source=share&utm_medium=member_ios

In this case, A search and seizure carried out under section 132 where the assesse surrendered undisclosed income of Rs. 4.53 crores during the assessment year 2017-18. The Assessing Officer taxed this income at a special rate under section 115BBE. However, on appeal, the Commissioner (Appeals) held that the income should be taxed at the normal rate as it was derived from regular business activities. The Tribunal upheld this decision.

On further appeal to the High Court, it was held that no substantial question of law arose from the Tribunal’s order. The High Court emphasized that an appeal to the High Court requires the presence of a substantial question of law, which was not found in this case. The appeal was dismissed as there was no merit in challenging the Tribunal’s decision, and the findings were based on a thorough consideration of the evidence available.

Bases on the above observations, The High Court dismissed the appeal, affirming the Tribunal’s decision and ruling that no substantial question of law arose from the case.

The post Important Due Dates for April 2024, Income Tax Updates – March 2024 appeared first on SK Patodia & Associate LLP.

• The stocks of Dubai – predicated parking operator Parkin endured a swell of over 30% upon the company’s debut on the Dubai Financial Market.
• With its IPO raising 1.57 billion dirhams ($ 429 million), Parkin witnessed oversubscription by 165 times, performing in demand totaling 259 billion dirhams – marking a record for the Dubai Financial Market exchange.

In Dubai, United Arab Emirates, the shares of Parkin, a parking operator, endured a swell of over 30% on Thursday, March 21, 2024, as the company made its debut on the Dubai Financial Market.

With trading commencing, Parkin’s share price rose to 2.73 dirhams ($0.74), marking a largely positive prolusion for the United Arab Emirates’ first public table of the time. Firstly, priced at the upper end of the range at 2.1 dirham per share, Parkin attained a valuation of $1.7 billion.

Having raised 1.57 billion dirhams ($429 million) through its IPO, Parkin garnered inviting demand, being oversubscribed by 165 times, which amounted to a record- breaking 259 billion dirhams in demand for the exchange.

As the largest provider of paid parking in Dubai, Parkin is poised to meet adding demand with the municipality’s rising population. In the first half of 2023, Dubai witnessed a 63% swell in residency visas issued compared to the same period the former time.

Chairman Ahmed Hashem Bahrozyan remarked shortly after trading began on Thursday that, “There are clear suggestions that Dubai is on a growth line, and Parkin is an integral part of the municipality of Dubai. So as Dubai grows, it’s only natural that Parkin grows as well.”

The Dubai Investment Fund, Parkin’s owner, offered a 25% stake in the company’s table, with strong demand from state institutions and families, signaling robust interest in Gulf investment.

Parkin’s prospectus indicates that it’s offering a tip equal to 100% of profit or free cash flux to equity, whichever is advanced, “subject to distributable reserves conditions.”

When questioned about the company’s capability to sustain analogous payouts in the future, Bahrozyan expressed confidence, stating, “We are truly confident we can, as I said the position of growth in the municipality promises that we will grow. And we do have truly comprehensive and truly important plans for expansion. We promise that we will do our swish to maximize the value for all the shareholders.”

Parkin’s table follows a fairly quiet period for registries in Dubai, following an active time of public offerings in 2022 that saw multitudinous of the emirate’s major public utility and critical structure operators go public.

These included Dubai’s power and water utility DEWA, which conducted the municipality’s largest- ever IPO, raising 22.3 billion dirhams in April 2022, along with toll operator Salik, quarter cooling services provider Empower, and Dubai Taxi.

Parkin marks the sixth establishment to suffer an IPO as part of Dubai’s public table action, which commenced in 2021. The municipality aims to enhance liquidity and trading volume on its original stock exchanges to more contend with counterparts in Abu Dhabi and Riyadh.

Across the Gulf region, there has been a flurry of IPO exertion, with the maturity being in Saudi Arabia. In 2023, 35 Saudi companies went public, alongside eight in the UAE, two in Oman, and one in Qatar.

Fadi Arbid, founding partner and CIO of Dubai- predicated investment director Amwal Capital mates, characterized this trend as a “spree of IPO lagniappe,”.

He noted, “In Dubai, it’s a truly deliberate effort from the government to privatize some trophy assets, and also open them to the public and to investors encyclopedically. And Saudi Arabia is equally driven by the private sector and the government as well.”

Arbid stressed that IPOs in Saudi Arabia benefit from strong support from retail investors, contributing to a deep request. “It’s still a healthy channel,” Arbid remarked. “It’s all about the pricing now.”

Source: CNBC

The post Dubai Market – UAE’s first IPO of the year appeared first on SK Patodia & Associate LLP.

1. Tax Saving Investments: In order to plan the taxes on income earned in FY 2023-24, it is essential to make tax-saving investments, especially for those who opt for the old tax regime. It is suggested to allocate funds to such tax-saving options that balances the earnings, savings, spending and tax payments. Below are some of the available tax saving investments options: • Section 80C Investments (like Term Insurance, PPF, ELSS Mutual Fund units, etc) • National Pension System (NPS) • Section 80D Health Insurance • Section 80G Donations to charitable institutes

2. Section 43B(h) – Payment to a Micro or Small Enterprise under MSME Act: Finance Act 2023 introduced a new provision to provide that any sum payable to a registered Micro or Small enterprise (manufacturer or service provider) beyond the credit period or 45 days (whichever is lower) shall be allowed as deduction only on actual payment basis. Therefore, if any sum is due and outstanding to a registered Micro or Small enterprise (for which credit has expired or going to expire on or before 31st March), in order to claim deduction of such expenses in FY 2023-24, last date to make payment to such a Micro or Small enterprise is 31st March, 2024.

3. Filing of Updated Return in ITR-U u/s 139(8A): Updated Income Tax Return can be filed if taxpayer wants to rectify any error or omissions in the original Return or where no Return is filed, wherein additional tax liability arises on preparing the revised computation of income. The due date to file such an updated return u/s 139(8A) is 24 months from the end of the relevant Assessment Year. Therefore, it is important to note that the updated return for FY 2020-21 can be filed till 31st March, 2024 by paying 50% of additional tax+interest+late fee, as applicable. Furthermore, for FY 2021-22, an updated return can be filed by 31st March 2024 by paying 25% of additional tax+interest+late fee, as applicable.

4. Withholding tax provisions applicable on year-end provisions provided payees are identifiable; The taxpayers who follow mercantile system of accounting, are required to account for all expenses, even if the bills/invoices have not been received. This is done by making provision for various expenses at year-end. Questions regarding applicability of withholding of taxes on such provision of expenses, is subject matter to litigation, for which various judicial judgments are available. Therefore, it is may be advisable to deduct and pay TDS on the amount credited to “Provision for Expenses account” where the Payee & Liability amount is ascertainable.

5. Investment by Trust/Institution to claim exemption u/s 11 of the Income Tax Act, 1961; For claiming exemption u/s 11 of the IT Act by a 12AA/12AB registered Charitable Trusts, it is provided to mandatorily apply 85% of its income earned during the relevant Financial Year wholly and exclusively towards the charitable and/or religious objects for which it was granted registration. However, where such Trusts/Institutions fails to apply 85% of its income during the relevant FY, they can decide to accumulate its income, either in whole or in part for application towards such objects in subsequent Assessment Years. For this, the Trusts/Institutions are required to invest the income so accumulated or set apart in modes specified u/s 11(5) of the Income-tax Act on or before end of relevant FY i.e. on or before 31st March, 2024. Having said above, in case of any amount is so accumulated or set apart by any Trust/ Institution as per above provision for the FY 2018-19, the last date to utilize such funds for specified purposes is also 31st March, 2024. Accordingly, where the Trust/Institution has not utilized the funds within this date, then it shall be treated as deemed income of Trust/Institution and taxed accordingly.

6. Form 67 – Foreign Tax Credit 31st March 2024 is the extended due date for uploading a statement in Form 67 to claim Foreign Tax Credit in case of any foreign income is offered to tax and on such income, tax was deducted or tax paid in FY 2022-23 [If ITR has been furnished within the time specified under section 139(1) or section 139(4)].

The post Aspects of Income Tax – to bear in mind before finance year ends appeared first on SK Patodia & Associate LLP.

1.Vide notification dated 13.02.2024 and Folio N0 – 375/02/2023, relating to extinguishment of outstanding tax demand

Consequent upon the Finance Minister’s budget speech on 01.02.2024, tax demands related to the assessment years mentioned below, which were outstanding as on 31st January, 2024 would be extinguished. The following demands shall be extinguished:

The remission and extinguishment of the above outstanding tax demand shall be subject to maximum ceiling of Rs. 1,00,000/- for the following types of demand entries-
a. Principal component of tax demand under the Income Tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 or Gift-Tax Act, 1958.

b. Interest, penalty, fees, cess or surcharge under various provisions of Income Tax Act, 1961 or corresponding provisions, if any, of Wealth-tax Act, 1957 or Gift-Tax Act, 1958

The above remission and extinguishment of the entries of outstanding tax demand shall not be applicable to the demands raised against TDS or TCS provisions of the Income Tax Act, 1961.

As per income tax provisions, if demand is not paid within 30 days of raising demand, interest @1% p.m. is charged for the period of delay. Accordingly, at the income tax portal, along with outstanding demand; accrued interest also appears from the date on which demand is raised to a particular date, till which interest is calculated.

In the order dated 13.02.2024, it is specified that there shall not be requirement of calculation of interest on account of delay in payment of demand and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs. 1,00,000/- of each demand entry. For e.g., Mr A’s outstanding demand is Rs.20,000 for AY 2005-06 and no interest is charged till date. It is likely that demand of Mr A will be extinguished as outstanding demand is less than specified limit. In another example, Mr B’s outstanding demand is Rs.20,000 for AY 2005-06 and interest of Rs.10,000 is charged till date. It is likely that demand of Mr B will not be extinguished as outstanding demand is more than specified limit.

It is also specified that in order to compute the aforesaid maximum ceiling of Rs 1,00.000/-, any demand entry having value more than the specified monetary limits shall not be taken into calculation. For e.g., Mr A’s outstanding demand is Rs.25,000 for AY 2003-04, AY 2005-06, AY 2006-07 and AY 2007-08. There is a demand of Rs. 30,000 for AY 2004-05 also. Total demand outstanding is Rs.1,30,000. However, as for AY 2004-05, outstanding demand is more than specified limit; said demand will not be extinguished and same will not be considered for overall limit of Rs. 1,00,000.

Also wherein, on or before 30.01.2024, if demand is already adjusted against refund or if demand is paid; benefit is not likely to be available for said taxpayers.

2. Vide notification dated 26.02.2024, implementation of e-verification scheme 2021 related to mismatch between interest and dividend income as per ITR and AIS/TIS of the taxpayers

In order to reconcile the mismatch or provide reason for mismatch, an on-screen functionality has been made available in the Compliance portal of the e-filing website https://eportal.incometax.gov.in for taxpayers. At present, the information mismatches relating to Financial Years 2021-22 and 2022-23 have been displayed on the Compliance portal.

The taxpayers are being notified the mismatch through SMS and emails as per details available with the Department.

In case the taxpayer has disclosed the interest income in the ITR under the line item ‘Others’ in the Schedule OS, he/she need not respond to the mismatch pertaining to the interest income. The said mismatch shall be resolved on its own and will be reflected in the portal as ‘Completed’.

The post Important Due Dates for March 2024, Income Tax Updates – February 2024 appeared first on SK Patodia & Associate LLP.

Although, the hon’ble Finance Minister does not propose to make any changes relating to taxation and proposes to retain the same tax rates for direct taxes and indirect taxes including import duties, however, to extend direct tax benefits till 31.03.2025 to start-ups, investments made by sovereign wealth or pension funds and IFSC units; necessary changes are proposed in Income Tax Provisions. Further, with respect to relief announced through a press release (last year in June) for TCS on LRS remittances and foreign tour packages, necessary changes are proposed in the Sec 206C(1G).

Moreover, with the aim of removing, hindering the issue of Income Tax refunds, Hon’ble FM proposed in interim budget to withdraw old disputed Income Tax Demands. Accordingly, it is proposed to withdraw tax demand of up to Rs. 25,000 for the financial year up to 2009-10 whereas tax demands up to Rs.10,000 is proposed to be withdrawn relating to the period starting from FY 2010-11 to FY 2014-15. Resultantly, this will help a lot of honest taxpayers who were not aware about their old tax demands unless proposals for adjusting recent years income tax refunds are received by them. Usually, the taxpayers don’t maintain old records of Income Tax return filed and its working. Thus, it was very difficult for taxpayers to get a reason for demand. Further, in many cases, reason for demand was raised due to short credit of TDS which was due to non-deposit of TDS by the deductor in many cases and it is difficult for the deductor to resolve the issue. Before the e-filing era, Income tax return was accompanied by specified documents supporting Computation and Tax Credits. However, on many occasions, even tax officials found it practically difficult to get old records of ITR filed and assist taxpayers in deleting demand for honest taxpayers.

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1. LEI No. is required for Credit of Income Tax Refunds exceeding Rs. 50 crore.
In case of non-individuals, a Legal Entity Identifier (LEI) No. is required for Credit of Refunds exceeding Rs. 50 crore. For hassle-free refund processing, income tax department asked to submit LEI details at portal (after doing Login->Dashboard->Services->LEI)
What is an LEI?
An LEI or Legal Entity Identifier is a unique code, consisting of 20 symbols, that allows for identification within the global financial system. An LEI code is issued to a company just once and is unique.

Who is obliged to request an LEI code?
According to the Mifid II directive 2014/65/EL, LEI codes are mandatory for all legal entities who trade in securities. The Reserve Bank of India has mandated the use of LEIs by all companies trading in OTC markets for Rupee Interest Rate derivatives, foreign currency derivatives and credit derivatives in India. Mandatory use of LEIs was phased in between August 1, 2017 and March 31, 2018, as per the RBI Notification dated June 1, 2017.

2. Donations collected from parents for new admissions without any compulsion couldn’t be termed as capitation fees

[Deputy Commissioner of Income-tax Vs Sindhi Educational Society – ITAT Chennai]

If any Institution / Trust are engaged in imparting education which falls under definition of charitable purpose, then, even if Society/Trust earns some surplus, it does not mean that said Trust / Institution solely existing for profit but not for charitable purpose.

Voluntary corpus donations collected by assessee (educational society) from parents of students enrolled in its schools would qualify for exemption under Section 11.

3. Loss on reduction of capital invested in shares of Company is eligible for set off against capital gains

[Tata Sons Ltd. Vs Commissioner of Income-tax-2 – ITAT Mumbai]

In the case where assessee was holder of equity shares in the company & incurred losses due to a scheme of arrangement and restructuring and paid-up equity share capital was reduced as a result, assessee’s shareholding was also reduced .

Assessee can claim long-term capital loss or set-off against any other capital gain on account of reduction of capital loss.

4. No penalty proceedings under sec. 270A if additions were made based on voluntary disclosure by assesse

[Chambal Fertilizers and Chemicals Ltd. Vs Principal Commissioner of Income-tax – Rajasthan HC]

During scrutiny where the assessee suo moto surrendered any expenses or add the income by revising its return of income and adding back said amount to total income and same was communicated to revenue, on that basis no penalty proceedings initiated under sec. 270A.

The post Important Due Dates for February 2024, Income Tax Updates – January 2024 appeared first on SK Patodia & Associate LLP.

1. Vide notification dated 13.12.2023, due date of filing of Accounts to Charity Commissioner of Maharashtra extended

Charitable trusts registered with Charity Commissioner Maharashtra are required to file accounts by 30th September. It was extended twice for FY 2022-23. It is further extended till December 31,2023.
2.New TDS guidelines for e-commerce operators [Circular no.20 of 2023]

In order to widen and deepen the tax net by bringing participants of e-commerce within the tax net, Finance Act 2020 inserted a​ new section 194-O in the Act so as to provide for a new levy of TDS @1%. The TDS is to be paid by e-commerce operators for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform. E-commerce operators are required to deduct tax at the time of credit of amount of sale or service or both to the​ account of e-commerce participant or at the time of payment thereof to such participant by any mode, whichever is earlier.

Vide circular no.20 of 2023, new TDS guidelines for e-commerce operators are issued. Summary of important points of said circulars are as follows:

a. There could be a buyer side e-commerce operator (ECO) Involved in buyer side functIons and a seller side ECO Involved in seller side functions. As final payment is done by Seller side ECO, TDS obligation is on it.

b. Where the seller side ECO is the actual seller, TDS obligation is on ECO which finally makes payment to the seller, on gross amount including charges but excluding GST (unless charges are paid on lump-sum basis).

c. Adjustment is allowed for purchase return and sales discount, as allowed under 194Q guidelines subject to discount passed on by buyer.
3. IBC have overriding effect on Revenue’s claims raised after resolution [TUF Metallurgical Pvt. Ltd Vs UOI and Anr – Delhi HC]In the case of TUF Metallurgical Pvt. Ltd Vs UOI and Anr, the appellant took over management of another company in terms of the resolution plan that was approved by the NCLT.

Delhi HC observed that the impugned notices and orders pertains to revenue’s claims for income-tax for the period much prior to the date of approval of the resolution plan. Pointed out that the public announcement for submission of claims by Jan 21, 2019, however the Revenue did not file any claim till that date or even thereafter and it was only after the approval of resolution plan by the NCLT vide order dt. 05/11/2019 that the Revenue issued the impugned assessment order and demand Notice.

HC set aside order after referring to SC judgments in Ruchi Soya, EMCO Ltd and Ghanshyam Mishra apart from Delhi HC judgment in Sree Metaliks wherein it was held that, “once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan”.

4.Can prosecution be launched against independent, non-executive, and nominee director under income tax act?

Revenue ​can launch prosecution against the c​ompany as well as all the directors for the offence punishable under Sections 276-B (​e.g. delay in payment of TDS).​

Recently in the case of Anish Modi, Bombay high court quashed prosecution against an independent director ​on the ground that the condition of serving notice was not fulfilled and ​h​e can not be considered as ‘principal officer’​ for TDS prosecution for delay in payment of TDS.

However, a question may arise that “​Can prosecution be launched against independent, non-executive, and nominee director​s under income tax act?​”. Following three important points of the above said Judgment may guide us to get an answer.

a. ​Revenue argued that the petitioner, a non-executive independent director of the company, regularly attended the meetings of the Board at the time of the commission of the offence. Therefore, he was well aware of all the legal and administrative matters of the company and cannot take the benefit of his designation as an independent director to absolve him from the prosecution.

b. ​​In order to treat a person as a ‘Principal Officer’ as defined under section 2(35)(b) of the I.T. Act, the following conditions must be satisfied: (i) he must be a person connected with the management or administration of the company, and (ii) the Assessing Officer must have served upon him a notice of his intention of treating him as the principal officer of the company.

c. Before initiating prosecution, revenue issue notice to the company to nominate the principal officer (if not appointed). If the department did not receive a reply, it would treat all directors of the company as principal officers and initiate appropriate action.

The post Important Due Dates for January 2024, Income Tax Updates – December 2023 appeared first on SK Patodia & Associate LLP.

1. Income Tax Department provides “Discard Return” option. When it’s available for use:

The Income Tax Department has launched a new feature called ‘Discard Return’. This new feature allows an individual to completely discard, i.e., delete their previously filed unverified income tax return (ITR). This means that the ITR that was previously submitted by an individual but not verified can now be deleted from the income tax department’s records.

This will help an individual to avoid going through the revised ITR process of correcting mistakes in the originally filed ITR. “Earlier, if an individual wanted to correct a mistake in their submitted ITR, it could only be done once the original ITR was filed and verified. Once the original ITR was verified, then the individual was required to file a revised ITR to correct mistakes.

As per income tax provision, Income tax return filer is required to verify its return in 30 days. On failure to do so, original return is considered invalid and the taxpayer has 2 options:

• Verify it after 30 days and file a condonation application on receipt of invalid ITR intimation with valid reason for delay in verification.

• File belated ITR, provided the due date of filing belated ITR is not expired. In the 2nd option, unverified original return is not relevant.

Accordingly, taxpayer will be able to discard the said verified ITR with the new feature available at income tax portal. Earlier, in the absence of said feature, original return was required to verify before filing revised return and if the same is not done within 30 days, revised return was considered as belated return (not revised return). Consequently, all the provisions of belated return will follow.

Thus, New feature will be useful if person realise some mistake in preparation of ITR before its verification.

2. Change in reporting of capital gains transaction for AIS :

Depository Institutions are required to submit information relating to capital gains on transfer of listed securities or units of mutual funds.

As per corrigendum to Notification No. 3 of 2021 dated 15.11.2023, with effect from 1s t April 2023 the statement of financial transactions data will be submitted on half yearly basis instead of existing quarterly basis i.e. data relating to 1st half of the Financial Year ending 30th September and remaining half of the Financial Year ending on 31st March shall be furnished on or before 31st of October and 30th of April respectively.

Further, consideration for the transaction should be determined based on revised prescribed rate in corrigendum. However, the taxpayer will continue to be able to modify the sales consideration before filing the return.

3. Withholding of refund:

New Income tax Instructions for withholding of refund till assessment is made as per income tax provisions, where a refund becomes due to an assessee after processing of ITR and notice for assessment is issued to him, AO may withhold such refund till the date of such assessment being made; if he is of the opinion that the grant of refund is likely to adversely affect the revenue. Such withholding can be done after recording the reasons for doing so, with the prior approval of the PCIT and applicable to assessment years on or after 2017-18.

Vide instructions no.2/2023 dated 10th Nov 2023, it is stated that withholding of refund is applicable in above said cases, where the value of refund is 10 lakhs or more. Further, Faceless AO, on receipt from intimation from CPC, shall intimate the Jurisdiction AO with regard to demand likely to be raised in pending assessment. Jurisdiction AO with proper application of mind and after analysing the factual matrix of the case (i.e. financial condition, past demands, pendency of appeal etc), seek approval of PCIT and communicate the decision to CPC. Time limit for the above process is revised to 20 days for faceless unit and 30 days for Jurisdictional AO.

4. Anonymous donation :

Anonymous donation not taxable if Trust exists for charitable as well as for religious purpose but revenue can take action for 80G [In the Judgment of Shree Sai Baba Sansthan Trust – I.T.A. No.3049/Mum/2022 – Mumbai ITAT] Income of any trust wholly from a public religious purpose and for charitable purpose is exempt from tax subject to certain conditions.

However, anonymous donations above a certain limit are taxable. Section 115BBC along with CBDT Circular No. 14/2006 provides relaxation for the anonymous donations received in hundis/ donation boxes etc. for both religious & charitable, from their devotees. In the case of Shree Sai Baba Sansthan Trust, revenue observed that Assessee is registered under Section 80G, and eligible trust cannot be for the benefit of any particular religious community other than charitable purposes and thus, concluded that the Assessee is a charitable trust only having no religious purpose, thus, not entitled to benefit under Section 115BBC. Hon’ble Mumbai ITAT while deciding the case against the revenue, explained that it is not possible to maintain the name, details and records of donors/devotees making their donation/offerings at religious places, without any direction/ instruction. Thus such anonymous donations are kept out of the ambit of Section 115BBC. ITAT also said that if the objects of any trust is not solely charitable but is mixed purpose and the Revenue is of the view that such trust cannot be registered under 80G then it is up to Revenue to take appropriate action in accordance to law regarding the certificate issued under Section 80G and it cannot be the other way round.

The post Important Due Dates for December 2023, Income Tax Updates – November 2023 appeared first on SK Patodia & Associate LLP.