ASSESSMENTS ISSUES

There is need for greater transparency in certain issues relating to assessment.

Need Greater Transparency

Taxpayers should be duly informed of the reasons for which their case is selected for scrutiny and irrelevant questions should be strictly avoided.

Reply via emails and post

Personal interface between taxpayers and AOs should be avoided by allowing submission of replies and information via email or post.

No Additions without Show Cause Notice

Necessary amendment to be made in the Act to provide that additions made by AO without show Cause Notice would not be maintainable.

Accountability of AOs for High Pitched Assessments

AOs should be made accountable for raising infructuous demands. CBDT should provide effective mechanism to ensure that assessments aren’t high pitched.

CPC ISSUES (RETURN)

There are certain important issues which needs to be addressed by CPC on priority basis for the sake of taxpayers.

Problems encountered by Discretionary Trusts

Although status of discretionary trust is that of individual yet it has to file return in status of AOP by using ITR-5 which creates certain problems.

Downloadable CPC Intimations and Orders

Taxpayers can view and download 26AS but same facility of downloading and viewing is not available for intimations and orders.

Speaking Order of CPC for Adjustment

CPC process intimations (for making adjustment) and reject rectification requests without passing speaking orders, causing hardship to taxpayers.

Response to objections against outstanding demand

Taxpayer can only view his objection to outstanding demand, but he is unable to view response of CPC in that matter.

Coordination between CPC and AO

There is lack of coordination between CPC and AO due to which taxpayers’ faces hardships.

CPC ISSUES (TDS)

There are certain issues which are faced by taxpayers while filing or processing of TDS return. These should be addressed by CBDT on priority basis for the benefits of taxpayers.

Coordination between TDS CPC and TDS Authorities

There is lack of coordination between TDS CPC and TDS authorities due to which taxpayers faces several problems.

Demands continue even after being paid

There is no facility to provide TDS credit without filing of TDS correction statement even in those cases where demands are paid by the deductors.

No Surcharge and Cess for short deductions

Surcharge and EC are not applicable if tax is deducted as per treaty. However, TDS CPC does not recognize this aspect.

Uploading of Statements without PAN of payee

No TDS at higher rate of 20% if payee doesn’t have PAN and treaty provides for lower rate. However, TDS CPC doesn’t recognize this aspect.

Lower TDS certificate should be valid for all units of deductor

When certificate for TDS under Section 197 is issued in respect of one unit of deductor, same is not considered for other units of deductors.

TDS AND PREPAID TAXES

There are certain recommendations/ issues relating to TDS and prepaid taxes which needs to be addressed by CBDT on priority basis.

Rationalization of TDS limits

Threshold limits of certain TDS provisions had not been revised over the years. These limits call for an urgent review and needs to be revised.

Rationalization of TDS Rates

With the restructuring of income-tax rates over the past few years, there is a dire need for rationalization of TDS rates.

Passbook system for tax credits and debits

There is a need for introduction of should be like a passbook wherein he has the option to set off any surplus against his tax liabilities.

TDS and Cash Method of Accounting

CPC TDS does not have the facility to grant credit for TDS in certain cases where assessee is following cash system of accounting.

Facility to respond in cases of Mismatch of Tax Credit

There should be a facility for taxpayers to lodge any response or complaint on CPC portal in cases of TDS credit mismatch.

DEMANDS & REFUNDS

There are various issues relating to demand and refund which needs to be addressed by CBDT on priority basis.

CBDT Instructions not followed by AOs

AOs do not follow instructions of CBDT on stay of demand. Thus, CBDT should direct them to strictly adhere to such instructions.

No Adjustment of Refunds

A mechanism should be devised whereby no adjustment of refund should be permitted u/s. 245 without dealing with taxpayer's response.

No demand in respect of settled issues

No recovery of demand or adjustment of refund should be made in cases where demand pertains to issues settled in assessee's favour in earlier year.

Refunds not to be blocked if scrutiny notice is issued

Taxpayer should not be deprived of legitimate refund just because his return is not processed u/s 143 and his case is selected for scrutiny.

LITIGATIONS & APPEALS

CBDT should come out with clear instructions to avoid infructuous litigations.

Avoid litigation arising from audit objections

CBDT should revise its instruction relating to reassessment of cases due to audit objections with a view to avoid meaningless litigations.

Facilitate Online viewing of finality of ITAT and HC Orders

AOs should follow the final orders of ITAT and High Court. Further, such orders should be made available online for taxpayers.

CBDT’s Rulings on Vital Issues can help dispose and curb Litigation

There are number of vital issues in litigations. Thus, CBDT should come out with clear ruling on those issues to curb litigations.

Increase threshold limit for disposal of appeal

Single Member Bench of the ITAT should be authorized to deal with cases involving addition or disallowance upto Rs. 30 lakh

TIME LINES FOR EFFICIENT ADMINISTRATION

CBDT should directs its officials to follow time-lines for passing orders

Strict window for rectification within 6 months

Rectification application shall deemed to be allowed if order rejecting/accepting such application isn't passed within 6 months.

Additional interest for belated Appeal Effects

Interest on refund should be granted at double rate if AO fails to give effect to an appeal within 90 days.

Disposal of petitions for waiver of penalty within stipulated period

There should be a time-limit of one year for disposal of applications which are filed for waiver of penalty and interest.

Disposal of Appeal by CIT (A)

Recommendatory time limit of one year provided under Section 250 for disposal of appeal by CIT(A) should be followed in its true spirit.

OTHERS

There are certain other issues/recommendations which needs to be addressed by CBDT.

Linking of exemptions and deductions with CII

The threshold limit of old-age exemptions and deductions should be revised by linking them with cost inflation index.

No penalty in bona fide cases

No concealment penalty should be imposed where assessee had no mala fide intension to evade tax or issue was debatable one.

No Sec. 234C interest for new businesses

Sec. 234C interest not to be levied where new business is started after lapse of time-limit for payment of first or second installment of advance tax.

Disclosure during survey proceedings

CBDT should direct AO to strictly adhere to its directions and do not seek any disclosure from assessee during Survey Proceedings.

Jewellery found during search

Clarification is needed to provide that jewellery found during search should not treated as undisclosed investment if same is within prescribed limit.

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