Oct - Dec, 2019 Volume 1 | Issue 2 Dialogue on Tax Oct 2019 - Dec, 2 Building a network to share and discuss An Initiative by Directorate of Legal & Research Central Board of Direct Taxes Income Tax Department Directorate of Legal & Research Central Board of Direct Taxes Goverment of India General Information Patron Sh. Prasana Kumar Dash Member (Audit & Judicial), CBDT MISSION Editor-In-Chief Sh. Krishna Mohan Prasad To provide a platform and build a network Pr. CCIT (National e-Assessment Centre) amongst tax officers, tax practitioners, Delhi eminent personalities, tax payers etc., for Managing Editor Ms. Swati Joshi sharing and discussing matters related to ADG (Legal & Research), Dte. of L&R tax issues, administrative best practices, such other matters as deemed to be of Executive Editors Sh. Jitendra Kumar Sonkar educational/professional value etc., with a JDIT (NJRS & CTC), Dte. of L&R view to promote effective and Sh. Neeraj Gupta litigation-free tax administration, voluntary DDIT (NJRS & CTC), Dte. of L&R compliance and tax payer service. Editorial contact [email protected] Suggestions can be submitted on NJRS Portal Directorate of Legal & Research Income Tax Department, Govt. of India Drum Shaped Building I.P. Estate, New Delhi–110002 EDITORIAL POLICY 1) To invite and publish articles relevant to tax policy, legal issues and tax administration from the fellow officers, tax practitioners, eminent personalities and tax payers 2) To disseminate the best practices in tax administration, e-governance initiatives, innovation in administrative matters, newer tax-payer friendly initiatives etc. 3) To update the knowledge of the officers about latest and important legal/judicial developments in the field of direct taxation 4) To provide a knowledge sharing space for the Officers to raise current and critical issues with a view to facilitate live discussions on-line and to share experiences 5) To publish any other material relevant for improving the effectiveness and efficiency of Income Tax Department, enhancing professions competency and developing human resources TDS The Missing Link: The Collaboration between GSTN and TDS K. Ravi Ramachandran Commissioner of Income Tax(TDS), Investigation including working in CBDT. Chennai Krishna Mohan Prasad [email protected] On behalf of the Editorial Board, it’s my great This next-generation income-tax e-filing system pleasure and privilege to present the second issue shall reduce the time for processing of return to of quarterly e-journal ‘Taxalogue’. less than 24 hours. Keeping technology in the nd Sh. K. Ravi Ramachandran, is an IRS officer of 1994 The first edition of the e-journal ‘Taxalogue’ was forefront, the 2 issue of ‘Taxalogue’ is user and batch and is currently posted as Commissioner of inaugurated by the Honourable Finance Minister, environmental friendly being available in e-Book Income Tax (TDS), Chennai. He is a Post Graduate in Ms Nirmala Sitharaman on the Income Tax Day, and pdf format. th Masters in Public Policy (MPA) from University of 24 July 2019. The e-journal was greatly welcomed The second issue of ‘Taxalogue’ has 21 articles Minnesota, Minneapolis, USA. by officers of the Department and extremely on the subjects of assessment, TDS, Dispute appreciated by the tax professional community Resolution Mechanism, Transfer Pricing etc. The Manasarovar Yatra to Tibet, China. on the social media as the “first e-magazine of the article on Group and Faceless assessment-The CBDT”. The ‘Taxalogue’ went viral on Whatsapp E-assessment Scheme explains the new structure and through publications on various e-fora to the readers in an easy manner. Further, a case Executive Summary and some of the articles of this issue became study showing detection of tax evasion by misuse subject matter of articles in other e-journals and of section 35 of the Income Tax Act is an eye- newspapers. opener for the readers. A category ‘Ideation’ has Needless to say, the reception of the first edition of been introduced in this edition containing four ‘Taxalogue’ was not only beyond any expectation articles having new ideas and best practices. of the officers behind publication of the first issue, it has placed onerous responsibilities upon the The Third Edition is proposed to be issued by th editorial board to come up with future editions, 15 of February 2020. In addition to articles of containing articles of novelty, innovation and subjects of choice of the authors, the editorial board seeks articles on two significant issues-a) implementation of the TDS provisions. solution, to present articles on the complex direct tax issues being faced by the country, so as to Litigation Management and b) Black Money. ease the life of taxpayers, tax practitioners and tax The editorial board is confident that the esteemed 1. Introduction administrators. readers shall cherish the exchange and analysis of The best win in a war is winning the war without fighting. E-governance is being seen as a major tool ideas in this edition and shall be encouraged to TDS provision is a knight in shining armour in the Income to introduce efficiency, transparency and express their ideas which we would love to publish. accountability in the functioning of the Government Tax Department's war against tax evasion and its endeavour Season’s Greetings, Merry Christmas and Happy of India. The Income Tax Department has taken a New Year! of revenue mobilisation. It plays a significant role in tax significant step in launching faceless E-assessment collection in India as it accounts for 40% of total collection Scheme for the assessment of income. The of Direct Taxes. It is a cost effective and non-intrusive tool scheme will bring in a paradigm shift in tax Krishna Mohan Prasad of tax collection. It lightens the tax burden as the tax payer enforce TDS provisions. administration by eliminating human interface Pr. Chief Commissioner of Income Tax, pays the tax, through TDS, in instalments as and when the in the income tax assessment system. Further, the Department has launched Integrated e-filing National e-Assessment Centre, CBDT and Centralized Processing Centre 2.0 Project. Editor-in-Chief, ‘Taxalogue’ 94 July - Oct 2019 Taxalogue Taxalogue Oct - Dec, 2019 i TDS 2. Why such a proposal? administrators by bringing in precision and speed into the administrative and monitoring processes. Therefore, it is Assessment E-assessment imperative for the ITD to collaborate with GSTN on real time basis for generation of business intelligence and analytics for effective implementation of the TDS provisions. Establishing a platform for seamless exchange of data between GSTN and TDS Wing is an urgent need of Group & Faceless Assessment: The E-assessment Scheme, 2019 55 the hour as GSTN is in the process of firming up its - Krishna Mohan Prasad Understanding the Applicability of architecture after initial field trials. Moreover, a robust data Section 115BBE 01 mining mechanism thereon will provide cost effective and - Ajay Kumar Srivastava non-intrusive tool for successful enforcement of TDS Exemptions collections. It will also significantly contribute towards Taxability of Capital Gain in Case of the main challenge for effective implementation Joint Development Agreement (JDA) 10 widening the tax base, promotion of voluntary compliance - G.V. Hemalatha Devi and thus, checking tax evasion. Principles of Cross Examination in the tax payers and TDS compliance thereon. In this regard, 3. GST at a glance: Context of Income Tax Proceedings 13 - Sulekha Verma Introduction of GST is one of the most ambitious initiatives Trust But Verify in the arena of tax reform in India. It is expected to change - Somogyan Pal 62 A Bird’s Eye View of HUF Taxation the Indian tax structure and pave way for modernization of in India 23 tax administration. GST is a destination based consumption - Sowmya V. tax. The introduction of GST has subsumed around 17 different indirect taxes in India, viz., Excise duty, Service Search Assessment u/s 153A & Ideation 153C 29 tax, Central Sales tax, Value added tax, Entertainment tax, - Santosh Kumar It is estimated that the GSTN is going to Luxury tax, Entry tax, etc. There are three models of GST A) Central GST - Levied by Centre Mistakes are the Stepping Stones to Dispute Resolution Learning 65 B) State GST and - Levied by State - Prasenjit Singh C) Integrated GST - Levied on Inter-State supplies. Assessment of Cash Deposits in Every person whose supplies (turn over) under GST OCM Cases 76 - S.S. Rana exceeds Rs.20 lakhs in a year, is compulsorily required to get themselves registered under GST. Certain assessees are Judgments in Favour of Revenue in The Civil War between Globalists required to compulsorily register even though the supplies Penny Stock Cases 36 and Nationalists: Evidence from - Kalyan Nath does not exceed Rs.20 lakhs. For e.g., supplier through e- Efforts to Tax the Digital Economy 81 - Smarak Swain commerce, person making inter-state supply etc. Quo Vadis-Retrospective or Every registered person under the GST is required to file the Prospective 49 Digital Evidences & Handling - Dr. Abani Kanta Nayak during Assessment Proceedings following returns. - Harsh S. Gautam 86 - Pawan K. Minz ii Oct - Dec, 2019 Taxalogue Taxalogue July - Oct 2019 95 TDS The Missing Link: The Collaboration International Taxation TDS between GSTN and TDS K. Ravi Ramachandran Commissioner of Income Tax(TDS), Investigation including working in CBDT. Chennai [email protected] International Taxation: A User’s Guide 95 - Nilay Baran Som Sh. K. Ravi Ramachandran, is an IRS officer of 1994 Tax Deducted at Source-Scope and Way Forward 114 batch and is currently posted as Commissioner of - Aman Preet Income Tax (TDS), Chennai. He is a Post Graduate in Masters in Public Policy (MPA) from University of Emerging Issues in TDS Minnesota, Minneapolis, USA. - Pratap Singh 119 Penalty Manasarovar Yatra to Tibet, China.