Roll out of the new Annual Information Statement (AIS)

• Income Tax Department has rolled out the new Annual Information Statement (AIS) on the Compliance Portal which provides a comprehensive view of information to a taxpayer with a facility to capture online feedback. The new AIS can be accessed by clicking on the link “Annual Information Statement (AIS)” under the “Services” tab on the new Income tax e-filing portal (https://www.incometax.gov.in) The display of Form 26AS on TRACES portal will also continue in parallel till the new AIS is validated and completely operational.
• The new AIS includes additional information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance information etc. The reported information has been processed to remove duplicate information. Taxpayer will be able to download AIS information in PDF, JSON, CSV formats.
• If the taxpayer feels that the information is incorrect, relates to other person/year, duplicate etc., a facility has been provided to submit online feedback. Feedback can also be furnished by submitting multiple  information in bulk. An AIS Utility has also been provided for taxpayers to view AIS and upload feedback in offline manner. The reported value and value after feedback will be shown separately in the AIS. In case the information is modified/denied, the information source may be contacted for confirmation.
• A simplified Taxpayer Information Summary (TIS) has also been generated for each taxpayer which shows aggregated value for the taxpayer for ease of filing return.
• TIS shows the processed value (i.e. the value generated after deduplication of information based on pre-defined rules) and derived value (i.e. the value derived after considering the taxpayer feedback and processed value). If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real time. The derived information in TIS will be used for pre-filling of Return (pre-filling will be enabled in a phased manner)

Important Judicial Precedents

1. Assessee borrowed a loan for purpose of purchase of land for starting a new project and claimed interest paid on such loan as a deduction under section 36(1)(iii) – Assessing Officer disallowed claim on ground that since no activity had commenced in new project and, thus, assets were not put to use, interest paid on loan borrowed for purchase of land was to be capitalized and added back to Work-in-Progress account – It was to be noted that assessee furnished an abstract of expenses pertaining to said new project and expenses were in nature of advertisement expenses, architect fees, CMDA charges, consultancy charges, electricity charges, legal fees, rent, security charges, site expenses, various labour charges and purchase of materials – Assessee had also furnished ledger accounts for these expenses and also facts that they carried on major work of demolition of existing structure which was newly built by previous owner for hotel business and this demolition was done by assessee – This factual position would go to show that land was put to use in assessment year under consideration – Whether assessee was able to establish that substantial activities had been done in project which would go to show that property purchased was put to use – Held, yes [Paras 18 and 21][ [2021] 131 taxmann.com 181 (Madras) HIGH COURT OF MADRAS Commissioner of Income Tax v. Ceebros Hotels (P.) Ltd.
2. Section 250 of the Income-tax Act, 1961 – Commissioner (Appeals) – Procedure of (Faceless Appeal Scheme) – Transfer petition had been filed seeking transfer of cases challenging Faceless Appeal Scheme, 2020 from High Courts to instant Court – Additional Solicitor General submitted that Department was having a second look at matter on issue of Faceless Appeal Scheme, 2020 and sought a period of three months as it may require change of law – Whether Matter was to be listed on 10-01-2022 for directions – Held, yes [2021] 131 taxmann.com 51 (SC) SUPREME COURT OF INDIA
3. Section 144B, read with section 143, of the Income-tax Act, 1961 – Faceless Assessment (Personal hearing) – Assessment year 2018-19 – Whether section 144B(7) provides for an opportunity of personal hearing, if requested, by assessee – Held, yes – Whether where no hearing had been granted to assessee before passing impugned assessment order passed under section 143(3) read with section 144B, there was a violation of principles of natural justice as well as mandatory procedure prescribed in Faceless Assessment Scheme, hence impugned assessment order as well as demand notice and all proceedings initiated pursuant thereto were to be set aside and matter was to be remanded back to Assessing Officer for adjudication afresh – Held, yes.
4. ITAT: Receipts from web-based database services, subscription of e-journals not taxable as Royalty under India-US DTAA-ITAT remarks “as of now, the issues are squarely covered in assessee’s favor by cited decisions of Tribunal for AYs 2014-15 to 2016-17 and we see no reason to deviate from the same.”; ITAT notes from the order for AY 2014-15 that “No ‘use or right to use’ in any copyright or any other intellectual property of any kind is provided by the assessee to its customers. Furthermore, the information resides on servers outside India, to which the customers have no right or access, nor do they possess control or dominion over the servers in any way. Therefore, the question of such payments qualifying as consideration for use or right to use any equipment, whether industrial, commercial or scientific, does not arise”; ITAT, thus, follows the earlier ruling and holds that receipts from CAS division and PUBS division are not royalty and hence, not taxable in the hands of the Assessee.:ITAT Mum American Chemical Society [TS-995-ITAT-2021(Mum)]
5. HC: Abu Dhabi Investment Authority’s income earned through Jersey-based trust exempt in India; Quashes AAR ruling-Holds that u/s 160 even a non-resident trustee can be a representative assessee since it is nowhere provided that only a resident can be an agent of a nonresident; Remarks that even if the trust structure were to be discarded, then the investment must be regarded as having been made by ADIA directly and the income would not be taxable in India by virtue of provisions of India-UAE DTAA; Since, ADIA has right to re-assume power over the entire Trust’s income as per the Deed of Settlement, it has to be assessed in terms of Section 61 in the hands of ADIA and the exemption under Article 24 of India-UAE DTAA would be attracted; Further holds that if Section 61 is inapplicable, then also the ETL can only be assessed in a representative capacity in the “like manner and to the same extent” as the applicable to the ADIA which would attract the benefit of India-UAE DTAA; Quashes the AAR ruling and the steps taken in furtherance of the Ruling: HC BOMAbu Dhabi Investment Authority [TS-1011-HC-2021(BOM)].
6. Deletes Rs.257.87 Cr. addition of share premium u/s 56(2)(viib) for GMR Enterprises; Directs fresh examination-Revenue held that the Assessee cannot pick and choose with regard to valuation of certain assets as certain assets were taken at market value and certain others at book value, thus, valued the share adopting NAV and made an addition of Rs.257.87 Cr. u/s 56(2)(viib); ITAT notes that the valuer primarily valued the shares under DCF Method and corroborated the same under NAV Method; ITAT remarks that noting the huge difference in prices arrived at by DCF Method and NAV Method i.e., Rs.13,246/rights share and Rs.12,631/CCPS as against Rs.18.68/share, the Revenue ignored the DCF valuation without examining it whereas the Assessee had furnished two reports based on the Balance Sheet as on Sep 30, 2014 and another report based on the Balance Sheet as on Dec 31, 2014 since the Assessee had issued two different kind of shares on two different dates, preparing two valuation reports was justifiable; In the light of Rule 11UA, ITAT finds that the Revenue ignored the prescribed methodology for valuing quoted shares (Assessee’s shareholding in GMR Infrastructure Ltd.) which accounted for major difference in the valuation and thus, the Revenue misguided itself in determining the value under NAV Method; Therefore, holds that Revenue failed to examine the valuation under the DCF Method and the valuation under NAV Method as per the Revenue suffered from major defects and the Revenue also did not appreciate the necessity of preparing two valuation reports and did not consider the correct provisions of Rule 11UA, hence, rejects the valuation reports; ITAT restores this issue for examining it afresh with the direction to examine the valuation reports furnished by the Assessee in the light of Rule 11UA; ITAT allows Assessee’s ground on restricting the disallowance u/s 14A to the extent of exempt income of Rs.27.37 Cr. claimed through the revised computation during the course of assessment proceedings as against suo motu disallowance.

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