CBDT vide Notification No. 111/2022 dated 28th September 2022 in G.S.R. 733(E) through Income-tax (32nd Amendment) Rules, 2022 notifies Rule 132 for making an application for the purpose of re-computation of total income of the previous year without allowing the claim for deduction of surcharge or cess, which has been claimed and allowed as deduction under section 40 in the said previous year in accordance with the provisions of section 155(18) of the Income-tax Act, 1961 (‘Act’).
Such an application for recomputation of total income to disallow the deduction of surcharge or cess by the assessee himself, where such deduction is claimed and allowed in any previous year, shall be required to be made in Form No. 69.
Further, such application for recomputation of income under section 155(18) of the Act shall be made on or before 31.03.2023.
These new rules shall come into effect from 1st October 2022.
The Board has also notified Form No. 70 through which the assessee shall inform the Assessing Officer about the payment of tax liability which has arisen due to recomputation of income after disallowing the deduction for surcharge and cess within a period of 30 days of payment thereof.
Application in Form No. 69 and intimation of payment of tax on income recomputed under section 155(18) in Form No. 70 as per Rule 132 of the Income-tax Rules, 1962 (‘Rules’) shall be made electronically.
Finance Act, 2022 has amended the provisions of section 155 and inserted an new sub-section (18) to section 155.
Section 155 of the Act provides for an extension of the time limit for passing rectification orders under section 154 under various specified circumstances.
Section 155(18) provides for passing a rectification order under section 154 in a case where a deduction for surcharge or cess which is not allowable under section 40 has been claimed and allowed in any previous year. This sub-section provides that such claim of deduction for surcharge or cess shall be deemed to be under-reported income for that previous year in which deduction was so claimed under section 270A.
The Assessing Officer shall recompute the total income of the assessee of such previous year and shall pass an order under section 154. In this case, the period of limitation of 4 years of passing a rectification order under section 154(7) shall be computed from the end of the previous year commencing on the 1st day of April 2021.
Thus, the rectification order under section 155(18) can be passed by the AO till 31st March 2026.
In this case, where the deduction for surcharge or cess is disallowed by the AO, the assessee has to pay the tax due thereon as well as the penalty under section 270A.
An exception is provided in this sub-section by way of a proviso which provides that if the assessee makes an application to the AO in the prescribed form and within the prescribed time for the recomputation of income after disallowing the deduction for surcharge or cess and pays the tax due thereon, then no such penalty under section 270A will be levied.
With this Rule 132, Form No. 69 is prescribed for making an application to the AO by the assessee himself for recomputation of income under section 155(18) within the prescribed time limit of 31.03.2023. In this case, the assessee is required to pay only the tax due on such recomputed income after disallowing the deduction for surcharge or cess. No penalty will be levied in this case.
Rule 132 provides the procedure for recomputation of income under section 155(18) in the following manner-
1. An application requesting for recomputation of total income of the previous year without allowing the claim for deduction of surcharge or cess, which has been claimed and allowed as deduction under section 40 in the said previous year, shall be made in Form No. 69 on or before the 31st day of March, 2023.
2. The application in Form No. 69 shall be required to be furnished electronically.
3. Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall lay down the procedures and standards for furnishing and verification of Form No. 69 and to forward the application received in Form No. 69 to the Assessing Officer.
4. The Assessing Officer shall, on receipt of the application in Form No. 69, recompute the total income by amending the relevant order and issue notice under section 156 specifying the time period within which amount of tax payable, if any, is to be paid.
5. The tax due, if any, will be determined after recomputation for the relevant assessment year in which deduction for surcharge or cess is disallowed and also for the subsequent assessment year(s) in which carry forward loss or unabsorbed depreciation or MAT credit /AMT credit under section 115JAA/115JD is set-off due to variation in these components after recomputation for the relevant assessment year.
6. The assessee shall intimate the Assessing Offcier about the payment of tax within a period of 30 days from the date of payment of tax in Form No. 70.
Read the full text of CBDT Notification No. 111/2022 dated 28.09.2022 on Notifying Rule 132 for recomputation of income u/s 155(18)
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 28th September, 2022
INCOME-TAX
G.S.R. 733(E).– In exercise of the powers conferred by section 295 read with sub-section (18) of section 155 of the Income-tax Act, 1961, the Central Board of Direct Taxes, hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.– (1) These rules may be called the Income-tax (32nd Amendment) Rules, 2022.
(2) They shall come into force from the 1st day of October, 2022.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 131, the following rule shall be inserted, namely–
“Application for recomputation of income under sub-section (18) of section 155.
132. (1) An application requesting for recomputation of total income of the previous year without allowing the claim for deduction of surcharge or cess, which has been claimed and allowed as deduction under section 40 in the said previous year, shall be made in Form No. 69 on or before the 31st day of March, 2023.
(2) Form No. 69 shall be furnished electronically to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorized by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems).
(3) Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall lay down the procedures and standards for furnishing and verification of Form No. 69 and to forward the application received in Form No. 69 to the Assessing Officer.
(4) The Assessing Officer shall, on receipt of the application in Form No. 69, recompute the total income by amending the relevant order and issue notice under section 156 specifying the time period within which amount of tax payable, if any, is to be paid,-
(i) for the assessment year relevant to the previous year referred to in sub-rule (1); and
(ii) for the assessment years subsequent to the assessment year referred to in clause (i), if the order for such assessment year results in variation in carry forward of loss or allowance for unabsorbed depreciation or credit for tax under section 115JAA or section 115JD.
(5) The assessee shall, after making the payment of the tax determined under sub-rule (4), furnish the details of payment of tax in Form No.70 to the Assessing Officer within thirty days from date of making the payment.”.
3. In the principal rules, after Form No.68, the following Forms shall be inserted, namely:-
“Form No. 69
[See rule 132]
Application for recomputation of income under sub-section (18) of section 155
(1) Name of the person filing the application :
(2) PAN or Aadhaar number (if available) of the person filing the application :
(3) Name of the person in respect of which the application is being filed (if different from (1)) :
(4) PAN of the person in respect of which the application is being filed (if different from (2) :
(5) Address :
(6) E-mail Id :
(7) Mobile Number :
(8) Details of computation of total income without deduction of surcharge and cess :
VERIFICATION
I……………………….… son/daughter of …………………………. having PAN/Aadhaar number………………….. do hereby declare that to the best of my knowledge and belief what is stated above is correct, complete and truly stated. I also declare that I am making application in my capacity as ……………………. of …………………… and I am also competent to make this application and verify it.
Date: Signature:
Place: Address:
*Tax payable includes interest, surcharge and cess on the tax payable.
# Total income/deemed total income should be reported as per latest assessment/ reassessment/ recomputation order, as the case may be.
Note:
1. Row no. (3) and (4) would be needed where:
(i) the successor entity is filing the Form for predecessor entity who is no longer in existence
(ii) the Form is filed by the legal heir of deceased person
2. Separate Form must be filed for each predecessor entity if there are more than one predecessors
3. Separate Form must be filed for successor and predecessor.
Form No. 70
[See rule 132]
Intimation to the Assessing Officer of the payment of tax on income recomputed under sub-section (18) of section 155
To,
The Assessing Officer,
….…………………………….
Madam/Sir,
I,…………………………………,daughter/son of …………………………….., in my capacity as …………………………………. of ……………………………., having ………..(quote PAN) hereby intimate that tax (including interest, surcharge and cess thereon) on total income recomputed, as per proviso to section 155(18), by orders, details of which are mentioned herein below, has been paid as per the details below:
*dd/mm/yyyy
I, therefore, request that the above details may be updated in the record. I hereby declare that what is stated above is correct.
Signature
Date ………………………… Address …………………………….”.
[Notification No. 111/2022/F. No. 370142/32/2022-TPL]
Om Prakash Meena, Under Secy.
Note.– The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O. 969 (E), dated the 26th March, 1962 and was last amended vide notification number G.S.R.709 (E) dated 19.09.2022
Download CBDT Notification No. 111/2022 dated 28.09.2022 on Notifying Rule 132 for recomputation of income u/s 155(18) in PDF format
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