ITR FILING ALERT! I-T Department INSERTS Rule 14C to ease authentication of electronic records submitted in faceless assessment proceedings; provides relief to THESE taxpayers

The Income Tax (I-T) Department has inserted a new Rule 14C to ease authentication of electronic records submitted in faceless assessment proceedings. If electronic records are submitted through registered account of taxpayer on the income tax portal, separate authentication through EVC is not required to be done, it has notified. 

The amended Income-tax Rules, 1962 provides that electronic records submitted through registered account of the taxpayers in the Income-tax Department’s portal shall be deemed to have been authenticated by the taxpayer by electronic verification code (EVC).  

Therefore, where a person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated by EVC for the purposes of section 144B(7)(i)(b) of the Income-tax Act, 1961. 

However, under the existing provisions of section 144B(7)(i)(b) of the Act, this simplified process of authentication by EVC is not available to certain persons such as companies, tax audit cases, etc., and they are mandatorily required to authenticate the electronic records by digital signature.  

To provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also.   

Hence, the persons who are mandatorily required to authenticate electronic records by digital signature shall be deemed to have authenticated the electronic records when they submit the record through their registered account in the Income-tax Department’s portal. Legislative amendments in this regard shall be proposed in due course. 

The I-T Department also mentioned that it provides relief to taxpayers who were eligible to file application for settlement as on January, 31, 2021 before ITSC, but could not, due to cessation of ITSC vide Finance Act,2021. Such applications can be filed by September 30, 2021 before the Interim Board, subject to certain conditions.

CBDT provides relief to taxpayers who were eligible to file application for settlement as on 31.01.2021 before ITSC, but could not, due to cessation of ITSC vide Finance Act,2021. Such applications can be filed by 30.09.2021 before the Interim Board,subject to certain conditions. pic.twitter.com/BU6sUSWi8n

— Income Tax India (@IncomeTaxIndia) September 7, 2021

The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 to inter alia provide that the Income-tax Settlement Commission shall cease to operate with effect from February 01, 2021. The following conditions are satisfied:-

CBDT inserted a new Rule 14C to ease authentication of electronic records submitted in faceless assessment proceedings. If electronic records are submitted through registered account of taxpayer on the income tax portal,separate authentication thru EVC is not required to be done. pic.twitter.com/p9NRAuXXQR

— Income Tax India (@IncomeTaxIndia) September 7, 2021

The assessee was eligible to file application for settlement on January 31, 2021 for the assessment years for which the application is sought to be filed (relevant assessment years);

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All the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement. 
Such applications, subject to their validity, shall be deemed to be “pending applications” under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act. 

Further, it has also been provided that no application for settlement can be filed on or after February 01, 2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha.  

The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal. 

It has been represented that a number of taxpayers were in advanced stages of filing their application for settlement before the ITSC as on February 01, 2021. Further, some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, the High Courts have given interim relief and directed acceptance of applications of settlement even after February 01, 2021. This has resulted in uncertainty and protracted litigation.