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CBDT Notifies Rules for verifying ITR and Authorized Representative for any other person under section 140 and section 288

cbdt-notifies-rules-for-verifying-itr-and-authorized-representative-for-any-other-person-under-section-140-and-section-288

CBDT vide Notification No. 93/2021 in G.S.R. 578(E) dated 18th august 2021 through Income-tax (24th Amendment) Rules, 2021 notifies Rules prescribing ‘any other person’ who shall verify income-tax returns as per section 140(c) and clause (cd) of the proviso to section 140(c) of the Income-tax Act, 1961 (“Act”) and who shall be treated as authorised representative before any income-tax authority as per section 288(2) in case of a company and a Limited Liability Partnership (LLP). For this purpose, two new Rules have been inserted in the Income-tax Rules, 1962. Rule 12AA is notified to prescribe person for the purposes of clause (c) and clause (cd) of section 140 and Rule 51B prescribing appearance by Authorised Representatives in certain cases.


Section 140 of the Act provides that in the case of a company, the return is required to be verified by the managing director (MD) thereof. Where the MD is not able to verify for any unavoidable reason or where there is no MD, any director of the company can verify the return. 


It is also provided that in case of a company in whose case an application for insolvency resolution process has been admitted by the Adjudicating Authority (AA) under the Insolvency and Bankruptcy Code, 2016 (IBC), the return has to be verified by the insolvency professional appointed by such AA. 



Similarly, in the case of a limited liability partnership (LLP), the return has to be verified by the designated partner of the LLP or by any partner, in case there is no such designated partner.


Further, section 288 of the Act provides for the persons entitled to appear before any Income-tax Authority or the Appellate Tribunal, on behalf of an assessee, as its “authorised representative”, in connection with any proceedings under that Act. While the IBC empowers the Insolvency Professional or the Administrator to exercise the powers of the Board of Directors or corporate debtor, it has been reported that lack of explicit reference in section 288 of the Act for an Insolvency Professional to act as an authorised representative of the corporate debtor has been raising certain practical difficulties.


Finance Act, 2020 has thus, amended, clause (c) and (cd) of section 140 of the Act so as to enable any other person, as may be prescribed by the Board to verify the return of income in the cases of a company and a limited liability partnership.


Further, sub-section (2) of section 288 was also amended to enable any other person, as may be prescribed by the Board, to appear as an authorised representative.


Accordingly, the Board has prescribed that for the purpose of clause (c) or clause (cd) of section 140, ‘any other person’ shall be the person, appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator, as the case may be, under IBC and the rules and regulations made thereunder.


Similarly, for the purposes of section 288(2)(viii), ‘any other person’, in respect of a company or a limited liability partnership shall be the person appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator under IBC and the rules and regulations made thereunder.


Read the full text of Notification No. 93/2021 dated 18.08.2021 prescribing ‘any other person’ for section 140 and section 288


MINISTRY OF FINANCE 

(Department of Revenue) 


(CENTRAL BOARD OF DIRECT TAXES) 


NOTIFICATION 


New Delhi, the 18th August, 2021


G.S.R. 578(E).—In exercise of the powers conferred by clause (c) and clause (cd) of section 140 and clause (viii) of sub-section (2) of section 288 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:- 


1. Short title. - These rules may be called the Income-tax (24th Amendment) Rules, 2021. 


2. In the Income-tax Rules, 1962 (hereinafter referred to as principal rules), after rule 12A, the following rule shall be inserted, namely:–


12AA. Prescribed person for the purposes of clause (c) and clause (cd) of section 140.- For the purpose of clause (c) or clause (cd), as the case may be, of section 140, any other person shall be the person, appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator, as the case may be, under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and the rules and regulations made thereunder. 


Explanation.– For the purposes of this rule, “Adjudicating Authority” shall have the same meaning as assigned to it in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”.


3. In the principal rules, after rule 51A, the following rule shall be inserted, namely:–


51B. Appearance by Authorised Representative in certain cases.- For the purposes of clause (viii) of sub-section (2) of section 288, any other person, in respect of a company or a limited liability partnership, as the case may be, shall be the person appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator, as the case may be, under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and the rules and regulations made thereunder.


Explanation.– For the purposes of this rule “Adjudicating Authority” shall have the same meaning as assigned to it in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”.


[Notification No. 93/2021/F.No. 370142/34/2021-TPL(Part III)] 

SHEFALI SINGH, Under Secy., Tax Policy and Legislation


Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II Section-3, SubSection (ii) vide number S.O. 969(E) dated the 26th March, 1962 and were last amended vide notification No. G.S.R. 551(E), dated the 10th August, 2021.


Download Copy of CBDT Notification No. 93/2021 dated 18.08.2021 prescribing ‘any other person’ for section 140 and section 288 in pdf format


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