TIOL Effect – CBDT officially confirms that Form 17 and the rest of confusion effective only from 1.7.2009

By Vijay Kumar

YOU must have read our TIOL Top story we carried yesterday - New TDS Regime-A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'

The Government has reacted rather quickly and issued a Press Release to the effect that:-

The Central Board of Direct Taxes have decided to defer the implementation of Notification No.31/2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962. The amended/substituted Rules will now come into effect on 1st July 2009 instead of 1st April 2009.

Tax deductors/collectors may continue to deposit TDS/CS tax and file TDS/TCS returns as per the pre-amended provisions in the interim period.

Now Notification No. 31/2009 had amended the Income Tax Rules and it specifically mentioned that the Income-tax (8th Amendment) Rules, 2009, shall come into force on the 1st day of April, 2009.

Now by a press release, the Board has extended this effective date to 1st July 2009 instead of 1st April 2009.

The CBDT can certainly amend the Rules, but can they do so by a PRESS RELEASE? The Rules made by the CBDT have the status of statute and are required to be placed before Parliament. Press Releases don't certainly have that status and are not subject to Parliamentary scrutiny.

Now the new Rules had come into force on 1st April 2009, can they by a Press Release say that the Rules will come into force from 1st July 2009?

What happens during the period from 1st April till yesterday when they gave a Press Release?

Obviously they will come up with a notification – hopefully very soon.

Had we not raised this issue strongly yesterday, perhaps the confusion would have continued.

We are grateful to the Board for reacting quickly – though they should have given a Notification instead of a Press Release, but a Press Release is far easier to release than a Notification.

CBDT Press Release No.402 /92/2006-MC (11 of 2009) Dated: April! (May?) 11, 2009