Page 30 - Union Budget, 2022

Union Budget, 2022

Revision of TPO Orders prejudicial to revenue

• It is proposed to provide powers additionally to PCCIT/CCIT/PCIT/CIT, who is assigned the
jurisdiction of transfer pricing, to revise the order passed by TPO under Sec 92CA, which are
prejudicial to the revenue, in order to determine the arm’s length price of the international or

specified domestic transaction.
• The existing time limit pertaining to passing of order pursuant to a revision order, is extended to
passing of order by TPO as well. (9 months from the end of FY of the revision order, if fresh order
u/s 92CA and 3 months from the end of the month of revision order, in other cases).

• Further, to modify the scrutiny assessment or reassessment or recomputation, in accordance with
such revised order passed by TPO, it is proposed to provide AO, an additional time period of 2
months from the end of the month in which such order is received.

AY 2022-23 and subsequent AYs.

• The proposed amendment provides the required clarity in terms of passing of order under Sec 263
when transfer pricing assessment has been conducted.

Computation of interest in the event of default in deduction/collection or payment of TDS/TCS
• Interest is charged in case TDS / TCS is not deducted / collected or if deducted / collected and not paid to
the credit of the Government, u/s 201(1A) and 206C(7) respectively. However, computation of such interest
has been the subject matter of various litigations.
• It is proposed that where an order has been made by the AO with respect to failure to deduct or collect tax
at source or non-payment after deduction or collection, then interest shall be paid by the person in accordance
with the order made by the AO.

April 1 , 2022
st

• Interest as computed by AO would be final and any clerical or arithmetical mistakes cannot be contended
at the time of payment. Such orders are appealable; however, the benefit of making 15% of disputed tax

shall no longer be available in this case, since the entire amount has to be paid based on the AO’s order.
• The AO will have to consider in the final order, the relaxation provided in the provisos of Sec 201 and
206C, of restricting computation of interest till the date of payment of tax and filing of return of income
by the payee.

Refund of TDS in certain cases of remittance to non-residents
• In cases where an assessee was required to pay any sum to a non-resident, other than interest, and tax was
deductible u/s 195 and such tax was to be borne by the assessee under an agreement or arrangement, and
the assessee claimed that no tax was required to be deducted on such income, there was no other way to
obtain a refund of such tax paid by the assessee but to appeal to the CIT(A) under Sec 248.
• However, a new Sec 239A is proposed to be inserted where such assessee may file an application before
the AO for refund of such tax deducted. AO can pass an order, allowing or rejecting such application,
after giving an opportunity of being heard to the assessee. If the assessee is not satisfied with the AO’s
order, the same can be appealed before CIT(A).
• To rationalize the provision, it is now provided that no appeal shall be filed directly to CIT (A) under the
existing Sec 248, when tax is paid and refund is required; AO’s order of rejection pursuant to application
for refund can be appealed before CIT (A).
1 April 2022
st

• The proposed amendment shall reduce the prolonged appeal process whereby the appeal to CIT(A)
is preceded with a simple application for refund before the AO.

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