The Finance (No. 2) Bill, 2024 [FB (No. 2) 2024 or Bill] was presented by the Hon’ble Finance Minister Nirmala Sitharaman on 23 July 20241. While moving the Bill for approval by the Lok Sabha on 7 August 2024, the Union Finance Minister introduced amendments to the Finance Bill (No, 2) 2024. The amendments are generally intended to address certain ambiguities/uncertainties arising from the proposals as contained in the Bill.
Under the new block assessment scheme [proposed to be reintroduced vide FB (No. 2) 2024 as discussed above], (in case of searched person as also search connected third person in respect of whom documents/evidence of Unique Document Identification Number (UDI) is found in case of search), UDI for different years (6 prior years plus broken period up to date of search) are assessed together as a single block. Such UDI is taxable at the rate of 60% (plus applicable surcharge and cess).
The Finance Bill (No. 2) 2024 proposed to define UDI. Besides the evidence-based UDI found during search, such definition also proposed to include any expenses, deductions or allowances incorrectly claimed by a taxpayer. In this backdrop, Amended Bill proposes to enhance the scope of UDI definition to also specifically include incorrect claim of exemptions.
Under the proposed Block Assessment scheme, tax authority can assess UDI on the basis of any material or information available with the tax authority or which comes to its notice post search action as well.
Under the block assessment as proposed vide FB (No. 2) 2024, tax authority is to compute UDI basis evidence found as a result of search, survey or requisition of books of account or other documents. In addition, the tax authority can also take into consideration ‘such’ other material or information as are available with the tax authority or which comes to tax authority’s notice during block assessment proceedings.
The Amended Bill proposes to substitute the expression ‘such’ with ‘any’ and thereby clarifies that UDI can now be determined also on the basis any material or information available with or coming to the notice of the tax authority during block assessment proceedings.
