Amended and updated notes on section 115JH of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to foreign company said to be resident in India.
Chapter XIIBC (Section 115JH) of the Income Tax Act 1961 deals with the provisions related to special provisions relating to foreign company said to be resident in India. Section 115JH of IT Act 1961-2023 provides for foreign company said to be resident in India.
Recently, we have discussed in detail section 115JG (Interpretation in this Chapter) of IT Act 1961. Today, we learn the provisions of section 115JH of Income-tax Act 1961. The amended provision of section 115JH is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 115JH of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section-115JH: Foreign company said to be resident in India
Section 115JH(1) of Income Tax Act
Where a foreign company is said to be resident in India in any previous year and such foreign company has not been resident in India in any of the previous years preceding the said previous year, then, notwithstanding anything contained in this Act and subject to the conditions as may be notified by the Central Government in this behalf, the provisions of this Act relating to the computation of total income, treatment of unabsorbed depreciation, set off or carry forward and set off of losses, collection and recovery and special provisions relating to avoidance of tax shall apply with such exceptions, modifications and adaptations as may be specified in that notification for the said previous year:
Provided that where the determination regarding foreign company to be resident in India has been made in the assessment proceedings relevant to any previous year, then, the provisions of this sub-section shall also apply in respect of any other previous year, succeeding such previous year, if the foreign company is resident in India in that previous year and the previous year ends on or before the date on which such assessment proceeding is completed.
Section 115JH(2) of Income Tax Act
Where, in a previous year, any benefit, exemption or relief has been claimed and granted to the foreign company in accordance with the provisions of sub-section (1), and, subsequently, there is failure to comply with any of the conditions specified in the notification issued under sub-section (1), then,—
- (i) such benefit, exemption or relief shall be deemed to have been wrongly allowed;
- (ii) the Assessing Officer may, notwithstanding anything contained in this Act, re-compute the total income of the assessee for the said previous year and make the necessary amendment as if the exceptions, modifications and adaptations referred to in sub-section (1) did not apply; and
- (iii) the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the failure to comply with the conditions referred to in sub-section (1) takes place.
Section 115JH(3) of Income Tax Act
Every notification issued under this section shall be laid before each House of Parliament.