A communication issued by the Central Board of Direct Taxes, as FTS- 1275045/2019, dated 18 October 2019.
A public notice of the Central Board of Direct Taxes, not an order under any section, inviting applications from banks and payment system providers. Section 269SU, inserted in the Income-tax Act, 1961 by the Finance (No. 2) Act 2019, requires every person with a business turnover of more than Rs 50 crore to provide facilities for accepting payment through prescribed electronic modes. Before the Central Government prescribed those modes, the Board asked the industry to put forward the payment systems that should be considered.
This one does not fall neatly into the Board's usual classes — it is a letter, a memorandum, a consultation paper or something else the department has published in this collection. What it is, and what weight it carries, is set out below.
It records three things and then asks for one. First, section 269SU obliges every person having a business turnover of more than Rs 50 crore to provide facilities for accepting payments through prescribed electronic modes. Second, section 10A, inserted in the Payment and Settlement Systems Act 2007, bars a bank or system provider from imposing any charge on the payer or on the beneficiary for a payment through a mode prescribed under section 269SU. Third, both provisions come into force with effect from 1 November 2019. The Board then invites banks and payment system providers operating an authorised payment system under the 2007 Act, who are willing that their system be considered for prescription, to apply in the tabular format printed in the notice, duly signed by the authorised signatory, by e-mail to dirtpl4@nic.in by 28 October 2019.
Section 269SU works only once the electronic modes are prescribed; until then the obligation on a large business has no content. The Central Government had to choose which payment systems to prescribe, and the choice touches every bank and payment system provider, because section 10A of the Payment and Settlement Systems Act 2007 forbids any charge on a payment made through a prescribed mode. The Board therefore called for applications from the industry before prescribing, rather than after.
It is addressed to banks and payment system providers, not to assessees, and it confers nothing. Like any communication of the Board, it can bind only the department, never the taxpayer and never a court or the Tribunal. No business becomes liable under section 269SU by force of this notice, and no bank acquires a right by applying; the obligation comes from the section and from the modes actually prescribed.
The notice is dated 18 October 2019. The expression of intent was to be sent by e-mail to dirtpl4@nic.in by 28 October 2019, with queries on 011-2309 2964. Section 269SU of the Income-tax Act, 1961 and section 10A of the Payment and Settlement Systems Act 2007 were to come into force with effect from 1 November 2019.
This is only an invitation. It prescribes no mode of payment; that had to be done separately by the Central Government, and no turnover-based obligation can be tested against this notice. Note the timing on its face: applications were called for only up to 28 October 2019, days before the section came into force on 1 November 2019. The application format asks for PAN and the licence or registration number of the payment system.
every person having a business turnover of more than Rs 50 Crore shall mandatorily provide facilities for accepting payments through prescribed electronic modes.
— the Central Board of Direct Taxes, communication FTS- 1275045/2019, 18 October 2019. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 269SU | section 187 |
What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its number, its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
What we could not settle. The designation in the signature block is garbled and reads 'Under Steretany'; the notice appears to be signed by an Under Secretary, and no name can be read. The application format is a table, which the scan renders as a single run of column headings. The notice states no provision under which it is issued, so 'authority' is left blank.