TIOL-DDT 1017 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1017 </font><br>
23.12.2008 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No penal action on electronically filed Income Tax returns bearing acknowledgement date stamp of 1st October 2008</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Board of Direct Taxes has ordered that any return of income for the assessment year 2008-09 filed electronically on 30th September 2008, in respect of which the electronic acknowledgement bears the date stamp of 1st October 2008, shall be treated as having been filed within the due date, i.e. 30th September 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, such returns of income shall be eligible for all benefits of filing of tax returns by the due date and no penal consequence shall be attracted for failure to file the return by the due date.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A person who is not suitable to be appointed as a permanent judge, should not be continued as an Additional Judge - Supreme Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"We have no hesitation in saying that a person who is not suitable to be appointed as a permanent Judge on the ground of unsuitability due to adverse factors on account of mental and physical capacity, adverse materials relating to character and integrity and other relevant matters, which are so paramount and sacrosanct for the functioning as a Judge, should not be continued as an Additional Judge. Even when an additional Judge is appointed as a permanent Judge, he does not become immune from action, if circumstances so warrant," said the Supreme Court in an important judgement delivered last week in a PIL filed by eminent lawyer and a former Law Minister Shanti Bhushan.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Judges, like Caesar's wife, should be above suspicion is the focal point in this petition.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>How are High Court Judges appointed?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Justice and Judges of High Courts are to be appointed by the President under Clause (1) of the Article 217 of the Constitution. Appointments to the High Court should be made on a time bound schedule so that the appointments are made well in advance preferably a month before the occurrence of the anticipated vacancy.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a permanent vacancy is expected to arise in any year in the office of a Judge, the Chief Justice will as early as possible but at least 6 months before the date of occurrence of the vacancy, communicate to the Chief Minister of the State his views as to the persons to be selected for appointment. Full details of the persons recommended, should invariably be sent. Before forwarding the recommendation, the Chief Justice must consult two of his senior most colleagues on the Bench regarding the suitability of the names proposed. All consultation must be in writing and these opinions must be sent to the Chief Minister along with the recommendations.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Justice while sending the recommendation for appointing an additional Judge as a permanent Judge must along with his recommendation furnish statistics of month wise disposal of cases and judgments rendered by the Judge concerned as well as the number of cases reported in the Law Journal duly certified by him. The information would also be furnished regarding the total number of working days, the number of days he actually attended the Court and the days of his absence from the Court during the period for which the disposal statistics are sent.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The proposal for appointment of a Judge of a High Court shall be initiated by the Chief Justice of the High Court. However, if the Chief Minister desires to recommend the name of any person he should forward the same to the Chief Justice for his consideration. Since the Governor is bound by the advice of the Chief Minister heading the Council of Ministers, a copy of the Chief Justice's proposal, with full set of papers should simultaneously be sent to the Governor to avoid delay. Similarly, a copy thereof may also be endorsed to the Chief Justice of India and the Union Minister of Law, Justice and Company Affairs to expedite consideration. The Governor as advised by the Chief Minister should forward his recommendation along with the entire set of papers to the Union Minister of Law, Justice and Company Affairs as early as possible, but not later than six weeks from the date of receipt of the proposal from the Chief Justice of the High Court. If the comments are not received within the said time frame, it should be presumed by the Union Minister of Law, Justice and Company Affairs that the Governor (i.e. Chief Minister) has nothing to add to the proposal and proceed accordingly.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Union Minister of Law would consider the recommendations in the light of such other reports as may be available to the Government in respect of the names under consideration. The complete material would then be forwarded to the Chief Justice of India for his advice. The Chief Justice of India would in consultation with the two senior most judges of the Supreme Court form his opinion in regard to a person to be recommended for appointment to the High Court. The Chief Justice of India and the collegium of two Judges of the Supreme Court would take into account the views of the Chief Justice of the High Court and of those Judges of the High Court who have been consulted by the Chief Justice as well as views of those Judges in the Supreme Court who are conversant with the affairs of that High Court. It is of no consequence whether that High Court is their parent High Court or they have functioned in that High Court on transfer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After their consultation the Chief Justice of India will in course of 4 weeks send his recommendation to the Union Minister of Law. Consultation by the Chief Justice of India with his colleagues should be in writing and all such exchange of correspondence with his colleagues would be sent by the Chief Justice of India to the Union Minister of Law. Once the names have been considered and recommended by the Chief Justice of India they should not be referred back to the State constitutional authorities even if a change takes place in the incumbency of any post. However, where it is considered expedient to refer back the names, the opinion of Chief Justice of India should be obtained. The Union Minister of Law would then put up as early as possible preferably within 3 weeks the recommendation of the Chief Justice of India to the Prime Minister who will advise the President in the matter of appointment.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The correspondence between the Chief Justice and the Chief Minister and the correspondence between the Chief Minister and the Governor, if any should be in writing and 21 copies of the correspondence should invariably be forwarded along with the Chief Minister's recommendations.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As soon as the appointment is approved by the President, the Secretary to the Government of India in the Department of Justice will inform the Chief Justice of the High Court who will obtain from the person selected (i) a certificate of physical fitness as in Annexure II signed by a Civil Surgeon or District Medical Officer and, (ii) a certificate of date of birth as in Annexure III. A copy of the communication will also be sent simultaneously to the Chief Minister of the State. The medical certificate should be obtained from all persons selected for appointment whether they are at the time of appointment in the service of the State or not. When these documents are obtained the Chief Justice will intimate the fact to the Secretary to the Government of India in the Department of Justice and also forward these documents to him.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As soon as the warrant of appointment is signed by the President, the Secretary to the Government of India in the Department of Justice will inform the Chief Justice and a copy of such communication will be sent to the Chief Minister. He will also announce the appointment and issue necessary notification in the Gazette of India.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can a person appointed through this elaborate procedure be but good?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The last para of the Supreme Court judgement reads as,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before saying "omega" it needs to be emphasized what Shakespeare wrote in Othello (Act III, Scene 3, 155)</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Good name in man and woman, dear my lord, Is the immediate jewel of their souls. Who steals my purse steals trash; 'tis something, nothing; 'T was mine, 'tis his, and has been slave to thousands: But he that filches from me my good name Robs me of that which not enriches him And makes me poor indeed." Again in "Richard II", Act 1, Sc. 1 said Shakespeare wrote: "The purest treasure moral times afford Is spotless reputation; that away, Men are but gilded loam or painted clay."</font></p>
</blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2008/2008-TIOL-236-SC-MISC.htm">SHANTI BHUSHAN AND ANR Vs UNION OF INDIA AND ANR</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Before saying "omega" - What does it mean?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why don't you write in to us what this really means?</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise Officers arrested by CBI</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe it's the year-end target time for CBI and Revenue officials are easy targets. It seems yesterday the CBI arrested a Superintendent and three Inspectors of Central Excise in the Thane Commissionerate for demanding and accepting a bribe of Rs. 1.5 Lakhs - for returning illegally seized documents.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A very senior officer told DDT, "no officer will ever get caught, if he accepts whatever money is willingly and voluntarily paid by the assessee; It is only the greedy who demand and harass who get caught." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems demanding a bribe is not an offence, only accepting it is.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>'Crime Free India Bureau' not Authorised by CVC to receive Complaints</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Vigilance Commission has in a Public Notice informed that</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"It has come to the notice of Central Vigilance Commission that an organisation named "Crime Free India Bureau", with its address as "Media Force, D-411, Ramphal Chowk, Dwarka, Sector-7, New Delhi-110 077", in its publications namely "Crime and India" and "Media Force" and other publicity material, has stated that the Central Vigilance Commission has authorized them to receive complaints against public servants, to conduct investigation and to submit reports to the Commission.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is hereby informed to all concerned that Crime Free India Bureau has not been authorized by the Central Vigilance Commission to either receive complaints against public servants on its behalf or to conduct investigation and submit reports to the Commission. The organisation is using the Commission's name and authority in an unauthorized manner and the public or any organisation which is having any kind of dealings/interaction with Crime Free India Bureau would be doing so at their own risk. The Central Vigilance Commission would not be responsible for any action of Crime Free India Bureau."</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Security, shoes, economy, jobs and the President</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Security personnel guarding the President (US of A) are experts - if it was a bullet or a bomb that was hurled at President Bush, they would have stood between the President and the bullet/bomb, but then nobody told them about shoes or trained them on how to handle shoes and the most powerful man on Earth was left to defend himself against those shoes - and what a great job he did in ducking those shoes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now those shoes have become very popular. BBC reports that the shoe maker Baydan Shoes, has tens of thousands of orders from around the world - including from the US and Iraq. The shoe was called Model 271 but has been renamed Bush shoe. According to the shop's owner, Ramazan Baydan , a US firm has ordered 18,000 pairs, a further 15,000 pairs are destined for Iraq and a British distributor has asked to be the firm's European sales representative - and had to take on 100 extra workers to cope with the demand.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A shoe thrown at the President has created employment, more money in the market and maybe a little succour in these troubled times.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appellate proceedings not a substitute for original proceedings by TPO</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE Transfer Pricing (TP), within the fold of international taxation, is fast emerging as a major chapter in the Indian Income Tax Act. The first ever case that had reached through the writ-route to the High Court-level had gone in favour of the Revenue vide Sony India case (</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2006/2006-TIOL-323-HC-DEL-IT.htm" target="_blank"><strong>2006-TIOL-323-HC-DEL-IT</strong></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">).
But the second case decided by the Delhi High Court last Friday has gone
against them. And the entire issue was fought by legal luminaries from both
sides on the basic issue of granting oral hearing. Albeit it may sound too
simple and tenuous, but it is indeed the most critical pillar for the globally-accepted
edifice of natural justice.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While deciding a bunch of TP cases the High Court has held that vide the provisions of sub-section (3) of section 92CA, the legislature has clearly cast an obligation on the TPO to accord an oral hearing to the assessee. Going by the words of the statute, the grant of oral hearing by the TPO is mandatory.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this important judgement today - please see our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8334" target="_blank">Breaking News</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8334">.</a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">- Tomorrow's cases</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Non-resident airlines - Indo-US tax treaty - No exemption for activities like third party security screening and charter handling as such subsidiary activities do not fall within ambit of words 'any other activity directly connected with such transportation' under Article 8 of tax treaty: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AIRLINES </strong>business is a highly competitive sector. To shore up bottom-line, undertaking subsidiary activities like security screening services, maintenance services and third party charter handling services is a common practice. And this is what the assessee, a tax resident of the USA, did in India. However when it came to its taxability, it claimed exemption under Article 8 of the Indo-US tax treaty.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No review by Commissioner after order passed by Commissioner (Appeals) - doctrine of merger is not a doctrine of universal or unlimited application, and it will depend on the nature of jurisdiction exercised by the superior forum- High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> was the question framed for the High Court's verdict. "Whether the Commissioner of Central Excise could exercise his power of revision under Section 84 of the Finance Act, 1994 to the extent the order of Adjudicating Authority was found to be erroneous by him and about which no appeal lay at the instance of Revenue notwithstanding that to the extent the assessee was aggrieved, he had preferred the appeal and the order in appeal has been passed."</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rent - India-UK tax treaty - legal services hired by Indian clients - territorial nexus doctrine - only that part of income is chargeable to tax in India which arises from services rendered and also utilised in India; Income from services utilised in India but rendered outside India not taxable: Bombay HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> India and UK taking crucial steps forward to allow their legal professionals to freely set up shops in each other's domain and provide legal services to business and industry what was perhaps required as the last input for cementing this relationship was the taxability of their income. If that was so, here is an important decision from the Bombay High Court which has held that if the full effect is given to the provisions of Sec 9(1)( vii)(c), the income of tax-resident of UK which provided legal services to Indian client on hourly basis and their services were utilised in India is chargeable to tax only to the extent the income is attributable to India within the framework of territorial nexus doctrine.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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