TIOL-DDT 1117 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099" size="3">TIOL-DDT 1117 </font><br> 25.05.2009 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New TDS and TCS payment and information reporting system – CBDT views this as an opportunity to minimize rent seeking behaviour </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> is of the view that no claim for TDS / TCS should be admissible unless the deductor / payer has paid the amount so deducted / collected to the credit of the Central Government and the information relating to the transaction is received. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the processing of data in the department was done manually and the volume of information being large, it was not feasible to undertake 100% matching of TDS claims with information furnished by the deductors. In view of this, the Department adopted a risk management strategy for allowing claim for TDS and as a part of this initiative, the deductors were required to electronically furnish the TDS related information (through the NSDL). This system was introduced in early 2004 as one of the modules of the Taxpayer Information Network (TIN). However, CBDT is of the view that this reporting mechanism was far from satisfactory for the following reasons: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Non-compliance, especially by Government deductors, with TDS return filing requirement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Low quoting of PAN number in TDS returns that are filed on account of non-furnishing of PAN by deductees to their deductors and negligence by deductors. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to resolve the problems in granting credit for pre-paid taxes, the CBDT constituted a sub-group to analyse the various problems in granting credit for prepaid taxes and make appropriate recommendations. The sub-group was of the view that, the problem of matching and reconciliation of prepaid taxes is rooted in the three sets of data pertaining to TDS entering the system separately at different times from different sources, thus causing mismatch. It was of the view that the problem can be solved if the agency receiving the TDS amount and the TDS returns (and the documents by which this is done) is the same. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, to mitigate and minimize the risk of financial fraud and protect the interest of all the stakeholders – Government, Income Tax Department and Tax payers, the Board has decided that, henceforth, claim for TDS and TCS shall be allowed only if the– </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099">(i) amount has been deposited by the deductor / collector; </font></strong></font></p> <p align="justify"><font color="#660099"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) information relating to the deductee has been furnished by the deductor / collector; and </font></strong></font></p> <p align="justify"><font color="#660099"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) claim matches the information furnished by the deductor / collector. </font></strong></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To implement this, CBDT notified the new TDS and TCS payment and information reporting system vide notification No. 858(E) dated 25th March, 2009. <font color="#FF6633"><strong>The salient features of the new TDS and TCS payment and information reporting system are as follows : - </strong></font></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The new system has been harmonized for all deductors (including Central and State Governments). Therefore, like non-governmental tax deductors, every deductor in the Central and State Government have also been made responsible for making direct payment of TDS in the bank. They are no longer allowed to make payments of the TDS and TCS by making book adjustments or consolidated payments. As a result, the TDS payment and information reporting system will be uniform across deductors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Rule 30 and Rule 37 CA of the Income-tax Rules, 1962 have been substituted to provide, inter alia, for the following: - </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) All sums of tax deducted at source under Chapter XVII-B and of tax collected at source under Chapter XVII-BB shall, in general, be paid to the credit of the Central Government within one week from the end of the month in which the deduction, or collection, is made. Similarly, the same time limit for payment will also apply for income-tax due under sub-section (1A) of section 192. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) It is mandatory for all deductors (including Central Government and State Governments) to pay the amount by electronically remitting it into the RBI, SBI or any authorized bank. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) It is mandatory for all deductors (including Central Government and State Governments) to make the payment by electronically furnishing an income-tax challan in Form No. 17. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) In the process of electronically furnishing the income-tax challan in Form No. 17, the deductor will be simultaneously required to furnish to the Taxpayer Information Network (TIN) system maintained by National Securities Depository Limited (NSDL) either through screen based upload or file upload, three basic information relating to the deduction i.e., PAN, name of the deductee and amount of TDS/TCS. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Upon successful remittance of the TDS/TCS to Central Government account and the uploading of the basic information as mentioned above to the TIN system, every deduction record will be assigned a unique transaction number (UTN). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) NSDL will create a facility to e-mail the UTN file to the deductor if the e-mail address of the deductor is available with them. In addition, they will also create a facility for the deductor to download the UTN file. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) The UTN will be required to be quoted by the deductor on the TDS/TCS certificate issued by him to the deductee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) NSDL will also create a facility to allow independent viewing of the UTNs by the deductee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(viii) With a view to enabling the Income Tax Department to monitor compliance by the deductor with the TDS provisions, every person (including Central Government and State Government) who has obtained a Tax Deduction or Collection Account Number (TAN) shall electronically furnish a quarterly statement of compliance with TDS provisions in Form No. 24C. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is mandatory for all TAN holders to furnish this form irrespective of whether any payment liable to TDS has been made or not. This form shall be furnished on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year, respectively, and on or before the 15th June following the last quarter of the financial year. This e-form No. 24C has to be furnished at http://incometaxindiaefiling.gov.in. The first quarter in respect of which Form 24C is required to be furnished is the quarter ending on 30th June, 2009. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ix) In order to enable the deductor to furnish the UTN to the deductee, the existing Form 16 and Form 16A have been appropriately modified. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(x) The quarterly returns of TDS and TCS hitherto required to be filed in Form No. 24Q, Form No. 26Q, Form No. 27Q and Form No. 27EQ shall now be required to be filed for all quarters on or before the 15th June following the Financial Year. Effectively, the quarterly returns have now been replaced by an annual return. </font></p> </blockquote> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The above new system will be effective for all tax deducted at source or tax collected at source on or after the 1st April, 2009. However, any TDS or TCS effected on or after the 1st April, 2009 but not later than 31st May, 2009 shall continue to be paid to the credit of the Central Government by using the old challan form. The TDS or TCS effected on or after the 1st June, 2009 shall be required to be paid electronically by electronically furnishing income tax challan in Form No. 17. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where the payment of TDS or TCS effected on or after the 1st April, 2009 but not later than 31st May, 2009 is paid to the credit of the Central Government by using the old challan form, the deductor / collector shall, nevertheless, be required to fill up Form No.17 in respect of such payments any time between 1st July, 2009 to 15th July, 2009. Therefore, the deductors/collectors are advised to prepare the schedule relating to details of TDS / TCS from deductees in Form No.17 in advance (in an excel sheet) and be in a state of preparedness to file the same by 15th July, 2009 so that the UTNs relating to TDS / TCS transactions carried out in the month of April and May can be generated / obtained for onward transmission to the deductees. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, a deductor can split the total amount of TDS and TCS which he is required to deposit to the credit of the Central Government so that every deposit to the account of the Central Government is made through a separate challan in Form 17. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The returns of income in Form No. ITR-1 to Form No.ITR-8 for Assessment Year 2009-10 have also been notified which requires the quoting of the relevant UTN for every TDS or TCS claim made by the assessee. Therefore, the credit for any TDS or TCS claim will be allowed, amongst others, if the assessee quotes the relevant UTN for every TDS and TCS claim and the said UTN matches with the UTN in the database of the Income Tax Department. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to enabling the processing of returns relating to Financial Year 2007-08 (Assessment Year 2008-09) and enabling the assessee to receive the UTN for TDS and TCS transactions in the Financial Year 2008-09 (relevant for Assessment Year 2009-10), the following procedure shall be followed: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) National Securities Depository Limited (NSDL) shall assign a UTN for every TDS and TCS transaction records in Financial Years 2007-08 and 2008-09, reported in the quarterly returns received by it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) NSDL will create a facility to e-mail the UTN file to the deductor if the e-mail address of the deductor is available with them. In addition, they will also create a facility for the deductor to download the UTN file. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Upon receipt of the UTN, the deductor will inform the UTN to the deductee. In cases where the UTNs are available to the deductor before the issue of the TDS/TCS certificate to the deductee, the deductor will indicate the UTNs on the certificate. However, if the UTNs are not available to the deductor before the issue of TDS/TCS certificate, the deductor shall, subsequently, send a consolidated statement of all TDS/TCS transactions indicating the UTNs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) NSDL will also create a facility to allow independent viewing of the UTNs by the deductee. As a result, even if the UTNs are not received by the deductee from the deductor, they can be directly obtained from the NSDL database and quoted while making claims of TDS and TCS in the return of income. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The old forms have been substituted by the new Form 16, Form 16A and Form 27D with effect from the 1st day of April, 2009. In the new Forms, it is mandatory for the deductor/collector to quote the UTN. Therefore, where the certificate is required to be issued in respect of <strong><font color="#FF6633">deduction or collection made before the 1st April, 2009,</font></strong> the deductor/collector may adopt any of the following course of action:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) The deductor/collector may issue certificate of deduction or collection in the Form 16, Form 16A or Form 27D, as the case may be, as it existed prior to 1st April, 2009 and send a consolidated statement of UTNs to the deductee/buyer/lessee etc., as soon as the same is received by him; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) The deductor/collector may issue certificate of deduction or collection in the new Form 16, Form 16A or Form 27D, as the case may be. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards, TDS/TCS certificates in respect of <strong><font color="#FF6633">deduction or collection effected on or after the 1st April, 2009</font></strong><font color="#FF6633">,</font> it is mandatory to issue the certificates in the new Forms and quote the UTN relating to the TDS/TCS transactions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new Form 24C has been notified to monitor compliance with the provisions of TDS/TCS. This new Form 24C is required to be furnished by all TAN holders irrespective of whether a TDS/TCS transaction has been effected during the quarter or not. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT is of the view that the new TDS and TCS payment and reporting system will enable faster payment, accurate accounting and uniformity across deductors. It is felt that the new system will facilitate accurate, quicker and full credit for taxes paid enabling faster refunds to taxpayers and minimize interface of tax administration with taxpayers and intermediaries, thereby eliminating any opportunity for rent seeking behaviour. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2009/it09cir02.htm" target="_blank">CBDT CIRCULAR NO 2/2009., Dated: May 21, 2009</a></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see our well researched articles on the complexities and difficulties involved in the implementation of the new TDS regime: </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9006">New TDS Regime - A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'! </a></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">and </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9026">New TDS Regime - A tale of goof-ups; TPL, TRU need to develop grip over taxpayers' pulse for improved compliance! </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT clarifies on New Return Forms for Assessment Year 2009-10 </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT had vide notification S.O. No.866 (E) dated 27th, March, notified the following new forms for Assessment Year 2009-10: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(i) ITR-1</strong> return of income for individuals having income from salary/ pension/ family pension and not having any other income except income by way of interest chargeable to income-tax under the head Income from other sources; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(ii) ITR-2</strong> return of income for Individuals and Hindu Undivided Families (HUFs) not having any income under the head Profits or gains of business or profession; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(iii) ITR-3</strong> return of income for Individuals and HUFs being partners in firms and not carrying out business or profession under any proprietorship; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(iv) ITR-4</strong> return of income for individual and HUFs having proprietory business or profession; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(v) ITR-5</strong> combined form for return of income and fringe benefits for Firms/ Association of Persons / Body of Individuals; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(vi) ITR-6</strong> combined form for return of income and fringe benefits for companies (other than companies claiming exemption under section 11; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(vii) ITR-7</strong> combined form for return of income and fringe benefits for persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D); </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(viii) ITR-8</strong> stand alone form for return of fringe benefits for persons who are not required to furnish return of income but are required to furnish return of fringe benefits. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of certain issues arising out of furnishing the returns in the above mentioned forms, CBDT clarifies that: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) An assessee should obtain the report of audit from an accountant under section 44AB of the Act on or before the due date of the furnishing of the return and should fill out the relevant columns of the return forms on the basis of such report. However, the report of audit should not be attached with the return or furnished separately any time before or after the due date. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) These returns are not to be accompanied with any other document including any statutory form or report of audit (other than the report under section 92E), which is otherwise required to be furnished before the due date or along with the return for making any claim. <strong><font color="#FF6633">The provisions of the law shall be deemed to have been complied with in respect of the requirement of the filing of the attachments or documents or reports along with the return. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The report as required under section 92E of the Income-tax Act should not be furnished along with the return. However, it should be separately furnished before the date specified in rule 10E. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, it is mandatory for a company and a firm liable to audit under section 44AB of the Act to furnish the return electronically. However, electronic filing is optional for other categories of tax-payers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The e-Return has to be furnished at <a href="http://incometaxindiaefiling.gov.in/">http://incometaxindiaefiling.gov.in </a>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, it is advisable (though not mandatory) to use a digital signature for electronically furnishing the return. If the return is electronically furnished under a digital signature, the tax-payer is not required to furnish the Form ITR-V with the Income-tax Department as a follow up to the electronic transmitting of data in the return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, any return which is digitally signed by the assessee and filed with an E-Return Intermediary (ERI), who, in turn, submits the return to the Income Tax Department under his digital signature, will also be deemed to have been filed under a digital signature of the assessee and no Form ITR-V is required to be submitted. In such cases, the date of electronic transmission of the data in the return shall be the date of furnishing the return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, if the assessee does not use a digital signature for electronically transmitting the data, he is required to follow-up the electronic transmission of the data by submitting the Form ITR-V with the Income-tax Department as verification of the electronic filing of the return. In such a case, the date of transmitting the data electronically will be the date of furnishing the return if the Form ITR-V is furnished within thirty days after the date of transmitting the data electronically. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case, Form ITR-V, is furnished after the above mentioned period, it will be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the assessee to electronically re-transmit the data and follow it up by submitting the new Form ITR-V within thirty days. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the Form ITR-V is bar-coded, assessee is advised not to fold the same and post it in A4 size envelope. <strong><font color="#663399">The assessee shall furnish the Form ITR-V to the Income-tax Department by mailing it to “Income Tax Department – CPC, Post Box No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka” within thirty days after the date of transmitting the data electronically. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Post Box shall deliver all the Form ITR-V to the Centralized Processing Centre (CPC) of the Income-tax Department in Bangalore . Upon receipt of the Form ITR-V, the CPC shall send an e-mail acknowledging the receipt of Form ITR-V. The e-mail shall be sent in due course to the e-mail address furnished by the tax-payers in his return. <strong><font color="#FF6633">No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner. </font></strong></font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">All returns filed electronically shall be processed, on priority basis, only at the Centralized Processing Centre of the Income-tax Department in Bangalore . </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since no documents are required to be furnished along with the return of income, the credit for Tax Deducted at Source (TDS), Tax Collected at Source (TCS), advance tax and self assessment tax (hereinafter collectively referred to as ‘pre-paid taxes') shall be allowed on the basis of information relating to pre-paid taxes furnished in the relevant schedules of the return forms subject to matching with the information provided by the deductor, collector and the banks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, tax payers are advised to ensure that the information relating to pre-paid taxes is complete in all respect and correct. With a view to enabling the matching of information relating to pre-paid taxes furnished by the tax payers, the Income-tax Department has created a system of Unique Transaction Number (UTN) and Challan Identification Number (CIN). Assesses must ensure that the deductor and the collector have provided them with separate UTNs in respect of each TDS and TCS transaction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tax payers should ensure that the UTN for every TDS and TCS claim in the return is correctly filled in. Similarly, they must also ensure that they correctly fill in the CIN in respect of payments of advance tax and self-assessment tax. Further, no disallowance of claim for pre-paid taxes shall be made by the Assessing Officer only on the ground that the TDS/TCS certificates and challans have not been furnished along with the return of income or Form ITR-V. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The return of income in Form No. ITR-1 to Form No.ITR-8 for Assessment Year 2009-10 have been notified which require, amongst other, the quoting of the relevant UTN for every TDS or TCS claim made by the assessee. Therefore, the credit for any TDS or TCS claim will be allowed, amongst others, if the assessee quotes the relevant UTN for every TDS and TCS claim and the said UTN matches with the UTN in the database of the Income Tax Department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to enabling the processing of returns relating to financial year 2007-08 (Assessment Year 2008-09) and enabling the assessee to receive the UTN for TDS and TCS transactions in the Financial Year 2008-09 (relevant for Assessment Year 2009-10), the procedure as detailed in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2009/it09cir02.htm" target="_blank">Circular No. 2/2009, Dated May 21, 2009</a> for NSDL/deductor</strong> shall be followed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the past, instances have come to the notice of the Board that in spite of specific directions contained in the instructions for filling the return forms, the practice of accepting returns, along with annexures is still continuing. Tax-payers have in the past also complained that staff and officials in certain stations are refusing to accept returns which are not accompanied with annexures. These practices are against the expressed policy of the Government and are not in consonance with the legal provisions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, it is emphasized that Chief Commissioners of Income Tax must ensure strict compliance with the provisions of law. It may be reiterated that all annexures accompanying the income tax return forms should be detached and returned to the tax payers by the receiving official. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All officers and staff of the Department should strictly comply with the contents of this Circular. Any violation thereof will be viewed seriously by the Board. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now how many assessees and TDS deductors including DDOs in the Income Tax Department will know about these complicated procedures and when will DDOs in remote areas know about this? </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">And now somebody who makes a payment to me cuts TDS but does not make that payment into the government account in the way the CBDT wants it to be done, they propose to disallow credit to me because my deductor did not follow the procedure. I will pay my tax – why TDS and consequential litigation for me? WHY TDS at all? - At least till you are able to put your system in order? </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2009/it09cir03.htm" target="_blank">CBDT CIRCULAR NO 3/2009., Dated: May 21, 2009 </a></font></strong></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">– Tuesday's cases </font></strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">General</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Hurried is Justice Buried: While justice delayed may amount to justice denied, justice hurried may in some cases amount to justice buried. Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Procedural</strong> law so dominates in certain systems as to overpower substantive rights and substantial justice - No person has a vested right in any course of procedure. He has only the right of prosecution or defence – In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods manufactured by a 100% EOU out of raw-materials received from another 100% EOU and cleared to DTA – whether eligible for benefit of exemption under Notification No. 8/97-CE, 23/2003-CE – Matter referred to Larger Bench. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The respondents had cleared goods such as readymade garments, rejects and waste on payment of Central Excise duty. The clearances were made after obtaining permission of the Development Commissioner. The department took a stand that respondents were required to discharge duty in terms of notification No.2 /95 CE, dt . 04.01.95 which exempts all goods produced or manufactured by 100% EOU and allowed to be sold in India as per Para 9.9 and 9.20 of Exim policy in excess of the duty calculated at the rate of 50% of each of the duties of customs. Thus the department required the respondents to pay differential duty of Rs.2 ,10,536 /-. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A transaction of loan can be without interest and a transaction of loan implies an agreement to repay the money – such loan cannot be added to income – ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A transaction of loan can be without interest and a transaction of loan implies an agreement to repay the money – such loan cannot be added to income: the orders of Revenue Authorities appear to be passed on assumptions and presumptions and, particularly, when apparently, there exist no provision in the section 56(2 )( v) to treat loans, which may not be repaid, as income of the assessee. Several commercial considerations prevail in the business world for entering into business transactions of various types and if the Revenue Authorities tax such transactions in this manner, then, the conduct of business would become impossible. It is also pertinent, to mention here that '0'% interest loan or interest free loan have been institutionalized where the manufacturing, companies or marketing companies compensate the financing companies who give money to the customers interest free to buy the products and these types of loan result into a vibrant economy benefiting all concerned and if the view taken by the Revenue Authorities is accepted then, all such transactions can be taxed as-income, u/s. 56(2)(v) of the Act which cannot be the intention of the legislature. </font></p> <p><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements </font></strong></p> <p><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT </strong></font></p> <p><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p><font color="#FF6600" 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> </body> </html>