TIOL-DDT 1281 · 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><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1281 </font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br> 19.01.2010 <br> Tuesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax Department - Winds of Change – Vision 2020 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> process of drafting a new Vision document – Vision 2020 has been initiated. It is proposed that the release of this Vision document would be announced by the Hon'ble Finance Minister in his budget speech this year. The Department is once again at the threshold of change. Vision 2020 would be a roadmap for perspective planning having an important bearing on the future of the Department. An earnest appeal is made to all the Departmental personnel to actively contribute their individual/ group suggestions in connection with Vision 2020. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We constantly talk about the changes that should be, now is the opportunity for us to actually contribute to that change. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Suggestions may be sent to <a href="mailto:ditdoms.km@gmail.com">ditdoms.km@gmail.com </a>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why don't these Government officers use the government email ids instead of the private ones? They are more comfortable and reliable? With or without vision2020!! </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAN - A complete game changer </strong></font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIRST project in Government to outsource a public service against User charges </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over 6 crore PAN cards issued so far under the new process </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Quantum change in standards of taxpayer service in respect of PAN -at no cost to Government </strong></font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Time bound service with Facility to track status online and CRM support </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Savings to Government of the order of Rs 400 crore, besides freeing sizable manpower in ITD for other work </font></p> </blockquote> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Huge fillip to implementation e-governance initiatives in the department and outside </strong></font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Computerised processing of returns of income </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Tracking of high value financial transactions </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A factor in large increase in tax collections from 2005 onwards </font></p> </blockquote> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAN has become a surrogate citizen identifier </strong></font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ in financial circles -Banks, MFs, DGFT, EPFO, Depositories, Telcos </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Central Excise, Service Tax, VAT </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Scores of citizen services unrelated to tax or even finance e.g. railway/air reservations, passport </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ UID Authority desires to partner with ITD </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Source: a power point presentation by Mr. SS Khan, Former Member, CBDT. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Does construction of railway track amount to manufacture? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERVICE</strong> Tax right from its birth had a special treatment. Though administered by the Central Excise officers, certain provisions were special for service tax under Finance Act, 1994 which ultimately had to give way to match with Central Excise Act, 1944. For example, initially for invoking extended period, under Section 73, mere omission or failure to make a return was enough. It was later amended on par with Central Excise by incorporating the ingredients of fraud, collusion etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In respect of issuing clarifications also, it appears service tax has a special treatment even now. Whenever any doubt is expressed or an issue is referred to Board for clarification, the views of the Board or the clarification is communicated only to the party seeking clarification, and may be to the field formations. The other tax payers absolutely have no clue on the said clarification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently we came across a clarification issued in 2008 on applicability of service tax on welding of rails. It was replied only to the Commissioner who asked the query that: </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Construction of railway track is a construction of civil structure. The activity performed for welding of railway track under construction, is a service as defined in the ‘commercial or industrial construction service'. The said activity does not amount to manufacture as defined under the Central Excise Act, 1944. Therefore, this activity is in the nature of ‘commercial and industrial construction'; However, as railways is specifically excluded from the scope of such service, the activity would not be taxable under the said taxable service. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, there may be many other Commissionerates where this activity is also undertaken which will have no idea of the clarification issued. Even there may be show cause notices issued demanding service tax. It is time that a uniform approach is maintained in respect of these clarifications and may be a copy of all those secret / sacred letters can be marked to the Industry / Trade associations. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/raiway_track.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC F.No. 137/185/2007-Cx.4 Dated: February 06, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jaigad in Maharashtra made a Customs port for all imports and exports </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Notification No. 62/94 – Cus NT, Jaigad is a customs port for loading of Molasses and Bauxite Ore. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is made a port for “Unloading of imported goods and the loading of export goods or any class of such goods” </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_005.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO. 5/2010-Cus., (N.T.), Dated: January 13, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Budget 2010 – Tell FM </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> will be starting out Budget run up soon. Do send in your comments and suggestions – not that the FM can afford to give any more concessions and benefits. He has practically nothing to offer and maybe the only request could be – don't roll back anything you have given. Still a Budget is a Budget and let us tell the FM – and he is prepared to listen. </font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="3">tiol</font><font color="#006600" size="2"> – Wednesday's cases</font></strong></font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Option of payment of reduced penalty under Section 11AC to be mentioned in adjudication orders in terms of Board Circular dated 22.05.2008 : High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SINCE</strong> the demand relates to the period subsequent to 28.09.1996 and the earlier provision of Section 11AB was not considered by the Tribunal, the impugned order of the Tribunal is set aside on this point and remand the matter to the Adjudicating Authority to decide the whole issue with regard to charging of interest keeping in mind the provisions contained in unamended Section 11AB of the Act. </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>Reassessment - mere non-discussion of an issue in assessment order does not conclusively mean that the AO did not form his opinion over that – reassessment based on change of opinion is not valid - ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no hard and fast rule to determine the question of the AO forming his opinion or not. It will depend upon the facts of each case. But one thing is certain that mere non-discussion of an issue in the assessment order does not conclusively mean that the AO did not form his opinion over that. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty Free Shop - show cause notice issued without any tangible evidences and based only on inferences involving unwarranted assumptions is vitiated by an error of law: It is well settled that when an allegation is made, burden is on person who alleges, to prove it beyond doubt: Madras High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is well settled that when an allegation is made, the burden is on the person who alleges, to prove it beyond doubt and the burden can be discharged only on the basis of concrete evidence and admission statements from the persons concerned or opinion from a technical expert. When there are variations in the signatures, a technical expert could have certified whether both the signatures belonged to the same person or not, which is admittedly not done in this case. </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>GTA Service – Service tax liable to be paid only when service is received from GTA and not truck owners or transporters – Legislative intent is not to tax truck owners or truck operators – In absence of a finding that appellants had received service of transport of goods from any GTA demand of service tax and penalties liable to be set aside. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> impugned services had been provided by goods transport owners and goods transport operators. These services could not be subjected to tax in view of the Budget Speech of the Finance Minister, which spelt out the legislative intent. The appellant had wrongly paid an amount of Rs.63,61,833/- (Rupees Sixty three lakhs one thousand eight hundred and thirty three only) which was due to be refunded. The levy under the category of GTA was attracted only when there was a relationship of Agency between the service provider and owner of the goods carriage or the operators of the goods carriage. As per the impugned order, the appellant had received services from goods transport operator. This activity did not attract levy under “Goods Transport Agency”. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong> </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p align="justify"><font color="#FF6666" 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>