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<div><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#663399" size="3">TIOL-DDT 1383 </font><br/>18.06.2010 <br/>Friday </strong></font></p><p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">
  Microsoft Tax Demand - Pot Calling Kettle Black?</font></strong></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>AN</strong> IITian returned from US after working for some years there and wanted to set up a small office in India. He wanted to buy some computers and called for the quotations.  All the quotations received contained only the price of the hardware. When he asked why they have not included the price of software like Windows and MS Office in the quotations, they looked at him as if an ignorant creature from Mars and said “we give it free” (pirated, of course!). We are so much used to piracy that we feel as if it is our birthright and always forget that there is a legal version available in the market. And most of the Government offices use pirated software. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">You go to any Central Excise office from the lowly Range Office to the mighty CC's office – you will find hundreds of computers using pirated versions of ‘Windows' and ‘MS Office'. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Remember the Service Tax demand of Rs 125 crores on Microsoft? It may not be surprising if the SCN was typed on a pirated MS Office. What if Microsoft launches legal action against the Central Excise Department? Maybe after deducting the 125 crores , the department would have to pay a couple of hundred crores to Microsoft. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Central Excise Department is going great guns with the new avatar of Audit, the CAAP . Reportedly CAAP uses IDEA software and the legal version of this software costs around Rs 48,000/-. While hundreds of CDs are bought for CAAP with no problem of funds, why do they take it for granted when it comes to buying Microsoft products? Piracy is birthright? </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">And this is the very department which alleges Microsoft with suppression of facts to evade taxes !!!! </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Isn't a Law Enforcing Department expected to obey the laws of the land and maybe a day will come when Central Excise Officers may be appointed to enforce anti-piracy laws – then they need not leave their offices to book cases – they can get all the cases in their own offices. When the Department is overactive in demanding tax from Microsoft, why should it steal software from Microsoft and with impunity? </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Distinguished Chief Justice of Bombay High Court, MC Chagla once remarked that every moment of our life is spent in either obeying or disobeying a Law. The Prime Chief Minister of Bombay Morarjee Desai was not impressed. He sent a letter to Chagla that he expected the Chief Justice to obey all the laws and not disobey some of them. Desai was actually referring to Chagla's drinking habits in the prohibition-enforced State of Bombay – but Chagla had a licence to drink! </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Now, shouldn't CBEC set an example as a law abiding government authority? They should direct all their officers to use only licenced software in the offices and perhaps Board should first check up whether the software used in the Board computers are licenced ones! </font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Law Breakers have no moral authority to enforce LAW.</font></p><p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Modi talks GST with Pranab </strong></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>WHEN</strong> the High Profile BJP Chief Minister of Gujarat meets the high profile troubleshooter of the UPA Government, what do they talk about? Certainly not the weather! Pranab Da told the media, “<font color="#ff6633"><strong>I am visiting all states and meeting CMs and FMs to discuss the GST issue. Today, I met Gujarat CM, FM and the minister of state for finance. We discussed various issues. The state government also submitted a memorandum regarding various issues.'' </strong></font></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">And Modi said, <strong><font color="#ff6633">“We have presented our views on GST to him. We have told him that GST should benefit the common man and fuel the nation's growth. GST should also keep in mind the development of manufacturing and consumer sector of the nation. For better implementation of GST , we need nationwide IT infrastructure.” </font></strong></font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Our politicians seem to be more clear than our babus ! </font></p><p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">What is Effective Date of an Adjudication Order? </font></strong></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>IS</strong> it? </font></p><blockquote><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ The Date of the Order </font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ The Date of Dispatch of the order </font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ The Date of the receipt of the Adjudication order by the assessee </font></p></blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Delhi High Court recently held that in matters relating to Settlement Commission, the effective date has to be taken as the date of dispatch of the order. The High Court observed, <em><font color="#ff6633"><strong>“Adjudicating Authority may quickly pass the adjudication order the moment he gets an inkling that the assessee is about to approach the Settlement Commission. There is also the danger that the adjudicating authority may backdate an order. Adjudicating authorities are not supposed to behave in this manner and are presumed to function within the boundaries of law but these things can happen. Would not a literal construction of the provisions then come in aid of such errant officers and run counter to the legitimate hopes of assesses who want to come clean, pay their taxes and have their cases settled by the Settlement Commission. The answer to this would lie in construing the date of adjudication to be the date on which the adjudicating authority loses his locus poenitentia , or opportunity to tear off, destroy or alter the adjudication order. In other words, when the order goes out of his control. And, that happens when the order is signed and the one-way process of sending it to the assessee is put in motion either directly or indirectly through some other agency.” </strong></font></em></font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">We will bring you this High Court order soon.</font></p><p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Backdating of Adjudication Orders - A Routine Affair in CBEC? </strong></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>IN</strong> the above para, we quoted a High Court order, which stated, <em><font color="#ff6633"><strong>“There is also the danger that the adjudicating authority may backdate an order. Adjudicating authorities are not supposed to behave in this manner and are presumed to function within the boundaries of law but these things can happen.” </strong></font></em></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">This is a routine practice in CBEC. Adjudicating Officers never give the correct figures about their orders. They will routinely show orders as having been passed, when they have not written the Adjudication orders, assured that they will never be questioned because their bosses are worse culprits. Finally when these officers are transferred, there is a mad rush to prepare orders, which they have already reported as delivered! </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">You will always find that there is a gap of three to four months between the date of the order and the date of delivery of the order to the assessee. If you have delivered an order and signed it, there is no reason for you to keep that order in your file for three to four months. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">It is clear to everyone that the order had been signed with a backdate ! And it is not the trait of the corrupt officers – the honest officers are more prone to this kind of fraud than the corrupt ones. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Signing the Adjudication Order with a backdate is a common phenomenon/fraud in the Department that everybody accepts it as the right path. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Chief Commissioners who need not pass Adjudication Orders can set right this fraud. They can direct that a copy of every Adjudication Order should be delivered to the CC's Office within 24 hours of its alleged delivery! The whole system will fall in place – nobody will pass a backdated order! </font></p><p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#006600">Jurispruden</font><font color="#ff6633" size="5">tiol</font><font color="#006600"> – Monday's cases</font></strong></font></strong></font></p><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><img align="left" alt="Legal Corner Icon" border="0" height="84" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" width="100"/><strong><font color="#663399">Service Tax</font></strong> </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#ff6633">Service Tax paid and later exemption claimed under SSI notification 6/2005 (ST) – no cause of refund in view of clause 2(i) of the notification: CESTAT</font></strong></font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> appellant is providing the service of Chartered Accountant and is registered since the year 2004. During the year 2006-2007 appellant paid service tax amounting to Rs.37,960/-. Later on, they claimed refund on 21.01.2008 of this amount of service tax paid on the ground that the value of taxable service received by them during the year 2006-2007 in question was below Rs.4,00,000/- as per the exemption limit under notification no. 6/2005(ST) dated 1.3.2005 which was available to them.</font></p><p><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">Income Tax </font></strong></p><p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Block assessment - Law does not mandate that there should be evidence regarding concealment of income for every year during block period - ITAT order set aside: High Court </font></strong></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> issue before the High Court is - Whether in view of the material found in search and also availability of huge cash not reconcilable from cash book, the AO was correct in assessing the income of the entire block period and the order of the ITAT which restricted the purview of block period in as much as it excluded those years for which no evidence was found is not tenable. And the HC's answer is YES. </font></p><p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">See our columns Monday for the judgements </font></strong></p><p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until Monday with more <strong>DDT</strong></font></p><p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Have a nice Weekend. </font></p><p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Mail your comments to</font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijayWrite@taxindiaonline.com </strong></a></font></p></div>
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