TIOL-DDT 1616 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1616</font><br>
</strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26.05.2011<br>
</font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thursday </font></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Port Codes for SEZs </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has accorded SEZ ports codes to 24 SEZs, which include Mundra Port SEZ and GMR Hyderabad Aviation-SEZ. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applicants may file applications using these codes to DGFT wherever required under the provisions of Foreign Trade Policy 2009-14 / SEZ Act and Rules. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Circular No. 31/(RE-2011)/2009-14, Dated: May 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Allocation of 10,000 MT of Sugar</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has allocated a total quantity of 10,000 MTs (Ten thousand metric tonnes) of raw/white Sugar for export of CXL Concessions Sugar to European Union (EU) for the period October, 2010 to September, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian Sugar Exim Corporation Limited, New Delhi is the designated agency for export of Sugar to EU under Preferential Quota </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 49/(RE-2011)/2009-14, Dated: May 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SOP on Appeals to High Court - CBDT Instructions</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has issued fresh instructions on filing appeals against orders of ITAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Responsibility for Filing of Appeal to High Court: </strong>The jurisdictional CCIT shall be the authority to decide whether to contest an order of the ITAT, in the light of the facts and circumstances of a particular case and the statutory provisions. He shall take a view in the matter after taking into consideration the recommendations of the authorities below. Once the CCIT communicates his decision to contest a particular order of ITAT, it shall be the responsibility of the CIT to ensure timely and proper filing of appeal in the High Court and consequential follow up actions. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Quality of Appeals:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. An appeal to the High Court or the Supreme Court can be filed <strong>only on 'Substantial Questions of Law'</strong>. The CCsIT/CsIT have to bestow their personal attention on this issue while taking decision to file appeal under section 260A of the Act. The Substantial Questions of Law arising out of the order of ITAT must be clearly identified and suggested draft question of law should be sent to the Standing Counsels for their consideration </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Although the expression ‘substantial question of law' has not been defined anywhere in the statute, the Supreme Court has laid down the following tests to determine whether a ‘substantial question of law' is involved:</font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether the issue directly or indirectly affects substantial rights of the parties?
</font>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether the question is of general public importance?
</font>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether it is an open question in the sense that the issue has not been settled by pronouncement of Supreme Court?
</font>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether the issue is not free from difficulty?
</font>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether it calls for a discussion for alternative views? </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. Perversity of facts also constitutes ‘Substantial Question of Law' as it falls in (d) and (e) above. Supreme Court has laid down the attributes of perversity by holding that an order or finding is perverse on facts if it falls under any of the following categories: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The finding is without any evidence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The finding is contrary to the evidence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ There is no direct nexus between the conclusion of fact and primary fact upon which that conclusion is based? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ When an authority draws a conclusion which cannot be drawn by any reasonable person or authority on the material and facts placed before it. </font></p>
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<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Proper Judicial Record Management System: </font></strong></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. A proper judicial record management system is essential for meaningful conduct of litigation. The CIT has to, inter alia, ensure that once appeal to ITAT is authorized against the order of CIT (A), a separate judicial folder for the assessee for a particular year is maintained in his office. Among other things, the folder should have a copy of relevant assessment order, the remand report of the AO on the order of the CIT (A), if any, and the scrutiny report submitted by the authorities below. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. This folder should be retrieved as soon as the order of ITAT in the case is received. The scrutiny report on the order of the ITAT may be processed through this folder (where other relevant papers including the scrutiny report while filing appeal to ITAT should be available). If the appeal to High Court is filed under section 260A, the relevant papers (scrutiny report, memo of appeal etc) should also be linked to the same folder. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. These judicial folders should be easily retrievable once the judgement of the High Court in the case is received, so that the decision to file SLP is taken without making reference to the AO/Range Head and proposal to file SLP is processed in the office of the CIT timely. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv. Likewise, a separate judicial folder should be maintained in case of assessee's appeal under section 260A/writ petitions filed in High Court, which should contain relevant documents including copy of counter & rejoinder affidavits filed in the Court proceedings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v. The CIT should evolve a system through which a digital copy of relevant documents such as Appeal Memo and its enclosures (assessment order, CIT(A)'s order, ITAT order etc) are retained for use at the time of sending SLP proposal in the case, if the need arises. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Preparation of Memorandum of Appeals/Papers etc: </strong>The CIT shall evolve a system in his charge to ensure that: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) There is proper vetting of Memorandum of Appeals as regards relevant facts therein before the appeal is actually filed; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Necessary particulars including the correct PAN and CIT charge is mentioned; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) All annexures including copies of orders of authorities below are properly typed as per High Court Rules to avoid defect/office objections. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) In case, any document like agreement, depositions etc crucial to the issue involved and considered by lower authorities, a copy of the same must be referred to at relevant place in appeal memo and its copy annexed thereto.</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appeal/Writ Petition Filed by the Assessee:</strong> As soon as the memo of appeal/writ petition filed by the assessee is received, a file should be opened in the office of CIT and assigned a proper identification number incorporating the ITA No./WP No. allotted by the High Court. Factual comments on the memo of appeal/writ petition and judicial precedents in support of the Revenue's stand should be forwarded by the CIT to the Departmental Counsel for drafting counter-affidavit. The CIT should ensure that the counter-affidavit is filed within time allowed by the Court and further follow up actions taken in consultation with the counsel. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Power to defend Union of India, Ministry of Finance, Secretary (Revenue), Chairman CBDT etc in cases before High Court:</strong> All the cases before High Court, pertaining to Direct Taxes, wherein Union of India, Ministry of Finance, Secretary (Revenue), Chairman CBDT, or any of these figure as respondents, should be defended by the CCIT/ DGIT concerned. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Compliance of High Court Directions:</strong> The CIT shall personally ensure compliance of directions of the High Court like Dasti service, filing of counter or rejoinder affidavit or other specific directions within time frame to avoid adverse observations. There should be close co-ordination between field officers and Standing Counsels in the High Court so that directions are communicated in time and proper compliance is made to the satisfaction of the Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Judgments of High Court containing strictures etc.</strong> Judgments of the High Court containing strictures or which are contrary to Board's orders, notifications, instructions, circulars etc. shall be brought to the notice of the Board ( concerned division) immediately by the CCIT/DGIT under intimation to ITJ section of the Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Assistance to Departmental Counsels:</strong> The CIT should ensure that whenever the Departmental Counsel seeks Instructions/clarifications in a case, the same are attended to by the officers concerned promptly. The counsel should be briefed properly to strengthen Revenue's case. The CIT should personally involve himself in cases involving intricate issues of facts/law having wide ramifications or involving high revenue stake. A copy of the scrutiny report for filing appeal to High Court should invariably be made available to the appearing counsel for his assistance in preparation of the case and arguments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Time Lines:</strong> The CBDT has also issued a time line chart according to which the appeal to the High Court should be filed within 115 days of the receipt of the order from ITAT. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2011/instruct1107.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instructions No. 7/2011, Dated: May 24, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Electronic Registry under SARFAESI Act </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PURSUANT</strong> to the announcement made by the Finance Minister in the budget speech for 2011- 12, Ministry of Finance notified the establishment of the Central Registry. The objective of setting up of Central Registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), a Government Company licensed under section 25 of the Companies Act 1956 has been incorporated for the purpose of operating and maintaining the Central Registry under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Initially transactions relating to securitization and reconstruction of financial assets and those relating to mortgage by deposit of title deeds to secure any loan or advances granted by banks and financial institutions, as defined under the SARFAESI Act, are to be registered in the Central Registry. The records maintained by the Central Registry will be available for search by any lender or any other person desirous of dealing with the property. Availability of such records would prevent frauds involving multiple lending against the security of same property as well as fraudulent sale of property without disclosing the security interest over such property. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reserve Bank of India Circular RBI/2010-2011/545: Dated: May 25, 2011 </font></strong></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"> – Friday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><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 color="#663399">Central Excise</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recovery of dues - Adjustment from the refund amount - Section 11 of Central Excise Act - Section 11 does not provide for adjustment of monies due to assessee towards the amount due to the revenue: HC</font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WHEN</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> once the adjudicating the authority has held that the assessee is entitled to refund of the amounts which he had paid to the Department in the absence of a specific provision authorising the revenue adjusting the said amount towards due to them, it is improper for them to make such adjustment.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NDPS</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imperative on part of empowered officer to apprise person intended to be searched of his right to be searched before a gazetted officer or a Magistrate: SC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TO</strong> check the misuse of power, to avoid harm to innocent persons and to minimise the allegations of planting or foisting of false cases by the law enforcement agencies, it would be imperative on the part of the empowered officer to apprise the person intended to be searched of his right to be searched before agazetted officer or a Magistrate. The Court had no hesitation in holding that in so far as the obligation of the authorised officer under sub-section (1) of Section 50 of the NDPS Act is concerned, it is mandatory and requires a strict compliance. </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">Whether 'hospital' is an industrial undertaking for purpose of deduction u/s 32A - Whether deduction is also available for investment allowance in respect of medical equipment - YES, rules Madras HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the Bench are - Whether 'hospital' is an industrial undertaking for the purpose of deduction u/s 32A and whether deduction u/s 32A is available for investment allowance in respect of equipments such as X-ray, ultra sound, angiography, gamma camera, stress analysis equipment etc. And the High Court's answer is YES. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Objection on Jurisdiction should be raised at earliest stage; Person filing Bill of Entry is Importer: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> jurisdictional objection should be raised at the earliest stage of quasi-judicial proceedings. “Importer” as defined under Section 2 (26) of the Customs Act includes any owner or any person holding himself out to be the importer. In the present case, the appellant, by filing the Bills of Entry, held himself out to be the importer of the goods and, therefore, he is the importer for purposes of Section 28 of the Customs Act. Where the taxable event is “import”, the tax has to be paid by the importer. Therefore, the importer is the person chargeable with the duty on the goods imported and presented under the Bill of Entry. </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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p>
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