TIOL-DDT 1803 · 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="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1803 </font><br> 27.02.2012 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Condonation of delay in filing return of income u/s 119(2)(b) of Income Tax Act </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had received representations regarding Condonation of delay in filing return of income u/s 119(2)(b) of the Income Tax Act, 1961 in the case of applicants who have made investment in the 8% Savings (Taxable) Bonds, 2003 issued by the Government of India and opted for scheme of cumulative interest </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has decided that the time limit prescribed in clause 4 of CBDT Instruction No. 13/2006 dated 22.12.2006 for entertaining application u/s 119(2)(b) of the Act shall not apply if </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) the applicant has made investment in 8% Savings (Taxable) Bonds, 2003 issued by the Government of India opting for cumulative interest on maturity but has accounted interest earned on mercantile basis, and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) the intermediary bank at the time of maturity has made deduction of tax at source (TDS) on the entire amount of interest paid without apportioning the accrued interest/TDS for various financial year/s involved. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Other conditions prescribed in CBDT Instruction No. 13/2006 shall continue to apply. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The conditions prescribed in Instruction No. 13/2006 are: </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No fresh application for claim of refund will be entertained beyond six years from the end of the assessment year for which the application/claim is made. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The powers of acceptance/rejection within the monetary limits delegated to the CCsIT/CsIT would be subject to the following conditions:- </font></em></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ The refund has arisen as a result of excess tax deducted/ collected at source and payments of advance tax under the provisions of Chapter XVIIB, XVIIBB and XVII-C respectively and the amount of refund does not exceed Rs. 50,00,000 in respect of CCsIT and Rs. 10,00,000 in respect of CsIT for any one assessment year </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act; and </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ No interest will be admissible on the belated refund claims. </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the time of considering the case under the provisions of section 119(2)(b), it should be ensured that the income declared and refund claimed are correct and genuine and also that the case is of genuine hardship on merits. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CCsIT/CsIT are empowered to direct the Assessing Officer to make necessary enquiries or scrutinize the case in accordance with provisions of the Income-tax Act to ascertain the correctness of the claim. </font></em></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2012/instruct1202.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction No. 2/2012-Cus., Dated: February 22, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Decline in Exports - Re-fixation of Annual Average Export Obligation </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA</strong> 5.11.2 of the Hand Book of Procedure Volume - 1 (HBP V-I) permits re-fixation of Annual Average Export Obligation, in case the export in any sector/ product group decline by more than 5%. This implies that for the sector/product group that witnessed such decline in 2010-11 as compared to 2009-10, would be entitled for such relief. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has published a list of such product groups showing the percentage decline in exports during 2010-11 as compared to 2009-10. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All Regional Offices are to re-fix the annual average export obligation for EPCG Authorizations for the year 2010-11 accordingly and to ensure that there is a mention on the Licence File, as well as on the Amendment Sheet, if there is any reduction in the Annual Average Export Obligation on the basis of this Circular. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Regional Offices while considering requests of discharge of Export Obligation are to ensure that in case of shortfall of Export Obligation Policy Circulars issued in terms of Para 5.11.2 of HBP 2009-14 (RE 2010) are also considered before issuance of demand notice etc. This stipulation should also form part of Check-Sheet for the purpose of EODC. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir053.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 53/(RE-2010)/2009-14, Dated: February 23, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Import of spares for existing machinery procured indigenously under EPCG Scheme </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ISSUE</strong> of allowing import of spares against Capital Goods procured indigenously against an EPCG Authorization was discussed during the last Port Officers Meeting held on 24-25 November 2011 wherein it was decided that the matter would be examined separately. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter has since been examined. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 5.2A of Foreign Trade Policy stipulates two options for import of spares for imported Capital Goods: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Capital Goods have been earlier imported under EPCG; Spares for these Capitals Goods are allowed under EPCG Scheme. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Capital Goods have been imported (though EPCG Scheme was not availed for such imports); Spares for these are allowed under EPCG Scheme. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is now clarified that for all types of imported Capital Goods, import of Spares under EPCG Schemes is allowed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under Para 8.2 (c) of Foreign Trade Policy, Capital Goods can be procured indigenously upon invalidating an EPCG Authorization. However, domestically procured Capital Goods <strong>cannot</strong> be treated as ‘imported Capital Goods' and hence the facility of Para 5.2A of Foreign Trade Policy cannot be allowed for such Capital Goods sourced domestically after invalidating EPCG Authorization. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir054.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 54/(RE-2010)/2009-14, Dated: February 23, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Watching TV in Judicial Proceedings - Impaired Hearing? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> advocate told us recently that he appeared before a Commissioner (Appeals) and the learned Commissioner (Appeals) was more interested in watching cricket match in the TV installed in his room than hearing the learned counsel. (In our courts, everyone is either learned or honourable) It seems that this particular Commissioner has not limited his interest in TV to watching cricket; it is his practice to watch some programme on TV while hearing the appeals. Nothing offensive, the advocate tells us – as the TV screen is visible to the other side also, he could not get as much entertainment as the Karnataka ministers did. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is this farce of a hearing? It is not that all appellate and adjudicating officers watch TV during the hearing – others are often busy with phone calls or calls from their bosses – they never tell the caller that they are in the midst of a very important hearing – all hearings are important only to the victim. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tribunal and High Court judges never move out of their seats during hearing; they never answer a phone call while on the Bench, let alone watch TV - and they are certainly higher judicial officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is another angle to the story. The hearing does not really matter – to the hearer – the learned Commissioner. Anyway, everybody knows that his order is most probably going to be in favour of Revenue. When the end is clearly known, why bother about niceties of the means? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More seriously, the Government should seriously consider revamping the Departmental adjudication and appellate mechanism. No institution can survive once it loses public confidence and we are almost on the verge of that as far as departmental adjudication is concerned. The Commissioner (Appeals) does only appellate work – he should sit in an open court, instead of a swanky office. And like the Tribunals and Courts, the proceedings should be open to the public. The Commissioner (Appeals) and adjudicating officers should pronounce their orders in the open court immediately after the hearing. ALL WISHFUL THINKING! </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sleeping Member:</strong> Another advocate sent us this anecdote: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was the hearing of a Larger (Three Member) Bench of a Tribunal. All through the proceedings, while learned lawyers were emotionally explaining tricky issues of the Law, one of the Hon'ble Members of the Larger Bench was happily sleeping. Even after the arguments were over and the Court adjourned, the sleeping Member did not wake up. The other two members woke him up and took him to their chambers. These two bright judges wanted to play a trick on the Member who was sleeping through the proceedings; they asked him to write the judgement for the Bench, to which he readily agreed. When the judgement came out, it was found to be the best, correct and most balanced one. The sleeping judge could write this because he was not influenced by the long winding arguments of the learned lawyers! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Day Celebrated with Pomp and Glory across Country </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JUDGES</strong>, IAS, IPS and IRS(IT) officers, cricket stars and a even a film star added glamour to the Central Excise Day celebrations in various parts of the country. Former Chief Justice of India Justice Venkatachalaiah was the Chief Guest in Bangalore. He was disappointed with the disproportionate collection of taxes compared to the general prosperity in the country. This function was also attended by the Karnataka DG of Police. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Mysore, former cricketer Javagal Srinath was the star attraction while in Mangalore popular actress Pranitha added a touch of filmy glamour. Of course, it was not all glamour and pomp. In every function, Chief Commissioners and Commissioners explained the role of Central Excise, how the officers are now facilitators and how much revenue they collected. Several officers were felicitated on the occasion and cultural programmes were organized. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And in Delhi, the Chief Guest at the function was Chairman of the CBEC, SK Goel. How can he be the Chief Guest at his own function? He should have been the Chief Host! </font></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"> – Tuesday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pre-deposit is rule and waiver is an exception - Appellant is a public sector undertaking and very solvent. If it is so, nothing wrong in depositing a sum of Rs. 90.00 lakh as is indicated by tribunal: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ORDERS</strong> passed by Customs, Excise and Service Tax Appellate Tribunals in exercise of their power under the proviso to Section 129E of the Customs Act, 1962 (for short, the Act) or corresponding provision of Section 35F of the Central Excise Act, 1944 have become orders which are a source of perennial litigation and nothing but a case of much ado about nothing! It is rather paradoxical that whether it be the assessee, by and large always the assessee, or even revenue, seeks to give more importance to the proviso than to the main section viz.., Section 129E of the Act, a provision mandating the deposit of the amount in dispute before an appellate authority as a condition for maintaining the appeal, but the proviso making an exception for a relaxation in certain circumstances. </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 where provisions of Sec 49 apply and indexed cost of improvement is allowed, benefits of indexed cost of acquisition is also available to assessee - YES: Delhi HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE </strong>Mr Arun Shungloo acquired property No.D-11, Maharani Bagh, New Delhi, sometime before 1st April, 1981. On 5th January, 1996, Mr Shungloo transferred the property to the trust managed by the appellant, i.e., Arun Shungloo Trust. During the period relevant to the assessment year 2001-02, the appellant Trust sold and transferred the acquired property to a third party. The contention of the Revenue which was accepted by the Tribunal was that appellant was entitled to indexed cost of acquisition for the period on or after 5th January, 1996, i.e., the date on which the appellant-Trust had acquired the property upto the date of sale. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Common input services for manufacture and trading - Pre-Deposit ordered: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant is before the CESTAT with a stay application and relying upon the Order passed in the case of <em>M/s Ericsson India Pvt. Ltd</em>. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2011/2011-TIOL-408-CESTAT-BANG.htm"><strong><font size="1">2011-TIOL-408-CESTAT-Bang</font></strong> </a>submits that since trading activity is not covered under Rule 6 of the CENVAT Credit Rules, the demand is not sustainable. </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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT </strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p> <p><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> </body> </html>