TIOL-DDT 1908 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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><font color="#663399" size="3">TIOL-DDT 1908</font><br>
25.07.2012<br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Return Filing - Help at Home</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DO</strong> you have a problem in filing your Income Tax Return? A Tax return Preparer will visit your home and assist you in preparing the return at a nominal cost not exceeding Rs. 250/- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To make the Income Tax Return filing experience even more convenient, the Income Tax Department has started two more taxpayer friendly initiatives <strong>'Register for Home Visit' </strong> and <strong>'Online Tax Help'</strong>. To avail these facilities, a taxpayer must visit the website <a href="http://www.trpscheme.com"><strong>www.trpscheme.com</strong> </a>and take help of trained professionals either online or at their homes. The taxpayer can choose between ‘online help' or ‘home visit'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The online query will be resolved by tax experts through Email or Phone within 24 hours.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the Home Visit Scheme, a Tax Return Preparer (TRP) will visit the taxpayer and render assistance. The facility is aimed to facilitate taxpayers in filing their return and thereby reducing their cost of compliance. The TRPs are allowed to collect fee from the taxpayers as per the TRP notification subject to a maximum of Rs. 250 per return preparation. The facility for home visit by TRPs is at present made available in few cities such as <strong>Bangalore, Chennai, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, New Delhi, and Patna.</strong> The facility would be extended to more cities during the next phase. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You can call TRP scheme call centre <strong>1800-10-23738</strong> for further information regarding these initiatives. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ADG, CEI has jurisdiction to issue Show Cause Notices - Board is happy with High Court Judgement </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has called the attention of the field officers to the Allahabad High Court's Order and Judgment dated 21.05.2012. Writ Tax No. 251 of 2012 - <em>M/s Raghunath International Ltd vs UOI & Anr</em> - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2012/2012-TIOL-533-HC-ALL-CX.htm"><strong><font size="1">2012-TIOL-533-HC-ALL-CX</font></strong></a>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, involving demand against a Gutkha manufacturer, Show Cause Notice was issued by Addl. Director General, Directorate General of Central Excise Intelligence. The assesssee filed a Writ Petition before High Court for quashing the Show Cause Notice, interalia on the following grounds: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The Show Cause Notice was issued by Dr.Devender Singh, ADG, CEI whose appointment as ADG, CEI has not been notified by the Central Board of Excise & Customs in the official gazette which was required to be done in terms of Rule 3(1) of the Central Excise Rules,2002; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) The said Show Cause Notice has been issued without taking written approval of the Commissioner, which was must in terms of the Board's circular <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2003/excircular752.htm" target="_blank">752/68/2003-CX</a></strong> dt. 01.10.2003 and which circular was binding on the ADG.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court held that Addl. Director General, having been authorized to act as a Commissioner Central Excise, was a Central Excise Officer, within the meaning of Section 2(b) of the Central Excise Act, 1944 and was fully authorized to issue Show Cause Notice. The High Court also held that submission that prior permission of the adjudicating authority is required before issuing the show cause notice is without any substance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the order to be brought to the notice of <strong>concerned</strong> officers for taking proper note of it and bringing it to the notice of the Court appropriately in cases involving identical issue. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2012/letter_280_2012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Legal Section F.No.280/49/2012-CX.8A Dated: June 27, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Lifting the Lid on Tax Avoidance Schemes - HMRC Consultation Document </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> UK HM Revenue and customs has issued a Consultation Document on <strong>Lifting the Lid on Tax Avoidance Schemes.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax avoidance represents nearly 14% of the UK tax gap. It involves using the tax law to gain an advantage that Parliament never intended and frequently involves contrived, artificial transactions that serve little or no purpose other than to reduce tax liability. And it enables some taxpayers to gain an unfair advantage, undermining confidence in the tax system. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In March 2011, the Government introduced a new HMRC anti-avoidance strategy in the document Tackling tax avoidance. The strategy focuses on three core strands: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Preventing avoidance at the outset where possible; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Detecting it early where it persists; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Countering it effectively through challenge by HMRC. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has taken robust measures to tackle tax avoidance; e.g. announcing legislation that, in effect, has closed schemes down with immediate (and in one exceptional case, retrospective) effect. The Government is currently consulting on a General Anti-Abuse Rule<strong> ('GAAR')</strong> that is targeted at artificial and abusive tax avoidance schemes. The GAAR is expected to act as a deterrent to those engaging in such schemes in the first place; and where avoidance persists, it will provide an additional tool to enable HMRC to challenge and defeat these. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More robust legislation has led to both a reduction in the quantity and ‘quality' of avoidance schemes being marketed. Fewer schemes are now being sold and more are being challenged operationally, rather than through a change in the law, because it is clear that they do not work and simply do not deliver the tax advantages advertised by those who promote them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Disclosure of Tax Avoidance Schemes (‘DOTAS') regime is a key component of the detection strand of the strategy, and it also plays an important role in deterring avoidance, and hence in preventing it at the outset. DOTAS was introduced in 2004. It was an innovative approach to countering tax avoidance and so was initially limited to schemes that concern one or more of income tax, capital gains tax (CGT) or corporation tax (CT). A separate, but similar, disclosure system was introduced for VAT at the same time. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The initial focus of DOTAS was upon gaining information about avoidance schemes, particularly new and innovative schemes, to identify loopholes in the law that were being exploited and inform legislation to close them down. DOTAS has performed this role well and has informed over 60 measures in Finance Acts since 2004. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Something for India to copy? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/lltas_ukhmrc.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lifting the Lid on Tax Avoidance Schemes </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">PMLA - A Law Against the Accused as well as Victim? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Statement of Objects and Reasons of the Prevention of Money Laundering Act would show that the primary object for which the Act came into existence was for prevention of laundering of proceeds of drug crimes committed by global criminals/terrorists, involved in illicit trafficking of narcotic drugs and psychotropic substances. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But nowadays, it is being used against persons accused in various cases which can be tried under the IPC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Madras High Court in a recent case observed,<em> "The more and more the Act is used for tackling normal offences punishable under the Indian Penal Code, committed within the territories of India, the result would be disastrous to the victims of crime."</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court further observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"The Prevention of Money Laundering Act, 2002, not only seeks to punish the offenders, but also seeks to punish the victims of such offences. Take for instance a case, where an offence of kidnapping for ransom punishable under Section 364-A takes place. If the amount involved is more than rupees 30 lakhs, it is a scheduled offence under this Special enactment. Therefore, if the accused is apprehended and charged under this Act and the money is also recovered, then the person who paid the ransom to the accused and who happens to be the victim of the crime, will lose his money by virtue of Section 8(6) and Section 9. He would rather prefer to turn hostile in the criminal case by reaching an agreement with the accused so that the attachment order gets lifted under Section 8(5) enabling him to take away his money. In other words, Section 8(6) and Section 9, which seeks to punish the victims of crime along with the accused, appear to be a disincentive for the victims. The same analogy holds good even for offences of robbery and dacoity punishable under Sections 392 to 402, which are included in Paragraph 1 of Part B of the schedule to the Act. A person, who is robbed or a person on whom dacoity is committed, has to lose his property to the Central Government by virtue of Section 8(6) and Section 9 of the Act, if the stand taken by the respondents is accepted. <strong>For the victims of crime, there would virtually be no difference between the accused and the Central Government, as in any case, they would have to lose their property, to either of the two."</strong></em></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this important case today.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15515" target="_blank">Breaking News</a></strong></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"> - Thursday'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">Education Cess would be leviable ONLY on such portion of customs duty as is not exempt under DEPB scheme and not on full amount as is sought to be demanded by department: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REVENUE</strong> has contended that Education Cess is not exempt under Notification No. 45/2002 and the importer therefore cannot pay the same on imports made under the DEPB scheme. Under the impugned clarificatory circular, Government has provided that such Education Cess will also be adjusted against credit in the DEPB scrip.<strong> If Education Cess is not part of the exemption as contended by the respondents, how can it be adjusted against the credit in DEPB scrip by enforcing the condition of the Exemption Notification? This is a legal fallacy. </strong></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">Income tax - Whether voluntary cash assistance received from non-resident parent for recouping losses and restoring negative net worth, is a capital receipt, exempt from tax - YES: Delhi 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 voluntary cash assistance received from parent company for recouping losses and restoring negative net worth, is a capital receipt, exempt from tax; Whether only assistance or voluntary payments received from government out of public funds and not from private parties, is considered as capital receipt and whether it is only the purpose of the assistance and not the mechanism, is the conclusive test to determine the nature of such receipts. And the verdict goes in favour of the assessee. </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">ST
- Difference in figures of receipts shown in IT return and ST-3 return – for
same period after CERA conducted Audit and pointed out short payment, Internal
Audit party did reconciliation and worked out lower demand which appellant
paid – in such a situation duplication of demand by confirming SCN
based on CERA objection is not warranted – Matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> THE</strong> appellant
is engaged in providing taxable services under the category of "Business Auxiliary Services". </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><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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