TIOL-DDT 1991 · 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 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 1991 </font><br> 27.11.2012 <br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">A is for Assessee; A is also for Attack - Beware of the Four As </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong>, Central Excise and Service Tax assessees all over the country are in for real trouble in the next four months as the Board appears to have directed its Chief Commissioners to address the Revenue targets by a four pronged attack by using four <strong>A</strong>s.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>A is for Audit:</strong> In the next four months menacing Audit parties from the Department will descend on your premises and make you feel very uncomfortable and accuse you of evading taxes and persuade you to make spot payments of duty. Once you do that, another set of officers will come and demand interest and yet another group will issue a Show Cause Notice charging you with all possible violations and demand duty, interest and penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>A is for Anti Evasion: </strong>There is another group of officers who will make you feel that the Audit Group officers were angels. They will seize your goods, threaten you with arrest, summon you, take away your records and then force you to admit evasion, pay the duty and beg for mercy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>A is for Adjudication:</strong> Adjudication is a necessary corollary of Audit and Anti Evasion exercises. During the next four months, there will be an adjudication spree confirming all demands with interest and equal penalty and overanxious officers will swarm your place with coercive action to recover the arrears. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <strong>A is for Arrears Recovery:</strong> Every unreasonable, unfair and unjust order will leave a trail of arrears, which are to be immediately collected to boost revenue. Arrears recovery cells will be activated and there will be attachments, deterrent actions and all kinds of recovery measures. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Beware of these four <strong>A</strong>s - they are going to attack you in the next four months. You need God's help for doing business in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is said that the sine qua non of contract is <em>quid pro quo</em>, but in taxation, there is no equity. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ultimate beneficiary of the <strong>A</strong>ctions by the <strong>A</strong>uthorities in four <strong>A</strong>s would be the fifth <strong>A</strong> - <strong>A</strong> is for Advocate. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Renting of Immovable Property - Interest from when? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> 1985 had advised taxpayers to pay the tax on ‘renting of immovable property' with interest by 27th November 2012 to avoid penalty. Later the Board placed an ad in our own site advising assesses to pay the tax by 28th November 2012. That is tomorrow. But tomorrow is a public holiday and so the payment can be made on 29th November. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But another question arises - From when is interest payable? Please read an interesting article in our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16368" target="_blank">ST se GST tak</a></strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Functioning of Review Committee of Commissioners - CBEC Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADJUDICATION</strong> Orders of Commissioners are reviewed by a Committee of two Chief Commissioners and those of Commissioners(A) are reviewed by a Committee of Commissioners. Appeals are filed before the CESTAT based on the review and authorisation by these committees. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has found that the appeals against the orders of these Commissioners are dismissed on technical grounds. Scrutiny of several judicial pronouncements on the subject reveals that there are three broad categories of defects noted in such orders, which led to the dismissal of Departmental appeals. Defects in issuance of review cum authorization are seen to be a recurrent feature in most of the orders passed by the High Courts and the Tribunal. In some cases, appeals have been dismissed on account of absence of review- cum- authorization given by the Committee for filing appeal. This is an incurable legal infirmity and the law does not provide for curing this defect. Several orders have been dismissed by the Tribunal as well as the High Courts on the grounds such as signing of authorization by one Commissioner instead of both the Commissioners constituting the committee, undated authorization, date appearing below the signature not indicating the year etc. These technical defects have led to the conclusion being drawn by the Tribunal that authorization was not proper and valid. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another recurrent omission, noted in several orders, is lack of application of mind by the members of the committee showing any meaningful consideration of the issue being examined. This was the reason for dismissal of appeal by the High Court of Delhi in the case of <em>Kundalia Industries </em>reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2011/2011-TIOL-930-HC-DEL-CX.htm" target="_blank"><font size="1">2011-TIOL-930-HC-DEL-CX</font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The third main reason for several dismissals of the appeals filed by the Department is that no meeting was held by the committee to show meeting of mind or ad idem . This has been the stated reason in several recent decisions of Delhi Bench of the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taking note of the judgments in the case of Kundalia Industries cited above, <em>Grand Prints Ltd </em>reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2009/2009-TIOL-1109-CESTAT-DEL.htm" target="_blank"><font size="1">2009-TIOL-1109-CESTAT-DEL</font></a></strong> and several such judgments of the Tribunal and the High Courts, the CBEC wants the following precautions to be taken by the Commissioners constituting the committee while dealing with the review files- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The notings in the file and other relevant records should show meaningful consideration and application of mind by the committee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) It should be ensured by the members of the committee that review cum authorization orders are passed in each case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Procedural infirmities in the review cum authorization viz. signature of one Commissioner, signature without date, name not mentioned below signature etc. should be avoided. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The Members of the Committee may make use of Video Conferencing for conducting meeting wherever feasible. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above omissions are only indicative and not exhaustive. These have been observed in various judgments by the Tribunal and High Courts on more than one occasion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above precautions may be adopted by the committee of Chief Commissioners also. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also urges that due seriousness and diligence should be attached to the quasi-judicial function of review and the same should not be an idle formality. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has to tell its senior-most officers like Commissioners and Chief Commissioners to be a little more serious in their work! </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2012/instruction12_001.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F.No.390/Review/2/2012-JC., Dated: November 23, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Review by Committees - What Really Happens </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Committees of two Commissioners and two Chief Commissioners were stipulated to ensure that review is more meaningful and frivolous appeals are avoided, but the bright officers in the field are capable of frustrating any good intention of the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is how the review really takes place step by every farcical step. Let us take the case of an order passed by a Commissioner (A). </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Commissioner (A) passes an order on 1.1.2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The jurisdictional Commissioner who sits in the same building gets a copy of the order on 1.4.2012 (This is how time is gained to file appeal before Tribunal) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. There is a Superintendent (Review) in the Commissioner's office who actually reviews the order of the Commissioner (A). He reviews the order, decides that it is not proper and legal and writes a Draft Review Order and Authorisation Order to file an appeal in the Tribunal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. His Commissioner signs the Review Order and authorisation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Then the file is taken to the other Commissioner in the Committee of Commissioners who simply signs on the Review Order and authorisation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In this process, some Commissioners forget to sign, some others don't put the dates etc,. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The whole Committee system is successfully thwarted! </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Permanent Additional Charge - CBEC Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the major functions of the Board is to find a Chief Commissioner to act as additional charge Chief Commissioner, when a Chief Commissioner goes on leave or is absent. In order to draw a well defined system having pre-approved chain of nomination, so as to ensure that in the event of an officer at the level of Chief Commissioner / Directors General and Commissioners in the CBEC proceeding on leave/absence, CBEC has approved a chain of nomination (Link Officer): </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For example, if the Delhi Central Excise Chief Commissioner goes on leave, the post will be held by the Delhi Customs Chief Commissioner as the first link officer and if he is not available, the Chief Commissioner, Jaipur as the second link officer. Similarly if the DGRI goes on leave, the post will be held by DGCEI or DG(vig). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Chief Commissioners to appoint similar link officers at all levels in their jurisdiction.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/office_order_220_2012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F.No.F.No.A-22011/12/2012-Ad.II., Dated: November 23, 2012</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Liaison Office (LO)/Branch Office (BO) in India by Foreign Entities - Reporting to Income Tax Authorities</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LIAISON</strong> Offices (LO)/Branch Offices (BO) are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI clarifies that copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account. Further, at the time of renewal of permission of LOs by AD banks, they may note to endorse a copy of each such renewal to the office of the DGIT (international Taxation). </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2012/rbi12cir055.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI AP (DIR Series) Circular No. 55., Dated: November 26, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Setting up of a Special Cell for SCs /STs in Scheduled Commercial Banks </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INDIAN</strong> Scheduled Commercial Banks were advised to set up a Special Cell for monitoring the flow of credit to SC / ST beneficiaries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 15th Lok Sabha Committee on Welfare of Scheduled Castes / Scheduled Tribes during its recent visit to one of the Scheduled Commercial Banks, observed that there was no such Cell in that bank.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has therefore, reiterated that all Indian Scheduled Commercial Banks should set up a Special Cell for SCs / STs, if they have already not done so and ensure that instructions issued by RBI regarding credit facilities to Scheduled Castes / Scheduled Tribes are implemented properly. </font></p> <p align="justify"><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">RBI RPCD CO BC GSSD NO. 48/09.09.01/2012-13., Dated: November 26, 2012</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"> - 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">Central Excise</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">ROM filed without reading final order - Frivolous application dismissed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ROM </strong>application filed on the ground that in final order there is no finding in respect of penalty imposed u/r 173Q by the adjudicating authority - it appears that application is filed without reading the final order as in the last paragraph it has been specifically held penalty imposed u/r 173Q is set aside - Frivolous application dismissed. </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 in case of composite housing project, Sec 80IB(10) benefits are to be allowed based on principle of proportionality if conditions are partly satisfied by assessee - YES: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of development and construction of flats. There were four projects to its credit. Of these four projects, in Agrini and Vajra, the assessee had constructed and sold flats measuring less than 1500 sq.ft as well as more than 1500 sq.ft. The assessee claimed deduction u/s 80IB(10) and did not claim deduction in respect of flats exceeding an extent of 1500 sq.ft. The AO viewed that the deduction under the Section being for the project as a whole and all the residential units in the project must satisfy the conditions therein, on the admitted facts as to the units having built-up area more than 1500 sq.ft., the assessee was not eligible for deduction for the entire projects Agrini and Vajra, but was only eligible for deduction in respect of the other two projects. </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">Contempt notice for misleading Bench - Application for modification of Miscellaneous order - in view of unconditional apology tendered, SCN issued for initiation of contempt proceedings withdrawn: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE </strong>order dated 28/06/2012, the Tribunal has issued a show-cause notice to the applicant that why not contempt of Court proceedings be initiated against them for misleading the Court by stating wrong facts. The show-cause notice has been replied by the appellant and they have tendered unconditional apology for the inconvenience caused to this Bench, therefore, the show-cause notice issued to the applicant is withdrawn. </font></p> <p align="left"><font size="3"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is a holiday</font></strong></font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Thursday for the judgements</font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Thursday 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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindia online.com </a></strong></font></p> </body> </html>