TIOL-DDT 2180 · the untouched capture
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<p><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font>TIOL-DDT 2180</strong></font><br>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>02.09 .2013<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax Return Due Date: Ex-Tension</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was Tension with a Capital T. Worried assessees and consultants were constantly calling us to know whether the due date for filing the Service Tax return for the period from 1st October 2012 to 31st March 2013, has been extended or not. There is a temporary collective sigh of relief all over the country. All the threatening flashes in the ACES website that last date is 31st August and that there would be penalty for late filing are withdrawn. We knew all along that the Board had no option but to extend the last date; however we kept on requesting the Board to do the needful - and we are grateful they obliged by extending the date to September, 10, 2013.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It needs mention that while exercising the powers conferred by rule 7(4) of the STR, 1994, the Board has mentioned the following as the ‘circumstances of a special nature, which have given rise to this extension of time' -</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Difficulties have been faced by assessees in uploading the <strong><font color="#FF0000">offline utilities</font></strong>”.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>This would mean that the Board has not yet been briefed about the difficulties being faced by assessees in filing the ST-3 returns online - and quite possibly when they would be made aware we can all have another extension!</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other day, a Service Tax Commissioner disarmingly confessed that he doesn't know anything about ACES, but he was happy that the Income Tax Commissioners are no better; not one of the Income Tax Commissioners he called up was able to help him with his missing TDS credits and some huge demands raised against him!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If Commissioners don't understand the e-returns, how do they expect ordinary assessees to file them?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Every month, the Chairmen of the Boards and all Commissioners should be made to file a return of an assessee - then they will understand the difficulties and perhaps once in six months, the MoS and once in a year the Finance Minister should file the return of a random assessee.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2013/order_13_04.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Order No. 4/2013-Service Tax, Dated: August 30, 2013</strong></font></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T - Action on Unmatched Challans reflected in Form 26AS - CBDT Instructions</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Delhi
High Court in <em>'Court On its Own Motion vs. UOI and Ors' </em>- </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2013/2013-TIOL-207-HC-DEL-IT.htm">2013-TIOL-207-HC-DEL-IT</a>)</em></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="3"><strong> </strong></font>had
directed,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"...with regard to unverified TDS under the heading 'U' in form 26AS for verification and correcting unmatched challans within a time period, which should be fixed by the Board keeping in mind the date of filing of return and processing of return by the assessing officers."</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The unmatched challans belong to two categories of TDS statements, namely-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Statements pertaining to FY 2011-12 and earlier which have been processed by jurisdictional TDS Assessing Officers [AOs (TDS)]</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Statements pertaining to FY 2012-13 onwards, now processed by CPC(TDS)</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the directions of the High Court, Board has decided that the CPC(TDS)/AOs(TDS) shall immediately issue letters to the deductors, in whose case TDS challans are unmatched, with a view to verify and correct these challans. If necessary, the deductors may be asked to file correction statements, as per the procedure laid down and necessary follow up action be taken. The task should be completed by 31st December 2013 for FY 2012-13 in the case of CPC (TDS) and FYs 2011-12 & earlier in case of AOs (TDS).</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2013/instruct1311.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Instruction No. 11/2013, Dated: August 27, 2013</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VCES - Harassment?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Chartered Accountant sent us this mail:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>I am a practising chartered accountant in xxxx,</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>This past week, some of my clients & myself, who are regular service tax payers and filers of all periodic returns have received communication from the jurisdictional Commissionerate - informing us that our names appear in their stop filers / non filers list and informing us to take the benefit of the VCES scheme.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>My past experience tells me that in order to give a proper reply, I will be required to collect all the necessary data from clients about copies of past returns & challans etc- to show / establish that we are neither stop filers nor non filers.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Even with all this compliance, there is no guarantee that our names will be removed from the list.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In fact I am now expecting more such letters from the department to some more of my clients who of course are regular in compliance of these legal requirements.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Can you please suggest me a proper course of action to avoid occurrence of these incidences in future?</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VCES is a facility, not a penalty!</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the Status of Board Circular 967 dated 01/01/2013 in view of Tribunal's <em>suomoto</em> Order?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IS</strong> the CBEC draconian <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTQ1NDA=" target="_blank">Circular 967/01/2013</a></strong> dated 01/01/2013 still valid in view of the CESTAT Bangalore Bench <em>Suo Motu </em>Miscellaneous Order No. 25453/2013 dated 02.04.2013 - <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODc2Mjg=" target="_blank"><strong>2013-TIOL-553-CESTAT-BANG</strong></a></font>?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Mysore Central Excise and Service Tax Chief Commissioner recently clarified in a RAC meeting,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Board has decided to accept the Tribunal suomotu order No.25453/2013 dated 02/04/2013 under rule 41 of Cestat (Procedure) Rule, 1982, with respect to the CBEC Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTQ1NDA=">967/01/2013</a></strong> dated 01/01/2013.</em></font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">And What about Rewards under VCES? Informers Concerned!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> the Department is worried about the success of the VCES and assessees are worried about the hidden agenda and further consequences, there is a small group of persons who are really worried that their efforts are going in vain.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The informers of the Department are concerned that they would lose the hefty rewards if the delinquent assessees go to the VCES route.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An informer wrote to us;</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>It is pertinent to mention here that while drafting the said scheme the department has totally ignored the interest of the informers who used to pass on the information to the department and department used to recover huge amount from the tax evaders.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made there under, and such inquiry or investigation is pending as on the 1st day of March, 2013. It means if the informer would have provided information on tax evasion after 1st March, 2013, he or she would not be eligible for reward under VCES, 2013 as existing reward guidelines provides that if show cause notice is not issued, informer would not be eligible for reward.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>I am one of the potential informers have passed on number of duty and tax evasion cases to the officials of Indirect and Direct Tax departments all over India with successful result, have some doubt in my mind which I want to get clarified. The Ministry of Finance has announced aforesaid scheme to give immunity to the taxpayers who have outstanding tax between October 2007 to December 2012 and filed application under aforesaid amnesty scheme upto December 2013. However due to aforesaid provisions I have come to know that if aforesaid tax evader would file application under VCES, 2013, I would not be entitled for reward if the case is settled under VCES, 2013.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>I would like to know whether the informer would be eligible for reward in the following circumstances:</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) <em>The cases booked by the officials of DGCEI/DGRI/Local Commissionerates based on information provided by the informer after 1st March 2013 in which the tax evader had filed applications for closure of the case under VCES, 2013.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) <em>Whether informer would be barred from payment of reward where the case has been booked on the basis of information provided by the informer and Government has recovered dues including interest for five years but the cases were closed by the department under section Rule 73(3) of the Service Tax Rules, 1994 and Section 11A(1)(b)(2) of the Central Excise Act, 1944.</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This informer wanted us to do something to <em>safeguard the interest of the informer so that informer will give quality cases to the department in which risk to life of the informer is involved.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It looks as if the informers have to take rest till December 31 2013.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T - War against an Honest Assessee - HC Orders Enquiry</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> victim here sold a plot of agricultural land for Rs. 1.2 Crores but the registration was done only for Rs. 22 lakhs. (A very normal accepted practice). The assessee deposited an amount of Rs. 1.08 Crores in his bank account which he claimed as the sale consideration of the land sold by him. He claimed exemption of the agricultural land, which is not capital asset within the definition of Section 2 (14) (iii) (a) (b) of the Act and is therefore not chargeable for capital gains tax. He had also complained to the Stamp Valuation Authority that the transaction was undervalued.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Authorities were not prepared to believe such an honest assessee; so the AO added about Rs. 98 lakhs as income from undisclosed sources. However the ITAT deleted the addition, against which the Department appealed to the Allahabad High Court.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While dismissing the Revenue appeal, the High Court observed, " <em>in the present case the Income Tax Officer did not act in bona fide manner. The assessee led substantial evidence to establish that the amount treated to be undisclosed income by the A.O. was the sale consideration of sale of his agricultural land, which he had deposited in the bank and had voluntarily filed return disclosing his income. Overwhelming evidence led by him was discarded without giving any reasons at all. The assessment was framed only on the ipse dixit of the A.O., which gives us reason to believe that he had exceeded his authority with<font color="#FF0000"> <strong>some ill will or with ulterior motive</strong></font></em>."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court directed the CBDT Chairman to cause an enquiry into the conduct and motives of Income Tax Officer, Ward-1, Hapur in framing the assessment and raising demand of income tax against the petitioner.</font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODk1OTc=" target="_blank"><font size="1">2013-TIOL-650-HC-ALL-IT</font></a></font></strong></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 align="justify"><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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENVAT - rule 2(l) of CCR, 2004 - whether ST paid by authorized dealer for sales and servicing of vehicles is an Input Service for manufacture of vehicle - terms and conditions of agreement entered into between applicant and dealer shows that sale and service is at cost of dealer - taxable service provided by dealer after sale of motor vehicles manufactured by applicant prima facie, therefore cannot be considered as input service - Pre-deposit ordered: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the manufacture of motor vehicles which are sold to various dealers. The dealers are undertaking the service of vehicles during the warranty period and are liable to pay service tax in respect of taxable service provided by them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">I-T - Whether when assessee agrees to pay service tax separately, over and above technical or professional fees, service tax paid to service provider is not to be included in total sum for purpose of TDS u/s 194J - YES: HC</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Bench is - Whether when the assessee agrees to pay service tax separately over and above the technical or professional fees, the service tax paid to the service provider is not to be included in the total sum for the purpose of TDS u/s 194J. And the answer goes against the Revenue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service Tax</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Declaration of assessee as sick company by BIFR is sufficient cause under section 80 for wavier of penalties. Tribunal Order upheld: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Questions before the High Court: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"1. Whether the declaration of the first respondent as a sick industry with effect from 31.12.2000 by the BIFR could be construed as "reasonable cause" for the purposes of invoking Section 80 of the Finance Act, 1994? </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 2. Whether the Tribunal was right in setting aside the penalty in full solely on the ground that the first respondent was declared as a sick industry with effect from 31.12.2000?"</font></em></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements</strong></font></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<strong>.</strong></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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