TIOL-DDT 2362 · 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"><s><strong><font size="2"><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=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s><strong><font color="#663399" size="3">TIOL-DDT 2362 </font><br> 28.05.2014 <br> Wednesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Arun Jaitley - Supreme Court's Loss - North Block's gain </strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/Arun_Jaitley.jpg" alt="Legal Corner Icon" width="260" height="153" hspace="5" border="0" align="left"></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> Arun Jaitley said about P. Chidambaram, "<em>He is an extremely competent lawyer. Parliament's loss will be Supreme Court's gain</em>”. The converse is now true. Arun Jaitley is also an extremely competent lawyer and Supreme Court's loss may be North Block's gain as he has just taken over as the new Finance Minister of India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Jaitley has a daunting task before him, more so as he has to criss-cross between <a></a>North Block and South Block to manage the Defence of India from the South Block and to find the funds for it from the North Block. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While we wish him the possible innings in the wicked wicket of Finance Ministry (Jaitley was also a cricket administrator - as President of DDCA for thirteen years), may we remind him of some suggestions he had made, while he was an opposition leader? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IN <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjAxNDM=" target="_blank">DDT 2329</a></strong>, we reported, "BJP leader Arun Jaitley wants the Central Excise SSI Exemption threshold limit to be raised from the present Rs. 1.5 Crores to Rs. 5 Crores. He also wants the income tax exemption limit to be gradually, but significantly raised from the present Rs. 2 lakhs. He says, "It will be the major relief to small traders and mid level employees and the common man. The initial loss of revenue is not very significant. Such loss would be partly made up by placing more money in the hands of consumers and earning indirect taxes when consumers spend this money. The more the money velocity, the larger will be indirect tax benefits.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He wants the Goods and Service Tax (GST) to be immediately implemented. Comfort level will be given to State with this aspect, which anticipates a loss of revenue. This will ensure uniform rate of Tax in all states. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the demands of Mr.Jaitley are fair, reasonable and more importantly will appeal to the middle class, </font><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">but it is easy to make demands while you are in the opposition and most difficult to implement when you come to power</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Participating in the 2012 Budget Discussions, Mr.Jaitley said, <strong>(<a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTQ2NDQ=" target="_blank">DDT 1824</a>)</strong> </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For an earning person, the entire tax burden, taken directly or indirectly, could be anything between 50-60 per cent to what he earns. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Tax certainty is essential for any taxation planning. When investors come in, they must know how much tax they are going to pay if they earn money. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards service tax, the Finance Minister has formulated a principle that all services are going to be taxed this time except those, which are on the negative list. Don't look at the Budget only as a revenue-raising exercise. </font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax Terrorism is terrifying - One can't run government by thinking that everybody is thief </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU</strong> know who said that? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our Hon'ble Prime Minister Mr.Narendra Modi - while speaking at a FICCI meeting on 15.01.2014 - just four months ago. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now that Modi is the Prime Minister, will there be an attempt to end this tax terrorism and treatment of all assessees as thieves. Instances of tax terrorism are many - the law that your stay gets vacated because the Tribunal could not hear your appeal is the height of it! Perhaps, nowhere in the civilised world, you will have a law which says that if the Government fails to do something, the citizen will be punished. </font></p> <p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Nirmala Sitharaman - Speaking her way into three Ministries </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> new Minister of State in the Finance Ministry is BJP's vociferous and effective spokesperson Nirmala Sitharaman, who will also be a MoS in the Ministries of Commerce & Industry and Corporate Affairs - certainly related to FINANCE. At least we will not see the kind of cold war between Kamal Nath in Commerce and Chidambaram in Finance that we witnessed in UPA-I. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Sitharaman.jpg" alt="Legal Corner Icon" width="187" height="220" hspace="5" border="0" align="left"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She has been doing all the talking - now she has to do a lot of working. The BJP leaders are all good speakers, now is the time for them to prove that actions speak louder than words. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL wishes Ms Sitharaman an exciting tenure in all the three ministries, which should perhaps be eventually merged. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe one of her first jobs would be to clear the posting orders of Assistant Commissioners of CBEC. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can a former Member of ITAT practice before it? Tribunal has no jurisdiction to decide issue</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was in 2009 that the Government amended the <em>Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules,</em> 1963 to bar retired Members from practicing before the Tribunal. From then on, several retired Members have challenged this denial of their right to practice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the latest judgement of a Special Bench of the ITAT delivered on 23.5.2014, the Special Bench has held that the Tribunal has no jurisdiction to decide the issue - which means the issue is still open. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this order today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20523" target="_blank">Breaking News </a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For more information on this issue you may like to see: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1) TIOL story on April 17, 2009: <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8901">Former Members cannot practise in CESTAT - No unregulated right of practice - There was a time when a son would appear in court presided over by his father and no questions were asked - Former members' writ petition dismissed: Delhi High Court </a></strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2) <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9209">‘No Practice for Retired ITAT Members' </a> - TIOL-DDT 1137 22.06.2009 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3) <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9412">Can retired ITAT Members practise in the ITAT - Special Bench to hear </a> - TIOL-DDT 1159 22.07.2009 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4) TIOL story on September 17, 2009: <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9678">ITAT Members who retired prior to 3.6.2009 and Members who resigned before being confirmed can practice in Tribunal - ITAT envious of CESTAT: ITAT Special Bench </a></font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 5) <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9704">Ex-CESTAT Member practicing in CESTAT - Does it not lower the Stature of the ex-Member & the CESTAT? </a> - DDT 1202 - 23 09 2009 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 6) <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9680">Former ITAT Members - Practice Before ITAT? </a>- DDT 1199 17.09.2009 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7) <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12703">Are Retired Members of ITAT Eligible to Practice before ITAT? Matter once again before ITAT Special Bench </a> - DDT 1640 - 29.06.2011 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8) <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9678">ITAT - Practice by Former Members - Retired Members can practice before Benches where they have not worked - Till next hearing </a> - DDT 1783 - 27.01.2012 </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9) <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTQ1MTY=">Former Members Cannot Practice Before CESTAT - Issue reaches finality with Supreme Court Judgement </a>- DDT 1816 - 16.03.2012 </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ITAT - Selection of Vice President - Court not to interfere - Government urged to frame guidelines for selection: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ITAT</strong> Members are judges who decide cases involving hundreds of Crores - even thousands. Sometimes some of these Members feel aggrieved that they have been treated unjustly and unfairly in the matter of promotions. And they approach another Tribunal - the Central Administrative Tribunal - not with success often. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, two Members felt that they were unfairly overlooked in the matter of promotion as Vice Presidents of the Tribunal. They were not successful before the CAT and so are before the High Court. The High Court also declined to interfere. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the High Court made some observations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Members of tribunals such as the ITAT perform crucial judicial functions, which can have an adverse bearing on individuals, and at times, vast commercial and fiscal ramifications. In these circumstances, the Central Government should seriously consider continuous oversight through the concerned High Courts, given that High Courts exercise appellate (and supervisory writ) jurisdiction over the orders and proceedings of ITAT and its benches. Some reporting mechanism, preferably centralized, to oversee the quality of the orders of ITAT is essential because the President of ITAT's powers over members of ITAT and Vice President are not appellate, they are administrative. Creation of this mechanism would result in adding a new and possibly crucial dimension to ensure greater scrutiny of ITAT and its orders and also provide a link in the decision making process of selection to senior judicial positions within ITAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court also suggested that to allay any future apprehensions, it would be necessary for the Central Government, in consultation with all concerned, including the President of ITAT, to evolve some guidelines applicable for future cases. This could be in the form of some minimum information about each candidate who applies for the post of Vice President, Senior Vice President and President, in regard to the last three years or five years' performance, such as the number of orders written or delivered, each year; the units/appeals disposed of; a certain number of orders, i.e. about five or ten (may be chosen in advance by the Chairman of the Committee) to assess their quality, and personal interaction. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this Judgement today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20527" target="_blank">Breaking News </a></strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Remarkable Performance by DRI - GFI </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GLOBAL </strong>Financial Integrity (GFI) in its latest quarterly newsletter GFI Engages has reported:-</font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In late April, the Indian Directorate of Revenue Intelligence <font color="#FF0000">released a summary of its first two years of increased law enforcement activity</font> targeted at cases of commercial fraud, including illicit financial flows through trade misinvoicing. Their early results have been remarkable: between March 2012 and March 2014, they detected $1.3 billion worth of commercial fraud, and collected $396 million in new revenue. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India is just beginning its effort to crack down on trade-related illicit financial flows, and should serve as an example of the potential that curtailing trade misinvoicing has for development. India began working in earnest to reduce illicit financial flows after a report by Global Financial Integrity showed the economy had lost $462 billion since 1948 due to illicit outflows. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DRI does not appear to have released any such summary. What the GFI report refers to is a story in the Economic Times dated 30.04.2014. </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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty u/s 112(a) of Customs Act, 1962 - Action of importers in purchasing demand draft from fraudster can at most be an act of erroneous business diligence on their part - having discharged customs duty and interest on all the goods imported by them, question of visiting them with penalty does not arise: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> an investigation, it was noticed that Shri Malleshwar Rao and Shri Jayesh were engaged in forging the signatures of the cashier of the Customs Dept. on the TR6challans and forging signatures of Customs Officers on the reverse of photo copy of the duplicate copy of Bill of Entry and clearing consignments from the tank terminals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The modus operandi adopted by Shri Malleshwar Rao was forging the signature of the cashier of Customs on TR6 challans against the demand draft which were received by him and utilizing the said demand drafts for clearance of consignments of various other importers by en-cashing the amounts indicated on the demand drafts & collecting the cheques from the importers in various names. </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 when assessee is school certificate examination body, a mere hike in fees to general surplus would exclude it from ambit of Sec 10(23)(vi) - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> challenged the order passed by DGIT(E) refusing to grant exemption u/s 10(23C)(vi). The assessee is a society registered under Societies Registration Act and is listed as a body conducting public examinations under Delhi School Education Act. The assessee applied for approval u/s 10(23C)(vi) for AY 1999-2000 to 2001-02 to CBDT which was rejected by CBDT stating that it was not an educational institution but was an examination body which conducts examinations for ICSC and ISC and therefore, could not be granted the exemption as an educational institution. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It also filed application for approval u/s 10(23C)(vi) for subsequent years, which were not disposed off. For AY 2008-09 to 2010-11, DGIT (E) dismissed the application on the ground the assessee was not an educational institution but an examination body conducting examinations for ISCE and ISC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether when the assessee is a school certificate examination body, a mere hike in fees to general surplus would exclude it from the ambit of Sec 10(23)(vi); Whether a provision of service in the nature of charity would not cease to be charitable only because it entails receiving a charge for the same and Whether merely because the funds of the assessee may not have been utilized in the best possible manner cannot lead to a conclusion that they have not been applied to the object for which the assessee has been established. And the verdict goes against the Revenue. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CE - Appeal is maintainable before Tribunal against an order passed by Commissioner (A) dismissing appeal for non-compliance of stay order - matter no longer res integra : CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>is an appeal against the order passed by the Commissioner (A) dismissing the appeal filed by the assessee for non-compliance with the Stay order passed in terms of s.35F of the CEA, 1944. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative raised a preliminary objection regarding maintainability of the appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tribunal observed that the issue is no more res integra in view of the decision of the Tribunal in the case of <em>Girnar Transformers Pvt. Ltd. Vs CCE Kanpur </em> - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTIzMDM="><strong><font size="1">2014-TIOL-305-CESTAT-DEL<font size="2"> </font></font></strong></a>wherein the Tribunal has come to the conclusion that appeal dismissed by the Commissioner (Appeals) for non-compliance of stay order and the assessee's appeal under Section 35B is maintainable before the Tribunal.</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><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>