TIOL-DDT 2432 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><s><strong><strong><strong><strong><strong><font color="#663399"><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></strong></strong></strong></strong></s></strong></strong><font color="#663399" size="3">TIOL-DDT 2432 </font><br>
08.09.2014 <br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Audit of Govt Companies by CAG - MoCA amends Companies Act by an Order </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Ministry of Corporate Affairs has by a <em>Removal of Difficulties Order </em> amended Section 143 of the Companies Act, 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sub-sections (5) and (7) of section 139 of the said Act provide for power of the Comptroller and Auditor-General of India to appoint an auditor duly qualified to be appointed as an auditor in a government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sub-section (5) of section 143 of the said Act which provides for power of the Comptroller and Auditor General of India to conduct supplementary audit does not specifically cover companies owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments'; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And now they have rectified this error: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Section 143 of the Companies Act, 2013 in sub-section (5), for the portion beginning with the words , In the case of a Government company and ending with the words "required to be audited and", the following is substituted: - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"In the case of a Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the Comptroller and Auditor-General of India shall appoint the auditor under sub-section (51 or sub-section (71 of section 139 and direct such auditor the manner in which the accounts of the company are required to be audited and”. </em></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_not_1332013.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MoCA Order Dated: September 04 2014 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What do you think of Audit? CE Commissionerate Feedback Form </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> do you think of the Central Excise and Service Tax Auditors who visit you? (As per the Delhi High Court order, they are not supposed to visit you - but they continue to do so) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Service Tax Audit Manual requires the Commissioner to interact with the major taxpayers in order to obtain <strong>feedback </strong> on the audit system and the Central Excise Audit Manual stipulates that the <em>Audit Cell should discreetly gather views from the trade/industry regarding the system of audit. Standard <strong>feedback </strong> format should be designed by the cell for this purpose. The conclusions of the cell should be an input for taking responsive measures. This cell should prepare a comprehensive report <strong>highlighting </strong> the areas needing training and quality improvement</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have you ever heard about any Commissioner interacting with the taxpayers to obtain feedback on the Audit System? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have you ever heard about any feedback form being given to the assessees to get their feedback on the Audit's work? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> is happy to report a positive action by the Commissioner of Central Excise, Hyderabad III who has designed a feedback form which is sent to the Assessees along with the Final Audit Report. The feedback is to be sent to the DC directly without interference from the auditors. The Commissioner himself reads the feedback and he says that the feedback has been extremely useful in improving Audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Feedback form of the Commissionerates is given below: Why don't other Commissioners follow suit? </font></p>
<table
width=90% border=1 align="center" cellpadding=3 cellspacing=0 class=ListTable5DarkAccent5>
<tr>
<td width=40 valign=top bgcolor="#4BACC6">
<div align="center"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Sl. No.</b></font></div></td>
<td width=234 valign=top bgcolor="#4BACC6">
<div align="center"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Particulars</b></font></div></td>
<td width=353 colspan=11 valign=top bgcolor="#4BACC6">
<div align="center"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Feedback</b></font></div></td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>1 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the audit team give 15 days advance notice regarding the audit date?</font></td>
<td width=353 colspan=3 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes</font></div></td>
<td width=75 colspan=4 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">No</font></div></td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">No. of days of notice given</font></div></td>
</tr>
<tr>
<td width=353 colspan=3 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=75 colspan=4 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>2 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">During the Pre-audit, did the audit team explain the objectives, timing and audit process and solicited your questions and concerns?</font></td>
<td valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes to all</font></div></td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">No to all</font></div></td>
<td colspan=5 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes to some extent</font></div></td>
<td valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Left over aspects</font></div></td>
</tr>
<tr>
<td width=353 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=108 colspan=5 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=94 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>3 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the audit team bear their Identity Cards during the audit of unit?</font></td>
<td width=353 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes all</font></div></td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Only a few</font></div></td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">None of them</font></div></td>
</tr>
<tr>
<td width=353 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>4 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the audit team has fair understanding of your operation sand accounting system?</font></td>
<td width=353 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Good</font></div></td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Reasonable</font></div></td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Little Understanding</font></div></td>
</tr>
<tr>
<td width=353 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6"><div align="left"><font color="#FFFFFF"></font> </div></td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>5 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Were they professional, courteous and constructive in their approach?</font></td>
<td width=353 colspan=4 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes</font></div></td>
<td width=207 colspan=7 valign=top bgcolor="#4BACC6">
<div align="left"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">No</font></div></td>
</tr>
<tr>
<td width=353 colspan=4 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=207 colspan=7 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>6 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the Audit Team discuss the out come of the audit with your staff?</font></td>
<td width=353 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes</font></td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">To some extent</font></td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Not at all</font></td>
</tr>
<tr>
<td width=353 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=141 colspan=7 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=136 colspan=3 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>7 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the audit team <b><font color="#FF0000">made</font> </b>any significant observations in your internal control, accounting system and tax compliance to help you in improving tax compliance of your organisation?</font></td>
<td width=353 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excellent observations</font></td>
<td width=141 colspan=5 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Very good observations</font></td>
<td width=100 colspan=3 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Good observations</font></td>
<td width=100 colspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">No significant observations</font></td>
</tr>
<tr>
<td width=353 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=141 colspan=5 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=100 colspan=3 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=100 colspan=2 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
<tr>
<td width=40 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>8 </b> <b> </b></font></td>
<td width=234 rowspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the Final Audit Report contain the same points which were discussed during audit by the Audit Team?</font></td>
<td width=353 colspan=2 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">All points</font></td>
<td width=133 colspan=5 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">A few points</font></td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">None</font></td>
</tr>
<tr>
<td width=353 colspan=2 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=133 colspan=5 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
<td width=141 colspan=4 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
<tr>
<td width=40 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>9 </b> <b> </b></font></td>
<td width=234 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Your experience with audit process and auditors (Please rate on the scale of 1 to 5, 1 being not good and 5 for excellent)</font></td>
<td width=353 colspan=11 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
<tr>
<td width=40 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>10 </b> <b> </b></font></td>
<td width=234 valign=top bgcolor="#4BACC6"> <font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional comments, if any, on the above points</font></td>
<td width=353 colspan=11 valign=top bgcolor="#4BACC6"><font color="#FFFFFF"> </font> </td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is an ISO certified Commissionerate - the form can be seen at <a href="http://cxhyd3.nic.in/Documentfiles/Auditfeedbackform.pdf"><strong>http://cxhyd3.nic.in/Documentfiles/Auditfeedbackform.pdf</strong> </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - New Exchange Rates </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC </strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 05 September 2014. The US Dollar is 61 rupees for imports and 60 rupees for exports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Exchange rates were last notified on 21stAugust 2014.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_075.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 75/2014-Cus., (N.T.), Dated: September 04, 2014 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Facilitation Fee to Travel Agents for Air Travel for Babus </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per a Government O.M dated 1st October 2013 authorised travel agents, Balmer Lawrie & Company Limited (BLCL), M/s Ashok Travels & Tours (ATI) and Indian Railways Catering and Tourism Corporation Ltd. (IRCTC), were allowed to levy 'Facilitation Fee' of Rs. 100/- per ticket for domestic sector and Rs. 300/- per ticket for international sector for air travel, when Government of India bears the cost of air passage. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has decided to withdraw this O.M. with immediate effect. Consequently, no fee/service charges (by whatever nomenclature), which are not included in the 'tariff' charged by Air India/Airlines, are required to be paid to the authorised travel agents. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government also reiterates that as far as possible, air tickets on Government account may be obtained directly from Air India/Airlines (booking counters/offices/website) and only if obtaining tickets directly from Air India/Airlines is not possible, should the services of authorised travel agents be availed of. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/office_memorandum_1902412012.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOIMoF Department of Expenditure O.M in No. 19024/1 /2012-E-IV, Dated: September 05, 2014. </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Falling Standards of CAs - ITAT comes down heavily </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a recent order, the Mumbai Bench of the ITAT observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We are aware that the Chartered Accountancy profession commands high respect and value with one and all, because of their core expertise and knowledge. Their domain expertise and practical approach adopted by them to address the problems enable them to give near perfect advice in a given situation and hence tax payers and tax gatherers repose confidence in them. These kind of domain expertise could be achieved by a C.A due to strict training methodologies adopted by and also high level of standards maintained by the Institute of Chartered Accountants of India (ICAI), its vast and versatile curriculum, tough examination pattern, continuous updating of curriculum etc.. Most of all, the practical on-site training obtained by the students from a practicing Chartered Accountant that too during the period of study itself, makes the C.A course a unique one. The cumulative effect of these methodologies makes the students a perfect Chartered Accountant having high caliber, ability, high standards etc., and hence they are enabled to set up their own practice from day one itself. Though the Chartered Accountants are having domain expertise in accountancy and auditing areas, yet the training they undergo as well as the curriculum of C.A course makes them a best tax professional also. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Another important feature is that the ICAI ensures that the Chartered Accountants are updating their knowledge with current topics and also current developments that take place and the same is sought to be achieved by the ICAI through the Continuing Professional Education (CPE) programs. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Noticing that a CA might have given patently wrong advice to an assessee regarding filing of an appeal, the Tribunal observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>…. it may be showing signs of deteriorating standards with some of the Chartered Accountants in profession, which needs to be stopped on war footing by the ICAI. ….if it is presumed for a moment that all the C.A.s have concurred with the said view, then it only shows that the C.A profession is losing its grip over the Income tax matters, which is another cause of concern for ICAI. The self-study model coupled with ‘on-site articled clerk training' embedded in the Chartered Accountancy course aims to achieve high quality education and training through undergoing practical training, inculcating the habit of thinking, self-introspection, application of mind, analytical ability etc. and they enable the C.A students to have strong grip over the subjects and also to attain expertise in them. The commendable feature of the C.A course is that, as stated earlier, the C.A students are trained by the practicing Chartered Accountants during their articled clerk training program. Thus, the methodology adopted by the ICAI enabled the C.A. students to become a thorough professional with versatile knowledge and innovative mind. We notice that, in the recent past, the methodology of self-study is given a go-by by some of the C.A students and they have started depending more and more on the Commercial Coaching Centers, who undertake coaching of various subjects in the class room model. We notice that the ICAI does not appear to have taken steps to contain mushrooming growth of such coaching institutes, which indulge in manufacturing of Chartered Accountants through class room model, which may ultimately have undesirable effect on the quality of Chartered Accountants, since the habit of thinking, introspection, application of mind is replaced by spoon feeding, which kind of teaching discourages independent thinking. There should not be any controversy on the fact that the Chartered Accountants, till date, have occupied pioneer position vis-à-vis their counterparts in other parts of the World. They also contribute a lot to the building, sustenance and growth of our National economy. Any compromise on the quality of Chartered Accountants would not only affect our Country very badly, but is also expected to endanger the pioneer position enjoyed by the Indian C.A fraternity vis-à-vis their counter parts in other parts of the world. In our view, the ICAI should seriously take note of these alarming practices slowly emerging in our Country and should take appropriate corrective steps, lest the confidence reposed in C.A.s by the public should get diluted. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Disciplinary Action Recommended</strong>: The ITAT suggested disciplinary action against the CAs observing: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>If it is considered that the C.A firm has colluded with the assessee for giving such kind of affidavit, then it only warrants disciplinary action against them. Even, if it is considered that the said C.A. firm has really given such advices, then also it may require disciplinary action against them for giving such kind of advices, without proper verification of facts and without proper consideration of law. In our view, strict actions and fast disposal of disciplinary proceedings would not only instill discipline among the C.A fraternity, but also help curtail these kind of undesired practices adopted by some of the Chartered Accountants. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The ITAT had some harsh words for the Income Tax Department too</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>At
this juncture, we feel it necessary to highlight the lethargic approach
adopted by the revenue in the instant cases. In these cases, the revenue
is aware of the fact that these appeals are delayed by 2984 days (more
than 8 years) and such delay cannot be considered as normal. From the fact
sheet filed by the assessee, we notice that the assessee has claimed to
have received the orders dated 01-02-2000 passed by Ld CIT(A) only during
March, 2003, i.e.,after a gap of more than three years. We notice that
the assessee has computed the delay period of more than 8 years from March,
2003 only, i.e., from the date of receipt of first appellate orders as
claimed by the assessee. If we add the delay of three years to the existing
period of delay, the period of delay would be increased by three more years.
Thus, the assessee has simply put the responsibility upon the revenue for
a delay of three years. When these kinds of averments are made, it is normally
expected that the revenue should verify the appellate/assessment records
to find out the veracity of such explanations. It is unfortunate that the
revenue did not care to verify the records to find out the veracity of
the said submissions. Further, the revenue has also not chosen to counter
the averment made in the affidavit by furnishing any other counter affidavit
/ explanations. The Department Representatives, posted to argue the case
of the revenue, should be aware that they are “Officers of the Court” and
it is their primary duty to assist the bench to arrive at a fair and reasonable
conclusion on the issues contended by either of the parties. <strong>It
is unfortunate that we did not get any kind of assistance from the Ld D.R
in this regard </strong>. </em></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Tuesday's cases</font></strong></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"><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"></font></strong></font><font color="#663399">Service Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appellant purchases goods from the village industry units for supply of same to PSUs - transaction is simple trading - trade margin of 3% is not in nature of commission - activity not Business Support Services so as to attract ST: CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant purchases various goods, such as, khadi, soap and detergents, etc. from various units situated in villages. These goods are purchased in bulk from village industries and sold by the appellants through their retail outlets. The appellant also sells these goods to various public sector undertakings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards the supplies made by the appellant to PSUs, once the orders are procured from the PSUs, they are placed on the industrial units who are asked to supply the goods directly to the PSUs. However, the village industrial units raise invoices on the appellant and the appellant makes the payment to the village industrial units. In turn the appellant raises the bills on the PSUs and collects the sale proceeds of the goods supplied. The village industrial units, sometimes, give discount or trade margins of around 3% to the KVIC. The department was of the view that the activity undertaken by the appellant comes within the category of ‘support service of business or commerce' and therefore, on the trade margins collected by the appellant, service tax would be leviable. </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 color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether assessee is to be treated as assessee-in-default where assessee deducted tax payable by its employees but instead of remitting same in Govt account it appropriated same for its benefit - YES: HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Assessee Company is engaged in the business and operating as a schedule passenger airline in India. A survey under Section 133A was conducted in the assessee's premises in order to verify TDS compliance. The survey revealed that the assessee was not remitting the taxes deducted by it at source to Government account within the due dates as prescribed in the Income Tax Act, 1961. During the course of verification, it was noticed that for the financial year 2009-2010 to 2011-2012 certain sums were deducted from the salaries paid to the employees and payments under other heads for the above mentioned assessment years but the same was not remitted to the Government Account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether assessee is to be treated as assessee-in-default where assessee deducted tax payable by its employees but instead of remitting same in Govt account it appropriated same for its benefit. And the verdict goes against the assessee. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appellants had approached the Settlement Commission and admitted their liability and also admitted allegations and charges levelled in SCN - in view of admission before statutory authority, Penalties correctly imposed - appeal dismissed: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOODS</strong> imported by M/s Sonu International were examined by the Customs authorities and it was found that the importer described the goods as unbranded whereas the goods were found to be of Philips brand. During investigation it was found that earlier four consignments of similar goods were imported by M/s. R.R. Exports. Enquiries were made from M/s. National Shipping Agency, Custom House Agent of M/s. R.R. Exports. Shri Manish R. Sangani, partner of the CHA, in his statement admitted that the goods imported by M/s. R.R. Exports were dealt with by them and all the documents for clearance were received either from Shri Shankarlal Sharma or Shri Manu Advani. The draft in respect of the customs duty was also deposited by Shri Shankarlal Sharma. The CHA also admitted that the goods were branded goods whereas the same were declared by the importer as unbranded. On this evidence, show cause notice was issued demanding differential duty of Rs.15,94,827/- and for imposition of penalties. </font></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. </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@tiol.in"><strong>vijaywrite@tiol.in </strong></a></font></p>
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