TIOL-DDT 2477 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 2477</font><br> 18.11.2014<br> Tuesday</strong></font></p> <p align="center"><em><font face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600" size="3">Assessment completed only on date of service of assessment order? CBDT corrects six year old blunder </font></strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> the provisions relating to settlement of cases by the Income-tax Settlement Commission (ITSC) were amended in 2007, CBDT in Circular No. 3 of 2008 dated 12.03.2008 (inter alia) clarified that <em>"the assessment shall be deemed to have been completed only on the <font color="#FF6633">date of service</font> of assessment order to the applicant". </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This, naturally created its own confusion. This Circular was immediately referred to in the case of <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=282&filename=legal/settle/2008/2008-TIOL-01-SETTLE-IT-LB.htm" target="_blank"><strong>Rescuwear Corporation - <font size="1">2008-TIOL-01-SETTLE-IT-LB</font></strong> </a>- by the Special Bench of the Income Tax Settlement Commission in a case decided on 13.06.2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the <em>Chirag Construction</em> - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODk5NDI="><strong><font size="1">2013-TIOL-717-HC-MUM-IT</font></strong> </a>case, the Bombay High Court held that the Circular is binding on the Revenue even if it deviates from the provisions of the Act. It was also noted that interpretations given by the CBDT in favour of the assessee are binding on the Department and the Department is estopped from raising any argument contrary to the interpretation placed by the CBDT. The High Court also noted a Supreme Court decision that <em>Circulars can be issued by the Board to explain or tone down the rigours of law and to ensure fair enforcement of its provisions. These circulars have the force of law and are binding on the Income Tax Authorities, though they cannot be enforced adversely against the assessee. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It took the CBDT six years and a few court cases to realise its faux pas . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The latest Circular of the Board states, "<em>It has been inadvertently stated in para 61.2 of Circular No.3 of 2008 that the assessment shall be deemed to have been completed only on the <strong>date of service</strong> of assessment order to the applicant. This statement is not in consonance with the provisions contained in Explanation to clause (b) of section 245A of the Income-tax Act which, inter alia, provides that a proceeding for assessment of any assessment year shall be deemed to have concluded on the date on which the assessment is made."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the offending sentence is now retrospectively changed with effect from 1.6.2007 to read as, <em>"the assessment shall be deemed to have been completed on the </em><strong><em>date on which the assessment order is passed." </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can they amend a Circular retrospectively? Will they also amend the appellate orders based on this Circular? </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTcyNzM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No.16/2014, Dated: November 17, 2014</font></strong></a></p> <p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">How to Calculate safeguard duty - CBEC Clarifies </font></strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER</strong> Notification No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=338&filename=notification/custom/2012/ctariffsg12_004.htm" target="_blank"><strong>4/2012</strong> </a>-Customs (SG) dated 05.10.2012, safeguard duty was imposed on carbon black imported from China@ 30% ad valorem minus anti-dumping duty (ADD) payable, if any. ADD is leviable on import of carbon black from China @ USD 0.423 per kg vide notification No.9/2013-Customs (ADD) dated 26.04.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Imports against Advance Authorisation are exempt from payment of ADD. Safeguard (SG) duty leviable under section 8B of the CTA, 1975 is also exempt on imports against Advance Authorisation. However, the SG duty leviable under section 8C of the CTA, 1975 in respect of imports from China is not exempt on imports against Advance Authorisation. In this context, the issue that has been raised is as to what would be the SG duty leviable on imports of carbon black against Advance Authorisation, that is whether it would be 30% - 0 or 30% - USD 0.423 per kg. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC clarifies that: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SG duty leviable under section 8C of the CTA, 1975 will be 30% minus ADD payable, but for the exemption at the time of import i.e. 30% less USD 0.423 per kg. In a case where the SG duty payable is negative, the same shall be treated as Nil. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTcyNzI=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 11/2014-Cus., Dated: November 14, 2014 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Subsequent returns submitted do not constitute part of records placed before adjudicating authority - there is no mistake apparent on record</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is Airport Authority of India . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They are in appeal against an order dated 08.01.2008 passed by the Commissioner u/s 74 of the FA, 1994 rejecting their application for rectification of mistake apparent in the Order-in-Original dated 15.12.2006.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the CESTAT the appellant have essentially contended - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The Commissioner did take into account the returns subsequently filed by them before the Assistant Commissioner and no opportunity for hearing was given to them before passing the impugned order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) The figures provided by the appellants were not final figures. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the matter of the submission that the impugned order had been passed without providing opportunity to the appellants of being heard, the Bench adverted to sub-section 4 of Section 74 and observed that the appellants were required to be given an opportunity for being heard if the impugned order had the effect of enhancing the assessment or reducing the refund or otherwise increasing the liability on the assessee. Inasmuch as since none of these consequences followed as a result of the impugned order, therefore, the appellant's contention that the order is not sustainable because they were not given an opportunity for being heard is obviously untenable, the Bench held. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the second ground that the order dated 15.12.2006 was passed on the basis of wrong figures, the CESTAT observed that the expression used in Section 74<em> ibid is</em> "<font color="#FF0000"><em>with a view to rectifying any mistake apparent from the record</em></font>"; that the adjudicating authority while adjudicating a case goes only by case records pertaining to that adjudication and, therefore, mistake apparent from the records has to be with reference to the records which were related to the case and presented to the adjudicating authority for the purpose of adjudication. Noting that the appellants had admitted that the adjudication was done on the basis of the appellants' submissions including the figures submitted by them and </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">the subsequent ER-1 returns submitted to the field formations did not constitute part of the records before the adjudicating authority, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the Bench observed that it could not be termed as a case of mistake apparent from the record. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT, therefore, concluded that there is no infirmity in the impugned order dated 08.01.2008 and the same is legal and proper. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal was dismissed. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTc0MjY="><font size="1">2014-TIOL-2293-CESTAT-DEL </font></a> </font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">4.72 Crore Study Tour for IRS Probationers </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>134</strong> IRS probationers of Income Tax will be off to Kuala Lumpur for a seven-day study tour that will cost the Nation Rs. 4,72,67,294/-. That is, the Cost to the Country for each trainee will be Rs. 3,52,741. They will pay a course fee of Rs. 1.66 crore; Rs. 95 lakh on lodging, Rs. 90 lakh on airfare and Rs. 25 lakh on contingency expenses. Added to these are the DA payable of Rs.65 lakh and domestic travel expense of another Rs.25 lakhs. By the way, the Central Government will also add Rs.5.74 lakhs to its kitty in the form of Service Tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously the austerity measures announced by the Government are not for these youngsters who are being sent on an excursion at State cost. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is it that they are going to learn in Kuala Lumpur in a week at a cost of about Rs. 4 lakh each that they cannot learn in India? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally an Under Secretary in the CBDT will also accompany the large team. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/sanction_order_14_620.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F.No.HRD/TCB/620/8/2014-15/6797, Dated: November 15, 2014 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">KV Chowdary - Adviser on Black Money </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> reported by DDT on 31st October 2014, KV Chowdary, Retired Chairman of CBDT has been appointed as adviser on Black Money.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>His job</strong> is to:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Assist the SIT on behalf of the Department of Revenue, Ministry of Finance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Oversee black money related matters being considered by the SIT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Issues relating to and supervision and monitoring of the work/enquiries under Direct Taxes on information received/obtained from foreign jurisdiction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Supervising non-statutory matters out of the subjects being handled by the Member (Inv) in CBDT including overseeing progress of investigations and subsequent actions in cases concerning undisclosed foreign bank accounts/assets and search cases under Direct Taxes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Any other work specifically assigned by the Hon'ble Finance Minister or the Revenue Secretary. </font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Conditions: </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. His appointment is on contract basis is for a period of 6 months or till further order whichever is earlier. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. During the period of the contract he will draw the remuneration equivalent to the last pay drawn including allowances minus pension. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. He is eligible for all the facilities which he was enjoying as Chairman, CBDT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. He will be provided supporting staff as he was provided in the capacity of Chairman, CBDT. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Seems to be a powerful job.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/office_order_277_2014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoF - Dept. of Revenue Office Order No. 277/2014, Dated: November 14, 2014 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">IRS Probationers with President of India </font></em></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/65thBatch_IRS.jpg" alt="Legal Corner Icon" width="567" height="296" hspace="5" border="0" align="center"><br> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRESIDENT</strong> Pranab Mukherjee with the Probationers of 65th Batch of the Indian Revenue Service (Customs & Central Excise) from the National Academy of Customs, Excise & Narcotics, Faridabad, in the Durbar Hall of Rashtrapati Bhavan, in New Delhi yesterday November 17, 2014. </font></p> <p align="center"><font size="3"><strong><em><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif">Assistant Commissioner - Housekeeping? </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> the massive cadre review in CBEC, there are now at least 10 Assistant Commissioners in each Commissionerate. One of the charges given to a recently promoted Assistant Commissioner is 'Housekeeping'. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font color="#006600">Jurispruden</font></strong></strong></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font color="#FF6633" size="4">tiol</font></em></strong></font></strong></font><em><strong><strong><font color="#006600">-Wednesday's cases</font></strong></strong></em></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">Central Excise</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification has to be interpreted in light of words employed by it and not on any other basis-NCCD, although duty of excise, is not exempted in terms of notification 50/2003-CE: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner is aggrieved with the SCN dated 26th August, 2011 issued by the CCE, LTU, Mumbai seeking denial of exemption from levy of National Calamity Contingent Duty (NCCD) under the notification 50/2003-CE. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is mentioned in the SCN that NCCD is a duty of excise, but that it is not exempted under the implementing notification because it is not a duty specified in the I & II Schedule of the CETA, 1985, nor an Additional Duty of Excise, as specified in the implementing notification. It is also emphasized that the impugned notice is based upon the law laid down by Himachal Pradesh High Court in <em> Indo Farm Tractors and Motors vs. Union of India </em>- <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2007/2007-TIOL-724-HC-HP-CX.htm" target="_blank"><font size="1"><em>2007-TIOL-724-HC-HP-CX</em></font> </a></strong> to the effect that the absence of inclusion of NCCD under the subject notification would mean that NCCD was not exempt thereunder.</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 any interference is required by HC when assessee-trust has been imparting education and fees approved by AICTE are being utilitised to create educational infrastructure - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a trust registered u/s 12A. It had filed its return disclosing its total loss at Rs.3,96,54,653/- and claimed exemption u/s 11. However, the AO completed the assessment u/s 143(3) determining the total income at Rs.3,06,53,610/-. The AO had also disallowed exemption u/s 11 on the ground that the assessee was making systematic profit year after year. In addition, the AO also noticed that the assessee had incurred capital expenditure of Rs.51,24,483/- and diverted income to capital funds amounting to Rs.28,75,204/- which as per AO could not be treated as application of income u/s 11(1). Finally, the AO also added depreciation of Rs.95,90,956/- to the income of assessee.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether any interference is required by the High Court when the assessee-trust has been imparting education and the fees approved by the competent authority are being utilised to create educational infrastructure. NO is the HC's answer. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When GOI certifies and registers vessel M.V. Geo Hind Sagar as ‘ research' ship, other wing of GOI, Department of Revenue understands same vessel as Seismographic 'survey' vessel - revoking CB licence of the appellant is absolutely unwarranted - Appeal allowed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> Commissioner of Customs, Kandla revoked the Customs broker licence issued to the appellant and forfeited the security deposit of the appellant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is alleged in the enquiry conducted against the appellant that they had misdeclared the imported vessel by declaring it as Seismic Research Vessel and claimed benefit of exemption from whole of Customs duty under Notification No.21/2002-Cus (Sr.No.354). Inasmuch as after investigation it was found that the said vessel is correctly classifiable as Seismic Survey Vessel and liable to Customs duty as benefit of exemption notification 21/2002-Cus was not available. The duty which allegedly escaped payment is approximately Rs.9.25 Crores. Suffice to say that after enquiry the Customs broker was alleged to have colluded in the evasion of duty and the licence came to be revoked. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p> <p 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"><strong><a href="mailto:vijaywrite@tiol.in">vijaywrite@tiol.in </a></strong></font></p> </body> </html>