TIOL-DDT 490 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
490</font><br>
14 11 2006<br>
Tuesday</b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No
action if AG’s objection is against court orders or Board instructions - CBDT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has issued
detailed instructions on how to deal with objections from AG’s Audit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Please don’t
suppress records from AG. </b>Over the years the department has learnt a lesson
that the best way to avoid AG’s objections is to give them good food but no
files. When the auditors ask for a file, a ‘search’ operation is vigorously
initiated and most often the file is not ‘found’. Central Excise officers have
started asking assessees also to adopt this system and avoid showing files to
AG. A routine objection recorded by AG’s Audit is – “Files not produced”. In
some cases there is genuine difficulty in making available the files. With frequent
changes in jurisdiction and location, the files do get misplaced. And in a system
where there are more officers to give directions and hardly any one to take
them, files are difficult to trace. In many government offices, file management
has collapsed. There was a time when every file opened was entered in a register
of files and its movement and location monitored. Now there is hardly any control
of files and sadly there is no systematic handing over of files, when one is
transferred – result absolutely no responsibility. Now CBDT wants Commissioners
to ensure that the relevant records are made available to the CAG’s Audit party.
What will they do, if the files are not <b>traceable</b>? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Remedial action:
</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) An Audit objection
should be accepted and remedial action should be taken in a case where the audit
objection relating to an error of facts or an issue of law is found to be correct.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Even if objection
is not accepted by the CIT, remedial action should be initiated, as a precautionary
measure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No Remedial
action: </b>Remedial action need not be initiated in the following cases if</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) the CIT is
of the view that the interpretation of fact or law by the audit is in conflict
with a decision of the Supreme Court and the decision squarely applies to the
facts of the case,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) the CIT is
of the view that the interpretation of fact or law by the audit is in conflict
with a decision of the jurisdictional High Court, which is squarely applicable
to the facts of the case and the operation of which has not been stayed by the
Supreme Court,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) the CIT is
of the view that the Assessing Officer has acted in conformity with Board's
Instruction/Circular.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) the audit objection
raised is on facts, and the CIT, after necessary verification, is of the opinion
that the audit objection is factually incorrect.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Disciplinary
action: </b>Whenever the Audit objection becomes a Draft Audit Para, the department
is required to tell the CAG, the officers responsible for the lapse and what
action has been taken against them. Though normally no action is taken against
any officer for any objection raised by CAG, this is the real threat perception
of Audit. Now CBDT wants the explanation of officers to be obtained if the Audit
objections are due to </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Failure to
follow departmental instructions/circulars;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Failure to
follow binding judicial decisions; and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Palpable mistakes
on fact or law, or mistakes arising from gross negligence or mala fide action.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) default in
adhering to the time-limit prescribed for various.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And when failure
to take timely and appropriate remedial action in respect of objections raised
by Revenue Audit leads to irretrievable loss of revenue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> Arithmetical
mistakes: </b>Board does not want to tolerate arithmetical mistakes of its officers
and wants action initiated in the following cases:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a)
where an issue is considered / discussed in the body of assessment order,
and necessary addition on the issue is directed to be made, or where a deduction
is directed to be allowed by the Assessing Officer, but such directions are
not taken into account at the time of calculation of tax, interest and surcharge;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)
where there is totalling mistake in the computation of income;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c)
where an income disclosed in the return is not included in the computation
in the assessment order, except where the Assessing Officer has discussed
in the body of assessment order and directed not to include it;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d)
where there is wrong calculation of tax including application of wrong rate
of tax;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e)
where there is wrong calculation of interest including application of wrong
rate of interest or wrong calculation of period for which interest is leviable;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f)
where any income is added in the computation of income more than once;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g)
where wrong set-off of brought forward losses, unabsorbed depreciation, loss
on long/ short term capital gain etc. in the scrutiny/search assessments,
not commented by the Assessing Officer in the assessment order, has been allowed;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(h)
where wrong verification of, or failure to verify, the arrear demand before
the issue of refund results in wrongful issue of refund;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
where credit of pre-paid taxes is wrongly allowed.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Shouldn’t
CBEC also think of issuing such instructions at least to stop issuing silly
Show Cause Notices when Audit objects to the law and Board instructions? The
notices for Goods Transport under Service Tax are a classic example. </font></p>
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<p align=center><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Charge
sheet Newton for not discovering the law earlier</b></font></p>
<p align="justify"><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">An
officer of the AG Audit detected a major fraud in his office and found
that supervisory officers including himself had signed some bills without
verification. He had signed the bills to facilitate his investigation.
He did not want to raise any suspicion and make the files, ‘not available’.
In due course all the officers including the one who detected the fraud
where called to explain the lapse. His contention that he was the one
who detected the fraud was not appreciated. They wanted to take action
against him for the period he had signed the bills. The rattled officer
wrote,</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<font color="#663399"><strong>"Newton discovered the law of gravity
by seeing an apple fall. But the apples (forbidden variety and normal
ones) have been falling right from the time of Adam and Eve. It is like
charge- sheeting Newton for not discovering the law earlier."</strong></font></font></p>
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<p align="justify"><font size="2"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2006/instruct0609.htm">INSTRUCTION
NO. 9/2006, Dated: November 7, 2006</a></font></p>
<p align=center><font color="#006600" size="2"><strong>Albumins allowed for export</strong></font></p>
<p align="justify"><font size="2">Appendix – 37A Vol 1 of the Handbook of Procedures)
giving the list of export items eligible for benefits under VisheshKrishi and
Gram UdyogYojana is amended to include a new item 7 B <i>Albumins under Chapter
35 of ITC (HS) Classification of Export and Import Items 2004-09 with effect
from 1.4.2005.</i></font></p>
<p align="justify"><font size="2"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn068.htm">PUBLIC
NOTICE NO. 68 (RE-2006)/2004-2009, Dated: November 10, 2006 </a></font></p>
<p align=center><font color="#006600" size="2"><b>65,000 euros in Aishwarya’s
mail</b></font></p>
</font>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A packet addressed
to Ais</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">hwarya
Rai created a sensation in Mumbai’s foreign post office when a casual check
revealed it contained 65,000 euros, equal to about Rs 29 lakhs. The matter is
under investigation, reported a Mumbai journal.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more DDT </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@taxindiaonline.com">vijaywrite@taxindiaonlin</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">e.com</a></span></font></p>
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