TIOL-DDT 554 · 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
554</font><br>
19.02.2007<br>
Monday</b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Failure
to collects TDS –penalty liable </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section
271 CA of the Income Tax Act, inserted with effect from 1.4.2007</font></p>
<blockquote>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>271CA.
</b><i>(1) If any person fails to collect the whole or any part of the tax
as required by or under the provisions of Chapter XVII-BB, then, such person
shall be liable to pay, by way of penalty, a sum equal to the amount of
tax which such person failed to collect as aforesaid.</i></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(2)
Any penalty imposable under sub-section (1) shall be imposed by the Joint
Commissioner.</i></font></p>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a
penalty is liable for not deducting tax at source. And the penalty can be
equal to the tax not deducted. This would be applicable from the Financial
Year 2007-08. So from April 2007, if you are liable to deduct TDS, including
the fee paid to your consultant, please be sure to deduct TDS. Otherwise
you will end up paying penalty equal to the tax not deducted.</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Cellular
Operators demand concessions in the budget </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to COAI
(Cellular Operators Association of India) the 4% ACD paid on inputs by the telecom
service providers is an added cost to them, which in turn increases the cost
of main equipments like MSC, BTS/ BSC, HDSL/DWDM/ Routers, ATM/Frame Relay/
Ethernet Switch/ VAS Equipment etc. up to 4.64%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the government
has brought down the basic custom duty (BCD) on IT / Telecom products to zero,
an additional duty of customs (ACD) of 4% has been imposed / levied on ITA bound
items (including mobiles) and their inputs which attract nil duty in order to
compensate for the internal taxes like sales tax, proposed state VAT, central
sales tax, which apply to sale, purchase or transportation of goods in India.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Right now, the
manufacturers are entitled to avail credit of this ACD for payment of excise
duty on their finished goods. However, telecom operators being service providers
and not manufacturers, are not eligible to avail credit of this 4% ACD. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>8%
CVD on packaged or canned software: </b>COAI demanded that it should not be levied on the telecom
software, as it imposes an additional financial burden on the operators and
increases the cost of service. It said that a notification should be issued
clarifying that telecom software satisfying certain specified conditions is
customized software. </font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Customs
apathy – High Court frowns </font></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Is
the Commissioner’s job over once the case is entrusted to a Counsel?</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For eight long
years, the Customs Commissioner and the DRI did not bother to be represented
in the High Court and the moment the High Court passed an <i>ex parte</i> order,
the department woke up and wanted the ex parte order quashed. The High Court
was not impressed and came down rather heavily on the department. Most often,
the department does not show any interest in pursuing litigation in the High
Courts. Once they hand over the case to the ASG, the Commissioner believes his
role is over and the poor ASG does not get any assistance from the department.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems in Australia,
whenever a Revenue case is argued in a High Court, the entire top brass of the
Revenue department is present in the Court. Back home when a Customs or Central
Excise case is before a High Court, not even an inspector is present in the
court. It is time Board issues instructions that whenever Revenue cases are
before the High Courts, the Commissioner should be personally present in the
Court. After all it is his case and he should be interested in it. May be then
quality of defence in the High Courts would improve. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case we
are reporting today, for eight long years, the Commissioner refused to be represented
in Court showing utter disregard and contempt for the judiciary. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court
observed,</font></p>
<blockquote>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Time has come to express anguish at the manner in which Court proceedings
are being viewed by litigants, where indulgence shown by the Court is mistaken
by the litigant to be either a vested right afforded to him by the law,
or worse still the laxity of the Court, leading to a casual and cavalier
approach to Court cases.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Such approach of the litigant if not dealt with firmly may in time lead
to the breakdown of the judicial system itself.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Merely because indulgence is extended by the Court toward the party,
as was extended time and again in this case, the party cannot be presumptuous
enough to assume that it has attained a vested right for being served afresh
for each and every date of hearing.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>A party in order to seek relief from the Court must satisfy the Court
that it defaulted in appearance because of circumstances beyond its control
or, at any rate, on account of overwhelming difficulties.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Sleeping over the matter by the party should not be countenanced lightly.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Likewise, cryptic and off the cuff explanations for non-attendance deserve
outright rejection.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Government Departments, who take the Courts for granted, should not be
lightly let off for their dereliction of duties.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>A drastic alteration in the mind set of individuals seeking the assistance
of the Court as also corporate bodies and Government agencies unless brought
about is bound to lead to utter chaos in the judicial functioning.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Due diligence must take the place of negligence which pervades throughout,
if Courts are to deliver to the litigant his rights.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>Justice should not be allowed to be sacrificed at the altar of dereliction,
default, negligence, indifference and the like.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
<b>The defendants were sleeping uninterruptedly throughout and have now
arisen from their slumber to claim that the same should not be executed,
without even so much as giving a semblance of an explanation.</b></font></p>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the High Court
so rightly observed, <b>Justice should not be allowed to be sacrificed at the
altar of dereliction, default, negligence, indifference. </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this particular
case, the Revenue ended up paying costs by going to the High Court. Is there
any accountability in the department? Why should the department go out of its
way to prove its incompetence? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please
see our <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4998">Breaking
News</a></u></b> for more details of the important case.</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DTAA
– PIL by SK Jha</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:City>Mr.</st1:City>
Shiva Kant Jha is a one man army against the Double Tax Avoidance Agreement.
He has been in the Supreme Court and the Delhi High Court fighting a lone battle.
The former Chief Commissioner of Income Tax is so obsessed with the idea that
he has been crusading the movement all alone for so many years. <b>TIOL</b>
took him to Parliament to talk to the MPs on the Taxation Laws and he told the
MPs – there is a bigger problem – the DTAA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now he has filed
a PIL in the Delhi High Court as a humble citizen of India. He deserves assistance
and support from all other humble citizens of this country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See
the full text of his writ petition in our <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4997">Special
story</a></u></b> today. </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@taxindiaonline.com</a></span></font></p>
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