TIOL-DDT 590 · the untouched capture
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<p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT 590</font></b><b></b></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><b><br>
11.04.2007<br>
Wednesday</b></font></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Interest on refunds - CBDT cautions field </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In terms of section 244A of the
Income-tax Act, an assessee is entitled to receive interest on the amount of
refund due under the Act. The interest is to be granted simultaneously with the
refund and there should normally be no reason to grant refund without adding
the entitled interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of Sandvik Asia Ltd. v. CIT and others - <a
href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2006/2006-TIOL-07-SC-IT.htm" target="_blank">2006-TIOL-07-SC-IT</a></span>, the
Supreme Court adversely commented upon the delay in grant of interest on refund
and awarded compensation to the assessee for the delay by the Department. The
Court also recommended that action be initiated against the officers
responsible for the delay.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board instructs that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
while granting refund to the assesses, care should
be taken to ensure that any interest payable under section 244A on the amount
of refund due should be granted simultaneously with the grant of refund and
there should, in no case, be any omission or delay in the grant of such
interest.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Failure
to do so will be viewed adversely and the officer concerned will be held
personally accountable, inviting appropriate action.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The
Range officers should be directed to carry out periodic test checks of cases
within their jurisdiction to ensure that provisions of section 244A are
scrupulously implemented.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
These instructions should also be brought to the
notice of the officers responsible for conducting internal audit and adherence
to these should be checked by the auditing parties.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported the case more than a
year ago, on 30<sup>th</sup> January, 2006 to be precise and we are happy that
at least after 14 months, the Board has woken up to face facts. Officers should note that if they are
careless, they may face the consequences. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2007/instruct0702.htm" target="_blank">INSTRUCTION NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2007/instruct0702.htm"><u> 2 / 2007, Dated: March
28, 2007 </u></a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Does this apply to
CBEC? </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While commenting on the
judgement, TIOL had observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court's observation
that <b>"where excess amounts of tax are collected from an assessee or any
amounts are wrongfully withheld from an assessee without authority of law the
revenue must compensate the assessee"</b> should squarely apply to excise and
customs cases. Audacious Audit parties and pestering preventive parties should
think twice before forcing the assessees to make voluntary payment of duties
which they are not required to pay. Rather their bosses should be more careful.
This may not be a worthwhile exercise as, when the department ultimately loses
the case, the voluntary payment along with interest has to be returned and there is the risk of the Finance Minister being
told by the courts about the lethargic and adamant attitude which causes
considerable loss to Revenue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe CBEC should also consider issuing such an
instruction.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Rebate
on goods manufactured in North East, J&K etc.,
and subsequently exported under rule 18 of the Central Excise Rules</font></b> <font color="#006600"><b>- Board clarification creates confusion</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday's DDT carried a
detailed analysis of the issue which included an article, where we first raised
the issue. In today's special column, we carry an incisive article by an expert
on how the Board clarification creates more problems than it solves. Our expert
feels that there would have been no problem, if Board had not issued any
clarification at all. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See our <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5301" target="_blank">Special Column</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Monitoring of scrutiny
assessments by Range Heads - CBDT clarifies - Board instructions do not
restrict Range Heads to supervise their subordinates. </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Instruction No.
2/2006, dated 27th April, 2006, it was stated that the
monitoring of cases under scrutiny by the Range Heads shall be done in
accordance with the provisions of section 144A of the Income-tax Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is brought to the notice of
the Board that placing undue reliance on these instructions, the Assessing
Officers have taken a stand that the Range Heads could not and should not call
for records of cases except for the purpose of issue of instructions under
section 144A of the Income-tax Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board now clarifies that these
instructions do not in any way restrict the inherent
powers of the Range Heads to administratively supervise the work of their
subordinate officers by looking into the records.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2007/instruct0701.htm" target="_blank">INSTRUCTION NO. 1 / 2007, Dated: March
16, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Draconian 32/2006 - AP
High Court also stays order</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember the draconian
Notification No. 32/2006 CENT dated 30.12.2006, which was CBEC's
NEW YEAR gift to the trade, under which a Board Member can freeze Cenvat
credit, deny facility of monthly payment and post a big brother in the factory?
The hyperactive Board had already issued orders doing some of these things and
as predicted by DDT, these are being challenged in various High Courts. The AP High
Court yesterday stayed one such order. The lawyers of this country should be
grateful to the CBEC for giving them new opportunities. I
know a Law firm which has filed writs in several High Courts on this issue.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">No excise duty in
North East - DONER Minister, but where is the
Notification?</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DONER stands
for Development Of North Eastern Region and there is a
minister for that, Mr. Mani ShankerAiyer. The illustrious minister announced yesterday that there
would be no income tax for 10 years and no Excise Duty except on some health
harming substances like tobacco, gutka etc. But he is
perhaps not aware that his more illustrious Finance Minister is yet to notify
the excise exemption. The DONER minister wants to attract
investors to the North East, but will somebody clarify as to why the CBEC is
yet to notify the concessions?</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Elders get elders</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rajya
Sabha is supposed to be our house of elders and the President has nominated
two real elders to the House. 81 year old father of <st1:place
w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place>'s
Green Revolution, Prof. M S Swaminathan
and 78 year old scholar of classical Indian dance and Indian art and
architecture, Kapila Vatsyayan
are the new nominated members of the Upper House. Kapila
had a short stint as member earlier in March 2006, when she resigned on the
issue of office of profit. The youngest member of the House of Elders is just
33 years old while the oldest is 86 years. </span></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government babus want the
Pay Commission to consider a higher retirement age. </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>
<font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><u1:p></u1:p>
</font>
<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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