TIOL-DDT 668 · the untouched capture
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<!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 align="justify"><font size="2"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 668</font><font face="Verdana, Arial, Helvetica, sans-serif"><br> 31.07.2007<br> Tuesday</font></b></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax Returns – today is the last day</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The confusion about IT returns continues to baffle tax payers as the last date for filing the returns closes today. Even the cousin Central Excise department seems to be not all that compliant as today many Central Excise officers realized that though TDS has been deducted for them, their offices do not have a TAN. We are informed that a senior Central Excise officer has no PAN and has not filed any IT return, in spite of regular TDS! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In spite of the Board clarification that the return shall have no attachments, my Auditor confirmed that the ITO insisted on copies of documents. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is the FM keen on making life miserable for the tax payers? What was wrong with the good old Saral? And if changes were required, could they not be done slowly and after field trials. He should have asked Madame Sonia Gandhi and his Prime Minister to fill up the forms. And he should have imposed on this country only those forms which his political and executive bosses could fill up without assistance from professionals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In one of his budget speeches, Dr. Man <st1:PersonName w:st="on">Mohan</st1:PersonName> Singh said, “voting the congress is not only good politics but also good economics” On the same analogy, the new ITR forms are not only bad economics but bad politics. Any one who has filled up any of these forms is sure to vote against the present government. </font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Electronic Furnishing of Return of Income Scheme, 2007 – Notified</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has notified the Electronic Furnishing of Return of Income Scheme, 2007.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Salient Features:</font></b></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Filing of e-Returns:</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. An eligible person being a company or a firm or any other eligible person may, at his option, furnish his return of income or return of fringe benefits for assessment year 2007-08 or any subsequent assessment year, to an e-Return Intermediary who shall digitise the data of such return and transmit the same electronically to a server designated for this purpose by the e-Return Administrator, on or before the due date.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The eligible person shall submit the duly verified Form ITR-V to the Assessing Officer not later than fifteen days from the issue of the provisional receipt for the electronic data received by the e-Return Administrator and the date on which such receipt is issued shall be deemed to be the date of filing the return.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Where Form ITR-V is not submitted within the time prescribed in sub-paragraph (2), the date of submitting Form ITR-V shall be deemed to be the date of filing the return.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Revised Return of Income</font>.-</strong> An eligible person may furnish a revised return of income or of fringe benefits for an assessment year under this Scheme if he has furnished a return of income or return of fringe benefits for that assessment year under the scheme.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Qualifications of an e-Return Intermediary.-</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) An e-Return Intermediary shall have the following qualifications:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) it must be a public sector company; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) a firm of Chartered Accountants or Advocates, if it has been allotted a permanent account number; or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) a Chartered Accountant or an Advocate, if he has been allotted a permanent account number; or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) a Drawing or Disbursing Officer (DDO) of a Government Department.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The e-intermediary should have at least class II digital signature certificate from any of the Certifying authorities authorised to issue such certificates by the Controller of Certifying authorities.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) The e-intermediary should have in place security procedure to the satisfaction of e- Return Administrator to ensure that confidentiality of the assessees' information is properly secured.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) The e-intermediary should have necessary archival, retrieval and, security policy for the e-Retums which would be filed through him, as decided by e-Return Administrator from time to time.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) The e-intermediary or its Principal Officer must not have been convicted for any professional misconduct, fraud, embezzlement or any criminal offence by any court of law or by any professional body, as the case may be.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Authorisation of e-Return Intermediary.</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) A person qualifying to be appointed as an e-intermediary shall apply to the Registrar, along with such application fee, as may be decided by e-Return Administrator, from time to time.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Upon receipt of the application, the Registrar shall verify that the application is complete and duly supported by necessary documents.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) In case of any defect in the application, the Registrar shall intimate the same to the applicant for removing the defects within the period specified in such intimation.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) Applications not satisfying the qualifications specified in paragraph 5 shall not be processed further.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) In case of a valid application the Registrar shall carry out due diligence of the applicant.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(6) The Registrar shall transmit the application and the 'due diligence' report online to the e-Return Administrator and thereafter the e-Return Administrator may issue an appointment order along with the e-Return Intermediary Identification Number (ERIIN) and password to act as an e-Return intermediary.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(7) The appointment of the e- intermediary shall be valid for a period of two years and may be extended for a further period of two years.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(8) The Registrar, including his employees, agents, franchisees, etc., shall maintain confidentiality of any information that comes to their possession during the course of implementation of this scheme and shall not part with any such information except with the prior permission of the e-Return Administrator.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Procedure to be followed by the eligible person.</font>-</strong> An eligible person opting to furnish his return of income under this scheme shall -</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) ensure that his return of income or fringe benefits falls under this scheme; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) approach and give his consent to any one of the e-Return Intermediaries to act as his agent for the purpose of furnishing his e-Return for the relevant assessment year.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Procedure to be followed by e-Return Intermediary.-</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) An e-Return Intermediary shall receive the paper return of income, duly verified by the eligible person or shall prepare the return of income on the basis of the documents furnished by the eligible person, as the case may be.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The intermediary shall upload the completed return of income, after validation of permanent account number, in the format specified by the e-Return Administrator, using his e-Return Intermediary Identification Number (ERIIN).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) The uploaded returns shall be accepted after necessary validations. In respect of each accepted e-return, a duly filled Form ITR-V shall be generated by the system as a provisional receipt which shall be transmitted to the intermediary.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) The intermediary shall deliver the acknowledgement receipt of the Form ITR-V to the concerned eligible person if the Form ITR-V is collected by him for submission to the Income-tax Department.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) The date of issue of the provisional receipt shall be deemed to be the date of filing of return of income if the Form ITR-V has been filed with the Assessing Officer within fifteen days from the date of issue of the provisional receipt. If the Form ITR-V is filed after fifteen days from the date of uploading the data then the date of filing the Form ITR-V will be the date of filing the return of income.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>P<font color="#663399">rocessing of e-Return. –</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) The e-Return shall be processed on priority basis.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The refund, if any, due to the assessee shall be either credited by the assessing officer directly to his bank account, using the Electronic Clearing Services of the Reserve Bank of India or be directly sent to the assessee.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Functions and responsibilities of e-intermediary.-</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The e-Return Intermediary shall </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. ensure that the assessee is an eligible person under this scheme;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. ensure that the assessee has quoted a correct and valid permanent account number;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. ensure that the particulars of advance tax, self assessment tax and tax deducted at source are in accordance with the documents enclosed;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. ensure that the paper return of income has been properly filled in and duly verified by the assessee, and the enclosures required to be filed with the return of income are enclosed;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. ensure accuracy of the data entry while transcribing the return of income and during its transmission;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. ensure that the electronic portion of the return of income is transmitted on or before the due date for filing the return of income;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. ensure that the paper return Form-ITR-V is filed with the assessing officer having jurisdiction over the concerned assessee;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. retain for a period of one year from the end of the relevant assessment year the electronic data of the return of income and the information relating to the provisional receipts issued in respect of the returns filed through it; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. provide to the assessee a paper copy of the e-return submitted by e-intermediary and the acknowledgement receipt of Form ITR-V filed to the Assessing Officer;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10.maintain confidentiality of the information that comes to his possession during the course of implementation of this scheme and shall not part with any such information to anyone, except with the prior permission of the assessee or the assessing officer; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11.ensure that all his employees, agents, franchisees, etc., adhere to the provisions of this scheme;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12.promptly inform the Registrar of any change in the particulars given in the application filed by it for registration;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13.abide by the instructions issued by the e-Return Administrator, from time to time, for proper implementation of this scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">e-Return Administrator</font>.- </strong>The e-Return Administrator shall</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for the day to day administration of the scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) ensure compliance by the e-Return intermediaries with he technical requirements of the scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) be responsible for evolving and implementing appropriate security, archival and retrieval policies for proper and secure implementation of this scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the advice from tax experts is, <b><font color="#663399">Don't file the e-return until and unless it is mandatory.</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2007/it07not210.htm" target="_blank">NOTIFICATION NO. 210/2007., Dated: July 27, 2007</a></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DGFT clarifies that DEPB is valid only till 31.3.2008</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">DGFT has amended the handbook of Procedures to stipulate that </font></strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1. While the HBP will be valid till 31.3.2009, DEPB scheme shall continue till 31st March, 2008.</strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2. Execution of Bank Guarantee / Legal Undertaking for Advance Authorisation/DFIA and EPCG Authorisation - Before clearance of goods through Customs, Authorisation holder shall execute a BG / LUT with Customs Authorities. In such cases, RA shall endorse the following condition on the licence / Authorisation: “BG / LUT as applicable to be executed with concerned Customs Authorities”.</strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3. Fulfilment of export Obligation – DFIA – Furnish documents in ANF 4F in support of fulfilment of EO.</strong></font></p> <p align=justify><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2007/dgft07pn030.htm" target="_blank">DGFT PUBLIC NOTICE NO. 30 (RE-2007)/2004-2009., Dated: July 26, 2007</a></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Import of Rough Marble Blocks/Slabs for the year 2007-08 – DGFT amends circular</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was only on 26<sup>th</sup> July that DGFT issued a Policy Circular on import of marble fixing the floor price at US$ 350 per MT. Now the price is reduced to US$ 325.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2007/dgft07cir002.htm" target="_blank">DGFT CIRCULAR NO. 02 (RE-07)/2004-2009., Dated: July 30, 2007</a></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner – tomorrow's cases</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><b><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_31.gif" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left"></b></b></b></font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No discretion for reducing mandatory penalty - Penalty and interest liable even if duty is paid before issue of SCN - RINL is no more good law : Bombay HC </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is celebrations time for Revenue- the mandatory penalty and interest is once again upheld by yet another High Court. THIS should be music to the ears of Revenue as the High Court held that the decision of the Supreme Court in RINL is no more good law!</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The substantial questions of law before the High Court were:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) Whether there is any discretion with the authorities to exempt penalty under Section 11-AC and interest under Section 11-AB of Central Excise Act, 1944, while confirming the demand for evaded excise duty?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Whether such exemption can be justified merely because the evaded excise duty is paid before issuance of show cause notice by the department?”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The details of the assessee and the case are not important. The point is the respondent assessee paid the duty before issue of Show Cause Notice and the Tribunal held that no penalty and interest are payable.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b></b></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Parallel invoices and clandestine removal - statements of Director and traders corroborated - charges proved - duty and penalty confirmed : CESTAT </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE appellant's factory was visited by Central Excise officers on 03.01.00. Search of the factory resulted in recovery of 15 nos. of double set/parallel central excise invoices from the drawer of the table of the excise clerk. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Sub-Section 1A inserted in Sec 5A of Excise is not clarificatory in nature - assessee could forego exemption and pay duty prior to May 13, 2005 : Tribunal </font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">PAYMENT of duty on volition is a controversial issue that was supposedly put to rest by the Finance Act, 2005. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central government inserted a new sub-section 1A w.e.f 13.5.2005 which reads - "For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay duty of excise on such goods." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unlike all those earlier instances where such opening words couched with uncertainties galore made appearances as an Explanation, this time, it took the form of a sub-section. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Fluctuation in foreign exchange rate - change in liability - Deduction for such liability to be allowed in the year of fluctuation on accrual basis : Delhi HC </font></b></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE basic issue before the High Court was whether any increase or decrease in liability on account of fluctuation in rate of exchange of foreign currency as per the exchange rate prevailing on the last date of financial year is to be allowed as deduction in the year in which fluctuation occurred or when the liability is actually paid. While the assessee wanted to take the liability into account in the year of fluctuation, the revenue thought otherwise treating the same as notional liability. The Court finally decided in favour of the assessee by holding that such liability is to be taken into account in the year of fluctuation itself on accrual basis. </strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for the judgements</u></b></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></font></p> </body> </html>