TIOL-DDT 677 · the untouched capture
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<p align="justify"><font size="3"><b><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 677</font></b><font face="Verdana, Arial, Helvetica, sans-serif"><b></b></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
13.08.2007<br>
Monday<u1:p></u1:p></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Government issues new Income Tax Welfare Fund Rules - employee becomes official!</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has superseded the Income-tax Welfare Fund Rules, 1998 with the Income-tax Welfare Fund Rules, 2007, but the changes hardly make any difference. See the new Rules and how they are different from the old rules. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Purposes of the Fund.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The underlying purposes of the Fund shall be as under:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Promotion of welfare, recreation and other outdoor activities for the officials, including a sense of adventure. The welfare activities shall include setting up of recreation clubs, libraries, scholarships for children of <b><font color="#663399">officials</font></b><font color="#663399">,</font> opening of creches, providing vocational training to spouses of <b><font color="#663399">officials</font></b>, arrangements of subsidized transport facility for the <b><font color="#663399">officials</font></b>, providing more amenities in the departmental canteens, etc.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The only change here is that the <i>official</i> was an employee in the earlier rules. Is there any change in status? </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) To provide for financial help during contingencies like death resulting from accident or from injury suffered or from a natural cause during and while the<font color="#663399"> <b>official</b></font> is actually engaged in performing official duties. The benefits under the scheme shall continue to be available even after the official has ceased to be so employed, if death/injury can be attributed directly or indirectly to an event which occurred where the <b><font color="#663399">official</font></b> was engaged in search, survey or any other official duty.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Same <i>official </i>was employee</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) To provide for ex-gratia financial help, at the discretion of the Governing Body, to the family of officials in case of death of the official while in service but not in the course of performance of official duty.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This is a new addition. Maybe this will take care of the aid to Mumbai blast victims and perhaps all such future calamities.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Providing different forms of medical maintenance for emergencies and serious distress to officials and members of their families not fully reimbursed under the CGHS reimbursement rules and to provide for high risk insurance cover to officials involved in <b><font color="#663399">Survey and Search & Seizure operations.</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This was operational staff earlier</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) construction/hiring/leasing /furnishing /maintenance of holiday homes in places of tourist/pilgrimage interest and departmental guest houses for the use of <b><font color="#663399">officials</font></b><font color="#663399">.</font></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>It was departmental staff earlier.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>e</i>) Advancement of supplemental loans to officers/staff of the department for construction/hiring/leasing of residential complexes which could be leased for the use of departmental staff so long as they are in service.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This is missing in the new rules. God and Board know why.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) Any other scheme or measure intended for the promotion of welfare and improving performance of the <b><font color="#663399">officials</font></b>.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This was <i>staff</i> earlier</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) Any other purpose for the welfare of <b><font color="#663399">officials</font></b><font color="#663399">,</font> including removal of difficulties caused by natural calamities like floods, earthquakes, drought, etc.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Sources of Fund.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3(1) The corpus of the fund shall be Rs.100 crores (Rupees One hundred crores) which shall be contributed by the Government.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Accretions to the Welfare Fund shall be made from contributions as under:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) 10% of the excess of amount received after auction over consideration paid by the Government on sale of properties acquired by the Government under Chapter XX-C of the Income-tax Act (pre-emptive purchase of property) or under any other provision of similar nature that may be introduced under the Income-tax Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) 10% of the reward sanctioned to the officers and staff of the Income-tax Department under any established reward scheme.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">(iii) any other mode as may be prescribed.</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This is a new mode, but what is it?</b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Disbursable Fund.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 A<b>. <font color="#663399">The corpus fund shall be placed in an interest-bearing account. The interest accruing on the corpus fund, and the accretions as per para 3, shall be used for meeting the expenditure for any of the purposes listed in Para 2 .</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This is a new provision.</b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Administration of the Fund.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4(1). The Fund shall be centrally administered by a Governing Body consisting of :-</font></p>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chairman, CBDT</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Convener</font></td>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Member (Revenue) </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Member</font></td>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Member (Personnel)</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Member</font></td>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Financial Adviser/his nominee</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Member</font></td>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CIT(C&S), CBDT </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Member</font></td>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Director (Headquarters), CBDT</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Member Secretary</font></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) There shall be an Executive Committee headed by the DIT (DOMS), CBDT and including an officer of the rank of Commissioner of Income-tax from each of the zones viz., North, South, East, West and Mumbai, as nominated by the Governing Body, and also including a representative each of the Indian Revenue Service Association, the Income-tax Gazetted Officers Association and the Income Tax Employees Federation.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) The DIT (DOMS) shall also be the convener of the Executive Committee, which shall meet once every three months.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">There are some changes in the Committee.</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Sponsoring of proposals.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.(1) Specific proposals for conferring benefits of the Fund to the beneficiaries shall be sponsored by respective Chief Commissioners/Directors General of Income-tax for the officials on the recommendations of the Advisory Committee constituted at CCsIT/DGsIT level. joint Secretary (Administration), CBDT shall sponsor the beneficiaries working in CBDT or in any other Ministry/organization, but belonging to the Income-tax department.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Each proposal received from the CCsIT/DGsIT/Joint Secretary (Administration), CBDT/beneficiary shall be considered by the Executive Committee for making appropriate recommendation to the Governing Body.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Almost no change</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Sanctions and disbursements.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6(1) The approval and financial sanction of the Governing Body shall be conveyed to the CCsIT/DGsIT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The decision of the Governing Body in this matter will be final.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) DIT(DOMS), CBDT will disburse the funds as approved by the Governing Body.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Accounting Procedure.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The Chief Controller of Accounts, CBDT shall separately issue detailed instructions regarding the accounting procedure in respect of receipts to and expenditure from the Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. All sanctions and vouchers in respect of this Fund shall be kept in a separate general file to be maintained by the DIT(DOMS).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">The accounts of the fund shall be maintained by a Special Unit created for this purpose. (old)</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Audit.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The accounts will be subjected to statutory audit once in a year by the C&AG.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Amendments</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Any amendment/insertion to these Rules shall be made only after the prior approval of the Central Board of Direct Taxes.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>This is a new provision.</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/it07not217.htm" target="_blank">NOTIFICATION NO. 217/2007, Dated: August 8, 2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>India among the largest global economies -- Threats and Opportunities - call the left's bluff!</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Speaking at a seminar 'Next 60 years, Commerce Minister Kamal Nath said that owing to its democratic nature, the government had to tread carefully on the path of transformation and keep the larger acceptability of people as the benchmark for government action. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wipro chairman Azim Premji said that when it came to transformation, the government had put a fair amount on the table. "They have set it into motion by bringing in various policies. It is also up to the corporate sector to take this forward and translate it into inclusive growth." Premji added, "It is a mixed bag, except for recent jerks in West Bengal, the Left government there has been extremely progressive. One should not be carried away by some articulate people. If I were the prime minister, I would call the Left's bluff."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bharti Group chief Sunil Mittal said that "It is much tougher than we had expected as the infrastructure in rural areas is very weak. While the last few decades have been good in creating self-sufficiency, the agenda over the next few decades has to be filling in the vital missing links like cold chains, rural transport,". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mukesh Ambani, CMD, Reliance Industries said it "The problem is not with people and production but with distribution. There is a big opportunity and need to create a new development model in agriculture, for which the corporate sector will have to win farmers' trust".</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Inverted IPS</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><b><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ips.jpg" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left"></b></b></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a picture of a Police Commissioner, the HINDU carried on Friday. Do you observe anything odd? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just look at the shoulder badge<font color="#663399"> <b>IPS</b></font>, the officer has. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is inverted and reads as ...</font></p>
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<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><b><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ips_ips.jpg" alt="Legal Corner Icon" width="191" height="66" hspace="5" border="0" align="left"></b></b></b></font></td>
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<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">From our Legal Corner - tomorrow's cases</font><u1:p></u1:p></b></font></p>
<p><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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u1:p></u1:p><font color="#FF0000">Income Tax<u1:p></u1:p></font><u1:p></u1:p></strong></font></p>
<p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Can Income Tax file appeal in cases below monetary limit prescribed by CBDT? It can, provided issue is covered by SC, HC orders in other cases; Expenditure on repair of guest house not allowable u/s 37(4) : Bombay HC </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ALTHOUGH the issue has gone to the Constitution Bench of the Supreme Court, the settled law is that the Circulars and Instructions issued by the Revenue Boards are binding the department. One such Circular in the case of Income Tax lays down monetary limits for filing various appeals, and unless the issue involves a sum which crosses the threshold limit, an appeal can't be filed in that case. But the said circular itself lays down an exception to this in cases which involve a substantial question of law or cases where the same question of law will arise repeatedly in which case an appeal can be filed even if the revenue involved is below the prescribed limit for filing an appeal. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise </b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Duty on yarn can be paid at the time of removal of fabrics and reversal of credit amounts to not taking Credit - Supreme Court</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Grey fabrics manufactured by the assessee were exempted, if duty was paid on the yarn and no Cenvat Credit was taken. Assuming credit was taken and yarn was manufactured which was in turn used in the manufacture of fabrics, can exemption be claimed for the fabrics and if so, how?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The notification has two conditions</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Duty has to be paid on yarn, and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. No credit should have been taken </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the time of clearance of the fabric, the assessee paid duty on the yarn and reversed the credit. Has the assessee complied with the conditions? Read on ...</font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Credit is allowable of service tax paid by Commission agents since they prima facie promote sale of manufactured goods : Tribunal </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE brief facts of the case are that the applicant is engaged in the activity of manufacturing as well as trading of footwear and its accessories. In addition to manufacturing and selling such footwear, the applicant also trades in shoes manufactured by other manufacturers such as Floresheim, Red Tape, Lee Cooper etc. The bulk of its business (approximately 70%) comprises of goods manufactured and sold by it and only small portion of its turnover relates to the trading activity<b>. </b></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs </b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Imports - A collection of Wild animals of the same species is not a zoo for the common man, who looks for a variety of animals in zoo - Animals imported by an amusement park confiscated and duty demanded rightly - CESTAT</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THERE used to be a dolphinarium in Chennai where you were told that dolphins would do all kinds of tricks for you. Once you bought a hefty ticket and went inside, you were told that the dolphins are not in a mood to entertain you today, but we have better actors - sea lions. The sea lion would swim fast in the pool and get a ball thrown in there, dance to music, appreciate your applause and perform like in a circus. </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>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u1:p></u1:p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u1:p></u1:p></b><font color="#FF6666">Until Tomorrow with more DDT</font></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p>
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