TIOL-DDT 763 · the untouched capture
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<p><font size="2"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 763 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
17.12.2007 <br>
Monday </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
Tax return can be filed by 29.02.2008 - superfast CBDT - It is not for
the Court to decide what form the return is to be filed in</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the CBDT had prescribed new forms in place of the Saral forms, some High Courts had directed the Income Tax Department to accept the old returns. The Supreme Court on 14.12.2007 set aside these orders and the Board in lightening speed which should be a record for a government department, issued instructions allowing those who had filed their returns in the old format to file them in the new forms by 29.02.2008. This extension is applicable to assessees who have </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. filed the return of income for the A.Y.2007 -08 on or after 14 th May, 2007; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. filed the return in a form other than one of the forms notified for assessment year 2007-08( ITR -1 to ITR -8). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And these assessees would not be liable to any interest or penalty if they re-file their returns in the forms prescribed for the assessment year 2007-08, on or before 29.02.2008. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Whether the Return should be filed in a particular Form is not the business of the Court</font>. </strong> It is for the statutory Authority to decide the same. Be that as it may, as the original time for filing the Return has already expired, the learned Additional Solicitor General, appearing behalf of the Union of India, stated that the time for filing the Return in the prescribed Form is being extended to 29th February, 2008, in relation to all categories of assessees. This being the position, the impugned order is set aside. All the assessees, who have already filed Return in Form Saral 2-D, pursuant to the impugned order passed by the Allahabad High Court or any other High Court in the Country, are required to file Return in the prescribed Form by 29th February, 2008, to which date time is going to be extended. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6515">breaking
News on 14 th</a> and also see the <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2007/2007-TIOL-229-SC-IT.htm" target="_blank">Supreme Court order. </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise registration - proprietors, partners and firms - CBEC plans to react to CESTAT order - in due course </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the CBDT is moving at such unbelievable speed, the CBEC remains at the normal bureaucratic inertia as the following incident would show. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a landmark judgement, President Abichandani of the CESTAT observed in the case of M/s VASHIST ISPAT PRODUCT - <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-992-CESTAT-DEL.htm" target="_blank">2007-TIOL-992-CESTAT- DEL </a></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Registration can be done only of such prescribed person, and not of a sole-proprietary concern, which by itself is not a person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.<font color="#663399"> <strong>The practice of giving registration in the name of a proprietary concern and not the person, who is the proprietor, is contrary to the provisions of the said Act and is capable of perpetuating frauds due to the real name of the person concerned, being camouflaged by the assumed proprietary name.</strong></font><strong> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. None of the provisions of the Act or the Rules warrants recognition of mere sole proprietary name as manufacturer or assessee, who would be liable to pay the duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Only a person living or juristic can be registered for the purposes of the Act and will be liable to assessment and payment of duty irrespective of any name/names that he may adopt for doing the proprietary business. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. All the excise registrations and assessments under the Act and the Rules are required to be done in the name(s) of the persons concerned even when they run their proprietary business in different names. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In fact, the practice of registering manufactures in the name of proprietary concerns, appears to have been unwittingly recognized by a seemingly innocuous but a most damaging instruction in note 5 which has crept in the prescribed Form A1 , which was substituted w.e.f . 1.10.2002. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The said form is prescribed for application for central excise registration, in the context of Rule 9 of the Central Excise Rules, 2002. Surprisingly, though Section 6 of the Act clearly contemplated registration of a person who is engaged in the production or manufacture of excisable goods, the newly introduced instruction no. 5 of the proforma application A1 requires that, <strong><font color="#663399">name of the registrant should be the name and style in which the registrant is likely to carry out the business. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. This shady instruction 5 was wholly uncalled for and is contrary to the scheme of the Act and the Rules, and is capable of perpetrating mischief and fraud by shielding the names of the real persons who are engaged in the manufacture of excisable goods and are required to be registered under Section 6 of the Act read with Rule 9 of the Central Excise Rules, 2002, which refer to the registration of the person who produces or manufactures the excisable goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. There was absolutely no scope for registering the name of any "non-person"; and the details of the properties, persons, directors as the case may be, were also required to be given. In the same way, even in the still earlier proforma in Form R1 under the Central Excise Rules of 1944, the application for registration was required to be made by the person in whose name the registration certificate was required to be issued. The application was to be made in the name of the person (living or juristic) applying and not in any other name. Thus, there never was any possibility of giving excise registration in the names of sole-proprietary concerns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. <strong><font color="#663399">In view of the substantive provisions of Section 6 of the said Act and Rule 9 of the said Rules, instruction No. 5 in the proforma application Form A1 is ultra vires the scope of the said statutory provisions. All excise registrations and assessments are required to be done in the name(s) of the persons concerned even when they run proprietary business in different names. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. <strong><font color="#663399">It will be for the Parliament, the rule making authority, the Board and the excise officials to recognize the potential mischief and large scale abuse that is caused by allowing the excise registrations and doing assessments in the names of proprietary concerns and not in the names of the real persons who are the manufacturers and assessees, and take appropriate remedial measures. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Registrar was directed to forward a copy of this judgment to the Government of India, Ministry of finance, North Block, New Delhi . </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We carried this order of the CESTAT on July 22, 2007 . </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Again Justice Abichandani speaking for the Larger Bench over which he presided, observed in the case of <strong>GOPAL INDUSTRIES LTD - </strong><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-932-CESTAT-DEL-LB.htm" target="_blank">2007-TIOL-932-CESTAT- DEL -LB </a></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The issue involved in this case is whether outgoing partners are liable to pay excise duty assessed against a registered partnership firm, which was dissolved. Having regard to the importance and wide repercussions of the question involved the appeal has been placed for disposal before this Larger Bench. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There is no dispute about the fact that there is no reference express or implied in the CentralExcise Act or the Rules for assessment of a partnership firm, unlike in the provisions of the Income Tax Act in which Section 2(31) provides an inclusive definition of "person", which includes a "firm". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The assessment of partnership firm under the Income Tax Act is separate from the assessment of individual partners as regards their own income. Section 189(1) of the Income Tax Act provides that when a firm is dissolved, the assessing officer shall make an assessment of total income of the firm as if no dissolution had taken place. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. There is no such provision under the Excise Act and the Rules treating a partnership firm as a separate assessable entity. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Excise registration is done of any "prescribed person" as provided by Section 6 of the Act, and the word "assessee" in Rule 2(d) of the Central Excise Rules means any person who is liable for payment of duty assessed or a producer or a manufacturer of excisable goods or a registered person of a private warehouse including his authorized agent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Since no provision has been made in the Excise Act or Rules made thereunder, treating a partnership firm as a distinct assessable entity, every partner would be liable jointly with all other partners and also severally, for all acts of the firm, done while he is a partner, as provided by Section 25 of the Indian Partnership Act, 1932. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We carried this judgement also in July 2007. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously, the good president had pointed out that there was something terribly wrong with the Instruction No. 5 in the Central Excise application for registration. Obviously the Central Excise registration has to be given to a person and not a firm or concern which is not a juristic person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has issued a draft amendment proposing suitable amendments in the rules to rectify this lapse - five months after we carried the orders! See the speed difference between the Boards. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is an opinion in Revenue circles that the Tribunal is out and out for the assessee which is not true. Judges like Justice Abichandani were the best advocates for Revenue and got it out of the stupid mistakes committed by the babus in tinkering Law and even suggested changes - which take months if not years to be carried out because of the proverbial red tape! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you have any comments on the draft amendment mail them to <a href="mailto:hema.priya@nic.in">hema.priya@nic.in </a> by 31.12.2007 </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=31&filename=notification/excise/2007/draft_circular.htm" target="_blank">Board's draft amendment. </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden <font color="#663399" size="5">tiol</font> - Monday's cases </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><strong><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></strong></b></font></b></font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appeals - condonation of delay - Commissioner (Appeals) cannot condone delay beyond 30 days : Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issue before the Supreme Court was the power of the Commissioner (Appeals) to condone the delay beyond 30 days for filing appeals. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner had dismissed the appeal only on the ground that it was filed after 21 months of the date of service of the original order and the appellate authority did not have power to condone the delay beyond the period of 30 days from the date of expiry of period of 60 days prescribed for filing the statutory appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT took the same view and so did the High Court and the appellant is in the Supreme Court. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GTA Service - Cenvat Credit - It is convention that when matter is referred to Larger Bench, Stay of recovery of amount is granted and there is no reason to deviate from such convention : Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IN the case of India Cements Ltd. [ <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-1248-CESTAT-BANG.htm"><font size="1">2007-TIOL-1248-CESTAT-BANG</font> </a>], the Tribunal came to the conclusion that the transportation from the factory to the destination of the buyer becomes an 'outward transportation' & accordingly in terms of Rule 2(1)(ii) [First limb], this service becomes an 'Input Service' meaning to say that credit was available. However, since this view was at variance with the interpretation carried by the co-ordinate Bench of Tribunal in the case of Gujarat Ambuja Cement [ <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-539-CESTAT-DEL.htm"><font size="1">2007-TIOL-539-CESTAT-DEL </font></a>], the matter was referred to the Larger Bench for resolving the issue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably,
the assessee Inox Air Products [ <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-1829-CESTAT-MUM.htm"><font size="1">2007-TIOL-1829-CESTAT-MUM </font></a>],
whose case we had reported earlier, were unfortunate when their appeal, on
a similar issue, had come before the WZB because they were ordered to make
a pre-deposit of Rs 1,25,000/-. This despite the fact that the Tribunal has
in the case of Capital Paper Mills [ <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2002/2002-TIOL-384-CESTAT-DEL.htm"><font size="1">2002-TIOL-384-CESTAT-DEL</font> </a>]
held that when the matter is <em>sub judice </em>before the Larger Bench,
waiver of pre-deposit of duty and Stay of the recovery is required to be
granted & that
this was the practice in such cases as mentioned by the Tribunal in the case
of Uni Products (India) Ltd <b>[</b></font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2002/2002-TIOL-388-CESTAT-DEL.htm">2002-TIOL-388-CESTAT-DEL</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>]</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tax paid by employer for employee is perquisite which is not provided by way of monetary payment - Not includible in total income of assessee - taxes paid by employer can be added only once in salary of employee - tax on such perquisite is not to be added again : ITAT Special Bench </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE Special Bench has been constituted to dispose of the following issue: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Whether tax paid by the employer on the income of the assessee is entitled to exemption u/s 10( 10CC ) of the Income-tax Act?" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After the introduction of clause ( 10CC ) in section 10 w.e.f . 1.4.2003 by the Finance Act, 2002, it was claimed by the assessee as an employee that where the employer has paid tax on the salary of the employee, the tax on such tax as perquisite is exempt under the above provision. In other words, it is not possible to have double grossing up. However, Delhi Bench of the Tribunal in the case of M/s BJ. Services Co. Middle East Ltd did not accept this contention of the assessee and held that tax paid by the employer was part of salary and, therefore, tax on tax is not exempt and is liable to be added for computing total income of the assessee employee. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT </strong></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>
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