Delhi HC upholds Constitutional Validity of PMLA Clause [Read Judgment]

The Delhi High Court has upheld the constitutional validity of the second proviso to Section 5 (1) of the Prevention of Money-laundering Act, 2002 (PMLA).

The division bench was hearing 19 pleas, including that of former Himachal Pradesh Chief Minister Virbhadra Singh’s wife Pratibha Singh, daughter Aprajita Singh, and mining baron and former Tirumala Tirupathi Devasthanams (TTD) Board member J Sekar Reddy and his business associates S Ramachandran and K Rethinam. wherein the petitioners challenged the constitutional validity of section 5(1) second proviso, which deals with the power of an officer not below the rank of deputy director in the ED to provisionally attach a person’s property suspected to be brought from proceeds of crime, if he has “reasons to believe” that not doing so could frustrate the PMLA proceedings.

All the Petitioners are facing proceedings under the PMLA as a result of an Enforcement Case Information Report (ECIR) filed under Sections 3 and 4 PMLA leading to the filing of original complaints (OC) under Section 5 (5) PMLA. Consequently, provisional attachment orders have been issued under Section 5 (1) PMLA against the Petitioners. The Adjudicating Authority (AA) has served them with show cause notices (SCNs) under Section 8 PMLA. The challenge in these petitions is also, therefore, to the OCs, the SCNs, the provisional attachment orders and to all further proceedings in the aforementioned ECIR.

A division bench comprising of Justice S. Muralidhar and Justice I.S Mehta observed that, “The second proviso to Section 5(1) PMLA is not violative of Article 14 of the Constitution of India; the challenge in that regard in these petitions is hereby negative”.

Th Court also observed that, The expression reasons to believe‘ has to meet the safeguards inbuilt in the second proviso to Section 5(1) PMLA read with Section 5(1) PMLA. The expression reasons to believe‘ in Section 8(1) PMLA again has to satisfy the requirement of law as explained in this decision. There has to be a communication of the ‗reasons to believe‘ at every stage to the noticee under Section 8(1) PMLA.

The noticee under Section 8(1) PMLA is entitled access to the materials on record that constituted the basis for reasons to believe‘ subject to redaction in the manner explained hereinbefore, for reasons to be recorded in writing, the Court also said.

While dismissing the petition, the Court also said that, “There can be single-member benches of the AA and the AT under the PMLA. Such single-member benches need not mandatorily have to be JMs and can be AMs as well”.

If SCN against main Noticee is Set Aside, It would Automatically Invalidate the Proposals against Co-Noticees: CESTAT [Read Order]

The Chennai bench of the Customs Excise and Service tax Appellate Tribunal (CESTAT), recently held that if a Show Cause Notice (SCN) against main Noticee is set aside, it would result in deleting the proposals against the co-noticees also.

In the instant case, the Directorate of Revenue Intelligence (DRI), after investigation, proposed to impose penalty on the main appellant, an exporter, on ground that they had grossly over invoiced the value of the export goods with an intention to avail ineligible drawback benefits.  It was also proposed to impose penalty on the other persons, such as, the CHAs, shipping lines, freight forwarders etc. by finding that this alleged fraud was facilitated by them.

Before the Tribunal, the appellants relied on the decision of the Tribunal in Monte International Vs CC Amristar wherein it was held that show cause notices issued by D.R.I for recovery of erroneously granted drawback in terms of Rule 16 of the Drawback Rules cannot be held as valid show cause notices and that D.R.I officers have no jurisdiction to issue such SCNs.

On the basis of the earlier order, the bench held that the Show Cause Notices issued by the DRI is without jurisdiction and therefore, is liable to be quashed.

Revenue further argued that the proposal for imposition of penalty on the main appellants is even if held as invalid, it cannot adversely affect the proposal for imposition of penalties on the other co-noticees.

Rejecting the arguments, the Tribunal noted that the Show Cause Notice has to be viewed in its entirety and cannot be vivisected as may be convenient for the Revenue. “Thus, if a show cause notice is found as not valid or issued without jurisdiction in respect of the main protagonist, the very same SCN cannot be held as sustainable for other noticees like the appellants herein.  Any attempt for such vivisection is akin to putting the cart before the horse.   This is because the penal consequences on alleged abettors to the alleged offence under the Customs Act or the Rules made there under or will be directly proportional to the adjudication fortunes of the main players. Any contrary proposition would lead to a ludicrous situation wherein the main offenders are left unscathed because of the SCNs being not valid or issued without jurisdiction, but other smaller players like the CHAs, shipping lines etc., who were also noticees in the same SCNs, getting penalized for alleged negligence or for abetting the main offender. This is certainly not the intention of the law. Moreover, when the Tribunal is hand tied   to determine the liability arising out of the main offence, due to the SCN being void, the liability for abetting the offence cannot be adjudged or sustained.”

ITAT Quashes Re-Assessment since Service of Notice by Affixture was done at a Wrong Address [Read Order]

Kolkata bench of Income Tax Appellate Tribunal (ITAT) recently quashed the re-assessment under section 147/148 of the Income Tax Act since service of notice by affixture was done at a wrong address.

In this case, the Assessing Officer (AO) issued a notice under Section 148 of the Income Tax Act 1961 during the assessment proceedings and without concluding that proceedings again a second notice issued under section 148 of the Income Tax Act by the CIT (A) to the same assessee for the purpose of re-assessment proceedings.

The assessee company was on appeal before the tribunal by challenging the service of secondly issued notice. And the assessee contended that the secondly issued notice by affixture was done at the old or wrong address hence the same is not valid still the assessee does not has any liability on the said notice.

AO stated that he received the assessment records from the jurisdictional AO only in 2003 following restructuring in the department. Hence, these reasons recorded are without reference to the material available in the assessment record. Hence, there is non-application of mind.

After considering the rival submissions of both the parties the tribunal bench comprising of Judicial Member S.S. Viswanethra Ravi and Accountant Member J. Sudhakar Reddy observed that the assessee’s registered office was not at the place on which service of affixture was done by the Inspector of Income-tax. The bench further found that when service is to be done by affixture the responsible authority should at least enquire whether the assessee resides in this premises or not or whether this is the registered office of the assessee company. “But in the present case it is clear that the affixture was done at a wrong address. Thus, there is no valid notice of the second 148 notice,” the bench said.

RBI Notifies Interest rates for Small Savings Schemes [Read Notification]

The Reserve Bank of India (RBI), last day, notified the Interest rates applicable for Small Savings Schemes.

On 27^th December, a circular was issued by the Finance Ministry prescribing the rate of interest applicable to various small saving schemes such as savings deposits, Time deposits, Recurring deposits, Sukanya Samridhi Account Scheme etc., for the fourth quarter of financial year 2017-18 starting 1^st January 2018 to 31^st march 2018.

As per the circular, the interest rate for most of the savings schemes was reduced.

The RBI Notification said that “The contents of this circular may be brought to the notice of the branches of your bank operating Government Small Saving Schemes for necessary action. These should also be displayed on the notice boards of your branches for information of the subscribers to these Schemes.”

VAT on Compressed Natural Gas reduced in Uttar Pradesh

The Uttar Pradesh Government, on Tuesday proposed to reduce the rate of Value Added Tax (VAT) on Compressed Natural Gas (CNG) to five per cent. The current rate applicable to CNG in the State is ten per cent.

Earlier, States like Delhi and Gujarat reduced the tax rate applicable to compressed natural gas.

The decision will be a major relief to a host of industries dependent on compressed natural gas (CNG). Some industries including glass, ceramics, chemicals and textiles, among others, Ceramic industries, which are heavily dependent on CNG for their production units will also be benefitted.

Cash Transaction between Close Family Members for giving a support and help not amount to ‘Loan’ u/s 269SS: ITAT Deletes Penalty [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata bench on Wednesday held that cash transaction between close family members for giving a support and help would not attract penalty under section 269SS of the Income Tax Act, 1961.

The assessee, in the instant case, accepted a cash loan of Rs. 4,00,000/- from his son. Out of this, he repaid rs. 1,50,000/-. Assessee repaid the loan to his another son Sri Indranil Banik Mazumder at Rs. 2,25,098/- and also repaid the loan to his wife Smt. Sandhya banik Mazumder at Rs.54,928/.

The Assessing Officer imposed the penalty under sections 271D and 271E of the Income Tax Act, 1961 on the assessee by observing that the assessee has accepted the loan in cash and paid the loan in cash.

On the second appeal by the assessee, the bench observed that all these transactions are between husband and wife, and between father and son, being a close relative of one family. The bench also notes that assessee is a salaried employee and not a businessman.

“Therefore, based on the facts narrated above, these transactions do not fall within the ambit of sections 269SS and 269T of the Act and for that, we rely on the judgment of coordinate Bench in the case of Anant Himatsingka and Manisha Prakash Amin (supra).To support the family members, the money has been given by the assessee to his son/wife. This is simply a transfer of money from one family member to another family member to support day to day expenses, educational expenses and other family expenses. Going through the facts of case before us, we are of the view that the transaction between son and father and wife and husband, for giving a support and help, in law, is not a loan or deposit in stricter sense of section 269SS of the Act and it is only a financial support, therefore, penalty imposed by the Assessing Officer and confirmed by the ld CIT(A) needs to be deleted, and accordingly we quash both the penalty orders, i.e, under section 269SS and 269T of the Income Tax Act.”

Technical Glitches in GST Portal: Tax Practitioners in Gujarat to launch Indefinite Strike

Due to Government’s callous attitude towards taking adequate measures in rectifying the technical glitches of the GST portal, the Gujarat Sales Tax Bar Association has called for an indefinite strike.

GSTBA members from across the state, including Surat, attended a meeting on Thursday to discuss the next course of action against the Centre. The members attended the meeting unanimously decided to protest against the Government.

They stated that the extension of dates for filing the GSTR-1, GSTS-4, ITC-01 and TRAN forms due to the problems in the portal is not going to serve the purpose. The consultants and tax assessees in Gujarat are looking for a permanent solution for easy filing of the GST returns on the portal.

Assessing Officer cannot Review his Own Order by invoking Sec 147 of the Income Tax Act: ITAT [Read Order]

Kolkata bench of Income Tax Appellate Tribunal (ITAT) recently held that the Assessing Officer (AO) does not have any power to review his own order which has already been passed by him by invoking Section 147 of the Income Tax Act 1961.

Assessee in the present case is a is a corporate body engaged in the business of infrastructure development and also having a small scale industry in the North Eastern Region of India has duly filed its return of income for the relevant assessment year and claimed deductions under section 80IA and 80IC of the Income Tax Act 1961, by holding that since the assessee company was in the business of infrastructural development and having a small scale industry in the North East Region, it is eligible to claim deductions under the said sections for its business of infrastructure, development and manufacturing respectively.

During the assessment period the AO has completed the assessment under section 143(3) of the act and after partially allowing the claim of the assessee under section 80IA of the act and declared its total income at Rs.4,99,876. And the AO totally denied the assessee’s claim of deduction under section80IC of the Act. He was of the view that the assessee company is engaged in the business of constructing roads, highways, bridges and railway tracks etc. on contract with various State Govt., Railways, and BRTF etc.

And further he noted that during the year, the assessee company had undertaken various civil works in Railways, State Govt. and other local authorities on contract basis. Therefor he confirmed that Assessee Company was not involved in any developing, maintaining and operating any infrastructure project and had merely executed the contract work and, therefore, is ineligible to claim deduction u/s. 80IA of the Act. Consequently the AO has re-opened the assessment order in respect to section 80IA of the Act claimed by the assessee is that assessee is merely a works contractor and not a developer and, therefore, not eligible for deduction under 80IA of the Act.

After considering the rival submissions of both the parties the tribunal bench comprising of Judicial Member Aby. T. Varkey and Accountant Member M. Balaganesh observed that the assessee in its computation sheet produced before the AO during original assessment has clearly shown that the total income of Rs.286,71,025 as profit from contract and claimed depreciation, therefor it cannot be considered the case where the assessee had misled the AO in any manner while making the claim under section 80IA of the Act.

The bench further held that the action of the AO to reopen an assessment completed earlier under section 143(3) of the Act without any tangible material ought not to have been done and the AO made the re-assessment only on the basis of the same material facts which were the assessee submitted before him at the time original assessment proceedings.

While allowing the claim on deductions of the assessee under the aforementioned section the division bench declared that AO does not has any right to review his own order.

Tax Payers to get Alert about Proposed Income/ Loss Adjustments prior to Notice u/s 143(1) [Read Order]

The Central Board of Direct Taxes (CBDT) has, recently decided to issue an intimation to the tax payer in case of proposing income or loss adjustments before issuing a notice under Section 143(1) of the Income Tax Act, 1961.

This is with a view to draw the attention of the taxpayer to difference identified while processing ITRs u/s 143(1)(a)(vi). If taxpayer failed to submit respond within one month of receiving such communication, then a formal intimation u/s 143(1)(a)(vi) would be issued.

The intimation would be in form of an e-mail and SMS communication to the concerned taxpayer informing him about the variation in the tax. Return vis-a-vis the information available in the three Forms and requesting him to submit response to the variation within one month of receiving the communication electronically.

“In case the taxpayer does not respond within the available time-frame or the response is not satisfactory, a formal intimation u/s 143(1)(a)(vi) proposing adjustment to the returned income would be issued to him. As per the second proviso to section 143(1)(a)(vi) of the Act, in a case where no response is received from the taxpayer within thirty days of issue of such an intimation, the proposed adjustment shall be made to the returned income. Therefore, it is of utmost necessity that the concerned taxpayer files a prompt, timely and satisfactory response to the awareness campaign or subsequent intimation proposing adjustment u/s 143(1)(a)(vi) of the Act,” the Board said.

For furnishing the response electronically, taxpayer is required to login in his account in the e-filing site and choose the option (View-Returns/Forms). In a case where communication/ intimation has been issued to the taxpayer u/s 143(1)(a)(vi) of the Act, the status will be displayed in the dashboard as Response to Communication/Intimation u/s 143(1)(a) is pending’. The taxpayer can click on the same and submit his response.

Black Money: CBDT reports significant increase in Prosecutions against Tax Evaders

The Income Tax Department has accorded the highest priority to tackle the menace of black money. With this objective in mind, the Department has initiated criminal prosecution proceedings in a large number of cases of tax offenders and evaders.

Prosecutions have been initiated for various offences including wilful attempt to evade tax or payment of any tax; wilful failure in filing returns of income; false statement in verificationand failure to deposit the tax deducted/collected at source or inordinate delay in doing so, among other defaults.

During FY 2017-18(upto the end of November, 2017), the Department filed Prosecution complaints for various offences in 2225 cases compared to 784 for the corresponding period in the immediately preceding year, marking an increase of 184%. The number of complaints compounded by the Department during the current FY (upto the end of November, 2017) stands at 1052 as against 575 in the corresponding period of the immediately preceding year, registering a rise of 83%. Compounding of offences is done when the defaulter admits to its offence and pays the compounding fee as per stipulated conditions.

Due to the decisive and focused action taken by the Department against tax evaders, the number of defaulters convicted by the courts has also registered a sharp increase during the current fiscal. 48 persons were convicted for various offences during the current year(upto the end of November, 2017) as compared to 13 convictions for the corresponding period in the immediately preceding year, marking an increase of 269%.

A few illustrative cases are highlighted.

• A Dehradun Court convicted one defaulter for holding undisclosed foreign bank account and sentenced him to two years of imprisonment for wilful attempt to evade tax and to two years for false statement in verification alongwith monetary penalty for each default respectively.
• The Court of CJM, Jalandhar convicted a cloth trader with 2 years rigorous imprisonment for trying to cheat the Department by fabricating affidavits and gift deeds, in connivance with his advocate and witness, with the motive of evading tax. The Court, while awarding the sentence to the trader, also simultaneously awarded one year’s imprisonment to the advocate notarizing the forged affidavit and also to the witness for aiding and abetting the serious offence.
• In Bengaluru, the MD of a company engaged in infrastructure projects was found guilty of non-deposit of TDS of over Rs. 60 lakh(within the prescribed time), and was sentenced to rigorous imprisonment of three months alongwith imposition of fine. Similarly, a Mohali resident was held guilty of non-deposit of TDS within prescribed time and sentenced to one year jail alongwith fine.
• In another case of Hyderabad, the Director of an infrastructure company was sentenced to rigorous imprisonment of six months and fine for wilful attempt to evade tax. She was simultaneously sentenced to rigorous imprisonment for six months alongwith fine for false statement in verification.
• The Economic Offences Court at Ernakulam sentenced an individual to rigorous imprisonment of three months for selling property to evade payment of taxes of about Rs. 76 lakh despite issuance of the tax recovery certificate by the Tax Recovery Officer.
• In yet another case reported from Agra, the Special CJM convicted one defaulter with imprisonment of one year & six months for wilful attempt to evade tax and for false statement in verification respectively alongwith fine.

The Income Tax Department is committed to carry forward the drive against tax evasion and action against tax evaders will continue in all earnest in the remaining part of the current Financial Year.

E-Way Bill System: CBEC to Train Officers

As the electronic way Bill is all set to be rollout from 1st February 2018, the Central Board of Excise and Customs (CBEC) will conduct training classes to its officers.

Last month, the Goods and Services Tax (GST) Council has decided to implement E-way bill from 1st February 2017. After the meeting, the Council has said that till such time as the National e-way Bill is ready, the States were authorized to continue their own separate e-way Bill systems.

In connection with this, two Trainings of Trainers (ToT) will be organized by NACIN, Bangalore today and another at NACIN, Faridabad on 18th January.

“All CGST Zones and DG GSTI have been requested to nominate at least three officers. These ToTs are expected to deliver Master Trainers which are required to be roped for further training of CBEC officers across the country. A list of Master Trainers along with their contact details will be made available as soon as the above said ToTs are over.”

The Board further requested the ZTIs and RTIs to plan well in advance trainings of field officers of CGST Zones and DGGSTI in consultation with the Zonal Chief Commissioners.

Sanjeev Kaushik Appointed as Whole Time Member of SEBI [Read Notification]

The Security Board of India (SEBI) last day notified the appointment of Shri. Sanjeev Kaushik as its Whole Time Member.

Kaushik, a 1992-batch IAS officer of the Kerala cadre, is the Chairman and Managing Director of India Infrastructure Finance Company (IIFCL).

He has been appointed to the post for a period of three years or till the age of 65 years, on the pay as admissible to an additional secretary to the Government of India or a consolidated salary of Rs 3.75 lakh per month, the order issued by the Department of Personnel and Training (DoPT) said.

GST Council to discuss on Reducing Compliance Burden

The next meeting of the Goods and Services Tax ( GST ) Council is scheduled to 18^th January. The most powerful policy-making body under the new indirect tax regime, on that day, is likely to discuss how the compliance burden on the taxpayers can be reduced.

Reportedly, the returns committee has proposed that the GST returns filing process be simplified. They have suggested that the council combine the three different returns form into one.

The law review committee has proposed the Council to ease the procedure for claiming the refund.

Both centre and states are readying proposals to amend the current GST laws. These amendments are likely to simplify return filing process and tweaks to the composition scheme and the reverse charge mechanism.

The handicrafts panel has recommended that the definition of handicraft be changed in order to bring more items in the category.

ICAI to announce CA Final Exam Results Next Week

The Institute of Chartered Accountants of India (ICAI) likely to pronounce the result of the Chartered Accountants Final Examination held in November 2017 and Common Proficiency Test (CPT) held in December 2017 on Wednesday, the 17th January 2018 around 2.00 P.M.

The result as well as the merit list (candidates securing a minimum of 55% and above marks and upto the maximum of 50th Rank in the case of Final Examination in accordance with the decision of the Examination Committee) on all India basis will be available on the websites like icaiexam.icai.org, caresults.icai.org or in icai.nic.in.

The Institute said that for accessing the result at the above mentioned website the student shall have to enter his registration no. or PIN no. alongwith his roll number. Further, facilities have been made for students of Final Examination and Common Proficiency Test (CPT) held in November/December 2017 desirous of knowing their results with marks on SMS. The service will be available through India Times.

It also said that the result of the Information Systems Audit [ISA] Assessment Test held on 23rd DECEMBER 2017 is likely to be declared on 17th January, 2018 around 2.00 PM at the Institute’s office at New Delhi.

The result of the above Assessment Test will be available on the Institute’s website www.icai.org

ITAT Confirms Addition in respect of Unexplained Cash Credit since Assessee paid ‘On Money’ for Purchase of Property [Read Order]

The ITAT bench comprising acting judicial member Ravish Sood and vice president P.K. Bansal recently recently held that additions in respect of unexplained cash credit under Section 68 of the Income Tax Act, 1961 is valid since the Assessee paid ‘On Money’ for the purchase of property.

In the instant case, the return of income including agricultural income filed by the assessee was processed and completed as such under Section 143(1) of the Income Tax Act. The case of the assessee was thereafter reopened and a notice u/s 148 was issued to the assessee finding that the documents impounded during the course of survey proceedings conducted on M/s Dev Sharda Developers Pvt. Ltd. revealed that the assessee had paid “on money” for purchase of Flat.

On perusal of impounded document which revealed that total payment amounting to Rs.76,00,000/- was paid by the assessee for purchase of the aforesaid flat, as against the investment of Rs. 29,00,000/- shown by him. The A.O called upon the assessee to show cause as to why the amount of Rs. 47,00,000/- paid by him as “on money” for purchase of flat may not be added to his income for the year under consideration.

Dissatisfied with the contention of assessee, the AO made an addition of Rs. 47,00,000/-under Sec. 69 and aggrieved assessee carried the matter before CIT (A) However, the CIT(A) not finding favour with the contentions of the assessee, being of the view that the assessee had failed to rebut the presumptions regarding the noting of the cash payments in the impounded document, therefore, upheld the addition of Rs. 47,00,000/- made by the A.O.

While relying on the various decisions of High Court the tribunal bench had an opinion that presumption under Sec. 292C and under Sec. 132(4A) invoked in the case before the High Court is applicable only in a respect of documents seized during the course of search proceedings, therefore, the same would not be applicable to the case of the present assessee where survey proceedings were conducted.

During the survey proceedings, it was found that the said document is an unsigned one, the assessee in the present case had never admitted the contents of the seized documents relating to the purchase of the property under consideration. Based on this findings the bench ordered that the addition of Rs. 47,00,000/- made by the A.O u/s 69 and sustained by the CIT(A), cannot be upheld.

Making Reference to DVO is mandatory for invoking Sec 50C (2): ITAT [Read Order]

The Ahmedabad bench of ITAT recently proclaimed that making reference to DVO is mandatory for invoking Section 50C (2) of the Income Tax Act.

Section 50C(2) of the Income Tax Act 1961 defines exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.

The sole grievance of the assessee in instant case was the action of the Assessing Officer making an addition in respect of long term capital gains with by invoking Section 50C, in proceedings u/s. 143(3) of the Income Tax Act, 1961.

During the course of Appellate proceedings, it was found that the market value of the land fixed by the Stamp Duty Officer had been disputed by the purchaser and accordingly, they had approached in appeal to the Collector, Stamp Duty Valuation Division, for correct valuation as per the market price.

On appeal, the CIT (A) held that there is no requirement of remanding the matter back to the AO for referring the valuation of the land to the District Valuation Officer and also maintained the addition made by AO.

Aggrieved assessee preferred the matter before the tribunal and the bench pointed out that the decision taken by CIT (A) is of the opinion that the above reduced jantri price in Stamp Act Appellate proceedings coming to Rs.95,73,102/- is just and proper.

While relied on the decision of Calcutta high court’s judgment in (2015) 372 ITR 83 (Cal.), the tribunal bench held that impugned addition u/s.50C(2) of the Act mandates reference to the DVO in case an assessee contests the jantri price in question to be higher than fair market value of the relevant capital asset.

The bench comprising of S. S. Godara (judicial member) and Manish Borad (accountant member) allowed the appeal and referred the matter to the DVO.

Sale of Equipments to Educational Institutions Established by Govt attracts Lower VAT even without C/D Forms: Madras HC [Read Judgment]

Madras High Court held in M/s.Biojenik Engineering (P) Ltd. v. CTO, held that the sale of equipments to educational institutions established by Government attracts lower tax under the Tamil Nadu Value Added Tax (VAT) Act.

Assessee Company in the instant case engaged in the sale of scientific equipments to various educational institutions such as Indian Institute of Technology, etc. has claimed a lower tax rate of tax at 5 percent on the said items. Assessee contended that the supplies being affected to the educational institutions are capital goods and taxable under Schedule II Part B at the rate of 5% as per the amended Commodities list under CTD portal.

But the revenue has denied the claim of the assessee and took a view that since the sales were made to Government will be treated as sales to unregistered dealer and the same is liable for tax at the rate of 14.5 percent. It was said that in such cases where, notifications have been issued under Section 8 (5) of the Central Sales Tax Act, 1956 C/D form is essential and the assessee does not submit any kind of form that specified in the Act. In such circumstances it is impossible to allow the concessional tax rate to the assessee, the department said.

Aggrieved by the assessee filed an appeal before the court.

After considering the rival submissions of both the parties and perusing the available material facts on records Madras High Court Justice T.S.Sivagnanam observed that while analyzing the material facts it is clear that the assessee is a registered dealer of the above said goods to educational institutions and hospitals and in such a situation it cannot be denied of the benefits of concessional rate of tax, on the sales of the above said instruments and equipments in the course of inter-state trade or commerce and it is not necessary for the assessee to produce ‘C’/’D’ Declaration Forms to claim the benefit of concessional rate of tax.

While allowing the writ petition filed by the assessee the court also pointed out that the assessee is eligible for concessional tax rate on the sale of equipments to educational institutions.

Tax Exemption cannot be denied to a Society Imparting Education to Poor Women due to Non-Recognition of Courses: ITAT [Read Order]

Delhi bench of Income Tax Appellate Tribunal (ITAT) proclaimed in its recent order that society imparting education to poor women is eligible for tax exemption and it doesn’t matter whether the courses are recognized or not by any board of education.

Assessee involved in the present issue has registered under Societies Registration Act to fulfill the basic aims and objects of the society and has rooted in the Christian faith and endeavour to promote the full development of women/girls irrespective of race, culture and creed. During the assessment year the assessee declared a nil income in its return of income.

In response to the notice under section 143(2) of the Income Tax Act 1961 the assessee filed all the necessary papers and documents along with bills and vouchers with respect to the expenditure incurred and evidence of having earned income from different heads as is evident from assessment order itself.

During the period of assessment proceedings the Assessing Officer (AO) noted that the assessee did not include income of women training institute and accordingly he invoked the provision to section 2(15) of the Act.

On appeal before CIT (A) , while considering the factual matrix they directed the AO to to allow exemption on the earning from unrecognized courses as well, as being included in the definition of ‘education’. Aggrieved by the revenue was in appeal before the tribunal.

After considering both the sides tribunal bench comprising of Judicial Member Joginder Singh and Accountant Member N. K. Saini held that the unrecognized courses are also comes within the meaning of education or in other words, it can be said that the charitable purposes includes relief to the poor, education (yoga), medical relief, preservation of environment and preservation of monuments or placed or objects of artistic or historic interest and the advancement of any other objection of general public utility.

While analyzing the material facts and records it is also clear that the assessee society registered under society registration act with an aim to fulfill the basic objects of the society. And while admitting all these facts it can be concluded that the assessee society would be eligible to get tax exemption even if the courses are not recognized by any board of education.

CCI Orders Rs 135 Cr Fine on Three Firms for ‘Hard Core Cartel’ [Read Order]

The Competition Commission of India (CCI) has found Nair Coal Services Pvt. Ltd., Karam Chand Thapar & Bros (CS) Ltd. and Naresh Kumar & Co. Pvt. Ltd.  to be in contravention of the provisions of Section 3(1) read with Section 3(3)(c) and Section 3(3)(d) of the Competition Act, 2002 for acting in a collusive and concerted manner which eliminated and lessened the competition besides manipulating the bidding process in respect of the tenders floated by Maharashtra State Power Generation Co. Ltd. (MAHAGENCO) for award of contract of coal liasoning work for its various thermal power stations.

Taking a serious view of the collusive conduct of coal liasoning agents, CCI opined that the case fell in the category of hard core cartels as the parties reached an agreement to submit collusive tenders and to divide the markets which warranted the matter to be dealt with utmost severity. Accordingly, CCI invoked the stringent provision of the law which enables it to impose a higher penalty in case of agreements entered into by cartels. Hence, a penalty at the rate of 2 times of the total profits earned from provision of coal liasoning services to all power generators for continuance of the cartel for 2010-11 to 2012-13 years was imposed upon the parties. Resultantly, CCI has imposed a penalty of Rs. 7.16 crore, Rs. 111.60 crore and Rs. 16.92 crore upon NCSL, KCT and NKC for the anti-competitive conduct. Besides, a cease and desist order was also issued against the above companies.

CCI has also deprecated the conduct of the Informant in breaching the confidentiality and sanctity of the inquiry by circulating copies of the investigation report to B.S.N Joshi & Sons Ltd.- a rival of the Opposite Parties – who, in turn, forwarded copies thereof to various authorities.

Independent Directors are watch persons of Corporate entities; Capacity development of Independent Directors is very essential, says MoS P.P. Chaudhary

The Union Minister of State for Ministry of Law, Justice and Corporate Affairs, P P Chaudhary said that Independent Directors are watchpersons of Corporate entities. The MOS (Law, Justice and Corporate Affairs), Shri Chaudhary was delivering the Inaugural Address after inaugurating the two-day Orientation Programme for newly appointed Independent Directors of Public Sector Banks (PSBs) and Public Sector Undertakings (PSUs) at the campus of Indian Institute of Corporate Affairs (IICA) at Manesar in District Gurugram (Haryana) today. Addressing the newly appointed Independent Directors of PSBs and PSUs, Shri Chaudhary said, “It is high time to conduct such orientation programmes for Independent Directors (IDs) on a regular basis on various provisions, eventually leading to better accountability. The role of IICA is huge due to the large economic infrastructure in the country. He said that IDs impart balanced view along with transparency and credibility. The two most important functions of IDs are in advisory and monitoring capacity. They are systemically crucial in monitoring internal financial controls.” The MoS Shri Chaudhary appreciated the spirit behind organising the Conference aimed at capacity development of Independent Directors, since they play a crucial advisory role to ensure integrity and professional conduct in companies. Referring to the Section 150 of the Indian Companies Act, 2013, he shared the Central Government is seriously considering to develop a data base of Independent Directors at IICA.

On this occasion, Shri Gopal Krishan Agrawal, Member, Board of Governors, IICA, said that Independent Directors bring their experience of diverse fields to a company’s Board. However, appropriate knowledge and skills through such Capacity Development Programmes are vital. What is important is that the IDs have to set-up policy and systems.

Earlier, Shri Gyaneshawar Kumar Singh, Joint Secretary, MCA and DG & CEO, IICA welcomed the house and spoke on the crucial role of Independent Directors as independent advisors as they protect the shareholders’ interest. As such, IDs are institutions inside the Board. Therefore, the current initiative that aims at up-gradation of knowledge and skills of IDs will go a long way in strengthening corporate governance in the country.

Shri Madhhukar Gupta, Additional Secretary, Department of Public Enterprise, Govt. of India, highlighted the fact that the IDs have to contribute to the effective functioning of the Board and therefore, have crucial role and importance for the renewed focus on Corporate Governance.

Ms Vladislava Ryabota, Lead CG, IFC – World Bank, while referring to international best practices, underlined the need that the laws work effectively only if training and knowledge development accompany them.

Earlier, Dr Niraj Gupta, Head, School of Corporate Governance and Public Policy, IICA, welcomed the house. Vote of thanks was extended by Dr Naveen Sirohi, Head, School of Finance, IICA.

The Two day Orientation program will train 40 newly appointed IDs of PSBs and PSUs. The Program will have the presence of expert speakers and trainers from MCA, SEBI, Department of Public Enterprises, BSE, CII, IFC-world bank, UN Global Compact Network, GRI, International Integrated Reporting Council, Corporate sector, Banks, Media and Academia among others.

Wife cannot plead Ignorance about a Huge Cash Flow in her deceased Husband’s Bank Account: Karnataka HC [Read Judgment]

The Karnataka High Court, last week held that a wife cannot plead ignorance about a huge cash flow in the bank account of her husband.

The assessee, T. V Satyanarayana, a First Division  Clerk of the City  Civil  Court, Bangalore, received a large sum of  Rs.95.83 lakh in his Bank Account. Suspecting the transaction, the assessing Officer sent a notice to the assessee asking him to explain the source of the money.

Unfortunately, the assessee expired before receiving the notice. On receipt of the same, the wife of the assessee responded that she was not aware of the tax matters and the details of the bank accounts of her husband. However, the objections were overruled by the department and passed an order demanding tax.

The petitioner approached the High Court through a writ petition and submitted that in the absence of any separate Notice issued in the name of the petitioner-wife, Smt. S. Savithri, she is not accountable or answerable to furnish the said information as required under Section 133 (6) of the Act.

After hearing the rival contentions, Justice Vineeth Kothari found that the petition was misconceived and cannot be entertained. “The Notice even if deceased, the  Legal Representatives or the persons who inherit the estate of the deceased persons will have to comply with the said  Notice for furnishing the requisite information. The very purpose of the provisions of Section 133 (6) of the Act is to elicit the requisite  information  and  details  from  the  person concerned.”

“There is nothing on record to show that the fact of death was within the knowledge of the Respondent-Income Tax Officer and he still issued the Notice to a deceased person. The Legal  Representatives including the petitioner, wife of late Mr.T.V.  Sathyanarayana before this Court cannot protest or deny the obligation to furnish such information including the Bank details and relevant vouchers to be obtained from the concerned Bank of the husband of the present petitioner. After all, the wife of a person cannot plead ignorance about a huge cash inflow in her husband’s bank account,” the Judge added.