The Income Tax Appellate Tribunal (ITAT), Kolkata bench has condoned a delay of 1535 days (approximately 4 years) in filing the appeal since the assessee has reasonable ground for such delay due to health issues and lack of proper legal advise.
The assessee challenged an addition made under section 68 of the Act at Rs.2,04,80,000/- and disallowance u/s 14A of the Act at Rs.99,615/- after 1535 days from the date of receipt of first appellate order.
The delay, according to the assessee, was due to three reasons. Firstly, Sri Naresh Kumar Chhaparia, Director of M/s Orbit Delmark Pvt. Ltd. was suffering from lungs infection and diabetic and other oldage ailments, secondly the assessee was not advised properly by the legal consultant who has claimed to have forgotten about the said order and has not taken further process and thirdly, on account of lockdown in the State due to outbreak of Covid-19.
Condoning the delay, the Tribunal bench comprising Shri Rajpal Yadav, Vice-President and Shri Manish Borad, Accountant Member has observed that “We, therefore, in view of the reasons stated in the condonation application and also the extension of limitation period by Hon’ble Supreme Court in Suo Moto Writ Petition (Civil) No.3 of 2020 dated 8th March, 2021, condone the delay in filing this appeal and admit the same for adjudication.”
Remitting the matter before the adjudicating authority, the Tribunal held that “We, therefore under the given facts and circumstances of the case, in the larger interest of justice and being fair to both the parties, are of the considered view that all the issues raised before us, in the instant appeal needs to be restored to the file of the ld. CIT(A) for adjudicating the issues and pass a speaking order on grounds raised before us, including the issue of addition u/s 68 of the Act and disallowance u/s 14A of the Act. Needless to mention that the assessee should be provided a reasonable and proper opportunity of being heard and to place relevant material on record in support of the grounds raised by it.”
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After the Karnataka High Court Order, the Institute of Chartered Accountants of India ( ICAI ) has removed the name of a Chartered Accountant who is found guilty of Cash Embezzlement & Fraud.
The Notification issued by ICAI has said that, “In exercise of the powers conferred by sub-section (2) of Section 20 of The Chartered Accountants Act, 1949 read with Regulation 18 of the Chartered Accountants Regulations, 1988, it is hereby notified by the Council of the Institute of Chartered Accountants of India that the Hon’ble High Court for the State of Karnataka has, in pursuance of Section 21(6)(C) of the said Act, the name of Shri P.P. Joy, Chartered Accountant to be removed from the Register of Members for a period of one month after finding him guilty of “Other Misconduct” falling within the meaning of Section 22 read with Section 21 of the Chartered Accountants Act, 1949.
The Notification also said that, Accordingly, “it is hereby informed that the name of the said Shri P.P. Joy shall stand removed from the Register of Members for a period of one month from the date of publication of this Notification in Gazette of India. During this period, he shall not practice as a Chartered Accountant in terms of the said Order of the Hon’ble High Court of Karnataka at Bengaluru”.
Karnataka High Court Verdict
In a Karnataka High Court verdict in the Case The Institute of Chartered Accountants of India vs Shri P.P Joy, the Karnataka High Court has directed the ICAI to remove the Chartered Accountant guilty of Professional Misconduct.
The division bench comprising of Justice Alok Aradhe and Justice M.G.S Kamal has observed that, “the penalty recommended to be imposed by the Institute to remove the respondent from the register of members for a period of one month is just and proper as he is proved to be guilty of other misconduct within the meaning of Section 22 read with Section 21 of the Act. The Court has directed the counsel to implement the order within a period of two months from the date of receipt of the copy of this order”.
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The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the levy of interest under sections 234B and 234C of the Income Tax Act, 1961 for non/short payment of advance tax installment and delay in payment of income tax respectively cannot be levied on additional income agreed as per advance pricing agreement entered between the assessee and the CBDT.
The appellant-assessee, M/s Colt Technology Services provides Information Technology Enabled Services (‘ITES’) and contract software development (‘CSD’) solutions to its associated enterprises (‘AEs’). The assessee performs back-end operations in all business areas such as network operations and engineering, IT service provisioning, sales and marketing support, human resources and finance.
The assessee contended that since, assessee cannot estimate the additional income at the time of advance tax instilment and at the time of filing income tax return, did not pay advance tax on such income. Therefore, submitted that interest u/s 234C and 234B of the Act for non/short payment of advance tax installment and delay in payment of income tax respectively should not be levied on such additional income declared by the assessee in its modified return of income.
Relying on a catena of decisions, the Tribunal bench comprising Shri B. R. R. Kumar, Accountant Member and Sh. Yogesh Kumar U.S., Judicial Member observed that in the present case it is nobody’s case that the appellant has committed a default in payment of advance tax when it actually paid it, the appellant cannot be held liable to pay interest under section 234B.
“In so far as the observations in the order of the Tribunal, that the appellant should have anticipated the events that took place in March, 1992 are concerned, in our opinion, they have no substance. In our opinion, it is rightly submitted that it was not possible for the appellant to anticipate the events that were to take place in the next financial year and pay advance tax on the basis of those anticipated events,” the Tribunal said.
Following the decision of the Karnataka High Court in the case of Prime Securities Ltd. Vs. Assistant Commissioner of Income Tax (Investigation), the Tribuna held that the levy of interest u/s 234B and 234C of the Income Tax Act on additional income agreed as per advance pricing agreement entered between appellant and the CBDT is illegal.
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A division bench of the Supreme Court has upheld the constitutional validity of the recent amendments made in the Finance Act, 2020 in relation to the new provisions regarding the registration of charitable and religious trusts under the Income Tax Act, 1961.
The Finance Act, 2020 introduced various amendments related to the registration of Charitable trust and Religious trust for availing the exemption under sections 11 and 12 of the Income Tax Act, 1961.
Reverting to the challenge to the insertion of Section 12A vide the Amendment Act of 2020, a bench of Justice A.M. Khanwilkar, Justice Dinesh Maheshwari and Justice C.T. Ravikumar observed that the provision mandates that the person concerned who seeks prior permission or prior approval under Section 11, or makes an application for grant of certificate under Section 12, including for renewal of a certificate under Section 16, to provide an identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries.
“The Statement of Objects and Reasons of the Amendment Act is testimony about the past experience of abuse of foreign contribution receipts and spending on activities not connected with the purposes for which it was so permitted. It had been noticed that the inflow of foreign contributions had almost doubled between the years 2010 and 2019 and many of the registered associations had failed to comply with basic statutory formalities necessitating cancellation of certificates of registration of more than 19,000 registered organisations. This is a staggering (substantial) number indicative of gross violations by a large number of registered associations. More so, this amendment had been necessitated to safeguard the sovereignty and integrity of the country, and public order, including in the interests of the security of the State and of the general public,” the bench observed.
It was further added that “It is a law made by the Parliament which is competent to make such a law concerning the activities related to foreign donations and more particularly about its acceptance in prescribed manner and utilisation for the purposes defined in the certificate/permission granted by the competent authority. It has a legitimate purpose and nexus sought to be achieved with the objective underlying the Principal Act and the subject amendment. It is not open to argue that associations desirous of obtaining a certificate of registration under this Act need not furnish official identification document pertaining to its key functionaries.”
While concluding, the bench held that “Regardless of the above, the provision (Section 12A) envisages that a copy of the Passport can also be provided as identification document of all its office bearers or Directors or other key functionaries or Overseas Citizen of India Card, in case of a foreigner. The underlying purpose of this provision is merely to identify the key functionaries of the registered association so that they can be made accountable for violations if any. We are of the view that as the Passport in the case of a foreigner is accepted as a sufficient identification document, there is no reason why such a Passport of an Indian national cannot be relied upon for the same purpose. Thus understood, the challenge to this provision being unreasonable need not detain us nor is required to be taken any further. Whereas, we hold that the provision needs to be construed as permitting furnishing of the Indian Passport of the key functionaries of the applicant who are Indian nationals, for the purpose of their identification.”
To sum up, we declare that the amended provisions vide the 2020 Act, namely, Sections 7, 12(1A), 12A and 17 of the 2010 Act are intra vires the Constitution and the Principal Act, for the reasons noted hitherto. As regards Section 12A, we have read down the said provision and construed it as permitting the key functionaries/office bearers of the applicant (associations/NGOs) who are Indian nationals, to produce an Indian Passport for the purpose of their identification. That shall be regarded as substantial compliance with the mandate in Section 12A concerning identification.
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After Lok Sabha, the Rajya Sabha has also passed the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021.The Bill amends the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980. It changes the disciplinary mechanism under the three Acts and specifies…
The Central Board of Direct Taxes (CBDT) has extended the due date of filing of form 10AB under the provisions of the Income Tax Act, 1961.
As per Form 10AB, all Trust or institutions that obtain the provisional enrollment or approval for a 3-year duration would be needed to make the application in Form No. 10AB in 6 months post to the start of the charitable activities. These trusts would obtain a permanent enrollment post to make the application in Form No. 10AB.
The notification issued by the CBDT today said that “On consideration of difficulties in electronic filing of Form No.10AB as stipulated in Rule 2C or 11AA or 17A of the Income-tax Rules, 1962 w.e.f. 01.04.2021, the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119(1) of the Act, extends the due date for electronic filing of such Form as under: (i) The application for registration or approval under Section 10(23C), 12A or 80G of the Act in Form No.10AB, for which the last date for filing falls on or before 29`h September. 2022. may be filed on or before 30th September. 2022.”
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The Central Board of Direct Taxes ( CBDT ) has clarified that, Permanent Account Number (PAN) will not be inoperative if not linked with Aadhaar before 31st March 2023.
Under the provisions of the Income-tax Act, 1961 (“the Act”), every person who has been allotted a PAN as on 1st July, 2017 and is eligible to obtain Aadhaar Number, is required to intimate his Aadhaar to the prescribed authority on or before 31st March, 2022. On failure to do so, his PAN shall become inoperative and all procedures in which PAN is required shall be halted. The PAN can be made operative again upon intimation of Aadhaar to the prescribed authority after payment of a prescribed fee.
In order to mitigate the inconvenience to the taxpayers, as per Notification No.17/2022 dated 29th March, 2022, a window of opportunity has been provided to the taxpayers upto 31st of March, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions. As a result, taxpayers will be required to pay a fee of Rs. 500 up to three months from 1st April, 2022 and a fee of Rs.1000 after that, while intimating their Aadhaar.
However, till 31st March, 2023 the PAN of the assessees who have not intimated their Aadhaar, will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds etc. A detailed Circular No.7/2022 dated 30.03.2022 has also been issued in this regard.
After 31st March, 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative and all the consequences under the Act for not furnishing, intimating or quoting the PAN shall apply to such taxpayers.
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The Bombay High Court, while concurring with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court and Madras High Court has quashed the re-assessment notices issued on or after 1st April,2021 without following new procedure laid down under section 148A of the Income Tax Act, 1961. A bench comprising Justice…
The Ahmedabad bench of the ITAT has held that the expenses towards gifts purchased for sales promotion shall be allowable as deduction even if the assessee failed to provide the list of the recipients. The assessee firm at the relevant time was engaged in the business of installation of computer and providing after-sale services; sale…
The Institute of Chartered Accountants of India (ICAI) has imposed a fine of Rs. 50,000 on a Director for holding a position of ‘Director Simplicitor’ in a Company.
A complaint was filed against the Respondent, CA Gurudas Saha alleging that he is holding an office of Director Simplicitor in a private limited company and was involved in the day to day activities of the business.
Earlier, four-member committee of the disciplinary committee found that the respondent is guilty of professional misconduct.
The Committee, based on facts, noted that that it is clearly coming out from findings that the Respondent had given wrong declaration under Regulation 190A of the Chartered Accountants Regulations, 1988 whereas his role was more than director simplicitor and he was involved in day to day working of the Company.
“Therefore, keeping in view the facts and circumstances of the case, material on record and submissions of the Respondent before it, the Committee ordered that the Respondent i.e. CA. Gurudas Saha (M. No. 104292), be reprimanded with the fine of Rs.50,000/- (Fifty Thousand Rupees) to be payable by him within a period of 30 days of receipt of the order and in case -of non-payment of fine, the name shall be removed for 15 (Fifteen) days.”
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The Central Board of Direct Taxes (CBDT) has relaxed the form requirements of electronic filing of the application in form no. 3CF.
Form 3CF is an application form for approval under clause (ii) or clause (iii) of sub-section (1) of section 35 of the Income-tax Act, 1961 in the case of a research association.
A circular issued by the Board on Thursday provides relaxation from the requirement of electronic filing of the application in Form No. 3CF for seeking approval under section 35(1)(ii)/(iia)/(iii) of the Income Tax Act, 1961.
The circular stated that “On consideration of difficulties in electronic filing of Form No. 3CF as stipulated in Rule 5C (1A) and Rule 5F(2)(aa) of the Income-tax Rules, 1962 w.e.f. April 01, 2021, the Central Board of Direct Taxes (CBDT), in the exercise of its powers under Section 119(1) of the Act, provides the following relaxation:
(i) Applicants seeking approval under section 35(1)(ii)/(iia)/(iii) of the Act may file the application in Form No. 3CF physically during the period from the date of issuance of this Circular till:
(a) September 30, 2022; or (b) the date of availability of Form No. 3CF for electronic filing on the e-filing website, whichever is earlier.”
CIRCULAR NO: 5/2022
DATE: 16th March 2022
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The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the course fee paid to Harward Business School for the director is allowable as business expenses of the Company and therefore, eligible for deduction under the Income Tax Act, 1961. The Director of the assessee Company, Income Cables Pvt Ltd., was looking…
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the income tax penalty under section 271(1)(c) of the Income Tax Act, 1961 cannot be levied on ground that the assessee claimed deduction without any malafide intention.
The assessee, Shanti Chemsteel Pvt. Ltd has debited the interest charged to its OD account by the bank to its profit and loss account and claimed it as deduction. Undisputedly, while completing the assessment, Assessing Officer has allowed assessee’s claim. The first appellate authority has imposed penalty under Section 271(1)(c) of the Act, alleging furnishing of inaccurate particulars of income. The assessee approached the Tribunal for relief.
The Tribunal bench comprising Shri Saktijit Dey, Judicial Member and Dr. Brr Kumar, Accountant Member held that all material relating to the interest component was furnished before the departmental authority.
“In fact, learned Commissioner (Appeals) has found the interest on OD account from the profit and loss account of the assessee. Thus, in our considered opinion, the explanation of the assessee that it is a bona fide claim of deduction, appears to be reasonable. It is to be noted that penalty under Section 271(1)(c) of the Act is not automatic. If assessee offers reasonable explanation, then, penalty cannot be imposed. In the facts of the present appeal, in our considered opinion, the deduction claimed by the assessee is not due to any mala fide intention but on a bona fide belief. In any case of the matter, as held by the Hon’ble Supreme Court in case of CIT vs. Reliance Petro Products (322 ITR 82), disallowance of a deduction claimed by the assessee by itself cannot lead to furnishing of any inaccurate particulars of income. Applying the aforesaid legal principle, we hold that it is not a fit case for imposition of penalty under Section 271(1)(c) of the Act. Accordingly, we delete the penalty imposed,” the Tribunal said.
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The CESTAT, Delhi bench, while holding that Prasar Bharati has no service tax liability on the advertising services, directed the Company to make the refund to the customers as the former collected the same during the pendency of proceedings under the apprehension that the tax demand may be confirmed. The Company is also directed to…
The Reserve Bank of India ( RBI ) has launched two key initiatives today – (1) UPI123Pay – Option to make Unified Payments Interface (UPI) payments for feature phone users, and (2) DigiSaathi – a 24×7 Helpline to address the queries of digital payment users across products. While launching the two initiatives, RBI Governor Shri Shaktikanta Das highlighted the importance of these initiatives in enhancing the diversity, utility, and transformational power of digital innovations in the country. These initiatives will further deepen the digital ecosystem and financial inclusion. The Governor also stated that the RBI stands committed to providing an enabling environment for this.
At present, efficient access to UPI is available on smartphones. UPI can be accessed through NUUP (National Unified USSD Platform) using the shortcode of *99#. But this option is cumbersome and not popular. Considering that there are more than 40 crore feature phone mobile subscribers in the country, UPI123pay will materially improve the options for such users to access UPI. UPI123Pay includes four distinct options as below:
The 24×7 Helpline – ‘DigiSaathi’ – provides a channel to obtain help on the entire gamut of digital payments. Automated responses on information related to digital payment products and services are available in Hindi and English through multiple options like – (a) toll-free number (1800-891-3333), (b) a short code (14431), (c) website – www.digisaathi.info, and chatbots. DigiSaathi will assist users with their queries on digital payments via website & chatbot facility and through toll-free calls where users can dial or call out the options/products for which the information is required. More interactive options and language choices shall be enabled going forward.
The above initiatives are envisioned to accelerate the process of digital adoption in India, by creating a richer and more inclusive ecosystem that can accommodate larger sections of the population.
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The Bombay High Court has held that the department cannot make disallowance under section 40(a)(ia) of the Income Tax Act on the failure of the assessee to deduct TDS if employee’s commission is shown as a part of salary income.
Earlier, the Assessing Officer passed an order under Section 40(a)(ia) of the Income Tax Act by observing that the respondent/assessee had made a provision for commission for the Chairman and the Managing Director (CMD) of the Company at the year-end but not deducted TDS under Section 194H Income Tax Act.
The assessee claimed that the commission was paid to the CMD in the subsequent year, i.e., during the Assessment Year 2010-2011 after deducting TDS.
Before the Commissioner of Income Tax (Appeals), the assessee had contended that CMD was a full-time employee of the company and hence this payment was nothing but salary covered by TDS provision under Section 192 and under Section 194H of the Income Tax Act which deals with TDS on commission payments. As per Section 192 of the Income Tax Act, TDS is deductible from salary payment only at the time of payment and not at the time of making provision and therefore no disallowance is called for in the given circumstances. CIT (A) accepted the contentions of the respondent.
Counsel for the department has contended that the payment being commission in nature is covered by Section 194H of the Income Tax Act and hence TDS was deductible at the time of making provision at the year-end and as Respondent had failed to do so, the same called for disallowance under Section 40(A)(ia) of the Income Tax Act. Counsel for the respondent has pointed out that Form-16 of the CMD for the Assessment Year 2010-2011 showed that commission was part of overall compensation/salary of the CMD and hence TDS in respect thereof is covered under Section 192 of the Income Tax Act.
The division bench of Justice Amit B.Borkar and Justice K.R.Shriram has ruled that section 192 of the said Act, unlike other TDS provisions, requires deduction of tax at source under the head “Salary only at the time of payment and not otherwise.”
The court has said, “the tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analyzed and the correct test is applied to decide the issue at hand, then, we do not think that questions, as pressed, raise any substantial question of law.”
Pr. Commissioner of Income Tax-10 VS Indofil Industries Ltd
CITATION: 2022 TAXSCAN (HC) 139
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The Ministry of Corporate Affairs (MCA) has released a set of Frequently Asked Questions (FAQs) in relation with the LLP e-filing services on the portal. Recently, all the LLP e-filing services are being upgraded and migrated to MCA V3 portal. However, all the other services will continue to exist at MCA V2 portal.
As per the FAQ, the users can add multiple roles to their profile. However, this feature is only available for Registered users and Business users other than Company/LLP users.
Further, it clarified that only one user session per platform (Mobile app/web) will be allowed at a time.
In case the user does not log in for a continuous period of 60 days, then the account would be deactivated, and an email alert will be sent to the user stating the same. In order to activate the account, the user would be required to reset the password using “Forgot password” option.
It further stated that LLP is required to file LLP webform 8 (Statement of Account & Solvency) and LLP webform 11 (Annual Return) annually. The ‘Annual Return’ is required to be filed within 60 days of close of the financial year and ‘Statement of Accounts & Solvency’ shall be filed within 30 days from the end of six months of the financial year to which it relates. Every LLP must maintain uniform financial year ending on 31st March of a year.
Also, every LLP is required to file ‘Statement of Accounts & Solvency’ in prescribed LLP webform 8 which contains a declaration on the state of solvency of the LLP by the designated partners and information related to statement of assets and liabilities and statement of income and expenditure of the LLP. This form must be filed by the LLP on an annual basis. In case total turnover of the LLP/ FLLP exceeds Rs. 40 lakhs or partner’s obligation of contribution exceeds Rs. 25 lakhs, then the webform should be certified by the auditor of the LLP/ FLLP.
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The Income Tax Department has issued the Guidance on uploading of Manually submitted Form 15CA and Form 15CB with Authorised Dealers. In accordance with Press release dated 20th July 2021 issued by Central Board of Direct Taxes (CBDT), functionality for uploading Form 15CA and Form 15CB submitted with Authorised Dealers in manual format during the…
The Madhya Pradesh High Court has quashed the Faceless Assessment Order Passed Regarding Mandatory Requirements like Grant of Opportunity of Personal Hearing. The grievance of the petitioner, Metharam Pinjani as projected by learned counsel for petitioner Shri Ashish Goyal is that though an appeal u/s 246A of the Income Tax Act, 1961 is pending before…
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has directed the Commissioner of Income Tax (Appeals) to send notices to the advocate of the assessee through email as the notices sent to the assessee were returned. The assessee, while challenging an order of the Commissioner (Appeals) contended that the impugned order is…
This weekly round-up analytically summarises the key stories related to the Income Tax Tribunal (ITAT) reported at Taxscan.in during the previous week from January 31 to February 5, 2022. Madhavi Raksha Sankalpa Vs. CIT(E) The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) while quashing an order of the Commissioner of Income Tax (Exemptions),…
