 TIOL-DDT 1850
04.05.2012
Friday INTEREST payment is a charge on the Consolidated Fund of India and is, therefore, payable through a proper budgetary mechanism. Accordingly, Minor Head ¶interest on refunds¶ is to be operated under the Major Head ¶2020-Collection of Taxes on Income and Expenditure¶. However, CAG notes that no budget provision for ‘interest on refund' was made in the Budget Estimates for 2010-11 and the expenditure on interest on refunds amounting to Rs. 10,499.4 crore was treated as reduction in revenue. Accounting of interest on refund as reduction in revenue is incorrect as this interest was never collected in the first instance. Interest on belated refunds of excess tax should be budgeted as an expenditure item which, in fact, was done in the Budget Estimates 2001-02 when Rs. 92 crore was provided in the demand of ‘Direct Taxes' under the Major Head ‘2020 – Collection of taxes on Income & Expenditure' towards interest on belated refund of excess tax. However, subsequently at the Revised Estimates stage the earlier practice of showing the interest on excess refund as deduct receipt was reverted to. This practice is still being followed. On CAG's objection, the Department stated that this is a policy decision taken at the highest level. Income Tax - Appeals Mismanagement - CAG Frowns AS per the instructions of the Board, each CIT (Appeal) is required to dispose of a minimum of 60 appeals per month, and a total of 720 appeals annually. Thus, 1,05,840 lakh appeals could have been disposed of during the year on the basis of the working strength of 147 CIT(A). CIT(A) were required to dispose of 2,57,656 cases during 2010-11. Out of this, CAG notes that only 70,474 appeals (27.4 per cent ) were disposed of and the average annual disposal per CIT(A) during 2010-11 was only 479 appeals. The amount locked up in appeal cases with CIT(A) was Rs. 2.9 lakh crore in 2010-11 which is equivalent to 108.8 per cent of the revised revenue deficit of Government of India. Further, the amount locked up in appeals at higher levels (ITAT/High Court/Supreme Court) was Rs. 2.1 lakh crore in 72,196 cases as on 31 March 2011. Advisory Group for International Taxation and Transfer Pricing THE Central Board of Direct Taxes has constituted an Advisory Group for International Taxation and Transfer Pricing with the following Members: Revenue Secretary to the Government of India-Head of the Advisory Group Chairman, Central Board of Direct Taxes, Department of Revenue- Member Director General of Income-tax (International Taxation), New Delhi- Member Joint Secretary (FT&TR-I), Department of Revenue- Member Secretary Joint Secretary (FT&TR-II), Department of Revenue- Member Joint Secretary (TPL-I), Department of Revenue- Member Shri Som Mittal, NASSCOM, Member Shri P. Y. Gurav, CII, Member Shri Dinesh Kanabar, FICCI, Member Shri Ved Jain, ASSOCHAM, Member Shri Mahesh P.Sarda, ICAI, Member Shri T. P. Ostwal, IFA India, Member Shri Mukesh Butani, ICC India, Member CBDT F No. 500/54/2012-FTD, Dated: May 03, 2012 AP Government Request For CESTAT Bench at Hyderabad IT seems the Andhra Pradesh Information Technology Minister has written to the Union Finance Minister to establish a South Central Zonal Bench of the CESTAT at Hyderabad. The State Minister told the Central Minister that IT Companies in Andhra Pradesh are facing hardship in attending the Tribunal at Bengaluru and he wants a Bench at Hyderabad for ¶effective and speedy delivery of justice¶. It is understood that the Central Government has already cleared the establishment of a Bench in Hyderabad and once it is established, the Andhra IT Minister can take credit for bringing the CESTAT Bench to Hyderabad. For nearly twenty years, there is a demand for Hyderabad Bench of CESTAT, but somehow it had been scuttled and perhaps now, the time has come to see it as a reality. CESTAT, Bangalore Bench has jurisdiction over three States – Karnataka, Andhra Pradesh and Kerala. Let us hope the CESTAT administration and the Revenue Department would take interest in opening new benches of CESTAT in Hyderabad and other major cities. Didi says Dada is not for President MAMATA Banerjee says Pranab Da is not the Congress candidate for Presidentship. Renuka Choudhary says Pranab is too valuable to be spared for Presidentship. Pranab Da is almost the de facto Prime Minister - why can't we make him the real Prime Minister and make Dr. Singh the President? Prosecution of Government Servants - Guidelines GOVERNMENT constituted a Group of Ministers (GoM), on 6 th January, 2011 with the approval of the Prime Minister, to consider measures that can be taken by the Government to tackle corruption. One of the terms of reference (ToR) of the GoM was to consider and advise on - Fast tracking of all cases of public servants accused of corruption¶. The Group of Ministers, while considering this ToR, observed that it is imperative that cases of sanction for prosecution should be decided expeditiously and within the timeframe of 3 months. The GoM, therefore, recommended that:- In all cases where the Investigating Agency has requested sanction for prosecution and also submitted a draft charge sheet and related documents along with the request, it will be mandatory for the competent authority to take a decision within a period of 3 months from receipt of request, and pass a Speaking Order, giving reasons for this decision. In the event that the competent authority refuses permission for sanction to prosecute, it will have to submit its order including reasons for refusal, to the next higher authority for information within 7 days. Wherever the Minister-in-charge of the Department is the competent authority and he decides to deny the permission, it would be incumbent on the Minister to submit, within 7 days of passing such order denying the permission, to the Prime Minister for information. It will be the responsibility of the Secretary of each Department/Ministry to monitor all cases where a request has been made for permission to prosecute. Secretaries may also submit a certificate every month to the Cabinet Secretary to the effect that no case is pending for more than 3 months, the reasons for such pendency and the level where it is pending may also be explained. The recommendation of the GoM has been accepted by Government with the approval of the Prime Minister. The Prime Minister has also directed that in cases of disagreement where the competent authority proposes to disagree with the investigating agency/CVC, the matter shall be referred to DoP&T and DoP&T's views in such cases must be communicated to the Competent Authority within such time as would enable the competent authority to pass the final speaking order within a period of three months. Henceforth all Ministries/Departments shall ensure: Strict compliance with the procedure and timelines for sanctioning prosecution of public servants; Submission of a certificate every month by the Secretary of each Ministry/Department to the Cabinet Secretary to the effect that no case is pending for more than 3 months and wherever a case is pending for more than 3 months, the reasons for such pendency and the level where it is pending; Submission of disagreement cases, where the competent authority proposes to disagree with CVC, to the DoP&T giving at least three weeks time for DoP&T to finalise its views and communicate the same to the competent authority; and Submission of copies of orders refusing sanction to prosecute to the next higher authority (Prime Minister, in case of an order passed by a Minister-in-charge of a Ministry/Department), within seven days. DOPT No. 372/19/2012-AVD-III, Dated: May 03, 2012 Jurisprudentiol – Monday's cases  Central Excise
Valuation - Certainty in taxation is fundamental cannon of taxation - payment of Net Present Value (NPV) of deferred taxes under Package Scheme of Incentives - difference between sales tax collected from customers and sales tax paid to state authorities at NPV cannot be treated as an additional consideration: CESTAT THE issue involved is that the appellants had applied for eligibility certificates for new units for sales tax incentive under Sales Tax Incentive 1988 Scheme or Part-I of 1993 packages scheme as notified by the Government of Maharashtra Resolution dated 30/09/88 or 1998 Power Generation Promotion Policy Sales Tax Deferral Scheme. The appellants were also issued with the eligibility certificates by SICOM Ltd./ MEDA, Pune (implementing agencies under the Schemes). As per the scheme which related to deferment of sales tax, the appellants were permitted to charge sales tax for the sale of goods and the amount of sales tax collected were permitted to be retained by the appellants and the same were required to be paid by the appellants to the State Government in five equal yearly installments on expiry of the 10th year as computed from the last date of filing returns. It was the stand of the department that the difference between sales tax collected from the customers and the sales tax paid to the state authorities at NPV should be treated as an additional consideration received from the buyers of the goods and, therefore, they should form part of the transaction value. Income Tax Whether actual expenditure incurred by employee on conveyance in performance of official duty and reimbursed by employer is liable to TDS or is a permissible deduction u/s 10(14) - HC rules against Revenue: HC THE AO while scrutinising Form-24 and Form-16 submitted by the LIC of India after issuing a notice to the responsible officers of LIC of India created a demand of Rs. 1,06,800/- on the ground that the responsible officers of the LIC have wrongly allowed deduction of conveyance allowance and additional conveyance allowance which resulted in short deduction of tax. The shortfall and interest u/s 201 was computed and arrived at. The CIT(A) affirmed the order of the AO. The Appellate Tribunal insofar as the amount regarding recovery of tax is concerned directed the AOs to reinvestigate into the matter after giving reasonable opportunity of being heard to the assessee and direct to produce the evidence of payment of tax by the Development Officers on the matter in question and to give finding thereafter. Insofar as the interest part was concerned, the appeal of the LIC was rejected. See our columns Monday for the judgements Until Tomorrow with more DDT Have a Nice Weekend Mail your comments to vijaywrite@taxindiaonline.com |
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