  TIOL-DDT 2308
06.03.2014
Thursday
THE Central Board of Direct Taxes (CBDT) has received several petitions from deductors/collectors, being an office of the Government ('Government deductors'), regarding delay in filing of TDS/TCS statements due to late furnishing of the Book Identification Number (BIN) by the Principal Accounts Officers (PAO) / District Treasury Office (DTO) / Cheque Drawing and Disbursing Office (CDDO). This has resulted in consequential levy of fees under section 234E of the Income-Tax Act, 1961.
Board has decided to ex-post facto, extend the due date of filing of the TDS/TCS statement prescribed under sub- section (3) of section 200 /proviso to sub-section (3) of section 206C of the Act read with rule 31A/31AA of the Income-tax Rules, 1962.
However Board has clarified that any fee under section 234E of the Act already paid by a Government deductor shall not be refunded. Further this extension is only a one-time exception in view of the special circumstances.
Board states that timely filing of TDS/TCS statements is essential to ensure timely reconciliation of Government accounts and for providing tax credit to the assessees while processing their Income-tax Returns.
Board suggests that since the Government deductor and the associated PAO/ DTO/ CDDO belong to the same administrative setup that regulates the clearance of expenditure, the deductors/collectors may be advised to co-ordinate with the respective PAO/DTO/CDDO to ensure timely receipt of BIN/filing of TDS/TCS statements.
This Circular is addressed to all Chief Commissioners and Directors General of Income Tax. They are supposed to inform all the officers for compliance.
CBDT Circular No. 7/2014 in F. No. 275/27/2013-IT(B), Dated: March 04 2014
Customs - Import of Ammonium Nitrate - Compliance of Ammonium Nitrate Rules - CBEC Instructions
AS per Rule 8 of the Ammonium Nitrate Rules, 2012, no person shall import, export, transport, possess or sell Ammonium Nitrate unless;
(i) iit is duly packed in a suitable waterproof bag or container or is suitably bagged by stevedore or converter;
(ii) the container or package is marked in accordance with the provisions of rule 8;
(iii) the package conform to the relevant standard of Bureau of Indian Standards or other standards accepted and approved by the Chief Controller; and
(iv) the packages of Ammonium Nitrate for export or import conform to the requirements of the tests as specified under International Maritime Dangerous Goods Code (IMDG Code) or United Nations recommendations on the transport of Dangerous Goods.
Considering the sensitive nature of import/export of Ammonium Nitrate, Board desires that guidelines contained in Ammonium Nitrate Rules, 2012 for import/export of ammonium nitrate be scrupulously followed by the field formations. All Commissioners of Customs concerned should ensure that consignment of Ammonium Nitrate is allowed clearance only in bagged form as specified in the subject Rules and not in loose form.
CBEC Instruction in F.No.450/37/2014-Cus.IV, Dated: March 5, 2014
No MEP for Export of Onions
GOVERNMENT has removed the Minimum Export Price stipulation for export of onions which was USD 150 per MT with effect from 26.12.2013. This was 1150 USD in September. Now that onion prices have come down, Government has reacted and removed the Minimum Export Price. This has no immediate impact, as the current price is almost around 150 dollars. In summer onion crop in the country is expected to go up substantially and the prices will come down further and at that time if there are no exports, farmers are going to be badly affected. In June, we will be having a new Government and perhaps it may not be possible to take a decision. So, the wise men in Government must have done this to avoid a future crisis.
DGFT Notification No. 72/(RE-2013)/2009-2014, Dated: March 04, 2014
Income Tax Additional Commissioner gets five years RI for bribe
THE charge against the IRS officer (let us call him SK) is that he demanded a bribe of Rs. 10 lakhs from an assessee. And then started the episode like a Bollywood movie.
The assessee alerted the CBI. SK had asked the assessee to bring the money to a road in Modi Nagar. It was 25/05/2006. The assessee and the CBI team in two cars reached the destined spot. Our SK also reached the spot in a Scorpio car and boarded the assessee’s car and both the cars proceeded to Meerut side. The CBI car followed them. In the car, the assessee handed over Rs. 8 lakhs in a polythene bag to SK. After some time both the cars stopped and SK called somebody from his car and handed over the money who took it back to the Scorpio. Both the cars again moved - of course followed by the CBI car. After sometime, again both the cars stopped and of course the third car of the CBI. SK got down from the vehicle and proceeded to board his Scorpio. At that moment the CBI team surrounded him and his car. He extricated himself, got into his car and the driver of the car first drove the car in reverse side and then moved ahead in high speed endangering the life of CBI team members.
Then started the Chase - with message flashed to the local Police. During the chase, SK threw away the bag containing the bribe money on the road from his Scorpio. The CBI team picked up the money and continued the chase. Local Police tried to stop the Scorpio at several places. Finally the car was taken into control. In the car, they found two other gentlemen - one was the driver and the other was the one who took the money from SK. The wife of SK (also an IRS officer) and their daughter were also found in the car. BUT SK WAS MISSING! The two gentlemen were arrested and SK surrendered before the Court on 27/05/2006.
It took 8 years for the trial and the CBI Court this week found SK guilty and convicted him.
The Special Judge, CBI Court made some interesting remarks while delivering his judgement:
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If an individual is posted as a senior officer in a city, the normal presumption for a businessman is that the officer is all-powerful and can initiate any action against him. The normal perception of common man is that an officer may not give any benefit but if the officer so desires may harm the common man. This unfortunate perception of nuisance value amongst the common people drive them to the payment of bribe and encourage the unscrupulous and corrupt public servants towards the demand of bribe.
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While awarding the sentence, the Judge made some more wise observations:
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It has been established on record that convict demanded and accepted a bribe of Rs. 8 lakhs from the complainant. The convict is an IRS officer of 1989 batch and at the time of incident, he was posted as Addl. Director (Investigation), Income Tax at Meerut. Indian Revenue Service is one of the premier services of this country and the system has conferred exemplary power upon the IRS officers. They are basically the pivots of entire economic system in the country. The IRS officers are generally at very sensitive positions and handle the revenue matters of public at large and ultimately of the entire nation. The corruption in any form, at any stage and by any public servant, on whatsoever position he/she is, is condemnable. However, if the corruption is done by the senior officers then it deserves special treatment. The country is run by the bureaucracy manned by senior officers and if such senior officers indulge in corruption then future of the country is actually in danger. It is painful to note that this country sometimes is being branded as the corrupt nation. The perception of common man has become such that nothing moves without indulging into corruption.
Any lenient view in awarding the punishment may be considered as an incentive to public servants who are susceptible to corruption to indulge in such nefarious practices with immunity.
It may be noted that the public servant represents the Government in the eyes of the public and any incident of corruption on the part of the public servant shakes the confidence of the public in the system itself. The loss of confidence in the governance has many ill effects including slow growth rate, bad law and order and over all mismanagement in the society.
I consider that a message must go that nobody is above the law and that indulging in corruption is a risky proposition. The society looks upon the Court in appropriate cases for a maximum punishment so as to have deterrent effect on the society at large.
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He was awarded RI for five years with a fine of Rs. 50,000/-.
Supreme Court Judges fume inside at behaviour of High Court Judge
THE Supreme Court in a judgement delivered yesterday fumed inside at the sudden unfamiliar incident on a raw unconventional protest that was unexpected, uncharitable and ungenerous, and to say the least it was indecorous.
Their Lordships were referring to the unconventional behaviour of Justice CS Karnan of the Madras High Court.
For the uninitiated, on 8th January 2014, Justice Karnan, a sitting judge of the Madras High Court stormed into a courtroom where two judges were hearing a PIL against alleged partisanship in appointment of judges to the Madras High Court. He told the court that the selection was indeed unfair. It was a first in India’s Judicial history when a sitting judge of the High Court storms into a courtroom and makes his submissions.
The Supreme Court observed,
The exceptional personal conduct of the learned Judge does not require any judicial response for investigating the unusual circumstances and scrutinising the same as it is not necessary to decide the issue at hand which can be otherwise disposed off in the manner as indicated herein. The learned Judge may have found himself caught in a conflict of class or caste structure and it appears that matured patience might have given way to injure rules of protocol.
It is said that immense dignity is expected, and weaknesses or personal notions should not be exposed so as to affect judicial proceedings. Judges cannot be governed, nor their decisions should be affected, only by the obvious, as proceedings in a court are conducted by taking judicial notice of such facts that may be necessary to decide an issue.
With the above observations and dignified reluctance touching disapproval, we leave this matter for any future milestone to be covered appropriately.
CBEC needs a Superintendent for ICD - Willing officers can apply
DON’T mistake ICD for your traditional ‘Inland Container Depot’ - this ICD is the International Customs Division in the Board. For the other ICD, no invitations are needed. Board has approved the appointment of a Superintendent on loan basis in the ICD in the Board to handle the work of in the areas of Bilateral Customs cooperation, IPR, Free Trade etc,. Board wants Chief Commissioners to forward names of willing and suitable officers, latest by 15.3.2014.
CBEC. F. No. 21000/1/2010-US(ICD), Dated: March 04 2014
Jurisprudentiol - Friday's Cases
Central Excise
 Valuation - buyer agreed to provide interest free advance to assessee to help him set up factory with an undertaking that assessee would supply at least 90% of their production to buyer - such ‘compensation’ is not includible in AV as SCN did not bring out categorically allegation that arrangement was to influence sale price: CESTAT by Majority
THE appellant was manufacturing re-treading and supplying 97% to 98% of their production to M/s Black Stone Rubber Industries Pvt. Ltd ("the buyer"). During 1996-97, the buyer paid an amount of Rs.6,84,780/- as "compensation" to the appellants in addition to the declared price of the goods. During 1997-98 the buyer paid Rs.6,50,500/- in similar manner.
The case of Revenue is that these amounts should have formed part of the assessable value of goods sold by the appellant to the buyer.
Accordingly, a SCN demanding excise duty of Rs.2,20,835/- was issued and confirmed by the adjudicating authority and also upheld by the Commissioner. However, the Commr(A) set aside the penalty of Rs.25,000/- on the appellant manufacturer and reduced the penalty on the partner to Rs.10,000/-
Aggrieved by this order, the appellant is before the CESTAT.
Income Tax
Reassessment u/s 147 - Whether Revenue is on sound legal footing if it denies to share2G Spectrum Investigation Report on ground of confidentiality - YES: Delhi HC
THE assessee is a company, incorporated under the Companies Act, 1956. It filed its return of income on 6.10.2010, declaring nil income for AY 2009-2010, which was processed u/s 143(1), without any notice u/s 143(2). Subsequently, assessee was served with a notice dated 5.7.2011 u/s 148 for reassessment of the AY 2009-2010. Assessee requested a copy of the reasons that led to opening of the reassessment proceedings. No such reasons were provided; however a questionnaire was sent, to which the assessee duly responded. Thereafter, reasons to believe that income had escaped assessment were provided to the petitioner.
The issues before the Bench are - Whether the issuance of a notice and the communication and furnishing of reasons thereof, go hand-in-hand; Whether two notices or proceedings can remain pending against the same assessee in respect of the same AY at the same time; Whether non disclosure of the internal date on which the reasons were prepared by the Revenue can vitiate the reassessment proceedings; Whether the mere fact that a letter conveying the decision taken in the order sheet was entered before the reasons recorded for the fresh notice, this mode prejudices the assessee or violates any procedural mandate u/s 147 and Whether the Revenue has power to keep the 2G Spectrum Report from the assessee on the ground of confidentiality. And the verdict goes in favour of Revenue.
Service Tax
If the appellant had indeed rendered a multiplicity of services, charges would have varied every month which also is pointer towards fact that appellant rendered only one type of service - From statements of the employees of appellant firm, service rendered was only security services and nothing else -: CESTAT
IN the present case, against the appellant, a service tax demand of nearly sixty lakhs along with penalties was confirmed on the ground that they did not pay Tax on the Security Agency services rendered.
Before the CESTAT while seeking Stay in the matter, the applicant submitted -
Over and above rendering security agency services, they were also rendering other services, such as management advice, group auditing, guidance on business planning, financial planning, and business guidance etc.
However, the adjudicating authority had treated that all the services rendered by the applicants as a single service, namely that of a security agency.
Service tax payable on the security agency service rendered by them would be approximately Rs.14 lakhs.
They are not a commercial concern as they are operating on a no profit no loss basis, and based on CBEC Circular no. 86/4/2006-ST dated 1.11.2006 service tax cannot be levied.
See our Columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice day.
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