TIOL-DDT 2898
28 07 2016
Thursday

CBEC issues the Circular:

In Kunj Power Projects vs UOI - 2015-TIOL-2728-HC-ALL-ST, the Allahabad High Court imposed cost on the Department and instructed the Central Board of Excise & Customs to issue a circular to all the officers ensuring that the powers under Rule 3 should be exercised with utmost care and caution and should not be exercised frivolously.

The Board has obeyed and issued a Circular yesterday.

This is a case of an assessee whose bank accounts were ordered to be attached without giving any opportunity to them. The Allahabad High Court after a detailed analysis of the legal provisions, observed,   inter-alia, that the order directing attachment of the property without waiting for a reply to the show cause notice, and without giving any opportunity and without giving any notice, was in gross violation of Rule 3 of the Rules of 2008 ( Provisional Attachment of Property Rules, 2008 ) read with paragraph 2 (iii) of the Circular 103/06/2008 dated 1st July, 2008. It was mandatory for the authority to issue a notice giving 15 days time to reply before attaching a property. The High Court further observed that since proceedings under Section 73 of the Act had been initiated and a show cause notice had already been issued to the petitioner, action for attachment could only have been initiated by the Commissioner and should not have been initiated by the Deputy Commissioner.

The Board Circular states:

1. On this issue, there are adequate safeguards in the law and same have been highlighted in the Circular dated 1.7.2008.

2. The present situation has resulted only on account of non-compliance with respect to both.

3. Chief Commissioners are requested to issue standing orders with respect to the observations of the Hon'ble Allahabad High Court and to also emphasize that non-compliance with legal provisions or administrative instructions will leave officers with no defence in legal proceedings arising out of such non-compliance.

The earlier Board Circular had emphasized that the provision for attaching a property provisionally is of an extraordinary nature and should be resorted to in the utmost circumspection and with maximum care and caution .

Obeying the Laws and Board Circulars is a rare trait among field officers.

Please also see DDT 2739 07 12 2015.

CBEC Circular No. 196/06/2016-SERVICE TAX., Dated July 27, 2016

When do you become sixty years old? CBDT Clarifies

INCOME up to three lakh rupees is exempted for every individual who is of the age of sixty years or more at any time during the previous year.

Now if Citizen A was born on 1.4.1956, when does he become sixty years old? Is it on 1.4.2016 or 31.3.2016. The crux of the problem is; can he avail the exemption for the financial year 2015-16?

A serious problem indeed for the CBDT.

The Board noted that although specific provision does not exist in this regard under the Income-tax Act, 1961, the Supreme Court had an occasion to consider a similar issue in the case of Prabhu Dayal Sesma vs. State of Rajasthan wherein it was observed:

"9....At first impression, it may seem that a person born on January 2, 1956 would attain 28 years of age only on January 2, 1984 and not on January 1, 1984. But this is not quite accurate. In calculating a person's age, the day of his birth must be counted as a whole day and he attains the specified age on the day preceding, the anniversary of his birthday. We have to apply well accepted rules for computation of time. One such rule is that fractions of a day will be omitted in computing a period of time in years or months in the sense that a fraction of a day will be treated as a full day. A legal day commences at 12 o'clock midnight and continues until the same hour the following night. There is a popular misconception that a person does not attain a particular age unless and until he has completed a given number of years. In the absence of any express provision, it is well settled that any specified age in law is to be computed as having been attained on the day preceding the anniversary of the birthday"

In view of the above judgment, the Central Board of Direct Taxes, in exercise of powers under section 119 of the Act, clarifies that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. In particular, the question of attainment of age of eligibility for being considered a senior/very senior citizen would therefore be decided on the basis of above criteria.

The field authorities are directed to take note of above position for ascertaining the age while computing tax liability of a taxpayer falling in 'Individual' category, being resident in India.

CBDT Circular No. 28/2016., Dated July 27, 2016

Scant respect for Board's Transfer Orders

IT is not the Laws and Board Circulars only that are disobeyed with consistency in the field, they have no respect for the Board's Transfer Orders also.

By Office Order No.53/2016, dated 10.05.2016, the CBEC transferred 190 Assistant/Deputy Commissioners. It was directed that the transferred officers must join at their new place of posting forthwith but not later than 17.05.2016 under intimation to the Board.

The Chief Commissioners/Directors General concerned were directed to send compliance reports regarding joining of the officers to the Board by 20.05.2016. It was also informed that all representations received till date regarding transfer and posting in the grades of Assistant/Deputy Commissioner of Customs and Central Excise stand disposed of and that no representations whatsoever shall be entertained before they join at their new place of posting.

Similarly, by Office Order No. 54/2016, Board transferred 145 Additional/Joint Commissioners with identical directions.

Obeying Board orders is not really a favourite pastime in the field. Everybody knows that the only consequence of disobeying the Board is the Board would view it seriously.

On 1.7.2016, Board realized that many of the transferred officers were not relieved. By a letter dated 1.7.2016, Board requested that all the officers, who have not been relieved so far, may be relieved by 04.07.2016 positively and a compliance report be sent to the Board latest by  08.07.2016.

On 26.07.2016, Board finds that 92 of the 190ACs/DCs and63 of the 145 JCs/ADCs transferred in May 2016 are yet to be relived - in spite of the Board's clear directions. In such situations, the Board knows what to do. It views this disobedience seriously. Without mistake, Board has again taken a serious view and requests that all these officers may be relieved immediately and compliance report sent to the board latest by 29.7.2016, failing which Board will constrained to take appropriate action against the defaulting Chief Commissioners . (It could have been better as Board will be constrained, but with too many disobedient officers around, Board cannot be too fussy about language.)

What will happen if the compliance reports are not received by tomorrow? You know the answer; Board will again take a serious view - they have been doing it for a long time.

CBEC Letter in F. No.C.50/30/2016-Ad.II., Dated: July 26, 2016

CBEC Decides to Assign Charge of CCs to PCs

BOARD has issued an Office Order as:

With the approval of the competent authority, it has been decided to assign the charge of the following posts of Chief Commissioner/Director General of Customs and Central Excise to the officers mentioned against each of the posts with immediate effect and until further orders, in addition to their present assignments

Please note Board has only decided to assign proposed charge. When will the decision and proposal get converted into order?

CBEC Office Order No.86/2016 in F.No.A.22011/3/2016-Ad.II., Dated July 26, 2016.

Rescission or Recession

TAKING note of the DDT capsule carried by us yesterday under the title "Scrumptious Circulars!" G Jayaprakash, Advocate and a prolific writer for our columns, brings to my notice the notification 3/2015-ST dated 01.03.2015 which reads - the Central Government, being satisfied that it is necessary in the public interest so to do, hereby rescinds the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 42/2012-Service Tax, dated 29th June 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R.520 (E), dated 29th June 2012, except as respects things done or omitted to be done before such recession.

Perhaps, the Central Government wanted us to read it as "rescission" but somewhere down the line the prevalent state of affairs might have made the notification maker spell it as "recession" - could also be blamed on predictive text technology?

However, this is not the only recession in the Board Notifications. I could find it in at least 6 other notifications - 7/2011-CE; 25/2007-CE; 21/2006-CE; 34/2012-ST; 35/2007-ST; 70/2007-Cus.

And it is not as if the Board does not know the word rescission - they used it in Customs Circular No. 19/97, dated 12.06.1997.

FTP - Import policy of Unmanned Aircraft System

GOVERNMENT has introduced policy condition No.3 under Chapter 88 of ITC (HS), 2012 - Schedule - 1 (Import Policy), as:

Import of Unmanned Aircraft System (UAS)/Unmanned Aerial Vehicle,- (UAVs)/Remotely Piloted Aircraft (RPAs)/drones is 'Restricted' requiring prior clearance of the Directorate General of Civil Aviation (DGCA) and import licence from DGFT.

DGFT Notification No. 16/2015-2020., Dated: July 27, 2016

Declaration of Assets and Liabilities by Babus -No Due Date - Act Amended

GOVERNMENT had notified the Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the limits for Exemption of Assets in Filing Returns) Rules, 2014 under the Lokpal and Lokayukt as Act, 2013 on 14.07.2014.

The Government servants were required to file returns of their assets and liabilities by 15th September 2014. Obviously the babus are not ready to part with this information.

In September 2014, the Government extended the last date to 31st day of December 2014.

Come December and they extended it to 30th April 2015.

In April also babus were not ready and the government extended the last date to 15th October 2015.

On October 11th, a Sunday, the Government extended the date to 15th April 2016.

The Government had emphatically stated on 28th March 2016 that there shall be no further extension of the aforesaid last date i.e. 15.04.2016. On 11th April,the Government extended it till 31st July 2016. DDT commented then, "This is the fifth extension - and certainly not the last."

Tomorrow is the last working day before 31st July and this time there is no date. Yesterday the Lok Sabha has amended the Lokpal and Lokayuktas Act, 2013. The Minister Dr. Jitendra Singh explained the position in Parliament yesterday:

Some of the provisions of this Act have created certain issues. For example, the Act requires that all public servants should file their declarations of assets including assets of their spouses and children. That is one issue which has raised considerable amount of discussion. The date for that was April, which later on extended and currently the deadline or the last date is 31st July, 2016.

I propose an amendment in Parliament today in order to substitute the provision of section 44 which precisely deals with the declaration of assets and the provision of making the assets public. I do so, so that the present or the immediate impasse which has happened with regard to the declaration of assets could be overcome and the same in relation to the public servants which include the Government officials as well as the political functionaries and the other category of NGOs could be deferred.

And the Bill was passed. So, now the babus need not file the statement maybe for another couple of years.

Please also see  DDT 2815,  2702,  2585,  2505, 2504,  2433,  2405, 2826

Until Tomorrow with more DDT

Have a nice day.

Mail your comments to vijaywrite@tiol.in