TIOL-DDT 590
11.04.2007
Wednesday
In terms of section 244A of the Income-tax Act, an assessee is entitled to receive interest on the amount of refund due under the Act. The interest is to be granted simultaneously with the refund and there should normally be no reason to grant refund without adding the entitled interest.
In the case of Sandvik Asia Ltd. v. CIT and others - 2006-TIOL-07-SC-IT, the Supreme Court adversely commented upon the delay in grant of interest on refund and awarded compensation to the assessee for the delay by the Department. The Court also recommended that action be initiated against the officers responsible for the delay.
So the Board instructs that
1. while granting refund to the assesses, care should be taken to ensure that any interest payable under section 244A on the amount of refund due should be granted simultaneously with the grant of refund and there should, in no case, be any omission or delay in the grant of such interest.
2. Failure to do so will be viewed adversely and the officer concerned will be held personally accountable, inviting appropriate action.
3. The Range officers should be directed to carry out periodic test checks of cases within their jurisdiction to ensure that provisions of section 244A are scrupulously implemented.
4. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
We reported the case more than a year ago, on 30th January, 2006 to be precise and we are happy that at least after 14 months, the Board has woken up to face facts. Officers should note that if they are careless, they may face the consequences.
INSTRUCTION NO. 2 / 2007, Dated: March 28, 2007
Does this apply to CBEC?
While commenting on the judgement, TIOL had observed,
The Supreme Court’s observation that “where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law the revenue must compensate the assessee” should squarely apply to excise and customs cases. Audacious Audit parties and pestering preventive parties should think twice before forcing the assessees to make voluntary payment of duties which they are not required to pay. Rather their bosses should be more careful. This may not be a worthwhile exercise as, when the department ultimately loses the case, the voluntary payment along with interest has to be returned and there is the risk of the Finance Minister being told by the courts about the lethargic and adamant attitude which causes considerable loss to Revenue.
Maybe CBEC should also consider issuing such an instruction.
Rebate on goods manufactured in North East, J&K etc., and subsequently exported under rule 18 of the Central Excise Rules – Board clarification creates confusion
Yesterday’s DDT carried a detailed analysis of the issue which included an article, where we first raised the issue. In today’s special column, we carry an incisive article by an expert on how the Board clarification creates more problems than it solves. Our expert feels that there would have been no problem, if Board had not issued any clarification at all.
See our Special Column
Monitoring of scrutiny assessments by Range Heads – CBDT clarifies – Board instructions do not restrict Range Heads to supervise their subordinates.
As per the Instruction No. 2/2006, dated 27th April, 2006, it was stated that the monitoring of cases under scrutiny by the Range Heads shall be done in accordance with the provisions of section 144A of the Income-tax Act.
It is brought to the notice of the Board that placing undue reliance on these instructions, the Assessing Officers have taken a stand that the Range Heads could not and should not call for records of cases except for the purpose of issue of instructions under section 144A of the Income-tax Act.
Board now clarifies that these instructions do not in any way restrict the inherent powers of the Range Heads to administratively supervise the work of their subordinate officers by looking into the records.
INSTRUCTION NO. 1 / 2007, Dated: March 16, 2007
Draconian 32/2006 – AP High Court also stays order
Remember the draconian Notification No. 32/2006 CENT dated 30.12.2006, which was CBEC’s NEW YEAR gift to the trade, under which a Board Member can freeze Cenvat credit, deny facility of monthly payment and post a big brother in the factory? The hyperactive Board had already issued orders doing some of these things and as predicted by DDT, these are being challenged in various High Courts. The AP High Court yesterday stayed one such order. The lawyers of this country should be grateful to the CBEC for giving them new opportunities. I know a Law firm which has filed writs in several High Courts on this issue.
No excise duty in North East – DONER Minister, but where is the Notification?
DONER stands for Development Of North Eastern Region and there is a minister for that, Mr. Mani ShankerAiyer. The illustrious minister announced yesterday that there would be no income tax for 10 years and no Excise Duty except on some health harming substances like tobacco, gutka etc. But he is perhaps not aware that his more illustrious Finance Minister is yet to notify the excise exemption. The DONER minister wants to attract investors to the North East, but will somebody clarify as to why the CBEC is yet to notify the concessions?
Elders get elders
Rajya Sabha is supposed to be our house of elders and the President has nominated two real elders to the House. 81 year old father of India’s Green Revolution, Prof. M S Swaminathan and 78 year old scholar of classical Indian dance and Indian art and architecture, Kapila Vatsyayan are the new nominated members of the Upper House. Kapila had a short stint as member earlier in March 2006, when she resigned on the issue of office of profit. The youngest member of the House of Elders is just 33 years old while the oldest is 86 years.
The Government babus want the Pay Commission to consider a higher retirement age.
Until tomorrow with more DDT
Have a nice Day.
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