TIOL-DDT 1108
12.05.2009
Tuesday

YOU must have read our TIOL Top story we carried yesterday - New TDS Regime-A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'

The Government has reacted rather quickly and issued a Press Release to the effect that:-

The Central Board of Direct Taxes have decided to defer the implementation of Notification No.31/2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962. The amended/substituted Rules will now come into effect on 1st July 2009 instead of 1st April 2009.

Tax deductors/collectors may continue to deposit TDS/CS tax and file TDS/TCS returns as per the pre-amended provisions in the interim period.

Now Notification No. 31/2009 had amended the Income Tax Rules and it specifically mentioned that the Income-tax (8th Amendment) Rules, 2009, shall come into force on the 1st day of April, 2009.

Now by a press release, the Board has extended this effective date to 1st July 2009 instead of 1st April 2009.

The CBDT can certainly amend the Rules, but can they do so by a PRESS RELEASE? The Rules made by the CBDT have the status of statute and are required to be placed before Parliament. Press Releases don't certainly have that status and are not subject to Parliamentary scrutiny.

Now the new Rules had come into force on 1st April 2009, can they by a Press Release say that the Rules will come into force from 1st July 2009?

What happens during the period from 1st April till yesterday when they gave a Press Release?

Obviously they will come up with a notification – hopefully very soon.

Had we not raised this issue strongly yesterday, perhaps the confusion would have continued.

We are grateful to the Board for reacting quickly – though they should have given a Notification instead of a Press Release, but a Press Release is far easier to release than a Notification.

CBDT Press Release No.402 /92/2006-MC (11 of 2009) Dated: April! (May?) 11, 2009

Regarding basic facilities, CESTAT Bench not better placed than Bar – RK Jain

In a recent meeting to welcome the new President of CESTAT, RK Jain, the legendary Secretary of the Bar Association said,

CESTAT commands the number one position among all similar Tribunals. Our institution disposes cases involving huge stakes and having much implication for the exchequer and national economy. It is almost on par with High Court as appeal from our Tribunal lies to Hon'ble Supreme Court in very many cases. Also, our Hon'ble Judicial Members are eligible for appointment as High Court Judges and we had number of Members who became Judges of High Court later. Our Technical Members had headed the Revenue Board and other high positions in the Revenue Department before joining the Tribunal and even after going from the Tribunal.

Our Tribunal has celebrated its Silver Jubilee recently. But, we don't have our own building so far. The Members of the Bar are rendering assistance to the Bench even without the basic facilities such as Chambers, Canteen, Service Centre with Photo-copying, Fax and Internet facilities and there is shortage of space for Bar Library. We are fully aware of the fact that in the matter of having basic facilities required for conducive judicial working, the Hon'ble President and Hon'ble Members of the CESTAT are no better placed than the Members of the Bar. The Ministry of Finance should take more interest in this regard.

We, at the Bar, are aware that the role of the Judges is difficult - they have to satisfy everyone - the parties to the cause, the appellate courts - even the loser should be a satisfied person with reasoning given against him. We are proud that orders passed by our Tribunal have been approved by the highest court of the land, in several cases though in some recent decisions the Apex Court has expressed expectations for more detailed and rational orders from the CESTAT.

Commissioners' Transfers – CBEC running out of time?

Strangely it is not Departmental officers alone who are interested in getting information about the transfer of Commissioners, but also a large number of assessees. It is a revelation to us that there are so many Commissioners who are so unpopular that both their staff and assessees are hoping for their transfer. Many assessees are seeking adjournments of Personal Hearing hoping that a more reasonable Commissioner will be posted. More than the Commissioners concerned we are flooded with calls from junior officers and assessees who are more interested than the Commissioners themselves in the transfers. All of them expect us to share inside information with them. We submit, we only report news; we don't create.

It seems the FM (you know who he is) wanted some changes in the proposed list. This is a time when politicians are very obliging.

But will the CBEC be able to issue the transfer orders by Friday? If not, the order may be stuck for quite some time, till a new Government takes a new decision.

It is understood that the FM has agreed to some major changes in the Transfer Policy like making the tenure in Metros 8 years instead of 6 years and excluding the period of deputation in the metros. If that is so, the transfers 2009 also have to be as per the revised policy. Really complicated issues and we will have to wait till the weekend and for that PH, wait for a week.

Customs Officer asking perfumes

A Filipino worker returning from Madrid recently had a harrowing experience with the Customs. A lady Customs officer asked him for money, perfumes, soap, shampoo, toothpaste, shoes, and milk, among others.

On refusing, he was suitably harassed even with a threat of being shot down.

Our Customs Better?

DDT has learnt that recently an Airport Customs in India had seized liquor bottles from an Immigration official. It is only a matter of time before the Immigration guys retaliate. You should realise whether the powers are vested in you or wasted in you.

Jurisprudentiol–Wednesday's cases

Central Excise

Embroidered fabrics, which are subject to process of dyeing and bleaching merit classification under Chapter heading 58.05 and are entitled to exemption under Notification no. 4/97-CE - Revenue ROM dismissed - CESTAT

It is not open to the Revenue to reargue the matter and call upon the Tribunal to review the basis of the decision. This is beyond the scope of the rectification application. Mistake apparent on the face of the record must be an obvious and a patent mistake and not something which has to be established by a long drawn process of reasoning or where two opinions are possible.

Income Tax

Search - TPO finds no fault but Investigation finds documents of tax avoidance - HC upholds provisional attachment of Dmat account u/s 281B; Sec 132 does not mandate disclosure of satisfaction recorded before issue of warrant: Bombay High Court

THIS is one of the very few search cases where the charges of tax avoidance by making exaggerated foreign remittances for marketing and advertising expenditure and routing the same fund into the account of the CMD of the assessee company, have finally stuck against the assessee despite the expenses being scrutinised by the Transfer Pricing Officer and same being allowed in regular assessment. The HC has also upheld the provisional attachment of property and demat account of the CMD u/s 281B in view of the alleged non-cooperation of the CMD in investigation by the Revenue.

However, the HC has allowed the CMD's plea that whenever he applies for sale of the attached shares and seeks investment of the sale proceeds in the blue-chip shares so that no prejudice is caused to the interest of the assessee but at the same time, the same shares are to be attached by the Revenue to safeguard its interests. The Bench also dismissed the assessee's charge that they have lost Rs 29 Crore because of the attachment of their demat account.

Customs

A severe back pain and wife's mental illness does not constitute sufficient cause for delay – Applications for Condonation of Delay dismissed - CESTAT

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice day.

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