TIOL-DDT 2485
28.11.2014
Friday

ARCHANA Girish Sabnis completed a professional course - Licentiate of the Court of Examiners in Homoeopathy medicines (LCEH) and then joined LLB Course in Mumbai. After completing her LL.B, she wanted to practice law and applied to the Bar Council of Maharashtra and Goa for getting herself enrolled as Advocate. The Bar Council refused admission on the ground that her qualification LCEH is not recognized by Bar Council of India. She filed a writ petition in the High Court and not being successful there, is before the Supreme Court.

The Supreme Court noted that he word ‘degree' means any such degree which is specified by the University Grants Commission in the official gazette with the approval of the Central Government. The counsel appearing for the appellant has not produced before the Court any such notification to show that the qualification of LCEH is a degree or equivalent to a degree duly notified by the Commission with the previous approval of the Central Government. The Bar Council of India Rules provide that for the purpose of joining the course in law for a degree, candidate must be a graduate of any University or must possess such academic qualifications which are considered equivalent to a graduate degree of a University recognized by the Bar Council of India.

The Supreme Court ruled that the Bar Council of India is not bound to grant a license as claimed by the appellant. Pursuing law and practicing law are two different things. One can pursue law but for the purpose of obtaining license to practice, he or she must fulfill all the requirements and conditions prescribed by the Bar Council of India.

So, the Doctor's hope to become a lawyer failed.

She applied to the Bar Council in 2001 and in 2014 - thirteen years later, the highest court of the land decides that she is not entitled to be a lawyer.

Perhaps she has become a successful doctor by this time.

Please see 2014-TIOL-94-Misc-SC

Income Tax Returns need not be disclosed under RTI - HC

A person who is said to be an informer of the Income Tax Department sought under the Right to Information Act, 2005 information and all the records available with the Income tax department in respect of nine assessees.

The CIC allowed the appeal and directed the PIO to provide inspection of the records and also other information sought for.

The assessees whose records have been sought for, are in writ before the Delhi High Court.

The High Court observed,

The income tax returns filed by an assessee and further information that is provided during the assessment proceedings may also include confidential information relating to the business or the affairs of an assessee. An assessee is expected to truly and fairly disclose particulars relevant for the purposes of assessment of income tax. The nature of the disclosure required is not limited only to information that has been placed by an assessee in public domain but would also include information which an assessee may consider confidential. As a matter of illustration, one may consider a case of a manufacturer who manufactures and deals in multiple products for supplies to different agencies. In the normal course, an Assessing Officer would require an assessee to disclose profit margins on sales of such products. Such information would clearly disclose the pricing policy of the assessee and public disclosure of this information may clearly jeopardise the bargaining power available to the assessee since the data as to costs would be available to all agencies dealing with the assessee. It is, thus, essential that information relating to business affairs, which is considered to be confidential by an assessee must remain so, unless it is necessary in larger public interest to disclose the same. If the nature of information is such that disclosure of which may have the propensity of harming one's competitive interests, it would not be necessary to specifically show as to how disclosure of such information would, in fact, harm the competitive interest of a third party.

Assessment proceedings are quasi-judicial proceedings where assessee has to produce material to substantiate their return of income. Income tax has to be assessed by the income tax authorities strictly in accordance with the Income Tax Act, 1961 and based on the information sought by them. In the present case, the respondent wants to process the information to assist and support the role of an Assessing Officer. This has a propensity of interfering in the assessment proceedings and thus, cannot be considered to be in larger public interest. The CIC had proceeded on the basis that the income tax authorities should disclose information to informers of income tax departments to enable them to bring instances of tax evasion to the notice of income tax authorities. This reasoning is flawed as it would tend to subvert the assessment process rather than aid it. If this idea is carried to its logical end, it would enable several busy bodies to interfere in assessment proceedings and throw up their interpretation of law and facts as to how an assessment ought to be carried out. The propensity of this to multiply litigation cannot be underestimated. Further, the proposition that unrelated parties could intervene in assessment proceedings is wholly alien to the Income Tax Act, 1961. The income tax returns and information are provided in aid of the proceedings that are conducted under that Act and there is no scope for enhancing or providing for an additional dimension to the assessment proceedings.

The High Court held that the information furnished by an assesse can be disclosed only where it is necessary to do in public interest and where such interest outweighs in importance, any possible harm or injury to the assesse or any other third party. However, information furnished by corporate assessees that neither relates to another party nor is exempt under Section 8(1)(d) of the Act, can be disclosed.

Please see 2014-TIOL-2073-HC-DEL-RTI

FTP - Amendment in ANF2A- Aayat Niryat

THE DGFT has amended the ANF2A. The existing Form ANF2A is replaced by another format, online filing of which is mandatory with effect from 1.1.2015.

Decision regarding grant of refusal of IEC will be conveyed within two working days by the jurisdictional R.A.

Facility of online filing of application for IEC will also be available on the e-biz portal of DIPP, after its integration with DGFT's system.

DGFT Public Notice No. 76/(RE-2013)/2019-2014., Dated: November 27 2014

CESTAT - Extension of Stay - not required henceforth?

YESTERDAY evening we reported the order passed by the Ahmedabad Bench of CESTAT in the case of Venketeshwara Filaments Pvt. Ltd. 2014-TIOL-2388-CESTAT-AHM wherein the Bench has while disposing of the applications seeking extension of stay of earlier orders granting stay has held -

Any stay order passed by the CESTAT, if it is in force beyond 07.08.2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension of orders granting stay either fully or partially.

This would, in hindsight, mean that the omission of the 1st, 2nd and 3rd provisos to section 35C(2A) of the CEA, 1944 by the Finance Act, 2014 was not a prudent piece of legislation after all. But then, the TRU had in its communication D.O.F.No.334/15/2014-TRU dated July 10, 2014 mentioned - "11. Section 35C(2A) is being amended to omit the first, second and third proviso in view of substitution of section 35F with a new section."

Perhaps the saving clause in the new section 35F was not an encompassing one!

Having said that, it is time for the CESTAT to come out with another Circular and make this decision applicable all over India. This would bring down the CESTAT pendency to manageable levels and the Benches would be left with real appeal work.

Unless, of course, the Revenue wants to challenge this order or for that matter bring in a saving clause via the retrospective route!

Showcasing of commendable work done during Service

THE Minister of State for Personnel, Public Grievances and Pensions, Dr. Jitendra Singh in a written reply in Rajya Sabha informed that a concept paper to create a platform for retiring employees to showcase significant achievements during their service period has been uploaded on the website of Department of Pension & Pensioners' Welfare. Once this facility is eventually created, retiring employees will be able to submit their outstanding achievements online.

While the retiring employees can look back with satisfaction and with a sense of fulfillment, this would also create a database of useful suggestions and information, is what the Department thinks about the novel idea.

But shouldn't this ‘showcasing' also involve "retired" employees too - after all, they draw pension and would be more than happy to extend a helping hand!

See Concept paper.

Jurisprudentiol-Monday's cases

Service Tax

Whether service rendered by an assessee is service within meaning of expression used in Finance Act, 1994, if so, under which category is an issue which has direct relation to rate of service tax - Appeal lies to Supreme Court under Sec 35L of Central Excise Act, 1944 and High Court has no jurisdiction - Revenue appeal dismissed: HC

THE assessee paid service tax under construction service by availing abatement and started paying service tax under works contract service with effect from 01.06.2007. It is the contention of revenue that the development charges received by the assessee are taxable under Real Estate Agent service and the assessee cannot reclassify the service of construction under Works Contract service with effect from 01.06.2007. The Tribunal allowed the appeal of assessee and the revenue is before the High Court.

The respondent assessee raised a preliminary objection on maintainability of the appeal before the High Court as the issue relates to determination of rate of tax or value of the service as the same stands excluded in terms of Section 35 G of the Central Excise Act, 1944.

Income Tax

Whether when major part of sales were made against opening stock, then sales are nothing but conversion of stock into liquidity - YES: ITAT

THE assessee is a private limited company. A search was conducted in the residential premises of the B.K. Dhingra, Poonam Dhingra and M/s Madhusudan Buildcon (P) Ltd. Assessment proceedings were initiated in the cases of the assessee company u/s 153C r/w section 153A. In response to the notice u/s 153C the assessee filed a return for six assessment years as required by the AO. Subsequently, the cases were transferred to another AO u/s 127. The AO however rejected the legal contentions of the assessee, made additions pertaining to unexplained purchases under Section 69C and disallowed expenses in the respective assessment orders. On appeal, the CIT(A) partly allowed the appeal and deleted the additions made.

The issue before the Bench is - Whether when a major part of sales were made against the opening stock, then the sales are nothing but the conversion of stock into liquidity. And the verdict goes against the Revenue.

Customs

Sikka port is situated in Gujarat and, therefore, offence, if any, has taken place in Gujarat & Customs Commissioner at Mumbai does not have jurisdiction - he could not have issued any SCN let aside ordering confiscation of vessel: CESTAT

THE appellant placed a ship building contract on M/s. Hyundai Heavy Industries Co. Ltd. for supply of crude oil tanker with a capacity of 115000 DWT. The said vessel was delivered to the appellant on 27/10/2010. The said vessel called upon India at Sikka Port (Gujarat) for the first time as a conveyance for cargo loading operations during its foreign run. On vessel's arrival in India, a ‘nil' cargo IGM was filed and all the procedural formalities were complied with. The vessel was also boarded by the Customs officials for preventive checks. Thereafter, the vessel left India taking on it the export cargo, after complying with the formalities, including filing of EGM and obtaining port clearance from the Customs authorities. Thereafter, during 2010-12 the vessel called upon India several times while being on foreign run.

See our Columns Monday for the judgements

Until Monday with more DDT

Have a nice weekend - as DDT completes TEN Years.

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