AMIT BAJAJ ADVOCATE

A new rule 51A has been introduced under the Punjab VAT Act 2005 authorizing the commissioner or designated officer under the Act to lock the TIN No of the person registered under the Act. Locking the TIN no means the temporary stoppage of interstate movement of goods of the concerned person for the purpose of verification or further legal action. Temporary stoppage is done by locking the TIN No of the concerned person in the server of the software used by the VAT Department all over the state including at barriers set up at the various borders of the state.

Assesements under Income Tax Act 1961 are made U/S 143, 144, 147, 153. The criterias for selection of cases for scrutiny has been increased. While making the assessement the assessing officer has to appericiate all the facts properly. If there is any misiterprtation of facts it may result in injustice to the assesee. Some times when there is confusion regarding interpretation of facts as appearing in a particular case or confusion regarding any law point the assessing officer tends to consult their senior officials like Additional Commissioners or else. The instructions the senior officials give to the assessing officer orally in such case, the assessing officer is guided by such directions while making assessement or sometimes the assessee also tend to explain their case to the Additional commissioner or joint commissioner especialy when the asssessing officer is guided by the directions of the Additional or Joint commissioner while making the assessement.

ASSESSEMENT NOTICES U/S 29 OF PVAT ACT RECENTLY ISSUED FOR YEAR 2005-2006-LEGALITY OF-

The VAT Department in Punjab has started issuing the notices for assessements for the year 2005-2006 under section 29 of Punjab Value Added Tax Act 2005 to the dealers across the state. The notices u/s 29 of PVAT Act 2005 can be issued within 3 years from the last date for filling of Annual statement i.e VAT 20 of the year concerned or the date on which the return is actually filled whichever is later.

The power of assessement or reassessement of any income chargable to tax that have escaped assessement has been provided under secton 147 r w s 148 of Income Tax Act of 1961.If the assessing officer has the reason to believe that any income chargabale to tax has escaped assessement then the assessing officer may subject to the provisions of section 147 to 153 assesse or reassess such income.

What is reason to believe: Before issuing any notice U/S 148 the assessing officer must have reason to believe that any income chargable to tax has escaped assessement. Reason to believe can not be a reason to suspect merely. There must be a direct nexus between the material coming to the notice of the assessing officer and the formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. The material for formation of belief must be relevent and not vague. The assessing officer must record reasons in writting before issuing notice u/s 148. Mere a reason recorded that "there is a huge concealment of income' or 'For further investigation' without any specific instance of entries or material relevent to the assessee will not constitute a valid reason as it is vague and general in nature.

The Delhi High Court has declared the service tax on renting of immovable property as ultra vires of the finance act. in case of Home Solution Retail India Ltd & ors vs union of India & ors. Evan Though the matter is pending before the SC by special leave petition filed by the central Govt seeking relief against the said order but the said judgement will havefar reaching effects.

GST i.e. Goods and Service Tax will be applicable in India from 01-04-2010 onwards replacing existing system of VAT, service tax, excise and other indirect taxes. There was a debate whether a single GST or a dual GST will be more feasible and doable in India in the present taxation scenario. But In this regard, the announcement that was made sometime ago by the Empowered Committee of State Finance Ministers was that it had accepted the recommendation of the Working Group that there should be a dual GST applicable.