Reassessment proceedings cannot be initiated merely on basis of internal audit report objectionsTuesday, June 7, 2011Delhi High Court in an important case namely CIT V. Simbhaoli Sugar Mills Ltd. has held that reassessment proceedings u/s 147 cannot be initiated merely on the basis of internal audit report objections when no new fact has come to light. This is very important decision as many a times the objections are raised by internal audit department on the Assessment orders. The implication of this judgement would be that if a case is reopened for reassessment u/s 147 merely on the basis of internal audit report objections, when the assessee has made full disclosure of information in the original assessment proceedings and no new material has come to light then such reopening of case will be a mere change of opinion, for which action u/s 147/148 is not allowed. General circular on Guidelines for Fast Track Exit mode for defunct companies u/s 560 of Companies Act, 1956Ministry of corporate affairs, Government of India has issued a general circular providing Guidelines for Fast Track Exit mode for defunct companies under section 560 of the Companies Act, 1956. As per Section 560 of Companies Act, 1956 the Registrar of companies can strike off the name of the defunct companies from the register of companies subject to fullfilment of certain conditions. To get a company wound up may prove to be a costly and time consuming affair for small companies who has already stopped their business and have nil assets and liabilities. This Fast Track Exit scheme will help certainly help defunct companies especialy the small defunct companies to exit u/s 560 of companies Act. The fees to be deposited under this scheme is Rs 5000. The circular is produced herebelow: Mandatory uploading of intra-state transactions in Punjab is suspended-It will now be optional onlyUploading of intra-state transactions (i.e transactions within the state) on the website of Excise and Taxation Department, Punjab, which was made compulsory by Punjab Government w.e.f 01-06-2011 has been suspended.(See earlier issued public notice). A Public notice to this effect has been issued by the Government today, making it clear that uploading of information of intra-state transaction will not be mandatory rather it will be directory and optional only. Rates of TDS for the Financial Year 2010-2011Monday, June 6, 2011
1. Self Declaration - Tax (TDS) is not deductible under section 193, 194, 194A, 194EE or 194K if the recipient makes a declaration in Form 15G / 15H under the provisions of section 197A. But, the person seeking to furnish Form 15G / 15H must have PAN number on or after 1.4.2010 2. Certificate from AO - Under Section 197 - A person can apply to AO and seek a certificate in Form 13 for no deduction of TDS or deduction of TDS at lower rates under sections192, 193, 194, 194A, 194C, 194D, 194G, 194H[, 194-I, 194J, 194K, 194LA and 195. 2. In case PAN of the deductee is not available than TDS rate will be 20% Share | Income Tax Rates for Individuals, HUFRates For the Assessment Year 2011-2012
Note 1: - Add Surcharge - Nil Note 2: - Add Education Cess - E. Cess is 2% of Income Tax Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax Rates For the Assessment Year 2010-2011
Note 1: - Add Surcharge - Nil Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (rebate u/s 88E is not deductible) Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (rebate u/s 88E is not deductible ) Income Tax Rates for Firms Rates for the Assessment Year 2011-2012Rate of Tax is 30% for the Assessment Year 2010-2011Notes for the Assessment Year 2011-2012. Note 1: - Add Surcharge - Nil Note 2: - Add Education Cess - E. Cess is 2% of Income Tax Note 3: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax Rates for the Assessment Year 2010-2011Rate of Tax is 30% for the Assessment Year 2009-2010Notes for the Assessment Year 2010-2011 Note 1: - Add Surcharge - Nil Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-2010) Note 3: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-2010) Income Tax Rates for Companies Rates For the Assessment Year 2011-2012
Note 1: - Add Surcharge - Surcharge is 7.5% of income-tax and in case of domestic companies and 2.5% in case of foreign companies if net income exceeds Rs.1crore in either case. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax plus surcharge Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax plus surcharge Minimum Alternate Tax for the Assessment Year 2011-2012
Note 1: - Add Surcharge - Surcharge is 7.5% of income-tax and in case of domestic companies and 2.5% in case of foreign companies if net income exceeds Rs.1crore in either case. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax plus surcharge Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax plus surcharge Rates For the Assessment Year 2010-2011
Note 1: - Add Surcharge - Surcharge is 10% of income-tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) and in case of domestic companies and 2.5% in case of foreign companies if net income exceeds Rs. 1 crore in either case. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) plus surcharge Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) plus surcharge Minimum Alternate Tax for the Assessment Year 2010-2011
Note 1: - Add Surcharge - Surcharge is 10% of income-tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) and in case of domestic companies and 2.5% in case of foreign companies if net income exceeds Rs. 1 crore in either case. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) plus surcharge Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) plus surcharge Income Tax Rates for Co-operative Societies Rates For the Assessment Year 2011-2012
Note 1: - Add Education Cess - E. Cess is 2% of Income Tax Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax Rates For the Assessment Year 2010-2011
Note 1: - Surcharge - Nil Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) Note 2: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (Rebate u/s 88E is not available w.e.f. AY 2009-10) Income Tax Rates for AOP, BOI
Income Tax Rates for Trusts Generally Income of a Trust is taxed in the same manner as taxed in the hands of a resident Individual. However, in certain specific cases, taxes are applicable at the following rates:
Income Tax Rates for Some Specific Cases For the Assessment Year 2011-2012
Rate of Surcharge is Nil in the following cases: a. If the taxpayer is an Individual / HUF/ BOI/ AOP b. If the taxpayer is firm c. If the taxpayer is company (domestic or non-domestic company) and net income does not exceed Rs. 1 crore. d. If the taxpayer is a co-operative or local authority. Rate of Surcharge will be 7.5% in the following cases: a. If the taxpayer is a domestic company and net income exceeds Rs.1crore. b. In case of section 115JB - MAT - if book profit exceeds Rs.1crore. c. In the cases attracting sections 161(1A), 164, 164A and 167B - surcharge is applicable irrespective of income. Rate of Surcharge will be 2.5% in the following cases: a. If the taxpayer is non-domestic company and net income exceeds Rs.1crore. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (rebate u/s 88E is not deductible) plus surcharge Note 3: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (rebate u/s 88E is not deductible ) plus surcharge For the Assessment Year 2010-2011
Rate of Surcharge is Nil in the following cases: a. If the taxpayer is an Individual / HUF/ BOI/ AOP b. If the taxpayer is firm c. If the taxpayer is company (domestic or non-domestic company) and net income does not exceed Rs. 1 crore. d. If the taxpayer is a co-operative or local authority. Rate of Surcharge will be 10% in the following cases: a. If the taxpayer is a domestic company and net income exceeds Rs. 1 crore. b. In case of section 115JB - MAT - if book profit exceeds Rs. 1 crore. c. In the cases attracting sections 161(1A), 164, 164A and 167B - surcharge is applicable irrespective of income. Rate of Surcharge will be 2.5% in the following cases: a. If the taxpayer is non-domestic company and net income exceeds Rs. 1 crore. Surcharge is subject to marginal Relief. Note 2: - Add Education Cess - E. Cess is 2% of Income Tax (rebate u/s 88E is not deductible) plus surcharge Note 3: - Add Secondary and Higher Education Cess - SHE. Cess is 1% of Income Tax (rebate u/s 88E is not deductible ) plus surcharge Share | Oil companies in Punjab exempted from payment of entry tax on Diesel in PunjabPunjab Government has exempted oil companies from payment of entry tax on diesel brought in the State of Punjab w.e.f 13-05-2011. The relevant notifiaction is produced herebelow: GOVERNMENT OF PUNJAB DEPARTMENT OF EXCISE AND TAXATION If income for which reasons are recorded to issue notice u/s 148, is not assessed then other income also cannot be assessed.Delhi High Court in an important case namely Ranbaxy Laboratories Ltd V CIT has held that if the AO doesnot assess the income for which reasons were recorded while issuing notice u/s 148 for escaped assessment then other income cannot be taxed. Before understanding the judgement one should know that notice u/s 148 is issued for rea  ssessment of income that has escaped assessment in the regular assessment proceedings. Notice u/s 148 is issued after recording reasons and the assessee has the right to ask for reasons recorded in writing before replying the notice u/s 148. (Read article on reassessment)Supreme Court questions Govt. on police action taken on Baba Ramdev-notice issued to file replyThe Supreme Court on Monday issued notice to the government on eviction of Baba Ramdev from the Ramlila ground. Taking suomoto cognizance of Baba's eviction by the government the apex court gave the government two-week notice to respond. An advocate on Sunday approached the Supreme Court seeking a direction to the government to issue a white paper on the entire episode leading to the eviction of yoga guru Ramdev and the alleged barbaric police action early today against his followers at the Ramlila Grounds. The petition filed by Ajay Agarwal said in the white paper the government should explain the entire sequence of events, details of negotiations and the so-called deal between the government and Ramdev. VAT rate on Declared goods in Haryana enhanced to 5%Sunday, June 5, 2011Haryana Govt has enhanced vat rate on declared goods from 4 % to 5% w.e.f 19-04-2011 after the ceiling rate has been enhanced by central Govt in the Budget 2011-12. The relevant notification is produced herebelow: 362 HARY ANA GOVT. GAZ. (EXTRA.), APR. 19, 2011 (CHTR. 29, 1933 SAKA) [Authorised English Translation] Credit of TDS to be allowed across the years in the same proportion in which income is assessableThe Chennai ITAT has held in ITO Versus Shri Anupallavi Finance & Investments that Where tax has been deducted at source and paid to the Central Government and income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. In this case deductor deducted TDS on accrual basis of income whereas deductee was declaring such income on cash basis as and when it was recieved by the deductee. The deductee-assessee however, claimed the credit of whole of TDS in the year of deduction stating that TDS deducted represents his income and is automaticaly offered to assessment in the year of deduction. But the AO allowed claim of TDS on pro rata basis i.e on the basis of income offered for assessment. Education loan can save your income tax-Deduction u/s 80E of Income Tax Act.If You have taken education loan for the higher education of your children or of your spouce or of your own, it can save your income tax. Section 80E of Income Tax Act provides for deduction of 100% interest amount on education loan taken from any financial institution or approved charitable institution, taken for one's own, or spouce's or children's higher education. This deduction is available to an individual assessee only. Before A.Y. 2006-07 section 80E also provided for deduction of the principal amount of education loan, repaid. But w.e.f A.Y 2006-07 deduction of only interest amount is available u/s 80E. Voluntary Surrender of Income cannot relieve assessee from penalty, but concealment of income must be establishedFriday, June 3, 2011Punjab & Haryana High Court in an important case namely CIT V M/S Careers Education and Infotech Pvt. Ltd., has held that voluntarily surrender of income cannot exonerate the assessee of its liability to pay penalty if it can be held that there was concealment of Income or furnishing of inacurate particulars. But in every case of surrender, inference of concealment of income cannot be drawn by itself by applying section 58 of Evidence Act. The AO must establish and prove the concealment of income even if there is surrunder of income by assessee and mere surrender cannot lead to levy of penalty u/s 271(1)(c) for concealment of income. New tax imposed by Punjab Government-Institutional and Building tax.Punjab Government has imposed a new tax namely institutional and building tax by promuglating ordinace dated January 10, 2011 by the name The Punjab (Institutions and Other Buildings) Tax Ordinance, 2010.This tax has been imposed on Buildings and Institutions situated outside the municipal areas in the state of Punjab. As we know the house tax is imposed by Municipal bodies on the commercial buildings situated within their limits, but no such tax is payable on the buildings and insitutions (like marriage palaces, hotels, Dhabas, schools, water parks, amusement parks etc), situated outside the municipal limits. To bring an end to this inequality this new tax has been imposed (this was asserted by the Governement at the time of introduction of this tax few months back) Professional’s heart surgery expense not deductible u/s 31 or 37(1), Heart is not plant-Delhi HCThursday, June 2, 2011In an interesting case namely Shanti Bhushan V CIT, Delhi High Court has held that a professional cannot be allowed deduction of the expenses incurred for his heart surgery u/s 31or 37(1) of Income Tax Act 1961. Interestingly the appellant (a lawyer) claimed that heart is a plant and expenses incurred on its surgery should be considered as expenses on current repairs.But High court rejected the claim of the appellant. Brief facts: The assessee, a lawyer, claimed that his professional work had led to a heart attack and that the expenditure incurred by him on a heart operation was deductible u/s 31 on the ground that the heart was “plant” and the expenditure was incurred on “current repairs”. It was also claimed that as his professional receipts increased substantially after the operation, the expenditure was “wholly & exclusively” for profession and deductible u/s 37(1). The AO, CIT(A) & Tribunal rejected the assessee’s claim. On appeal to the High Court, HELD dismissing the appeal: Deduction u/s 54EC to be allowed before set off of brought forward capital losses- Mumbai ITATMumbai Tribunal has held in an important case namely The Tata Power Co. Ltd. Vs Addl. CIT that deduction u/s 54EC from long term capital gains will be allowed before set off of brought forward Capital losses. Crux of the order: "The stage at which set off of carried forward long term capital loss is to be given is subsequent to the stage at which income under the head capital gains is computed and deduction u/s 54EC is to be given in the course of the latter. Accordingly, s. 54EC deduction has to be given before set-off of losses." Filing revised return under Income Tax Act, 1961If a person has filed his return of Income u/s 139(1) of Income Tax Act 1961 i.e within the due date of filing the return and if he subsequently finds that in the original return he has committed some mistake bonafidely then he can revise his return of income u/s 139(5) of Income Tax Act. Here below I am discussing provisions relating to revise returns. Revised return should be filed only if the mistake is bonafide: Original return should be revised only if there is a bonafide mistake in the original return. The benefit of section 139(5) cannot be claimed by a person who has made false return knowing it to be false. Deliberate omission and false and fraudulent statements fall outside the purview of the provision as this view has been taken in K.M Bhatia (Quarry) V. CIT [1992] 193 ITR 379 (Guj.) Punjab Govt considering adding of word additional demand in section 62(5) of PVAT Act, 2005Wednesday, June 1, 2011There is a news that Punjab Government is planning to amend section 62(5) of Punjab VAT Act, 2005 to provide for prior minimum payment of 25% of additional demand before any appeal is entertained. The provision u/s 62(5) as existing now provides for prior minimum payment of 25% of total tax, penalty and interest, which the Hon'ble P & H High Court in Ahluwalia case and Punjab VAT Tribunal in many other cases have interpreted to mean that if additional demand is raised in any order under PVAT Act 2005 then 25% prior minimum payment will be of the total tax, penalty and interest and not that of additional demand. Input Tax Credit and taxes paid in the returns by the assessee-dealer are presumed to be part of such 25% prior minimum payment. Salaried taxpayers upto 5 Lac income need not to file returns- notification to be issued in JuneTuesday, May 31, 2011As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax return from now onwards, a finance ministry official said. "No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. We would notify this in first week of June," outgoing Chairman of Central Board of Direct Taxes Sudhir Chandra told reporters here. The scheme would be applicable from assessment year 2011-12 onwards. This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year). However, such tax payers would have to file return if they want to claim refunds, Chandra said. Seller not liable to pay tax or penalty, if C forms given by Purchaser found to be not genuine afterwards- Madras High CourtThe Madras High Court in an important judgement delivered in case of M/S Sastha Enterprises Vs. Appellate Authority, Commissioner(CT) II (FAC) [VSTI 2011 MAD B-165] has held that selling dealers cannot be held for higher tax liability and consequential penal action for false declaration of the documents produced on the side of Buyer. In this case the seller was held liable in reopened assessment case, to pay tax by rejecting in transit sales on the ground that the C form obtained from the purchaser was found to be not genuine as the same was not issued by the concerned Assessing Authority. Hon’ble High Court in this case held that unless and otherwise it is, based on concrete material, found out that the transaction is not true or the petitioner-seller is the party to the act of fraud said to be committed by the purchaser, the question of disallowing the exemption already given to the petitioner for the transaction actually effected between the parties, does not at all arise. No penalty u/s 271(1)(c) for faliure to disallow u/s 14A unless malafide is proved- Delhi ITATMonday, May 30, 2011I have found the order of Delhi ITAT in the case namely DCIT Vs Nalwa Investments Ltd. very important one wherein it has been held that mere faliure to disallow expenses u/s 14A will not amount to levy of penalty u/s 271(1)(c) unless malafide is proved. In this case even the auditors did not suggest disallowance u/s 14A in respect of expenses relating to tax free income. Hence no malafide intention for not attributing expenses to tax free income was proved consequently no penalty u/s 271(1)(c) could be levied.
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