Intention to evade tax must be proved before leving any penalty u/s 51 of Punjab VAT Act, 2005Thursday, June 16, 2011I was once again to an ICC barrier today for a case regarding section 51 of Punjab VAT Act, 2005. This inspires me again to share some views on levy of penalty u/s 51. I am re-sharing my earlier article on section 51 herebelow for the readers of my blog who might not have read it, this article was also published in Punjab & Haryana Taxes Law journal. Section 51 of Punjab VAT Act 2005 Under section 51 of PVAT Act 2005 information collection centres have been esteblished by the Punjab Government at various places with a view to prevent and check the evasion and avoidance of tax under PVAT Act. Section 51(1) of PVAT Act authorizes the state government to esteblish such information collection centre or check posts by notification. Intimation u/s 143(1)(a) cannot be issued after notice u/s 143(2) is issued- Intimation u/s 143(1)(a) is not appealable-Mumbai ITATWednesday, June 15, 2011ITAT mumbai has held in an important case namely DCIT Versus Housing Development Finance Corporation Ltd. that if the intimation u/s 143(1)(a) has been issued after the issue of notice u/s 143(2) of Income Tax Act then intimation issued u/s 143(1)(a) will be illegal, relying upon the Judgement of Supreme Court in CIT v. Gujarat Electricity Board, 260 ITR 84 (SC) and further also held that no appeal will lie against intimation issued u/s 143(1)(a) after the amendment of 01/06/1999. The right cource is to file a ractification application u/s 154 of Income Tax Act. Facts: The assessee is a company. It filed a return of income for assessment year 2006-07 on20/10/2006 declaring an income of Rs. 8,06,501,48,149. A notice under section 143(2) of the income-tax Act, 1961 (the Act) dated10/9/2007 was issued by the AO and served on the assessee on September, 2007. This is a notice for making a regular assessment u/s. 143(3) of the Act. The AO issued an intimation under section 143(1) of the Act, dated23/11/2007. This was later served on the assessee, only on5/2/2008. As against the above returned income of Rs. 8,06,01,48,145 a sum of Rs. 8,64,11,91,630 was shown as assessed income in the intimation under section 143(1) of the Act, without giving any basis for the same. A consequential interest of Rs. 99,39,417 under section 234C of the Act was also charged, without providing any basis for the levy of the same. As a result of the change in returned income and assessed income, the refund claimed by the Assessee was also allowed at a lesser figure than what was claimed by the Assessee. Aggrieved by the aforesaid intimation under section 143(1) dated 23/11/2007 the assessee preferred appeal before CIT(A). The main contention of the assessee before CIT(A) was that pursuant to the return of income filed by the assessee on 20/10/2006 a notice under section 143(2) of the Act, dated 10/9/2007 was issued and served on the assessee an 14/9/2007 for making a regular assessment under section 143(3) of the Act. According to the assessee the intimation under section 143(1) dated 31/11/2007 could not have been issued by the Assessing Officer because a notice under section 143(2) has already been issued prior to the issue of intimation under section 143(1) of the Act. The assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT v. Gujarat Electricity Board, 260 ITR 84 (SC) and Gujarat Poly-AVX Electronics Ltd. v. DCIT, 222 ITR 140 (Guj.), wherein it was held that it would not open to the revenue to issue an intimation under section 143(1)(a) of the Act after notice for regular assessment issued under section 143(2) of the Act. The CIT(A) accepting the plea of the assessee cancelled intimation u/s. 143(1) of the Act as illegal. Held: In CIT v. Gujarat Electricity Board [2003] 260 ITR 84, the Supreme Court held that it was not open to the Revenue to issue intimation under section 143(1)(a) after notice for regular assessment is issued under section 143(2). Their Lordships said : “The provisions of section 143(1)(a)(i) indicate that the intimation sent under section 143(1)(a) shall be without prejudice to the provisions of sub-section (2). The Legislature, therefore, intended that, where the summary procedure under sub-section (1) has been adopted there should be scope for the Revenue, either suo motu or at the instance of the assessee, to make a regular assessment under sub-section (2) of section 143. The converse is not available ; a regular assessment having been commenced under section section 143 (2), there is no need for summary proceedings under section 143(1)(a)”. As rightly contended on behalf of the Revenue, the aforesaid decision of the Hon’ble Supreme Court was rendered in the context of the law as it stood prior to1/6/1999. The law laid down in the said decision will apply to the present assessment year also and to this extent we agree with the submissions of the ld. Counsel for the assessee. Since the appeal before the CIT(A) was not maintainable this decision could not have been relied upon by the CIT(A). The assessee is at liberty to seek appropriate remedy in accordance with law. In the given facts and circumstances of the case we are of the view that the appeal before CIT(A) by the assessee was not maintainable and the objection of the revenue in this regard found to be justified. In our view the grounds raised by the revenue are broad enough to cover even the objection regarding maintainability of the appeal by the assessee before the CIT(A). The ld. D.R in the course of his arguments submitted that if the assessee is aggrieved by the intimation under section 143(1) of the Act he would have field an application under section 154 of the Act and thereafter would have carried the matter further in appeal. We find that the period of four years for passing an order under section 154 of the Act from the end of the Financial Year in which the order sought to be amended was passed was still available. It is for the assessee to work out its rights in accordance with law. We, therefore, uphold the plea of ld. D.R and hold that the appeal before the CIT(A) was not maintainable. With the aforesaid observations we allow this appeal by the revenue. In the result, the appeal of the revenue is allowed. Full Judgement can be downloaded herebelow: DCIT Versus Housing Development Finance Corporation Ltd. Share | When assessment under Punjab VAT Act gets time barred.-Time limit for assessmentsTuesday, June 14, 2011Assessments under Punjab VAT Act 2005 are framed u/s 29 of the Act. But there is time limit for completing the assessement under PVAT Act, after which no assessment can be framed. Here below I am attending the issue of time limit prescribed under section 29 of Punjab VAT Act, 2005 for framing assessment. Assessment u/s 29(2) and 29(3) can be framed within three years: Section 29(4) of Punjab VAT Act provides that an assessement u/s 29(2),29(3) may be made within a period of three years after the date when annual statement was filed or due to be filed whichever is later. Exemption on Interest from Post office saving bank account restricted to Rs. 3500Sunday, June 12, 2011Exemption available on Interest from Post office Savings account has been restricted to Rs 3500 in case of Individual and Rs 7000 in case of Joint account holder. Earlier interest from post office savings account was fully exempt. Thus it means that after this notification interest from Post office saving account will be exempted to the extent of Rs. 3500 in case of Individual account holders and Rs 7000 in case of Joint account holders. For example if interest of an individual from P.O S/a is Rs 4000 then only 500 will be taxable out of it and 3500 will be treated as exempted u/s 10(15)(i). Plumber gets notice of Rs. 6.5 crore from Income Tax-Dont let others use your bank accounts, think twice before signing any document Do you think twice before submitting your identity proof documents to your employers? Or carefully read all documents your employer makes you sign? If not, Shivnath Patel's story is sure to send shivers down your spine. Patel, a plumber, received an Income Tax notice to explain a Rs six crore transaction from his bank account to purchase 69,000 shares of Alps BPO Services in 2002-03. Patel initially thought the notices were sent to him by mistake and returned them twice. He took it seriously only in December last year when he got a call from the I-T department. Officials questioned him about the financial transactions he had made as director of a realty firm. In works contracts, between contractor and sub-contractors only one is liable to pay taxSaturday, June 11, 2011When works contract is sub-contracted there is only one taxable event and between main contractors and sub-contractor only one is liable to pay tax on the goods incorporated in the works contract. Herebelow this issue is discussed in the light of decision of Supreme Court and P&H High Court in the context of VAT provisions especially under Punjab VAT Act, 2005. Definition of works contract: As per Section 2 (za) of Punjab Value Added Tax Act “works contract” includes any agreement for carrying out, for cash, deferred payment or other valuable consideration, building ,construction, manufacturing, processing, fabrication, erection, installation, fitting out, improvement, modification, repairs or commissioning of any movable or immovable property ITAT imposed costs on revenue for causing harrasment to assessee in recovery proceedingsFriday, June 10, 2011 The Pune ITAT has imposed costs on the revenue for causing harrasment to the assessee in recovery proceedings in a case namely Shramjivi Nagari Sahakari Pat Sanstha V ACIT. The bank account of assessee was attached even before the communication of CIT(A)'s order to the assessee. This is an important order as it is generaly seen that the department ussualy adopt coercive measures for recovery proceedings, I hope the department take some lesson from this order. Facts: The assessee, a credit co-operative society, contravened s. 269SS & 269T because of which penalty u/s 271E was levied. The CIT(A) confirmed the levy of penalty. Before service of the CIT(A)’s order, the assessee’s bank account was attached u/s 226(3). The assessee filed a stay application and claimed that as the assessee had to bear costs owing to the illegal action of the AO, costs had to be awarded to it. HELD upholding the assessee’s plea: AO is not suo moto bound to supply reasons for reassessment under Income Tax Act -Delhi HCThe Delhi High Court in an important case namely CIT V Safetag International India Pvt Ltd. has held that in case of reassessment proceedings u/s 147 of Income Tax Act if the assessee doesnot demand reasons recorded by AO for reopening of case then AO is not bound to supply the same suo moto to the assessee. Brief Facts: The assessee’s assessment was reopened u/s 147. The assessee did not ask for the recorded reasons. Even before the CIT(A), though the assessee challenged the reopening as being without jurisdiction, it did not ask for the reasons. Before the Tribunal, the assessee claimed that it was not aware that it could demand the reasons and object thereto. Pursuant thereto the Tribunal remitted the case to the AO with direction that the reasons & opportunity to object be provided and denovo assessment be framed if objections were rejected. On appeal by the department, the appeal was allowed: Lawyers will be able to practice in all courts through out India soon-Veerappa MoilyIndian lawyers will be able to practice in all courts and tribunals across India irrespective of which bar council they are enrolled in, after law minister Veerappa Moily said he would notify long-pending section 30 of the Advocates Act 1961. The notification is expected to be issued either on 7th or 8th June. Section 30 of the Act states: Subject to provisions of this Act, every advocate whose name is entered in the State roll shall be entitled as of right to practice throughout the territories to which this Act extends,- (i) in all courts including the Supreme Court; PUNJAB SMALL TRADERS BOARD SEEKS EXEMPTION IN VAT REGISTRATION LIMIT UPTO Rs 10 LAC The Punjab Small Traders Board today sought Rs 10 lac Value Added Tax (VAT) exemption for both manufacturers and retailers under Punjab VAT Act. Holding a meeting with Financial Commissioner S. S. Brar and Excise and Taxation Commissioner Mr A. Venu Prasad, delegation of Small Traders Board, Lumsum payment of tax schemes under Punjab VAT Act 2005Thursday, June 9, 2011Section 8-A of Punjab VAT Act 2005 provides for lump sum schemes for such goods or class of goods or such persons subject to such conditions as may be prescribed by State Government. The provisions of section 8-A are applicable irrespective of anything contained contrary in the other Provisions of Punjab VAT Act. As a result the Punjab Government has uptill now provided lump sum schemes for Dhaba Owners and for Brick Klin owners. But it is to be noted that these lump sum schemes are optional only. A dealer may or may not choose to pay under lump sum schemes. Search and Seizure operations should not violate one's basic Human Rights-Bihar Human Rights CommissionThe Bihar Human Rights Commission took on the Income Tax Department for violating Human Rights of an asseessee while conducting search and seizure operation. The commission asked the Department to carry on serach & seizure operations without violating one's basic Human Rights. In this case the income-tax department conducted search and seizure operations u/s 132 at the premises of the assessee when interrogation & recording of statement was conducted for more than 30 hours and till the odd hours of the night without any break or interval. The assessee filed a complaint alleging violation of human rights. The commission upheld the plea as under: 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.
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