✳Word of Wisdom:
▶A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them.
✳Direct Tax :
▶Mumbai ITAT Special Bench (‘SB’) confirms penalty levy u/s. u/s 271D on assessee -company for receiving cash loans from one of its directors during AY 2008-09 as assessee failed to demonstrate bonafide reasons for not accepting them by account payee cheque/bank draft; Clarifies that bonafide nature of transactions alone not sufficient to claim immunity u/s. 273B and “it is required to be established that there was some bonafide reasons for the assessee for not taking or accepting loan or deposit by account payee cheque or account payee bank draft”, cites SC ruling in Kum. A.B.Shanthi; [TS-387-ITAT-2018(Mum)
▶SC dismisses assessee-company’s SLP against Allahabad HC judgement upholding addition u/s 68 with respect to share capital subscription as assessee failed to establish identity and genuineness of the investors; Noting that assessee is private limited company and alleged investors were close friends and business associates of its directors and shareholders, HC had held that the burden rested squarely on the assessee to disclose true and correct details of the persons making substantial investments in assessee-company; HC e subscribed to its share capital”;[TS-386-SC-2018]
CBDT has directed tax sleuths to conduct quarterly ‘survey and inspection’ of High Value Transactions entities to determine the correctness of the statement filed by them and to report to the I-T department.
CBDT has notified the Income-tax (7th Amendment) Rules, 2018 which shall come into force from the date of their publication in the Official Gazette. CBDT amends Forms for advance ruling and seeks unique number for identification of non-resident for all advance ruling.
MCA wef 10th July, 2018 onwards every individual who has been allotted a DIN as on the 31st of March of a financial year shall submit e-form DIR-3-KYC to the Central Government on or before the 31 Aug-2018.
Supreme Court directed the Centre to come out with proper guidelines within two weeks to blacklist builders, contractors and architects found to have constructed buildings against sanctioned plans.
Cabinet approves ICAI's pacts with Tanzania's National Board of Accountants and Auditors (NBAA) and Bahrain Institute of Banking and Finance (BIBF) https://www.business-standard.com/article/pti-stories/cabinet-approves-icai-s-pacts-with-nbaa-bibf-118071801401_1.html
*👉🏻RBI to hold joint Audit of credit rating agencies with SEBI*
(RBI will conduct regular audit and inspection of rating agencies whose actions can significantly influence the borrowing price of all companies)
👇🏻 👇🏻 👇🏻
https://goo.gl/Ysjqq9
*👉🏻MCA invites applications from Chartered Accountants having 2 to 5 years of experience*
(MCA invites applications from Chartered Accountants (CAs) having 2 to 5 years of post-qualification experience as Consultant in the MCA Offices located all over India)
👇🏻 👇🏻 👇🏻
https://goo.gl/adJZZc
Finance Ministry has appointed Grievance Redressal Officers for processing the complaints/information under the E-Way Bill System.http://www.cbic.gov.in/resources/htdocscbec/gst/GRO%20Officers%20-%20180718.pdf.
MCA invites applications from CA having 2 years plus experience at all over India in compliance, Investigation and inspection related work. remuneration will be Rs. 40,000 PM + Rs. 1000/- as conveyance. may apply https://cmib.icai.org/mcaform by 28 July, 2018.
Lok Sabha passed the Fugitive Economic Offenders Bill, 2018, which seeks to bring back white collar criminals, who have fled the country, to face trial in India. It seeks to target fugitives for offences exceeding `100 crore.
Rajya Sabha passed the Prevention of Corruption (Amendment) Act, 2013. It comes at a time when bankers are facing intense scrutiny for their lending decisions with many former and current bankers arrested by investigative agencies over loans that have now turned non-performing.
ICAI has arranged the ‘Tax Cloud’ software on Web based ITR & TDS Return Preparation for Practice Chartered Accountants & CA Firms of ICAI. http://taxcloudindia.com
.
==========>
.
Part A & Part B of E way Bill - Non filling attracts heavy panelties.
E-Way Bill is the document which is necessary to be carried along other specified documents in terms of Rule 138A of the CGST Rules viz. invoice/bill of supply/delivery challan, by the transporter while transporting (either as supply or other than supply) goods whose consignment value exceeds INR 50,000/-.
E-Way bill has two parts; Part-A and Part-B which are to be filled and generated by the registered persons, who is causing movement of goods or by transporter, if he is being assigned for the same before the transportation of goods.
*Part-A* contains the details like GSTIN of the recipient, Place of delivery, Challan No. etc. to be filed by the registered consignor or consignee causing movement of goods,
*Part-B* contains details of the Vehicle no., its type, Transport Document no., etc., to be filed before the delivery of goods by the transporter so that the conditions of validity of the movement of goods are met by the concerned parties.
*Even E-way bill is mandatory for non-taxable supplies through delivery challan*: Kerala HC in the case of Assistant State Tax Officer Vs. Indus Towers Ltd. [2018] 95 taxmann.com 160 (Kerala), has held that E-way bill mandatory for non-taxable supplies through delivery challan.
Recently, Madhya Pradesh HC upholds INR 1.32 crore penalty for non-filing of E-Way Bill ‘Part B’ during inter-state transportation of goods. In this case, The transport company failed to fill up Part-B of the E-Way Bill and resultantly the goods were seized and penalty to the tune of INR 1.32 crores was imposed.
It was observed that as per the CGST Rules, Part B is a mandatory requirement, else the E-way Bill is not genuine / legal. One of the reasons for non-compliance of Part B of E-Way Bill can be the confusion as to who owes the responsibility to fill Part B of E-Way Bill. This may lead to error in filing of part B .
====≠===≠=====
From 20th July, The transporters have declared the nation wide indefinite strike because of such heavy penalty on transporter.
Fee for default in filingIT Returns challenged, Madras HC issues notice*
The Madras High Court on Friday issued notice in a petition challenging the constitutionality of Section 234F of the Income Tax (IT) Act, 1961, which prescribes a fee for delay in filing IT Returns.
The Bench of Chief Justice Indira Banerjee and PT Asha issued notice after hearing preliminary submissions made by Advocate T Mohan on behalf of the petitioner, Nirai Mathi Azhagan, a chartered accountant based in Vellore
Effective April 1, 2018, Section 234F – inserted through the Finance Act, 2017 – deals with “Fee for default in furnishing return of income.”
As per this provision, income tax assessees failing to file their IT Returns within the prescribed time would have to pay a fee for default. The amount of the late fee to be paid is as follows,
Upto Rs 1,000 for persons with a total income between Rs 1 lakh and Rs 5 lakh
Rs 5,000 for persons with an annual income higher than Rs 5 lakh if the ITR is filed before December 31 of the assessment year
Rs 10, 000 in any other case
Prior to the insertion of Section 234F, the erstwhile Section 271F came into play on default in filing of IT Returns
As per Section 271F, if there is a default in paying IT Returns, the Assessing Officer was conferred the discretion to impose a penalty of Rs 5000 on the assessee. Importantly, before such a penalty is imposed, the Assessing Officer was required to give the assessee an opportunity to be heard.
Section 271F was deleted after Section 234F came into force. Section 234F, in turn, has now been challenged as harsh, oppressive, unreasonable and arbitrary by the petitioner on the following grounds.
*Penalty disguised as “Fee”*
It has been pointed out that Section 234F uses the word “Fee” in prescribing what is effectively a penalty. Whereas “Fees” connote that there is an element of quid pro quo, with a person paying for the provision of a service, Section 234F does not entail the provision of any such reciprocal arrangement. It has been contended,
“I submit that since section 234F is a fee sans any service rendered, it is illogical, irrational and liable to be held unconstitutional….
In the absence of any work or service given by the Department to the taxpayer, No fees ought to be collected from the taxpayer.”
*Violation of Natural Justice*
The imposition of the penalty via Section 234F is in turn being carried out without giving the income tax assessee an opportunity to be heard, thereby violating the principle of audi alteram partem.
“…there is an imposition of penalty for the failure to furnish tax returns without even giving an opportunity to the defaulting assessee to explain his case and therefore is irrational on the fact of it and palpably arbitrary and violation of principles of natural justice.”
Adding to the problem, the petitioner points out that the late fee is deducted automatically.
“The provision is such that it not only does not dwell into the reasons for delay but also deducts the fee automatically before affording any opportunity in any manner to the assessee to furnish these explanations.”
Hence, it is argued that Section 234F entails a clear violation of the principles of natural justice.
Section 234F attracted even if tax liabilities are discharged
As noted in the petitioner’s affidavit,
“…it is pertinent to note that Section 234F of the Income Tax Act, 1961 is attracted even if the taxpayer has discharged his entire tax liability to the Government by way of Advance Tax, TDS, Self Assessment etc. Therefore, an assessee is punished by the virtue of Section 234F even if he has fulfilled his tax responsibilities. In view of the same, Section 234F is illogical and harsh.”
*Classification of taxpayers under Section 234F is arbitrary*
As noted above, the provision only makes a single differentiation when it comes to determining the amount of late fee to be paid i.e. those earning less than Rs 5 lakh and those whose income exceeds Rs 5 lakh. The petitioner has argued that such classification violates the right to equality under Article 14 of the Constitution thus,
“…a person earning Rs.5.01 lakhs is treated on the same pedestal with a person earning in Crores. While that being so, the statute infringes the cornerstone of equality enshrined under article 14 of the Indian Constitution which postulates not only that equals should not be treated unequally but also that unequals must not be treated equally.”
*No exemption for Senior Citizens, Differently-Abled etc*
The petitioner has also objected to the provision being unmindful of the difficulties faced by senior citizens and the differently-abled. Further, it does not provide any leeway for the delay in filing IT Rerturns due to genuinely acceptable reasons such as sickness, chronic ailments, maternity, marriage, death in the family etc.
It is further noted that the provision disregards giving exemption to charitable trusts. Therefore, after the amendment, a charitable trust will also lose its exemption under Section 11 of the IT Act.
*Added difficulty on account of online transactions*
The petitioner points out that the taxpayer is further inconvenienced due to the fact that the IT Returns can only be paid online. In this context of the challenge to Section 234F, the petitioner has argued that the provision is silent on what has to be done when technical delays in transactions are attributed to the government and not the assessee.
“…there is an inordinate delay in activating the ITRs in the e-portal from the side of the Government. Section 234F is however silent on what has to be done when the delay is attributed to the department and not due to the assessee. I submit that a citizen must not be made to suffer due to the default of the government.”
Representations made by the petitioner last May to the government authorities, requesting that Section 234F be dropped in view of these concerns did not yield any response.
Hence, the High Court was approached with a prayer that the Court declare Section 234F of the Income Tax Act, 1961, as inserted by the Finance Act 2017 as unconstitutional.
--
====≠===≠=====
Tax Audit 3CD Revised!
_*| 6 Amendments + 9 Insertions = Total 15 Changes |*_
*Read here at a glance...!!*
*Summary of Amendments:*
1. *4* - GSTIN to be mentioned.
2. *19* - Allowance under Section 32AD is to be reported.
3. *24* - Deemed gains under Section 32AD to be reported.
4. *26* - Clause (g) of Section 43B (sum payable to Indian Railways for use of assets) is to be reported.
5. *31* - *Cash receipts more than INR 2,00,000 under Section 269ST is to be reported now.*
6. *34* - *Details with respect to transactions not disclosed in TDS Return/ TCS Return is to be mentioned.*
*Summary of Insertions:*
1. *29A* - *Advance received on capital asset forfeited to be reported here {Section 56(2)(ix)}.*
2. *29B* - Income of gifts exceeding INR 50,000 to be reported here {Section 56(2)(x)}.
3. *30A* - Details about "Primary Adjustments" in transfer pricing to be reported here as per Section 92CE.
4. *30B* - Limitation of Interest deductions for borrowings from a AE upto 30% of EBITDA is to be furnished here.
5. *30C* - Details of Impermissible Avoidance Agreement to be furnished as referred to in Section 96.
6. *36A* - *Dividend received under Section 2(22)(e) is required to be reported here.*
7. *42* - Details w.r.t. Form 61 (details of no PAN Form 60 received), Form 61A (SFT) and Form 61B (SRA) is to be provided here.
8. *43* - *Details w.r.t. CbC Reporting as referred to in Section 286 is required to be reported.*
9. *44* - *BREAK UP of total expenditure in respect of GST Registered and Unregistered Entities is required to be given.*
====≠===≠=====
*Notification 33/2018 dated 20.07.2018 (effective from 20.08.2018).*
CBEC - Customs
CBEC has issued Clarification in case of SB003 errors and extension of date in SB005 & other cases using officer Interface for rectification of errors w.r.t Refund of IGST on export of goods on payment of duty. It has been brought to the knowledge of the Board that in several cases, the exporters have mentioned PAN instead of GSTIN in the Shipping Bills, even though GSTIN has been correctly mentioned while filing the GST returns. Due to this mismatch, the IGST refund claims are not getting processed. In view of the ongoing Refund Fortnight, giving high priority to the interests of exporters, it has been decided by the Board to extend the rectification facility to Shipping Bills filed up to 30.06.2018. Further, the facility of rectification through Officer Interface is also extended in case of other errors as mentioned in circulars.
