Category Archives: GS – April 2014 Series

Updates of Direct Taxes – April 2014 Series

Shree Guru Kripa’s Institute of Management

“GyaanSmriti” – DIRECT TAX LAW UPDATES –April 2014 Series

Updates in Direct Tax Law

 

  1. 1.   [2014] 43 taxmann.com 446 (SC)

Commissioner of Income-tax –III v. Calcutta Knitwears

Issue:-At what stage of proceedings under Chapter XIV-B does the assessing authority require to record his satisfaction for issuing a notice under section 158BD?

Decision:-The Assessing Officer could record his satisfaction for issuing notice under section 158BD in the case of person other than searched person even after the completion of assessment of searched person.

Reasoning:- Section 158BD provides that the satisfaction note could be prepared by the Assessing Officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158BC or during the stage of the assessment proceedings.

It didn’t mean that after completion of the assessment, the assessing officer couldn’t prepare the satisfaction note to the effect that there exists undisclosed income belonging to person other than the searched person.

 

  1. 2.   [2014] 43 taxmann.com 400 (Delhi)

Director of Income-tax v. Guru Harkishan Medical Trust

Issue:- Whether Registration can be granted u/s 12A of the Income Tax Act, 1961 for a trust which is illegally formed, snubing it’s legality.

Decision:- If the creation of a trust is illegal and contrary to law , no registration can be granted to it under section 12A especially when a civil court has held that establishment of trust is illegal and contrary to law.

Reasoning:- There is no dispute that if the creation of the Trust is held to be illegal, no exemption can be granted under Section 12A.

There is mandate to question or re-appreciate the civil court’s decision in income-tax appeals filed before HC under section 260A of the Act. The HC while dealing with IT appeals under section 260A shall regard civil court decision as final subject to any further appellate interference.

 

  1. 3.   [2014] 43 taxmann.com 200 (Delhi)

Gulshan Malik v. Commissioner of Income-tax

Isssue:-  From what date the preiod of 36 months u/s 2(42A) should be calculated?

Whether from date of booking/date of allotment application/ confirmation letter where the allotment application/confirmation letter states clearly that no right to provisional or final allotment accrues until Buyer’s agreement is signed and returned to the builder?

Decision:- 36 months period under section 2(42A) for booking rights should be counted from date of buyer’s agreement with builders.

Reasoning:- The capital asset of booking rights accrues to buyer only on the date of signing buyer’s agreement and not on date of allotment application/confirmation letter.

 

  1. 4.   [2014] 43 taxmann.com 300 (Delhi)

Director of Income-tax (Exemption) v. Charanjiv Charitable Trust

Issue:- Trust paid advance to the extent of 95 per cent of cost of property purchased to prohibited person without taking possession and without concluding a proper sale deed even after one year from the date of deal and then canceling the deal and getting the advance back without interest.

Decision:- ITAT cant go simply by assessee’s documentation & ignore normal course of human conduct & probabilities.

Reasoning:-  Section 13(1)(c)(ii) read with Section 13(2)(a) is attracted and this will result in loss of income-tax exemption under section 11.

Tribunal cannot allow itself to be simply led by assessee’s documentation and ignore normal course of business conduct and probabilities in deciding whether section 13 is violated.

 

  1. 5.   [2014] 43 taxmann.com 250 (Bombay)

Coca-Cola India (P.) Ltd. v. vAssistant Registrar representing Income Tax Appellate Tribunal

Issue:-  The ground for issue of  stay of demand when the appeal is pending.

Decision:- The question of irreparable loss not the only consideration while dealing with application for stay of demand . If this were so, every assessee with the means of deposit would be denied a right to seek stay of demand irrespective of the merits of his case. This is insupportable either on principle or on authority.

Reasoning:- In an application for stay, the AO is indeed not expected to analyze the entire evidence. There must however be some consideration of the facts and an indication of the same in the order.

 

  1. 6.   [2014] 43 taxmann.com 444 (Karnataka)

Vodafone South Ltd. v. Deputy Director of Income-tax, International Taxation, Circle -I(1)

Isssue:- Whether the scope and effect of the legislation can  be curtailed by the DTAA if after its entry into force an Act of Parliament is passed which contains contrary provision.

Decision:- The scope and effect of the legislation cannot be curtailed by the DTAA, if after it comes into force an Act of Parliament is passed which contains contrary provision.

Reasoning:- The petitioner had not questioned the validity of the said amendments in this writ. Thus, the Assessing Officer was bound to apply such provisions in determining the taxability of the payments made by the petitioner to the Non-resident Telecom Operators.

 

  1. 7.   NOTIFICATION NO.12/2014 [F.NO.503/02/1997-FTD-I]/SO 663(E), DATED 5-3-2014

AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – LATVIA

An Agreement was entered into between the Government of the Republic of India and the Government of the Republic of Latvia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income which was signed at New Delhi on the 18th day of September, 2013.

In exercise of the powers conferred by section 90 of the Income-tax Act, 1961 Central Government hereby notifies that all the provisions of said Agreement shall be given effect to in the Union of India with effect from the lst day of April, 2014.

 

  1. 8.           NOTIFICATION NO. 13/2014 [F.NO.501/10/1995-FTD-I]/SO 680(E), DATED 5-3-2014.

AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – ROMANIA

 

In exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of said Agreement shall be given effect to in the Union of India with effect from the 16th day of December, 2013.

 

  1. 9.           NOTIFICATION NO. 14/2014 [F.NO. 178/77/2010-ITA-I]/SO 756(E), DATED 13-3-2014

 

SECTION 80-IA, SUB-CLAUSE (iii) OF SUB-SECTION (4) OF THE INCOME-TAX ACT, 1961 – DEDUCTIONS – IN RESPECT OF PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKINGS, OR ENTERPRISES ENGAGED IN INFRASTRUCTURE DEVELOPMENT, ETC. – NOTIFIED UNDERTAKINGS

 

In exercise of the powers conferred u/s 80-IA(4)(iii) of the said Act, the Central Government hereby notifies the undertaking from the date of commencement i.e 2-2-2009 being developed and being maintained and operated by M/s Rupa infotech and Infrastructure Limited, as an undertaking and the project named “Platinum Techno Park IT Park”.[msp1]

 

  1. 10.       NOTIFICATION NO. 16/2014 [F.NO.142/1/2014-TPL]/SO 835(E), DATED 20-3-2014

INCOME-TAX (SECOND AMENDMENT) RULES, 2014 – AMENDMENT IN RULE 6AAH

In exercise of the powers conferred by section 295 read with Section 35CCD of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962.

They shall come into force on the date of their publication in the Official Gazette.

[msp2] In the Said rule, the clause (ii) “Training Institute” has been substituted by new definition, to include those institutes which are affiliated to, or approved by, or empanelled by, the National Skill Development Agency and others as specified.

 

  1. 11.       NOTIFICATION NO. 17/2014 [F.NO.196/53/2012-ITA.I]/SO 861(E), DATED 20-3-2014

SECTION 10(46) OF THE INCOME-TAX ACT, 1961 – EXEMPTIONS – STATUTORY BODY/AUTHORITY/BOARD/COMMISSION – NOTIFIED BODY OR AUTHORITY – ANDHRA PRADESH STATE AIDS CONTROL SOCIETY

 

In exercise of the powers conferred by clause (46) of Section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Andhra Pradesh State AIDS Control Society a body constituted by the Government of Andhra Pradesh in respect “Amount received in the form of grants-in-Aid from the Government of India.”

This notification shall be deemed to apply for the period 01.06.2011 to 31.03.2013 and shall apply with respect to the Financial Years 2013-14,2014-15 and 2015-16 subject to the given conditions.

 

  1. 12.       NOTIFICATION NO. 23/2014 [F.NO.501/10/1995-FTD-I], DATED 28-3-2014

AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – SRI LANKA

In exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that the provisions of DTAA annexed hereto shall be given effect to in the Union of India with effect from the 1st day of April, 2014.

 

  1. 13.       CIRCULAR NO.7/2014 [F.NO.275/27/2013-IT(B)], DATED 4-3-2014

SECTION 200 OF THE INCOME-TAX ACT, 1961 – DEDUCTION OF TAX AT SOURCE – DUTY OF PERSON DEDUCTING TAX – EX-POST FACTO EXTENSION OF DUE DATE FOR FILING TDS/TCS STATEMENTS FOR FYs 2012-13 & 2013-14

 

In exercise of the powers conferred under section 119 of the Act, the Board has decided to, ex-post facto, extend the due date of filing of the TDS/TCS statement prescribed under subsection (3) of section 200 /proviso to sub-section (3) of section 206C of the Act read with rule 31A/31AA of the Income-tax Rules, 1962. The due date is hereby extended to 31.03.2014 for a Government deductor and mapped to a valid AIN for—

(i)   FY 2012-13 – 2nd to 4th Quarter
 i)   FY 2013-14 – 1st to 3rd Quarter

 

Statutory Compliance Chart – April 2014

DATE

COMPLIANCE REQUIRED

FORM NO. / CHALLAN NO.

APRIL 2014

10

EXCISE: MONTHLY RETURNS FOR PRODUCTION AND REMOVAL OF GOODS AND CENVAT CREDIT FOR MAR 2014

ER 1

EXCISE: MONTHLY RETURNS OF EXCISABLE GOODS MANUFACTURED & RECEIPT OF INPUTS & CAPITAL GOODS BY UNITS IN EOU, STP, HTP FOR MAR 2014

ER 2

EXCISE: MONTHLY RETURNS OF INFORMATIONS RELATING TO PRINCIPAL INPUTS FOR MAR 2014 BY MANUFACTURER OF SPECIFIED GOODS WHO PAID DUTY>=RS. 1 CRORE DURING FY 2013-14 BY PLA/CENVAT/BOTH

ER 6

EXCISE: QUARTERLY RETURNS OF PRODUCTION AND REMOVAL OF GOODS BY SSIs FOR THE QUARTER ENDING MAR 2014

ER 3

12

CST/TN VAT: MONTHLY RETURNS AND PAYMENT OF CST AND VAT COLLECTED DURING MAR 2014 FOR ASSESSEES WHOSE YEARLY SALES TURNOVER > RS. 200 CRORES IN THE FY 2013-14 IF THE MODE OF PAYMENT OF VAT AND CST IS BY CASH/CHEQUE/DD

FORM 1 / FORM I

14

CST/TN VAT: MONTHLY RETURNS AND PAYMENT OF CST AND VAT COLLECTED DURING MAR 2014 FOR ASSESSEES WHOSE YEARLY SALES TURNOVER > RS. 200 CRORES IN THE FY 2013-14 IF THE MODE OF PAYMENT OF VAT AND CST IS BY ELECTRONIC MODE

FORM 1 / FORM I

15

EXCISE: QUARTERLY RETURNS OF ASSESSEES PAYING 1% OR 2% EXCISE AND NOT MANUFACTURING ANY OTHER GOODS FOR QUARTER ENDING MAR 2014

ER 8

EXCISE: QUARTERLY RETURN OF CENVAT BY FIRST STAGE AND SECOND STAGE DEALERS FOR QUARTER ENDING MAR 2014

ER 3

EPF: PAYMENT OF EPF CONTRIBUTION FOR MAR 2014

EPF: CONSOLIDATED STATEMENTS OF DUES AND REMITTANCES UNDER EPF AND EDLI FOR MAR 2014

12A

EPF: MONTHLY RETURNS OF EMPLOYEES WHO JOINED/LEFT THE ORGANISATION IN MAR 2014

5/10

PT: PAYMENT OF PROFESSIONAL TAX FOR HALF YEAR ENDING OCT 2013 TO MAR 2014

1

21

EXCISE: QUARTERLY RETURN OF PRODUCTION, REMOVAL AND CENVAT BY SPECIFIED MANUFACTURERS OF YARNS AND READY MADE GARMENTS FOR QUARTER ENDING MAR 2014

ER 3

CST/TN VAT: MONTHLY RETURNS AND PAYMENT OF CST AND VAT COLLECTED DURING MAR 2014 FOR ASSESSEES WHOSE YEARLY SALES TURNOVER < RS. 200 CRORES IN THE FY 2013-14 IF THE MODE OF PAYMENT OF VAT AND CST IS BY CASH/CHEQUE/DD

FORM 1 / FORM I

ESI: DEPOSIT OF ESI CONTRIBUTIONS AND COLLECTIONS FOR MAR 2014

22

CST/TN VAT: MONTHLY RETURNS AND PAYMENT OF CST AND VAT COLLECTED DURING MAR 2014 FOR ASSESSEES WHOSE YEARLY SALES TURNOVER < RS. 200 CRORES IN THE FY 2013-14 IF THE MODE OF PAYMENT OF VAT AND CST IS BY ELECTRONIC MODE

FORM 1 / FORM I

25

SERVICE TAX: HALF YEARLY RETURN FOR THE HALF YEAR ENDING 31ST MARCH 2014

ST 3

SERVICE TAX: MEMORANDUM OF PROVISIONAL DEPOSITS – PROVISIONAL ASSESSMENT CASES HALF YEARLY RETURNS

ST 3A

30

INCOME TAX: PAYMENT OF TDS ON CREDITS GIVEN ON 31ST MAR 2014

281

INCOME TAX: QUARTERLY RETURN OF NON-DEDUCTION OF TAX AT SOURCE U/S 206A FOR QUARTER ENDING MAR 2014

26QAA

EXCISE: ANNUAL DECLARATION ON PRINCIPAL INPUTS BY ASSESSEES WHO IN FY 2013-14 PAID>=RS. 1 CRORE AS PLA/CENVAT/BOTH

ER 5

EXCISE: ANNUAL INSTALLED CAPACITY STATEMENT BY ALL ASSESSEES

ER 7

SERVICE TAX: HALF YEARLY RETURN FOR PERIOD ENDING 31ST MAR 2014 BY INPUT SERVICE DISTRIBUTORS

ST 3

EPF: ANNUAL RETURNS SHOWING MONTHWISE RECOVERIES FROM MEMBERS

3A

EPF: CONSOLIDATED ANNUAL CONTRIBUTION STATEMENT

6A

INCOME TAX: FORWARDING OF COPIES OF DECLARATION IN FORM 60/61 (NOT BEING RECEIVED AT THE TIME OF OPENING A BANK ACCOUNT) RECEIVED BETWEEN 1ST OCT AND 31ST MAR TO DIT AND CIT

COPY OF 60/61