Tax Due Dates for April 2013

No	Due Date	Related to	Compliance to be made
1	30.4.2013	TDS/TCS (Income Tax)	·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of March 2013. ·        Deposit TDS from Salaries  deducted during the month of March 2013 •   Deposit TCS for collections made under section 206C including sale of scrap during the month of March 2013, if any •    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of March 2013, if any
2	20.4.2013	VAT	Payment of VAT & filing of monthly return for the month of March 2013
3	20.4.2013	STPI	Filing of Softex Form for the month ended March 2013
4	15.04.2013	Service Tax	Filing of Service tax from July to Sep 2012

Low Tax Effect Circular: Dept to show why appeal should not be dismissed

CIT vs. Sevak Pharma Pvt. Ltd (Bombay High Court)

The department filed an appeal before the Tribunal. The Tribunal dismissed the appeal on the ground that the tax involved in the appeal was less than the monetary limit of Rs. 3 lakhs prescribed in CBDT Instruction No.3/2011 dated 9.2.2011. The Tribunal followed Madhukar Inamdar (HUF) 318 ITR 149 (Bom) where it was held that the CBDT Instructions fixing monetary limit for filing an appeal to the Tribunal would apply even to pending cases. The Department then filed a MA before the Tribunal pointing out that in CIT v. Surya Herbal the Supreme Court had held that the CBDT Instruction No.3/2011 would not apply ipso facto and would not apply where the matter has cascading effect or raises a common principle involving a large number of matters. The Tribunal dismissed the MA. On appeal by the department to the High Court, HELD dismissing the appeal:

The grievance of the Revenue is that the Tribunal ought to have entertained the appeal by following the decision of the Apex Court in the matter of Surya Herbal Ltd. However, the revenue has not been able to point out before us any of circumstance as laid down by the Supreme Court in the matter of Surya Herbal Ltd being applicable to this case which would lead to non application of CBDT instructions No.3/2011. In the above circumstances, we see no reason to entertain the proposed question of law (it was also held following Chem Amit 272 ITR 397 that an appeal u/s 260A cannot be filed to challenge an order dismissing a MA)

Whether when reassessment proceedings are cancelled because of incorrect reasons recorded by AO, nothing prevents Revenue for initiating re-assessment again if it has adequate materials on record - YES: Bombay HC

THE issues before the Bench are - Whether when the reassessment proceedings are cancelled because of incorrect reasons recorded by the AO, nothing prevents the Revenue for initiating re-assessment again if it has adequate materials on record - Whether the order of CIT(A) can be treated as a bar for initiating fresh proceedings u/s 148 and Whether the order of CIT(A) can be treated as a bar for initiating fresh proceedings u/s 148. The HC verdict finally goes against the assessee.

Facts of the case

Assessee, an individual has filed a ROI for A.Y. 2006-07 declaring an income of Rs.1,05,275/-. A notice was issued u/s 148 seeking to reopen the assessment on basis that the assessee had not filed its ROI for AY 2006-07. Further it was also observed that there were accommodation entries passed in the books of the assessee and its firm. During reassessment, the AO had passed an order of assessment, determining the total income of the Petitioner at Rs.40,11,390/-. On appeal, CIT (A) had allowed the appeal and held that the reassessment proceedings were c

Whether when assessee avails benefits based on decision of Kerala HC, which was later over-ruled by SC, it cannot be granted waiver of penal interest merely because it is not located within jurisdiction of Kerala HC - NO: HC

THE issues before the Bench are - Whether when an assessee has genuinely availed benefits under the Income Tax Act, relying upon the decision of Kerala High Court, which was later overruled by the Supreme Court, it cannot be granted the waiver of penal interest u/s 119(2)(a), merely because the assessee is not located within the jurisdiction of the Kerala High Court; Whether the power of waiver of penal interest u/s 119(2)(a) can be exercised only in the perspective of the decision of the High Court or Supreme Court passed necessarily in assessee's own case and Whether the fact that the decision covers the field of Income Tax legislation, as may be applicable to any assessee, would not amount to a sufficient circumstance for reduction of waiver of interest - Whether the decision of the other High Courts have any persuasive value.

ST3 return for July-September 2012 - Frequently Asked Questions.

I got ST registration on/after 01.07.2012 with the service description, ‘Other Than in the Negative List’. Can I file the return now?

Assessees registered / amended their registration on or after 01.07.2012 with the service description, ”All Taxable Services – Other than in the Negative List’ are required to file amendment to their Registration online by deleting the said description and adding the relevant description(s) of Taxable Services available in the drop-down list in the online Amend ST1 Form. Only after approval of the amendment by departmental officers, these assessees will be able to file their returns for the period from July, 2012 onwards.

The ST-3 Return for the period, July-Sept., 2012 is quarterly or half-yearly?
It is a quarterly return.
Is the new ST-3 return for the period, July-Sept., 2012 available in both online or offline modes?
It is available in offline mode only as of now.

S. 54F: Deposit in capital gains account scheme by s. 139(4) due date sufficient

CIT vs. Jagtar Singh Chawla (P&H High Court)

The assessee sold property on 20.06.2006 (AY 2007-08) for a consideration of Rs. 2.24 crores. The said amount was not invested in the capital gains account scheme by the due date of filing the return u/s 139(1) (31.07.2007) and was instead used to purchase a new residential house on 31.3.2008. The assessee claimed exemption u/s 54F which was denied by the AO & CIT(A) on the basis that u/s 54F(4) the amount of the consideration which is not appropriated for purchase of the new asset before the date of furnishing the return of income u/s 139 had to be deposited in the “capital gains account scheme” before the due date for filing the return of income u/s 139(1). On appeal by the assessee, the Tribunal allowed the claim. On appeal by the department to the High Court, HELD dismissing the appeal:

If no taxes deducted from salary, is there any need to issue Form-16 to Employee ?

This is the common demand regarding issuing of Form-16 by Employer to Employee, even if Employer not deduct any Tax from drawn salary. What shall happen when Employee want's Form-16 for the same. In such situation Employer not liable to issue Form-16 to Employee. Form 16 is a certificate of TDS and in your case it will not apply. However your employer must issue a salary statement. TDS Certificate (Form-16) is not applicable to such employee whose tax (any amount) not deducted during current Financial Year. If the Employee deduct any amount of Tax during Financial Year, Form-16 will be issued to Employee u/s. 203 of Income Tax Act.

 

Financial Year of an LLP,

 means the period from 1st April of a year to the 31st March of the following year. However, in case of LLP incorporated after 30th September, financial year of an LLP may end on 31st March of the year next following that year. [Section 2(1)(l)]
As per the recent notice circulated by the MCA on Financial year of an LLP, all LLPs registered up to 30-September-2011 have to mandatorily close their financial year as on 31-03-2012 and file Form-8 by 30th October-2012. LLPs registered from 01-10-2011 to 31-03-2012 have option either to close financial year as on 31-03-2012 or 31-03-2013 and to file both Form-8 & 11 accordingly.
Taking into consideration these factors, LLPs that are incorporated on or after September 30^th 2011 are advised to close their financial year by March 31^st, 2013 and file Form 11 i.e., Annual Return of Limited Liability Partnership (LLP) by May 31^st, 2013 or any date as extended by the MCA and Form 8 i.e., Statement of Account & Solvency by October 30^th, 2013 or any other date as extended by the MCA in this regard. 

Whether when assessee avails benefits based on decision of Kerala HC, which was later over-ruled by SC, it cannot be granted waiver of penal interest merely because it is not located within jurisdiction of Kerala HC - NO: HC

THE issues before the Bench are - Whether when an assessee has genuinely availed benefits under the Income Tax Act, relying upon the decision of Kerala High Court, which was later overruled by the Supreme Court, it cannot be granted the waiver of penal interest u/s 119(2)(a), merely because the assessee is not located within the jurisdiction of the Kerala High Court; Whether the power of waiver of penal interest u/s 119(2)(a) can be exercised only in the perspective of the decision of the High Court or Supreme Court passed necessarily in assessee's own case and Whether the fact that the decision covers the field of Income Tax legislation, as may be applicable to any assessee, would not amount to a sufficient circumstance for reduction of waiver of interest - Whether the decision of the other High Courts have any persuasive value. And, the HC allows the assessee's writ.

Facts of the case

The assessee wanted to claim the benefit u/s 80HHC of the Act. At that point of time a

UNDERSTANDING SECTION 10 WITH LATEST CASE LAWS PART- II:

 

 

 

We had earlier discuss in detail about the concepts of exemption of section 10 along with various case laws earlier in part –I. In case you want to refer, the part –I, please click on the link below:

 

http://taxbymanish.blogspot.in/2012/02/understanding-exepmtions-of-income-tax.html

 

Over a period of time, there are number of judgements comes from various levels of courts from different locations of India and hence it is very important to know the same for the correct treatment of exemption of section 10.

 

No S. 271(1)(c) penalty if wrong claim due to mistake/ wrong advice of CA

The assessee filed a return of income in which it committed two mistakes (i) Depreciation was claimed at Rs.1.70 crores instead of at Rs. 1.05 crores due to a mistake in calculation, (ii) the assessee sold its garment manufacturing machine and suffered a loss of Rs.21.68 lakhs thereon. Though the loss was on capital account, it was claimed as a revenue deduction. In the course of the assessment proceedings, the assessee realised its mistake and withdrew the claim for excess depreciation and the claim for the loss. The AO levied penalty u/s 271(1)(c) on both issues which was confirmed by the CIT(A). However, the Tribunal held that both mistakes had occurred due to a mistake/ wrong advice given by the Chartered Accountant and that there was a “bona fide mistake”. It was also held that “the

Service tax Case law update - March 2013

1. Services:

 

Rent – a – Cab Service:

 

1.1  Shree Gayatri Tourist Bus Service vs. CCE, Vadodara 2013 (29) STR 499 (Tri-Ahmd.)

 

The appellant in this case had contract with client inter alia stipulating that, (i) vehicles were required for transportation of personnel and delegates of client, under their instructions/directions, (ii) vehicles may have to move on official duty to outstation, depending upon exigencies of client work, for which no other extra charges was to be paid, (iii) vehicle would be provided normally

Complete Procedure for File Rectification

On completion of processing of Income Tax Return by CPC, Income Tax Department, an assessee can rectify e-Filed Income Tax return online.

 

Rectification can be done on any mistake apparent in the Income Tax Return filed

An Income Tax authority may:

• amend any order passed by it under the provision of this Act
• amend any intimation or deemed intimation under sub-section (1) of Section 143.

Subject to the other provisions of this section, the authority concerned,

Whether while claiming deduction under section 10A, assessee is compulsorily required to claim depreciation under section 32 - NO: ITAT

THE issue before the Bench is - Whether while claiming deduction under section 10A, the assessee is compulsorily required to claim depreciation under section 32 of the Act. And the verdict goes in favour of the assessee.

Facts of the case

Assessee claimed deduction u/s 10A/10B. While computing eligible income for deduction, assessee opted not to claim depreciation in view of the judement of Supreme Court in the case of CIT vs. Mahendra Mills that the assessee cannot be forced to claim depreciation. AO observed that in the past assessee had been consistently claiming depreciation and hence the departure made in this year was not bona fide. ITAT in its order considered the decision of Indian Rayan

March 2013 Tax Update

Direct Tax

High Court

Tax Residency Certificate issued by the Revenue Authorities of the country of residence of the non-resident is a sufficient evidence of its beneficial ownership of royalty income

The taxpayer, a tax resident of Netherlands, was in receipt of royalty income from
Universal Music India Private Limited, an Indian company. The taxpayer claimed the benefit of Article 12 of the Double

Whether when assessee is given many opportunities to explain how rental income has become business income as claimed in return, lack of response from assessee justifies re-assessment u/s 147 - YES: Bombay HC

THE issue before the Bench is - Whether when assessee is given many opportunities to explain how rental income has become business income as claimed in the return, lack of response from the assessee justifies re-assessment u/s 147. YES is the HC's answer.

Facts of the case

The assessee had been receiving rent from leasing its property for many years. Till A.Y. 2007-08, the rental income was declared by the assessee under the head of business income. From A.Y. 2008-09 the rental income was declared by the assessee as income from house property. Since the assessee had accepted from A.Y. 2008-09 that the rental income was taxable under the head - income from house property, the AO was of the view that the same view needed to be taken for A.Ys. 2006-07 and 2007-08. The AO had also stated that the rental income was treated as income from house property.

Before the HC the Assessee's Counsel submitted that the purported reopening of the

How to View Form 26AS

Income Tax Department facilitates a PAN holder to view its Tax Credit Statement (Form 26AS) online. Form 26AS contains

• Details of tax deducted on behalf of the taxpayer by deductors
• Details of tax collected on behalf of the taxpayer by collectors
• Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders)
• Details of paid refund received during the financial year

Details of the High value Transactions in respect of shares, mutual fund etc.

The Tax Credit Statement (Form 26AS) are generated wherein valid PAN has been reported in the TDS statements.

Transfer Pricing: CBDT Circular On Research & Development Centres

F No. 500/139/2012
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(Foreign Tax and Tax Research-I Division)

New Delhi 26th day of March 2013

Circular No. 03/ 2013

Subject: Circular on conditions relevant to identify development centres engaged in contract R&D services with insignificant risk

It has been brought to the notice of CBDT that there is divergence of views amongst the field officers

Transfer Pricing: CBDT Circular On Application Of Profit Split Method

F No. 500/139/2012
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(Foreign Tax and Tax Research-Division)
New Delhi 26th day of March 2013

Circular No. 02/ 2013

Sub: Circular on application of profit split method

It has been brought to the notice of CBDT that clarification is needed for selection of profit split method (PSM) as most appropriate method. The issue has been examined in CBDT. It is hereby clarified that while selecting PSM as the most appropriate method, the following points may be kept in mind:

ST-3 Q2 Return Software Free Download and e-Return steps.

Friends Service Tax Assessees who are registered on or after 01.07.2012 for 'All Taxable Services - Other than in the Negative List' or those who have amended their Registration by adding the description 'Other than in the Negative List', are required to file amendment to their Registration online to delete the said description and add the relevant description(s) of Taxable Services available in the drop-down list in the online amendment Form.

Steps for filing of ST-3 Return:

I. Fill up the Return data: Navigate to each field of every section in the sheet to provide applicable data in correct format. (Formats will get reflected while filling data.)

II. Validating Sheets: Click on the ''Validate this sheet" button to ensure that the sheet has been properly filled in and also data has been furnished in proper format. If there are some errors on the sheet, e-filing utility will prompt you to correct the same.