Your SlideShare is downloading. ×
Latest updates of income tax by praveen kumar
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Latest updates of income tax by praveen kumar

17,469
views

Published on

Books of My Blog : for details go to my blog : …

Books of My Blog : for details go to my blog :
http://latestupdatesofincometax.blogspot.com/


0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
17,469
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
97
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. C M YCMMYCYCMY K
  • 2. C M YCMMYCYCMY K
  • 3. i ii i Latest Updates of Income Tax, TDS by PRAVEEN KUMAR Praveen Kumar C M YCMMYCYCMY K manufactured byi i i i
  • 4. i ii i The original blog can be found at http: // latestupdatesofincometax . blogspot .com/ C M YCMMYCYCMY K All rights reserved by the author. No part of this publication may be repro- duced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the author. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form, binding or cover other than that in which it is published, without the prior consent of the author. Manufactured by on September 28, 2011i i i i
  • 5. i ii i Interactive Platform for All Finance Professionals In Easy Language, Readers Queries are also welcome. C M YCMMYCYCMY Ki i i i
  • 6. i ii i C M YCMMYCYCMY Ki i i i
  • 7. i ii i Contents 50 Paise Coins to be Minimum Denomination Coin Acceptable for Transaction from June 30, 2011 . . . 1 Exemption from attaching accounts of subsidiaries with balance sheet of holding company . . . . . . . . 1 SEBIs recommendation on related party transactions 3 Centralized Processing Center (CPC), Bangalore has begun processing of returns for AY 2010-11 . . . . . 5 Budget – 2011- (Tax limit enhanced from Rs 1,60,000 C to Rs 1,80,000)) . . . . . . . . . . . . . . . . . . . . . . . 5 Monthly Compliance Chart – With Due Dates (very useful for every Finance professional) . . . . . . . . . M 7 Budget – 2011-Salaried Employee eraning Less then YCM 5 lacs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10MY Budget – 2011 – ( CHANGES IN INCOME TAX & SERVICE TAX – MAIN POINTS) . . . . . . . . . . . . . 12 PUBLIC INTEREST : VALUABLE INFORMATION . .CY 14 Notifications & Circulars (DVAT) – Extend the timeCMY K limit DVAT 51, up to 31st March, 2011 . . . . . . . . 15 Payment of MCA filing fees through electronic mode made mandatory . . . . . . . . . . . . . . . . . . . . . . . 18 Coins of 25 Paise and Below – Withdrawal from Circulation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Ministry approves 9.5% interest on PF deposits . . . 20 Monthly Obligation Chart APRIL- 2011 . . . . . . . . . 21 10 things to know about Mr. Anna Hazare and Lok Pal Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 COMPANIES NEED NOT PAY STAMP DUTY ON INCREASED CAPITAL: HC . . . . . . . . . . . . . . . . 24 ii i i i
  • 8. i ii i Imp. Info. : DUE DATE TO DEPOSIT TDS DEDUCTED AND PROVISIONS IN MARCH, 2011 IS 30TH APRIL, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Clarification on issues relating to CENVAT Credit Rules 2004- Regarding Circular No.943/04/2011-CX- 29.04.2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 STATUTORY OBLIGATION CHART FOR THE MONTH OF MAY, 2011 . . . . . . . . . . . . . . . . . . . . . . . . 31 e-Filing for AY 2011-12 has been started (ITR-1(SAHAJ) and ITR-2 are now enabled). . . . . . . . . . . . . . . . 33 Instructions on Issuance of TDS certificates in form no. 16A and option to authenticate same by way of Digital Signature . . . . . . . . . . . . . . . . . . . . . . . 34 Form No. 16A now generated from Tax Information Network (TIN). Mandatory for Companies and Banks to issue Form 16A from TIN to their deductees for C deductions made from April 1, 2011 (F. Y. 2011-12) 37 M E-filing for ITR 5 and ITR 6 enabled for AY 2011-12 40 Y RBI asks banks to reimburse failed ATM transactions in 7 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Monthly Obligation / Due Date Chart for month ofCMMY June, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 43CY Filing of Balance Sheet and Profit and Loss AccountCMY in XBRL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 K इनकम टैक्स रिटर्न भरने से छूट . . . . . . . . . . . . . . . . . . . 47 KNOW YOUR PF BALANCE ONLINE . . . . . . . . . . . . . . . 49 Monthly Obligation Chart (July, 2011) . . . . . . . . . . . . . . . . 49 Service tax Payable on billing basis from July 1 2011 (Clarification) 51 Cost Inflation Index for Financial Year 2011-2012 Notified . . . . . 52 Full Year Statutory Obligation Chart (2011-12) . . . . . . . . . . . 55 E-Filing : Digital Signature Certificate made mandatory w.e.f 1st Ju- ly 2011 for Firms and Individuals . . . . . . . . . . . . . . . . . . . 66 e-Filing Process – At a glance . . . . . . . . . . . . . . . . . . . . 66 GOD is One . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 CHECKLIST FOR INCOME TAX RETURN (Nice Info.) . . . . . 69 Monthly Obligations – August 2011 . . . . . . . . . . . . . . . . . 71 HDFC Bank starts income tax payment facility through ATMs . . . 73 Salaries of Chief Executives . . . . . . . . . . . . . . . . . . . . . 73 iii i i i
  • 9. i ii i Electronic filing of service tax return made mandatory for all w.e.f. 01st October 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Procedure of Filling Service Tax Return Electronically . . . . . . . 75 Excel Tips : – Fast AutoFill . . . . . . . . . . . . . . . . . . . . . . 78 Service Tax on fees charged for issuance of Country of Origin Cer- tificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Format of reply to Penalty notice under section 272B for wrong quot- ing or non-quoting of PAN . . . . . . . . . . . . . . . . . . . . . . 79 Gujarat HC upholds constitutional validity of service tax on renting of immovable property . . . . . . . . . . . . . . . . . . . . . . . . 81 Cost Inflation Index meaning and Index for all the years . . . . . . . 101 Your Monthly Obligation Chart for September, 2011 . . . . . . . . 107 How to rectify and avoid interest default in Payment of TDS and How to calculate interest on TDS defaults . . . . . . . . . . . . . . . . . 109 eTDS Correction Returns – Common reasons for rejection of TDS Returns and solution for the same . . . . . . . . . . . . . . . . . . . 114 C Income Tax Deductions under section 80C – Eligible Investments M and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Y Download MCA-21 All ROC Forms . . . . . . . . . . . . . . . . . 134 HAPPY TEACHER’S DAY…… . . . . . . . . . . . . . . . . . . . 146 How to interact with departmental officers & ReplyCMMY to SCN and adjudication- Service Tax . . . . . . . . . 146CY Useful Information on “CIBIL” . . . . . . . . . . . . . . 168CMY Modification in PPF Scheme: Deposit Limit Raised from Rs. 70,000 to Rs. 1,00,000/-(One Lac) . . . . . 171 Revised Schedule VI (shall be effective from 01.04.2011)172 K Online incorporation of companies within 24 hours . 174 MCA Circular on e-filing to avoid last minute rush . 175 Due date for submission of ITR-V extended . . . . . . 177 How To download FUV file from NSDL Website to revise e-TDS return . . . . . . . . . . . . . . . . . . . . . 178 FAQ on XBRL regarding software Purchase, Training, Filing of form 23AC and 23ACA, How to upload and Taxonomy . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Income Tax Calculator . . . . . . . . . . . . . . . . . . . 181 Computer Tricks : Is your computer male or female ?181 Computer Tricks : Hear a PDF file instead of reading it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 iiii i i i
  • 10. i ii i Excel Tips : Automatic Row Height for Wrapped Text182 FAQ on e-TDS / Corrected/Revised Return / Preparation of Correction Statement More than Once on the Same Regular Statement (Correction on Correction) 184 Documents pertaining to the transactions in relation to which PAN to be quoted . . . . . . . . . . . . . . . . 187 Income Tax – Notified long-term infrastructure bond U/s. 80CCF . . . . . . . . . . . . . . . . . . . . . . . . . . 190 FAQs on File Validation Utility (FVU) and How to Verify correctness of e-TDS/TCS return Prepared . . 192 CBDT may recommend VDIS scheme to bring back black money outside India . . . . . . . . . . . . . . . . . 195 How to make correction or Revision in Salary Details of e- TDS return already filed? . . . . . . . . . . . . . . 197 TDS deductor may soon be able to view PAN-wise ledger and different views available for Tax Payers C on NSDL-TIN website . . . . . . . . . . . . . . . . . . . . 200 M 15th September, 2011 – Last Date for Payment of Y Advance Tax . . . . . . . . . . . . . . . . . . . . . . . . . 203 Service Tax Notification No. 45/2011-ST dated 12.09.2011 – Legal Services provided by business entity to businessCMMY entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204CY Introducing NEFT in MCA . . . . . . . . . . . . . . . . . 205CMY Useful : Download Links for 35 Indian Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Amends Central Excise Rules, 2002 (Fourth Amendment) K thereby making e-filing of Central Excise returns mandatory in ACES . . . . . . . . . . . . . . . . . . . . . 207 Repo rate, reverse repo rate hiked by RBI; home, auto loan EMIs to go up . . . . . . . . . . . . . . . . . . 208 After petrol price hike, EGOM meet on LPG gas cylinder subsidy deferred . . . . . . . . . . . . . . . . . 210 FEMA – RBI increased the limit for Transfer of security by way of gift in calendar year to USD 50,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 VIEW TAX CREDIT (FORM 26AS) FROM BANK SITE THROUGH NET BANKING FACILITY . . . . . . . . . . 214 ivi i i i
  • 11. i ii i Income Tax Case Law : Claim of bad debts allowable even if debts are of the same year – ITAT Mumbai . 217 Tribunal can issue direction beyond the scope of the appeal for correction of error – Delhi HC . . . . . . . 227 TIPS TO TACKLE OFFICE POLITICS . . . . . . . . . . 240 Amends Notification No. 17/2004-Service Tax, dated the 10th September, 2004 . . . . . . . . . . . . . . . . . 242 Amends Notification No. 18/2002-Service Tax, dated 16th December, 2002 . . . . . . . . . . . . . . . . . . . . 244 Form 3CD with annexures, 3CA, 3CB and Caro Report in Excel Format (Updated) . . . . . . . . . . . . . . . . 245 International companies answerable to Indian consumer courts for service deficiency – Supreme Court . . . . 245 Online filing of excise duty, service tax returns mandatory from 1st October 2011 . . . . . . . . . . . . . . . . . . . 247 Govt may soon credit you service tax refund in you C bank account automatically . . . . . . . . . . . . . . . . 247 M FAQ on TAN Registration Number – What to do if it Y is forgotten or lost . . . . . . . . . . . . . . . . . . . . . 248 Electronic Fund Transfer – Dishonour – Same Liabilities as NI Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 249CMMY New Procedure for Correction of Income Tax PaymentCY challan (Pysical) by Banks . . . . . . . . . . . . . . . . . 251CMY Useful Links for All Finance Professionals (Bookmark This for future reference) . . . . . . . . . . . . . . . . . 256 Payment to tenants for vacating house is cost of K acquisition, Yet Not Relevant For Section 54F . . . . 257 (RBI Notifications) Returns to be submitted by NBFCs – Revised Formats . . . . . . . . . . . . . . . . . . . . . . 261 FAQ on 26AS (Useful) . . . . . . . . . . . . . . . . . . . 264 Provident Fund Secrets (1 of 6) . . . . . . . . . . . . . 271 Provident Fund Secrets Insurance benefits (2 of 6) . 273 Provident Fund Secrets Claim interest on withdrawn amount (3 of 6) . . . . . . . . . . . . . . . . . . . . . . . 274 Provident Fund Secrets Use of EPF TO FUND your NEEDS (4 of 6) . . . . . . . . . . . . . . . . . . . . . . . 275 Provident Fund Secrets PREMATURE WITHDRAWAL (5 of 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 vi i i i
  • 12. i ii i Provident Fund Secrets Have your grievances addressed (6 of 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 Excel Tips : Altering the Displayed Format of Numbers to the Nearest 100 . . . . . . . . . . . . . . . . . . . . . 278 Last date of filing ST-3 returns for the period April, 2011 to September, 2011 is 25th October, 2011 . . 279 Interest received on income tax refund can be set- off against the interest paid on delayed payment of income tax – ITAT Mumbai . . . . . . . . . . . . . . . . 281 Download book covering direct and indirect tax, accounting standards, LLP, Companies Act, Partnership Act in brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 FAQ ON National Pension Scheme (NPS) . . . . . . . 283 How to Apply and ‘Get Certified Copies’ of Documents from ROC . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Taxability of Leave Travel Allowance (LTA) . . . . . . 290 C Exemptions – Interest on bonds/debentures – Notified M bonds or debentures of public sector companies u/s Y 10(15) of income tax act, 1961 . . . . . . . . . . . . . . 292 (Very Very Useful) अपने फोन को अनचाही कॉल्स और एसए- मएस से ऐसे करें आजाद – (Try Now) :-) . . . . . . . . . . . 295CMMY Fraudulent payments in the Accounts of EPFO throughCY fake cheques‑ precautionary measure to avoid fraudulentCMY payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Filing of e-return by Legal Heir (LH) using DSC: Revised Process . . . . . . . . . . . . . . . . . . . . . . . 302 K Safe Efiling of ITR E-Filing cares about your security!!!302 Service Tax on Renting of Immovable Property per se upheld by Delhi High Court . . . . . . . . . . . . . . 306 vii i i i
  • 13. i ii i 50 Paise Coins to be Minimum Denomination Coin Acceptable for Transaction from June 30, 2011 Saturday, January 1, 2011 Government Calls in from Circulation Coins of Denomination of 25 Paise and below The Central Government, Ministry of Finance has notified on December 20, 2010 to call in from circulation the coins of denomination of 25 paise and below, issued from time to time, with effect from June 30, 2011. From this date, these coins shall cease to be a legal tender for payment as well as on account. The procedure for call in shall be notified separately by the Reserve Bank of India. C Consequently, from June 30, 2011 onwards these coins will not be accepted in transactions. The minimum denomination coin acceptable for transaction M will be 50 paise from that date. Also, in accounting, i.e. the entries in books Y of accounts, pricing of products/services/taxes shall also be rounded off toCM 50 paise or whole rupee from that date.MY The notification was issued in exercise of the powers conferred by sub-CY section 15A of the Coinage Act, 1906 (3 of 1906).CMY K Exemption from attaching accounts of subsidiaries with balance sheet of holding company Tuesday, February 15, 2011 Ministry of Corporate Affairs, Government of India (MCA), has on 8 Febru- ary 2011 issued directions through General Circular No. 2/2011 and Press Note 3/2011 exempting holding companies from attaching specified par- ticulars of its subsidiary companies with the balance sheet of the holding company. The directions have been issued by MCA in terms of Section 212(8) of the Companies Act, 1956 (the Act). 1i i i i
  • 14. i ii i Section 212 of the Act requires holding companies to attach with their bal- ance sheet, the following documents in respect of each of its subsidiary companies viz: 1. Balance sheet; 2. Profit and loss account; 3. Auditor’s report; 4. Director’s report; 5. Statement of holding company’s interest in subsidiary including changes therein if any, etc. MCA observed that large number of companies were approaching MCA for seeking exemption from attaching the above mentioned particulars of subsidiaries with the balance sheet of the holding company. C Considering globalizing Indian economy, increased number of subsidiaries M and introduction of accounting standards on consolidated financial state- ments, MCA directed that provisions of Section 212 of the Act shall not Y apply in relation to subsidiaries of those holding companies which fulfillCM the conditions which include the following:MY 1. Board of Directors of the holding company has given consent byCY a resolution for not attaching the balance sheet of the subsidiary with theCMY balance sheet of the holding company. K 2. The holding company shall present in its annual report, the con- solidated financial statements of holding company and all its subsidiaries audited by its statutory auditors. 3. The consolidated financial statement shall be prepared in strict compliance with the applicable Accounting Standards and, where applica- ble, Listing Agreement as prescribed by Securities and Exchange Board of India. 4. The holding company shall disclose in the consolidated balance sheet specified information in aggregate for each subsidiary including sub- sidiaries of subsidiaries. 5. The holding company shall furnish a hard copy of details of ac- counts of subsidiaries to any shareholder on demand. 2i i i i
  • 15. i ii i 6. The holding as well as subsidiary companies in question shall reg- ularly file such data to the various regulatory and Government authorities as may be required by them. 7. The holding company shall give Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary com- panies along with exchange rate as on closing day of the financial year. Conclusion • Approaching MCA on yearly basis for seeking exemption from attaching particulars of subsidiaries with the balance sheet of holding com- pany has been done away with if specified conditions are complied with. • Consolidation of financial statements will be a prerequisite for an unlisted holding company who wants to avail of the aforesaid general ex- emption. C Source : General Circular No. 2/2011 M YCM SEBI’s recommendation on related partyMY transactions Tuesday, February 15, 2011CYCMY Background:-Securities and Exchange Board of India [SEBI] at their Board K Meeting held on 7 February 2011 decided to recommend to the Ministry of Corporate Affairs, Government of India [MCA] to suitably amend Clause 166 of the Companies Bill, 2009 [Companies Bill], to disallow interested shareholders from voting on the special resolution of the prescribed relat- ed party transaction. SEBI move is aimed to protect small and diversified shareholders in listed companies from abusive related party transactions. As per Clause 166 of the Companies Bill, the Board of Directors of a com- pany is required to approve specified related party transactions. In case of companies having specified capital, such related party transactions which are not on an arm’s length basis would require prior approval of sharehold- ers by a special resolution. Specified related party transactions shall include any contract or arrangement with a related party with respect to— 3i i i i
  • 16. i ii i (a) sale, purchase or supply of any goods or materials; (b) selling or otherwise disposing of, or buying, property of any kind; (c) leasing of property of any kind; (d) availing or rendering of any services; (e) appointment of any agents for purchase or sale of goods, materials, services or property; (f) appointment to any office or place of profit in the company or its subsidiary company; and (g) underwriting the subscription of any securities or derivatives there- of, of the company. SEBI has already mandated non-participation in voting in the shareholders meeting by interested shareholders in the following cases: C • In case of issue of sweat equity shares to promoters under SEBI M (Issue of Sweat Equity) Regulations, 2002, for obtaining shareholders’ ap- Y proval by special resolution, the promoters to whom Sweat Equity SharesCM are proposed to be issued cannot participate in voting.MY • In case of voluntary delisting under SEBI (Delisting of EquityCY Shares) Regulations, 2009, the special resolution for seeking shareholders’ approval is considered to be approved, if the votes cast in favour of the pro-CMY posal by public shareholders is at least two times the number of votes cast K against it. Conclusion • The related party transactions which are not on an arm’s length basis in case of listed companies will be subject to a greater scrutiny from non- interested shareholders if the proposal is accepted by the MCA. Source: Press release PR No.24/2011 dated 7 February 2011 issued by SE- BI 4i i i i
  • 17. i ii i Centralized Processing Center (CPC), Bangalore has begun processing of returns for AY 2010-11 Wednesday, February 16, 2011 As on 11/2/2011 it has processed over 34.1 lakh e-filed returns of AY 2010- 11 in all categories of ITRs including Corporate Returns and generated re- funds in over 8.6 lakh cases. The Income Tax Department has now extended the last date for sending ITR Vs for AY 2010-11 to 31st July, 2011 or 120 days whichever is later . All taxpayers are requested to send their ITR-V early so that processing and issue of refunds can be completed. Marking the advent of Income Tax department in digital era, all intimation C orders are being sent by e-mail to taxpayers as a digitally signed password M protected PDF document. Y SMS alerts (where mobile number is provided) to taxpayers on completionCM of processing and determination of refunds has been introduced for ITRs ofMY AY 2010-11.CYCMY Budget – 2011- (Tax limit enhanced from Rs K 1,60,000 to Rs 1,80,000)) Monday, February 28, 2011 Finance minister MR. Pranab Mukharjee presented Union Budget – 2011 in Parliament today. Highlights of the Budget :- INCOME TAX: No change in tax slabs has been proposed. The tax ex- emption limit for general category has been raised from Rs 1,60,000 to Rs 1,80,000. No change in tax exemption limit for women. 5i i i i
  • 18. i ii i For senior citizens, exemption age limit has been reduced from 65 to 60. Their tax exemption limit will be Rs 2,50,000. Apart from this, a new exemption bracket has been created for those above 80 years of age. Their tax exemption limit will be Rs 5,00,000. Surcharge for companies cut to 5 per cent, from 7.5 per cent. A new revised income tax return form ‘Sugam’ to be introduced for small tax papers. DIRECT TAX: The FM announced that Direct Tax Code will be imple- mented from April, 2012 and the Goods and Services Tax Bill is to be in- troduced in Parliament this year. SERVICE TAX: Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic C tests. M Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 Y for international travel in economy class.CM On higher classes, it will be 10% flat.MYCY EXCISE AND CUSTOMS DUTY: There is a proposal to introduce self- assessment of customs duty wherein importers and exporters will them-CMY selves assess payment of duty. K There will be change in excise duty. The standard rate of central exercise duty will be maintained at 10%. A 1% central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted and there will be no change in CENVAT rates. A new scheme is to be introduced for refund of service tax on the lines of drawback of duties, he announced. Also, capital investment in fertiliser production will be considered as infrastructure sub-sector, Pranab said. Tax-free bonds of Rs 30,000 cr will be issued for infrastructure development which will cover Warehousing Corporation, NHAI, IRFC and HUDCO. 6i i i i
  • 19. i ii i Monthly Compliance Chart – With Due Dates (very useful for every Finance professional) Monday, February 28, 2011 Hello Friends, Given below are Compliance Reminder Chart which is very useful for every Finance professional Due Date Particulars C M 5th / 6th of every month YCM Service Tax & Excise Duty payment for preceeding month (6th if electronic payment, otherwise,MYCY the due date is 5th) (excluding March month)CMY 31/03 K Service Tax & Excise Duty payment for month of March 7th of every month TDS / TCS payment for the preceeding month (31 May with respect to TDS on entries passed on 31 March) 10th of every month 7i i i i
  • 20. i ii i i) Excise return (ER – 1) for the preceeding month ii) ER-6 monthly return u/r 9A(3) of CCR, 2004 15th of every month PF payment (excluding the 5 grace day allowed) for the preceeding month 15/03, 15/06, 15/09, 15/12 Advance Income tax – installments for the year 15/01,15/06,15/07,15/10 C TDS Quarterly Statement in 24Q (salary payments) /26Q (payments other M than Salary to Residents) Y 15/01,15/06,15/07,15/10CMMY TDS Quarterly Statement in 27Q (payments other than Salary toCY Non-residents)CMY K 15/01,30/04,15/07,15/10 TCS Quarterly Statement in 27EQ 21st of every month i) VAT (Maharashtra) -TDS payment in form 210 for the preceeding month ii) VAT (Maharashtra) & CST monthly payment for the preceeding month iii) ESIC payment for the preceeding month iv) VAT (Maharashtra) & CST monthly return (due date is excluding the 10 days grace allowed) 8i i i i
  • 21. i ii i 25/04, 25/10 Half yearly service tax return in Form ST-3 25th of every month PF monthly return for the preceeding month Last date of every month i) Issue of TDS certificate for the preeceding month (7 June with respect to TDS on entries passed on 31 March) C II) PT (Maharashtra) payment (challan cum return) for the liability of M preceeding month YCM 30/09MY Corporate tax return, Tax Audit, TP report & Wealth tax return for theCY preceeding March year endCMY K 30/04 i) Annual PF return for the Year ending 31 March ii) ER-5 declaration u/r 9A(1) of CCR, 2004 30/11 ER-4 declaration u/r 12(2)(a) of CER, 2004* (pertaining to previous FY) 9i i i i
  • 22. i ii i Budget – 2011-Salaried Employee eraning Less then 5 lacs Tuesday, March 1, 2011 SALARIED EMPLOYEE ERANING LESS THEN 5 LACS NOT HAV- ING OTHER INCOME NEED NOT FILE IT RETURN In a big relief from cumbersome tax filing process for the salaried class, Finance Minis- ter Pranab Mukherjee on Monday proposed to exempt them from filing tax returns unless they have other sources of income. The government will be issuing a notification exempting ‘classes of persons’ from the requirement of furnishing income tax returns, said the Memorandum to the Finance Bill 2011. Salary earners having an income of less than Rs 5 lakh will not have to file tax returns from this year. “Salaried people, may be up to Rs 5 C lakh…they need not file the (income tax) return,” CBDT chairman Sudhir Chandra said. The exemption from filing tax returns come into effect M from the assessment year 2011-12. The decision, which will come into Y effect from June 1, 2011, will reduce the compliance burden on small tax-CM payers, it added.MY In case such a salary earner has income from other sources like dividend,CY interest etc. and does not want to file returns, he will have to disclose such income to his employer for tax deduction, Chandra said.CMY K The Form 16 issued to salaried employees will be treated as Income Tax Return, he added. “Therefore, in cases where there is no other source of income, filing of a return is duplication of existing information,” the Memorandum said. The Income Tax department is open to examining a proposal to exempt them from the annual chore. Asked whether the department would think about doing away with Income Tax returns for employees, who had no other income apart from salaries in a financial year, Central Board of Direct Taxes chairman Sudhir Chandra said the department would certainly consider the proposal. 10i i i i
  • 23. i ii i He agreed that for a substantial chunk of salaried employees, savings bank interest is the only additional income and that in most cases, this not sub- stantial. This proposal, if approved, will benefit a large section of people and would reduce the I-T department’s workload in a big way. Of the country’s 35 million taxpayers, roughly half are salaried employ- ees. The proposal to do away with returns for salaried taxpayers was earlier in- ternally mooted within CBDT a few years ago. The argument in favour of the proposal was that income records for this class of taxpayer were available with both employers and banks. Chandra also promised small taxpayers another major relief. He said the I-T department is planning to release all small-value refunds before March C 31. M “I will ask my officials to give most refunds by the end of the current fi- Y nancial year,” he said. ”We will try to clear most refunds in a month. AtCM least small refunds can be given by March 31,” Chandra added. The newly- appointed chairman said he would communicate this to his officials. SomeMY of the refunds will be given to taxpayers directly through State Bank ofCY India under the refund banker scheme. Under this, tax refunds are sent toCMY taxpayers by State Bank of India, either through the electronic clearing ser- K vice mode or in physical form. The scheme was launched four years ago in Delhi and Patna and later extended to other cities. In 2009-10, the I-T department gave over Rs 58,000 crore (Rs 580 billion) in refunds, which was 50 per cent more than the previous year. CBDT has increased its target for processing refunds to Rs 70,000 crore (Rs 700 bil- lion) in the current financial year. Refunds increased by 19.5 per cent to Rs 44,000 crore (Rs (Rs 440 billion) up to December, 2010. The I-T de- partment has opened a Central Processing Centre in Bengaluru for faster processing of claims for electronically-filed returns. It will roll out three more centres in the Manesar, Pune and Kolkata. 11i i i i
  • 24. i ii i Budget – 2011 – ( CHANGES IN INCOME TAX & SERVICE TAX – MAIN POINTS) Tuesday, March 1, 2011 CHANGES IN INCOME TAX & SERVICE TAX – MAIN POINTS INCOME TAX 1. The basic exemption limit in the case of individuals increased from Rs.1.60 lacs to Rs.1.80 lacs. However, there is no increase in basic exemption limit in the case of Resident Women. 2. The qualifying age limit for senior citizens has been lowered from 65 years to 60 years and increased the current exemption limit under two cat- egories a. Category -1 – Age of Individual – 60 years or more but less than 80 years at any time during the previous year. The basic exemption limit is increased from Rs.2.40 lacs to Rs.2.50 lacs C b. Category – 2 – Age of Individual beyond 80 years or more at any time M during the previous year. The basic exemption limit is Rs.5.00 lacs. Y 3. In the case of domestic companies the surcharge reduced fromCM Rs.7.5% to 5% 4. In the companies other than domestic companies theMY surcharge has been reduced from 2.5% to 2%CY 5. The definition of charitable purpose u/s 2 (15) includes “the advancementCMY of any other object of general public utility”. The monetary limit in respect K of such activities has been enhanced from Rs.10.00 lacs to Rs.25.00 lacs. 6. The amount paid by an assessee as an employer by way of contribution towards pension scheme, as referred to in sec 80CCD(2) on account of an employee to the extent it doesn’t exceed 10% of the salary of employee in the previous year, shall be allowed as a deduction u/s 36 in computing the income under the head profit and gains of business or profession. 7. The Indian company which receives foreign dividend from foreign sub- sidiary company such dividend is taxable at the 15% as against 30% 8. The rate of MAT i increased to 18.5% from 18% of such book prof- it. 9. Minimum Alternative Tax has been introduced for Limited Liability Partnership (LLP) in line with MAT on companies with effect from the As- sessment Year 2012 – 2013. 12i i i i
  • 25. i ii i 10. The Government exempts assessee having no other income other than salary from furnishing the return of income by notification. The proposed amendment shall be effective from 1st June, 2011. 11. The SEZ developers are required to pay dividend distribution tax on dividends declared / distributed on or after 1st June, 2011. 12. The deduction u/s 80CCF to investment in notified long term infras- tructure bonds extended for the A. Y. 2012-13 also. 13. Liaison offices of a company will be required to file Annual Information in the prescribed form with in the 60 days from the end of the financial year. SERVICE TAX 1. The following new services have been proposed a. Services by air conditioned restaurants having licence to serve liquor; and C b. short term accommodation hotels / inns / clubs / guest houses etc charging M tariff above Rs. 1,000/- per day. Y c. Legal professional entities (other than individual) giving service to indi-CM vidual.MY d. Hospital having more than 25 bed with centralized air conditioning fa-CY cilities have to pay service tax @ of 5% plus cess.CMY e. Life Insurance companies providing services on investment products. K 2. Service Tax increased on air travel. 3. The monetary limit for adjustment of excess service tax paid is increased from Rs. 1.00 lacs to Rs.2.00 lacs. 4. The penalty for delayed payment of service tax u/s 76 has been reduced from 2% to 1% per month or Rs.100 per day whichever is higher. The maximum penalty reduced to 50% of the tax. 5. The rate of interest is reduced by 3% for assesses with turnover of upto 60 lacs. 6. The maximum penalty for delay in filing of return increased from Rs.2,000 to Rs.20,000 7. All individual upto Rs. 60 lacs p.a. turnover not required for service tax audit. 13i i i i
  • 26. i ii i PUBLIC INTEREST : VALUABLE INFORMATION Monday, March 7, 2011 SHARE THIS VALUABLE INFORMATION WITH YOUR FRIENDS JI JUST RECEIVED THIS INFORMATION ON MY MAIL AND I FOUND IT VALUABLE TO POST IT ON MY BLOG TO SHARE WITH EVERYONE. J 1. If you see children Begging anywhere in INDIA, please contact: “RED SOCIETY” at 9940217816. They will help the children for their studies. 2. Where you can search for any BLOOD GROUP, you will get thou- sand’s of donor address. www.friendstosupport.org 3. Engineering Students can register in www.campuscouncil.comto at- C tend Off Campus for 40 Companies. 4. Free Education and Free M hostel for Handicapped/Physically Challenged children. Contact:- Y 9842062501 & 9894067506.CM 5. If anyone met with fire accident or people born with problems inMY their ear, nose and mouth can get free PLASTIC SURGERY done byCY Kodaikanal PASAM Hospital . From 23rd March to 4th April by German Doctors. Everything is free. Contact : 045420-240668,245732CMY “Helping Hands are Better than Praying Lips” 6. If you find any im- K portant documents like Driving license, Ration card, Passport, Bank Pass Book, etc., missed by someone, simply put them into any near by Post Boxes. They will automatically reach the owner and Fine will be collected from them. 7. By the next 10 months, our earth will become 4 degrees hotter than what it is now. Our Himalayan glaciers are melt- ing at rapid rate. So let all of us lend our hands to fight GLOBAL WARMING. -Plant more Trees. -Don’t waste Water & Electrici- ty. -Don’t use or burn Plastics 8. It costs 38 Trillion dollars to cre- ate OXYGEN for 6 months for all Human beings on earth. “TREES DO IT FOR FREE” “Respect them and Save them” 9. Special phone number for Eye bank and Eye donation: 04428281919 and 04428271616 (Sankara Nethralaya Eye Bank). For 14i i i i
  • 27. i ii i More information about how to donate eyes plz visit these sites. http: // ruraleye.org/ 10. Heart Surgery free of cost for children (0-10 yr) Sri Valli Baba Institute Banglore. 10. Contact : 9916737471 11. Medicine for Blood Cancer!!!! ‘Imitinef Mercilet’ is a medicine which cures blood cancer. Its available free of cost at “Adyar Cancer Institute in Chennai”. Create Awareness. It might help someone. Cancer Institute in Adyar, Chennai Category: Cancer Address: East Canal Bank Road, Gandhi Nagar Adyar Chennai -600020 Landmark: Near Michael School Phone: 044-24910754 044-24910754, 044-24911526 044-24911526, 044-22350241 044-22350241 12. Please CHECK WASTAGE OF FOOD If you have a function/party at your home in India and food gets wasted, don’t hesitate to call 1098 (only in India ) – Its not a Joke, This is the number of Child helpline. They will come and collect the food. Please circulate this message which can help feed many C children. AND LETS TRY TO HELP INDIA BE A BETTER PLACE M TO LIVE IN Please Save Our Mother Nature for “OUR FUTURE GENERATIONS” YCMMYCY Notifications & Circulars (DVAT) – ExtendCMY the time limit DVAT 51, up to 31st March, K 2011 Friday, March 11, 2011 Extend the time limit DVAT 51, up to 31st March, 2011 GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI DEPARTMENT OF TRADE AND TAXES VYAPAR BHAWAN, I. P. ESTATE, NEW DELHI-110 002 TEL NO. : 011 23319691, 011 23318568, FAX NO. : 011 23319474 15i i i i
  • 28. i ii i No. F.3(33)/P-II/VAT/Misc./2006/1932-42 Dated : 04-02-2011 ORDER In exercise of the powers conferred under rule 49A of the Delhi Value Added Tax Rules, 2005, sub-section (2) of section 9 of the Central Sales Tax Act, 1956, and sub-rule (7) of rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, I, Jalaj Shrivastava, Commissioner, Value Added Tax, Government of National Capital Territory of Delhi, do hereby, extend the time limit prescribed in- C (a) sub-rule (1) of rule 67 of the Delhi Value Added Tax Rules, 2005 and M rule 4 of the Central Sales Tax (Delhi) Rules, 2005 for furnishing of reconciliation return in Form DVAT 51, up to 31st March, 2011 for Ist and Y IInd quarter of the year 2010-11.CM (b) Sub-rule (5) of rule 5, clause (a) of sub-rule (3) of rule 6, clause (a) ofMY sub-rule (5) of rule 7, sub-rule (2) of rule 9, rule 6B and sub-rule (2) ofCY rule 6A of the Central Sales Tax (Delhi) Rules, 2005 and sub-rule (10) ofCMY rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 K for furnishing of the portion marked ‘original’ of the Declaration Forms ‘C’, ‘E-I’ or ‘E-II’, ‘F’, ‘I’, ‘J’ and ‘H’ respectively, up to 31st March, 2011 for Ist & IInd quarter of the year 2010-11 in respect of the Declaration Forms which relate to the year 2010-11. (JALAJ SHRIVASTAVA) Commissioner, Value Added Tax No. F.3(33)/P-II/VAT/Misc./2006/1932-42 Dated : 04-02-2011 Copy forwarded for information and necessary action to :- The Principal Secretary (Finance), Government of NCT of Delhi, Delhi Sachivalaya, I. P. Estate, New Delhi. 16i i i i
  • 29. i ii i The Secretary to Finance Minister, Government of NCT of Delhi, Delhi Sachivalaya, I. P. Estate, New Delhi. PS to Commissioner, Value Added Tax, Department of Trade & Taxes, New Delhi. All Additional / Joint / Deputy Commissioners, Department of Trade and Taxes, Vyapar Bhawan, I. P. Estate, New Delhi. The Joint Commissioner (PR) requesting for wide publicity of the order for information of all concerned dealers. The Registrar, Value Added Tax Appellate Tribunal, Vyapar Bhawan, I. P. Estate, New Delhi. All VATOs/AVATOs, Department of Trade and Taxes, Vyapar Bhawan I. P. Estate, New Delhi. Manager, EDP Unit, Department of Trade and Taxes, Vyapar Bhawan, I. P. C Estate, New Delhi requesting for posting the order on web site of the M Department. Y D. D(R&S), Department of Trade and Taxes, Vyapar Bhawan, I. P. Estate,CM New DelhiMY The President, Sales Tax Bar Association(Regd.), Vyapar Bhawan, I. P.CY Estate, New Delhi.CMY Guard File. K (NAVEEN KATARA) Value Added Tax Officer (Policy) Notification No : No. F.3(33)/P-II/VAT/Misc./2006/1932-42 17i i i i
  • 30. i ii i Payment of MCA filing fees through electronic mode made mandatory Thursday, March 17, 2011 Payment of MCA filing fees through electronic mode made mandatory Background- Under the Companies Act, 1956 read with Companies (Cen- tral Government’s) General Rules and Forms, 1956, various forms are required to be filed electronically on the MCA21 portal with the Min- istry of Corporate Affairs (MCA), Government of India through the web- site www.mca.gov.in . Presently, MCA accepts payment of filing fees through any of the following channels: (i) Remittance through physical challan at the accredited branches of the authorized banks (cheque / cash) (ii) Credit Card C M (iii) Internet Banking Y (iv) any other mode as may be approved by MCA.CM Modification in payment mechanismMY a) To improve the service delivery time, it is decided that:CY 1. Payments upto Rs. 50,000 will be mandatorily required to be madeCMY through electronic mode w.e.f. 27 March 2011. K 2. Payments above Rs. 50,000 – a. Can be made through electronic mode / challan payment between the period 27th March 2011 to 1 October 2011. b. Will be mandatorily required to be made through electronic mode w.e.f. 1 October 2011. Conclusion- The proposals are one of many being implemented to simplify the existing Company law by removing redundant procedures and making optimum use of information technology. The above is expected to improve the services to the stakeholders by creating faster work item leading to re- duction in time for approvals of forms / applications. 18i i i i
  • 31. i ii i Coins of 25 Paise and Below – Withdrawal from Circulation Thursday, March 17, 2011 Coins of 25 Paise and Below – Withdrawal from Circulation RBI/2010-11/428 UBD. BPD. (PCB). Cir. No. 39 /09.73.000/2010-11 March 15, 2011 The Chief Executive Officers, All Primary (Urban) Co-operative Banks. Madam / Dear Sir, C Coins of 25 Paise and Below – Withdrawal from Circulation M Please refer to the Govt. of India Gazette Notification S. O 2978(E) dated Y December 20, 2010 and the Reserve Bank Press Release dated February 1,CM 2011 on the above subject (copies enclosed).MY 2. The Government of India has decided to withdraw coins of denomina-CY tion of 25 paise and below from circulation with effect from June 30, 2011.CMY The Reserve Bank of India has instructed the banks maintaining small coin depots to arrange for exchange of coins of denomination of 25 paise and K below for their face value at their branches. The coins will be exchanged at the branches of these banks as also the offices of the Reserve Bank till the close of business on June 30, 2011. Coins of denomination of 25 paise and below will not be accepted for exchange at the bank branches from July 1, 2011 onwards. The UCBs may take note of the above instructions. 3. Please acknowledge receipt to the Regional Office concerned. Yours faithfully (Uma Shankar) Chief General Manager 19i i i i
  • 32. i ii i Ministry approves 9.5% interest on PF deposits Friday, March 18, 2011 The Finance Ministry on 17.03.2011 on Thursday approved higher interest rate of 9.5 per cent to over 4.7 crore depositors with the Employees Provi- dent Fund Organisation (EPFO) for 2010-11. The EPFO had been paying 8.5 per cent interest on PF deposits since 2005- 06. In September last year, it had recommended an increase in interest rate to 9.5 per cent for 2010-11 after discovering Rs 1,731 crore surplus in their books of accounts. “The finance ministry has ratified 9.5 per cent rate of return on PF deposits for 2010-11. We have received a notification in this regard,” Central Prov- ident Fund Commissioner Samirendra Chatterjee told PTI. C M Chatterjee further added that “our calculations regarding Rs 1,731 crore surplus in the interest suspense account were found correct by the finance Y ministry and so they approved this higher rate of return”.CM The finance ministry’s approval is subject to the condition that any shortfallMY on account of payment of 9.5 per cent rate of return would be met by makingCY adjustments in the interest rate in 2011-12.CMY Chatterjee, however, said that there would be no need for making any ad- K justment in the next fiscal as “EPFO calculations are correct regarding the discovery of a surplus of Rs 1,731 crore in the interest suspense account.” The finance ministry has also asked the EPFO to update its subscriber ac- counts within the next six months. EPFO’s apex decision making body – the Central Board of Trustees (CBT) – in September last year had decided to provide 9.5 rate of return on retirement savings in 2010-11 after it found a surplus of Rs 1,731 crore. Refusing to ratify the said rate of return, the finance ministry had earlier argued that the surplus shown by the ministry was not real after CAG report has called the EPFO’s so called surplus unverifiable. 20i i i i
  • 33. i ii i According to sources, the finance ministry approved 9.5 per cent interest after the intervention by Finance Minister Pranab Mukherjee. Monthly Obligation Chart APRIL- 2011 Monday, April 4, 2011 SERVICE TAX As early as possible Deposit of shortfall (If any) of service tax in case of companies for the month of Mar. 2011 and in other cases for the Quarter Jan. to Mar. 2011, if not deposited upto 31st March 2011. DVAT/CST 25th April 2011 Filing of Half Yearly Return for Oct. 2010 to Mar. 2011. 15th April 2011 Filing of DVAT-55 for change of period of filing of return C in respect of change of quantum of turnover in F/Y 2010-11 in comparison M to F/Y 2009-2010. Y 15th April 2011 Deposits TDS (VAT) in challans DVAT 20 and issueCM certificate for TDS in form DVAT–43 for deductions in the month of Mar-MY 10.CY 25th April 2011 Deposit of DVAT/CST Challans and e-filing of return forCMY the month of Mar. 2011 for the dealers filing monthly returns. K 25th April 2011 Deposit of DVAT/CST Challans and e-filing of return for the Quarter ending March 2011 for the dealers filing quarterly returns. 28th April 2011 Deposit monthly return (Hard Copy of Electronic Filing) of VAT/CST for month March 2011. 28th April 2011 Deposit Quarterly return (Hard Copy of Electronic filing) of VAT/CST for quarter ending March 2011. 28th April 2011 For dealers filing Half Yearly or Yearly Return, to de- posit VAT/CST for quarter ending March 2011 irrespective of half yearly or yearly return. 30th April 2011 Filing of DVAT-01/DVAT-02/DVAT 3A/ WC 01 etc for opting /withdrawal from composition scheme 21i i i i
  • 34. i ii i INCOME TAX/T. D. S. 7th April 2011 Deliver a copy of form 15G/15H/27C to CCIT or CIT for declarations received in the month of Mar. 2011 7th April 2011 Deposit of TDS on Salary/TCS in challans no. ITNS 281 for deductions/collections made in the month of Mar. 2011. Deposit TDS other than Salary in challans ITNS 281 as per following Schedule: 7 th April 2011 i. TDS deducted upto 30/03/2011. 7th April 2011 ii. TDS deducted on the payment made on 31/03/2011. 31st May 2011 iii. TDS deducted on the payments credited but not made on 31/03/2011. 30th April 2011 Submit quarterly statement of deduction of TCS in Form 27EQ for quarter ending Mar., 2011 C 30th April 2011 Issue of consolidated certificate for credit/payments made M during the year 2010-2011 in Form 16 for salary & Form 16A for payments other than salaries. YCMMY 10 things to know about Mr. Anna HazareCY and Lok Pal BillCMY Friday, April 8, 2011 K Let’s at least pass the Message on and enlighten ppl on what is the Impor- tance of this Anna Hazare’s Hunger Strike….. !!!!!!!!! 1. Who is Anna Hazare? An ex-army man. Fought 1965 Indo-Pak War 2. What’s so special about him? He built a village Ralegaon Siddhi in Ahamad Nagar district, Maharash- tra 3. So what? 22i i i i
  • 35. i ii i This village is a self-sustained model village. Energy is produced in the village itself from solar power, biofuel and wind mills. In 1975, it used to be a poverty clad village. Now it is one of the richest village in India. It has become a model for self-sustained, eco-friendly & harmonic village. 4. Ok, …? This guy, Anna Hazare was awarded Padma Bhushan and is a known figure for his social activities. 5. Really, what is he fighting for? He is supporting a cause, the amendment of a law to curb corruption in India. 6. How that can be possible? C He is advocating for a Bil, The Lok Pal Bill (The Citizen Ombudsman Bill), M that will form an autonomous authority who will make politicians (minis- ters), beurocrats (IAS/IPS) accountable for their deeds. YCM 8. It’s an entirely new thing right..?MY In 1972, the bill was proposed by then Law minister Mr. Shanti Bhushan.CY Since then it has been neglected by the politicians and some are trying to change the bill to suit thier theft (corruption).CMY K 7. Oh.. He is going on a hunger strike for that whole thing of passing a Bill ! How can that be possible in such a short span of time? The first thing he is asking for is: the government should come forward and announce that the bill is going to be passed. Next, they make a joint committee to DRAFT the LOK PAL BILL. 50% goverment participation and 50% public participation. Because you cant trust the government entirely for making such a bill which does not suit them. 8. Fine, What will happen when this bill is passed? A LokPal will be appointed at the centre. He will have an autonomous charge, say like the Election Commission of India. In each and every state, Lokayukta will be appointed. The job is to bring all alleged party to trial 23i i i i
  • 36. i ii i in case of corruptions within 1 year. Within 2 years, the guilty will be pun- ished. Not like, Bofors scam or Bhopal Gas Tragedy case, that has been going for last 25 years without any result. 9. Is he alone? Whoelse is there in the fight with Anna Hazare? Baba Ramdev, Ex. IPS Kiran Bedi, Social Activist Swami Agnivesh, RTI activist Arvind Kejriwal and many more. Prominent personalities like Aamir Khan are supporting his cause. 10. Ok, got it. What can I do? At least we can spread the message. How? Putting status message, links, video, changing profile pics. Join him at Jantar Mantar, New Delhi. At least we can support Anna Hazare and the cause for uprooting corruption C from India. M At least we can hope that his Hunger Strike does not go in vain. YCM At least we can pray for his good health.MYCY COMPANIES NEED NOT PAY STAMP DUTYCMY K ON INCREASED CAPITAL: HC Wednesday, April 27, 2011 NEW DELHI: The Delhi High Court has held that a company is not required to pay the stamp duty on the increased amount of its authorised share capi- tal. A bench headed by justice S Muralidhar said this while allowing the plea of S E Investments, which challenged the direction of the Registrar of Com- panies (ROC) seeking stamp duty on increased amount in authorised share capital. 24i i i i
  • 37. i ii i “In the absence of a specific provision that permits the levy of stamp duty on the increase in authorised share capital, it would not be open to the Re- spondents (ROC) to insist upon S E Investments having to pay stamp duty for the increased authorised share capital,” the court said. The court, however, made it clear that the company would not be entitled to refund of the amount which it had already paid as stamp duty. “This will however not enable the petitioner to claim refund of any stamp duty paid earlier by it for increase in authorised share capital,” the court added. S E Investments, a public limited company, was incorporated on March 5, 1992 with an authorised share capital of 3.5 crore. In 2010, it increased its capital to 125 crore. The company sought the opinion of ROC and contended that there is no pro- vision in the Delhi Stamp Act to pay the duty on increase in the authorised share capital. C However, the ROC directed the company to pay 25 lakh as stamp duty, M prompting S E Investments to move the court. Y “It is directed that the ROC will now proceed to accept the petitioner’s FormCM 5 and record the increased authorised share capital without insisting on theMY petitioner paying stamp duty thereon,” the court added.CY Decision on: April 21, 2011CMY K Imp. Info. : DUE DATE TO DEPOSIT TDS DEDUCTED AND PROVISIONS IN MARCH, 2011 IS 30TH APRIL, 2011 Thursday, April 28, 2011 DUE DATE TO DEPOSIT TDS DEDUCTED AND PROVISIONS IN MARCH, 2011 IS 30TH APRI Due date to deposit the tax deducted on amount/Income paid in March 2011 and Tax deducted on provisions created in March 2011 is 30.04.2011. This is as per notification 41/2010 dated 31.05.2010 25i i i i
  • 38. i ii i Old rule: Many people have doubts regarding the due date for TDS pay- ment in March month. In old rules due date for tax deducted in month of March was 7 April and date to deposit tds deducted on provision on last day of financial year was 31.05 of next financial year. But the these rule has been amended and as per latest rule for tds deducted in march 2011, due date to deposit tax is 30.04.2011 So deposit tax on or before 30.04.2011. TAX is deducted by Govt Department 1 Tax deposited without challan Same day 2 Tax deposited with Challan 7th of next month C M 3 YCM Tax on perquisites opt to be deposited by the employerMY 7th of next monthCY TAX is deducted by other 1CMY Tax deductible in March K 30th April of next year 2 Other months & tax on perquisites opted to be 7th of next month (3) Notwithstanding anything contained in sub Rule (2), in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table: 26i i i i
  • 39. i ii i S. No. Quarter of Financial year ended Date of payment 1 30th June 7th July 2 30th September 7th Oct 3 31st Dec 7th January 4 31st March 30th April PLEASE NOTE- TDS RETURN FOR MARCH 2011 TO BE FILED ON OR BEFORE 15.05.2011 Clarification on issues relating to CENVAT Credit Rules 2004- Regarding Circular No.943/04/2011-CX-29.04.2011 Monday, May 2, 2011 Clarification on issues relating to CENVAT Credit Rules 2004– Regard- ing C M Circular No.943/04/2011-CX Y New Delhi, 29th April 2011CM F. No.354/73/2011 -TRUMY Government of IndiaCYCMY Ministry of Finance K Department of Revenue Tax Research Unit To The Chief Commissioners of Central Excise and Service Tax (All), The Director General (All), The Commissioners of Service Tax (All), The Commissioners of Central Excise and Service Tax (All). Madam/Sir, 27i i i i
  • 40. i ii i Sub: Clarification on issues relating to CENVAT Credit Rules 2004– Re- garding. The CENVAT Credit Rules 2004 were amended along with the Budget 2011 announcements vide Notification 3/2011-CE (NT) dt 1.3.2011. A few changes were further effected vide Notification 13/2011-CE (NT) dt 31.3.2011. On a few issues trade has requested for clarity. Accordingly the following clarifications are presented issue wise in a tabular format. S. No. Issue Clarification 1 Can credit of capital goods be availed of when used in manufacture of du- tiable goods on which benefit under Notification 1/2011- CE is availed or C in provision of a servicewhose part of value is exempted on the condition M that no credit of inputs and input services is taken? Y As per Rule 6(4) no credit can be availed on capital goods used exclusive-CM ly in manufacture of exempted goods or in providing exempted service.MY Goods in respect of which the benefit of an exemption under notificationCY No. 1/2011-CE, dated the 1st March, 2011 is availed are exempted goods [Rule 2(d)]. Taxableservices whose part of value is exempted on the con-CMY dition that no credit of inputs and input services, used for providing such K taxable service, shall be taken, are exempted services [Rule 2(e)]. Hence credit of capital goods used exclusively in manufacture of such goods or in providing such service is not allowed. 2 Is the credit of only specified goods and services listed in the definition of inputs and input services not allowed such as goods used in a club, outdoor catering etc, or is the list only illustrative? The list is only illustrative. The principle is that cenvat credit is not al- lowed when any goods and services are used primarily for personal use or consumption of employees. 3 28i i i i
  • 41. i ii i How is the “no relationship whatsoever with the manufacture of a final product” to be determined? Credit of all goods used in the factory is allowed except in so far as it is specifically denied. The expression “no relationship whatsoever with the manufacture of a final product” must be interpreted and applied strictly and not loosely. The expression does not include any goods used in or in rela- tion to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed. 4 C Is the credit of input services used for repair or renovation of factory or M office available? Y Credit of input services used for repair or renovation of factory or officeCM is allowed. Services used in relation to renovation or repairs of a factory, premises of provider of output service or an office relating to such factory orMY premises, are specifically provided for in the inclusive part of the definitionCY of input services.CMY 5 K Is the credit of Business Auxiliary Service (BAS) on account of sales com- mission now disallowed after the deletion of expression “activities related to business”? The definition of input services allows all credit on services used for clear- ance of final products upto the place of removal. Moreover activity of sale promotion is specifically allowed and on many occasions the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. 6 29i i i i
  • 42. i ii i Can the credit of input or input services used exclusively in trading, be availed? Trading is an exempted service. Hence the credit of any inputs or input services used exclusively in trading cannot be availed. 7 What shall be the treatment of credit of input and input services used in trading before 1.4.2008? Trading is an exempted service. Hence credit of any inputs or input services used exclusively in trading cannot be availed. Credit of common inputs and input services could be availed subject to restriction of utilization of credit up to 20% of the total duty liability as provided for in extant Rules. 8 While calculating the value of trading what principle to follow- FIFO, LIFO C or one to one correlation? M The method normally followed by the concern for its accounting purpose Y as per generally accepted accounting principles should be used.CM 9MYCY Are the taxes and year end discounts to be included in the sale price and cost of goods sold while calculating the value of trading?CMY K Generally accepted accounting principles need to be followed in this regard. All taxes for which set off or credit is available or are refundable/ refunded may not be included. Discounts are to be included. 10 Does the expression “in or in relation” used in Rule 6 override the defi- nition of “input” under Rule 2(k) for determining the eligibility of Cenvat credit? The definition of “input” is given in Rule 2(k) and Rule 6 only intends to segregate the credits of inputs used towards dutiable goods and exempted goods. While applying Rule 6, the expression “in or in relation” must be read harmoniously with the definition of “inputs”. 11 30i i i i
  • 43. i ii i Sub-rules 3B and 3C of rule 6 apply to whole entity or independently in respect of each registration? The sub-rules 6(3B) and 6(3C) impose obligation on the entities providing banking and financial services (in case of a bank and a financial institution including a non-banking financial company) or life insurance services or management of investment under ULIP service. The obligation is applica- ble independently in respect of each registration. When such a concern is exclusively rendering any other service from a registered premises, the said rules do not apply. In addition to BoFS and life insurance services if any other service is rendered from the same registered premises, the said rules will apply and due reversals need to be done. 12 Is the credit available on services received before 1.4.11 on which cred- it is not allowed now? e.g. rent-a-cab service C The credit on such service shall be available if its provision had been com- M pleted before 1.4.2011. Y 2. Trade and Industry as well as field formations may be suitably in-CM formed.MY 3. Receipt of this Circular may kindly be acknowledged.CY 4. Hindi version will follow.CMY K Yours faithfully, (Shobhit Jain) OSD, TRU STATUTORY OBLIGATION CHART FOR THE MONTH OF MAY, 2011 Tuesday, May 3, 2011 SERVICE TAX 31i i i i
  • 44. i ii i 5th May 2011 Deposit of service tax in case of companies for the month of April.2011 ———————————————————————————————————————— INCOME TAX/T. D. S. 7th May 2011 Deliver a copy of form 15G/15H/27C to CCIT or CIT for declarations received in the month of April. 2011 7th May 2011 Deposit of TDS /TCS for deductions/collections made in the month of April. 2011. 15th May 2011 Submit quarterly statement of de- duction of TDS/TCS in Form 24Q/26Q/27EQ for quarter ending Mar.2011. ———————————————————————————————————————— C M DVAT/CST Y 12th May 2011 E-filing of Half-yearly return of VAT/CST forCM the period Oct.2010 to Mar.2011MY 15th May 2011 Deposit hard copy of E-filed Half-yearly return of VAT/C-CY ST for the period Oct.2010 to Mar.2011.CMY 15th May 2011 Deposits TDS (VAT) in challans DVAT 20 and issue cer- K tificate for TDS in form DVAT–43 for deductions in the month of April- 11. 25th May 2011 E – payment of DVAT/CST Challans and e-filing of return for the month of April. 2011 for the dealers filing monthly returns. Note-E payment of DVAT/CST Challans has been made mandatory by Delhi vat deptt April 2011 onwards for monthly dealers through net banking 28th May 2011 Deposit Monthly return (Hard Copy of Electron- ic filing) of VAT/CST for month April 2011. 32i i i i
  • 45. i ii i e-Filing for AY 2011-12 has been started (ITR-1(SAHAJ) and ITR-2 are now enabled). Wednesday, May 4, 2011 LATEST NEWS: E-FILING FOR AY 2011-12 HAS BEEN STARTED (ITR-1(SAHAJ) AND ITR-2 ARE NOW ENABLED). CAN BE DOWNLOADED FROM INCOME TAX WEBSITE, LINKS ARE GIVEN BELOW :- SL. NO. FORM NAME RETURN PREPARATION SOFTWARE C REMARKS M SYSTEM REQUIREMENTS Y 1CMMY ITR-1 (SAHAJ)CY EXCEL UTILITY(VERSION 1.0)CMY NEW RELEASE K MS EXCEL 2 ITR-2 EXCEL UTILITY(VERSION 1.0) NEW RELEASE MS EXCEL 33i i i i
  • 46. i ii i Instructions on Issuance of TDS certificates in form no. 16A and option to authenticate same by way of Digital Signature Thursday, May 19, 2011 Instructions on Issuance of TDS certificates in form no. 16A and option to authenticate same by way of Digital Signature CIRCULAR NO. 3/2011 [F. NO. 275/34/2011-(IT-B) DATED 13-5-2011 Section 203 of the Income-tax Act 1961 (“the Act”) read with the Rule 31 C of the Income-tax Rules, 1962 (“the IT Rules”) provides for furnishing of certificate of tax deduction at source (TDS) by the deductor to the M deductee specifying therein the prescribed particulars like amount of TDS, Y permanent account number (PAN), tax deduction and collection accountCM number (TAN), etc. The relevant form for such TDS certificate is FormMY No.16 in case of deduction under section 192 and Form No.16A for deduction under any other provisions of Chapter XVII-B of the Act. TDSCY certificate in Form No.16 is to be issued annually whereas TDS certificateCMY in Form No.16A is to be issued quarterly. K 2. Currently, a deductor has an option to authenticate TDS certificate in Form No.16 by using a digital signature. However, no such option of using a digital signature is available to a deductor for issuing TDS certificate in Form No.16A and it, therefore, needs to be authenticated by a manual signature. The Central Board of Direct Taxes (the Board) has received representations to allow the option of using digital signature for authentication of TDS certificate in Form No.16A as issuance of TDS certificate in Form No.16A by manual signature is very time consuming, specially for deductors who are required to issue a large number of TDS certificates. 3. The Department has already enabled the online viewing of Form No.26AS by deductees which contains TDS details of the deductee based 34i i i i
  • 47. i ii i on the TDS statement (e-TDS statement) filed electronically by the deductor. Ideally, there should not be any mismatch between the figures reported in TDS certificate in Form No. 16A issued by the deductor and figures contained in Form No.26AS which has been generated on the basis of e-TDS statement filed by the deductor. However, it has been found that in some cases the figures contained in Form No. 26AS are different from the figures reported in Form No.16A. The gaps in Form No.26AS and TDS certificate in Form No. 16A arise mainly on account of wrong data entry by the deductor or non-filing of e-TDS statement by the deductor. As at present, the activity of issuance of Form No.16A is distinct and independent of filing of e-TDS statement, the chances of mismatch between TDS certificate in Form No.16A and Form No. 26AS cannot be completely ruled out. To overcome the challenge of mismatch a common link has now been created between the TDS certificate in Form No.16A and Form No.26AS through a facility in the Tax Information Network website (TIN Website) which will enable a deductor to download TDS C certificate in Form No.16A from the TIN Website based on the figures M reported in e-TDS statement filed by him. As both Form No.16A and Y Form No.26AS will be generated on the basis of figures reported by theCM deductor in the e-TDS statement filed, the likelihood of mismatch between Form No.16A and Form No.26AS will be completely eliminated.MYCY 4. In view of the above, for proper administration of the Act, the Board have, in exercise of powers under section 119 of the Act, decided theCMY following:— K 4.1 Issue of TDS Certificate in Form No. 16A (i) For deduction of tax at source made on or after 1-4-2011: (a) The deductor, being a company including a banking company to which the Banking Regulation Act, 1949 applies and any bank or banking institution, referred to in section 51 of that Act or a cooperative society engaged in carrying the business of banking, shall issue TDS certificate in Form No.16A generated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted on or after the 1st day of April, 2011 under any of the provisions of Chapter-XVII-B other than section 192. 35i i i i
  • 48. i ii i (b) The deductor, being a person other than the person referred to in item (a) above, may, at his option, issue TDS Certificate in Form No.16A generated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted on or after the 1st day of April, 2011 under any provisions of Chapter-XVII-B other than section 192. (ii) For deduction of tax at source made during financial year 2010-11: The deductor, may, at his option, issue the TDS certificate in Form No.16A generated through TIN central system which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted during the financial year 2010-11 under any of the provisions of Chapter- XVII-B other than section 192. 4.2 Authentication of TDS Certificate in Form No. 16A (i) The deductor, issuing the TDS certificate in Form No.16A by C downloading from the TIN Website shall authenticate such TDS certificate M by either using digital signature or manual signature. Y (ii) The deductor being a person other than a person referred to in itemCM 4.1(i)(a) above and who do not issue the TDS Certificate in Form No.16AMY by downloading from the TIN Website shall continue to authenticate TDSCY certificate in Form No.16A by manual signature only.CMY 5. The Director General of Income-tax (Systems) shall specify the K procedure, formats and standards for the purpose of issuance of TDS certificate in Form No.16A which is downloaded from the TIN Website and shall be responsible for the day-to-day administration in relation to the procedure, formats and standards for issuance of TDS certificate in Form No.16A in electronic form. 6. It is further clarified that TDS certificate issued in Form No. 16A by the deductors covered by para 4.1(i)(a) in accordance with this circular and procedure, format and standards specified by the Director General of Income-tax (Systems) shall only be treated as a valid TDS certificate in Form No. 16A for the purpose of section 203 of the Act read with Rule 31 of the IT Rules, 1962. Notification No : CIRCULAR NO. 3/2011 36i i i i
  • 49. i ii i Form No. 16A now generated from Tax Information Network (TIN). Mandatory for Companies and Banks to issue Form 16A from TIN to their deductees for deductions made from April 1, 2011 (F. Y. 2011-12) Thursday, May 19, 2011 Form No. 16A now generated from Tax Information Network (TIN). Mandatory for Companies and Banks to issue Form 16A from TIN to their deductees for deductions made from April 1, 2011 (F. Y. 2011-12) CIRCULAR NO. 03 /2011 F. No 275/34/2011-( IT-B) Government of India C Ministry of Finance M Department of Revenue Y Central Board of Direct Taxes New Delhi, dated the 13th May, 2011CMMY Subject: Issuance of TDS Certificates in Form No. 16A downloadedCY from TIN Website and option to authenticate the same by way of digi-CMY tal signature – Circular under section 119 of the Income-tax Act 1961. K Section 203 of the Income-tax Act 1961 (‘the Act’) read with the Rule 31 of the Income-tax Rules 1962 (‘the IT Rules’) provides for furnishing of certificate of tax deduction at source (TDS) by the deductor to the deductee specifying therein the prescribed particulars like amount of TDS, perma- nent account number (PAN), tax deduction and collection account number (TAN), etc. The relevant form for such TDS certificate is Form No.16 in case of deduction under section 192 and Form No.16A for deduction under any other provisions of Chapter XVII-B of the Act. TDS certificate in Form No.16 is to be issued annually whereas TDS certificate in Form No.16A is to be issued quarterly. 2. Currently, a deductor has an option to authenticate TDS certificate in Form No.16 by using a digital signature. However, no such option of us- ing a digital signature is available to a deductor for issuing TDS certificate 37i i i i
  • 50. i ii i in Form No.16A and it, therefore, needs to be authenticated by a manu- al signature. The Central Board of Direct Taxes (the Board) has received representations to allow the option of using digital signature for authenti- cation of TDS certificate in Form No.16A as issuance of TDS certificate in Form No.16A by manual signature is very time consuming, specially for deductors who are required to issue a large number of TDS certificates. 3. The Department has already enabled the online viewing of Form No.26AS by deductees which contains TDS details of the deductee based on the TDS statement (e-TDS statement)filed electronically by the deduc- tor. Ideally, there should not be any mismatch between the figures reported in TDS certificate in Form No. 16A issued by the deductor and figures con- tained in Form No.26AS which has been generated on the basis of e-TDS statement filed by the deductor. However, it has been found that in some cases the figures contained in Form No.26AS are different from the figures reported in Form No.16A. The gaps in Form No.26AS and TDS certificate C in Form No. 16A arise mainly on account of wrong data entry by the de- M ductor or non-filing of e-TDS statement by the deductor. As at present, the activity of issuance of Form No.16A is distinct and independent of YCM filing of e-TDS statement, the chances of mismatch between TDS cer- tificate in Form No.16A and Form No.26AS cannot be completely ruledMY out. To overcome the challenge of mismatch a common link has now beenCY created between the TDS certificate in Form No.16A and Form No.26ASCMY through a facility in the Tax Information Network website (TIN Website) K which will enable a deductor to download TDS certificate in Form No.16A from the TIN Website based on the figures reported in e-TDS statement filed by him. As both Form No.16A and Form No.26AS will be generated on the basis of figures reported by the deductor in the e-TDS statement filed, the likelihood of mismatch between Form No.16A and Form No.26AS will be completely eliminated. 4. In view of the above, for proper administration of the Act, the Board have, in exercise of powers under section 119 of the Act, decided the fol- lowing :- 4.1 ISSUE OF TDS CERTIFICATE IN FORM NO. 16A (i) For de- duction of tax at source made on or after 01/04/2011: (a) The deductor, 38i i i i
  • 51. i ii i being a company including a banking company to which the Banking Reg- ulation Act,1949 applies and any bank or banking institution, referred to in section 51 of that Act or a co-operative society engaged in carrying the the business of banking, shall issue TDS certificate in Form No.16A gen- erated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums de- ducted on or after the 1st day of April, 2011 under any of the provisions of Chapter-XVII-B other than section 192. (b) The deductor, being a person other than the person referred to in item (a) above, may, at his option, issue TDS Certificate in Form No.16A generated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted on or after the 1st day of April, 2011 under any provisions of Chapter-XVII-B other than section 192. (ii) For deduction of tax at source made during financial year 2010- C 11: M The deductor, may, at his option, issue the TDS certificate in Form No.16A Y generated through TIN central system which is downloaded from the TINCM Website with a unique TDS certificate number in respect of all sums de-MY ducted during the financial year 2010-11 under any of the provisions ofCY Chapter-XVII-B other than section 192.CMY 4.2 AUTHENTICATION OF TDS CERTIFICATE IN FORM K NO.16A (i) The deductor, issuing the TDS certificate in Form No.16A by downloading from the TIN Website shall authenticate such TDS certificate by either using digital signature or manual signature (ii) The deductor being a person other than a person referred to in item 4.1(i)(a) above and who do not issue the TDS Certificate in Form No.16A by downloading from the TIN Website shall continue to authenticate TDS certificate in From No.16A by manual signature only. 5. The Director General of Income-tax (Systems) shall specify the pro- cedure, formats and standards for the purpose of issuance of TDS certificate in Form No.16A which is downloaded from the TIN Website and shall be responsible for the day-to-day administration in relation to the procedure, formats and standards for issuance of TDS certificate in Form No.16A in electronic form. 39i i i i
  • 52. i ii i 6. It is further clarified that TDS certificate issued in Form No. 16A by the deductors covered by para 4.1(1)(a) in accordance with this circu- lar and procedure, format and standards specified by the Director General of Income-tax (Systems) shall only be treated as a vilid TDS certificate in Form No. 16A for the purpose of section 203 of the Act read with Rule 31 of the IT Rules,1962. 7. Hindi version shall follow. (AJAY KUMAR) Director (Budget) Tel. No.2309-2641 Copy to all CC- sIT/ DsGIT for circulation E-filing for ITR 5 and ITR 6 enabled for AY 2011-12 Monday, May 23, 2011 C M e-Filing for AY 2011-12 has been started (ITR-1(SAHAJ), ITR-2, ITR-3, Y ITR-4, ITR-4S(SUGAM), ITR-5 and ITR-6 are now enabled)CM Sl. No. Form Name Return Preparation Software Remarks SystemMY Requirements 1CY ITR-1CMY Excel Utility(Version 1.0) K New Release MS Excel 2 ITR-2 Excel Utility(Version 1.0) New Release MS Excel 3 40i i i i
  • 53. i ii i ITR-3 Excel Utility(Version 1.0) New Release MS Excel 4 ITR-4 Excel Utility(Version 1.0) New Release MS Excel 4 ITR-4S (SUGAM) C M Excel Utility(Version 1.0) Y New ReleaseCM MS ExcelMY For firms, AOPs and BOIsCY 1CMY K ITR-5 Excel Utility(Version 1.0) New Release MS Excel For Companies 1 ITR-6 Excel Utility>(Version 1.0) New Release 41i i i i
  • 54. i ii i MS Excel RBI asks banks to reimburse failed ATM transactions in 7 days Monday, May 30, 2011 The Reserve Bank on Friday directed banks to reimburse customers for amounts wrongfully debited from their accounts in failed ATM trans- actions within seven days of an account holder’s complaint or else pay aRs. 100 per day compensation. “The time limit for resolution of cus- tomer complaints by the issuing banks shall stand reduced from 12 working days to seven working days from the date of receipt of customer complaint,” the RBI said in a notification. C Failure to re-credit the amount within seven working days will require the M issuing bank to pay a compensation of Rs. 100 per day, it said. Y Earlier, banks were required to reimburse customers for amounts wrongful-CM ly debited from their accounts in failed ATM transactions within 12 days.MY The RBI further said that all customers are entitled to receive such compen-CY sation for delays only if a claim is lodged with the issuing bank within 30CMY days of the date of transaction. K The directive shall be come into effect from 1st July, 2011. The central bank instructed the issuing bank and the acquiring bank to settle failed ATM transaction disputes through the ATM system provider only. “No bilateral settlement arrangement outside the dispute resolution mecha- nism available with the system provided is possible,” RBI said. This measure is intended to reduce instances of disputes in payment of com- pensation between the issuing and acquiring banks, it added. 42i i i i
  • 55. i ii i Monthly Obligation / Due Date Chart for month of June, 2011 Thursday, June 2, 2011 SERVICE TAX 5th June 2011 Deposit of service tax in case of companies for the month of May. 2011. 6th June 2011 E- payment of service tax in case of companies for the month of May. 2011.having gross service tax exceeding Rs 10 lakh in f/y 2010-11 INCOME TAX/T. D. S. C 7th June 2011 Deliver a copy of form 15G/15H/27C to CCIT or CIT for declarations received in the month of May. 2011 M Y 7th June 2011 Deposit of TDS /TCS in challans no. ITNS 281 for deductions/collections made in the month of May. 2011.CMMYCY 15th June 2011 Deposit of first installment of Advance Income TaxCMY in form 280 in the case of companies for the financial year 2011-12 K DVAT/CST 14th June 2011 Deposit yearly return for the dealers filing Annual return having turnover less than 10 Lacs of VAT/CST for year ending March 2011.in form 16/ form 1 11th June 2011 E-filing of return for Financial Year 2010-11 for the dealers filing Yearly returns. 14th June 2011 Deposit yearly return (Hard Copy of Electronic filing) of VAT/CST for the f/y 2010-11. 43i i i i
  • 56. i ii i 15th June 2011 Deposits TDS (VAT) in challans DVAT 20 and issue certificate for TDS in DVAT-43 for deductions in the month of May- 11. 25th June2011 E payment of DVAT/CST Challans and e-filing of return for the month of May. 2011 for the dealers filing monthly re- turns. 28th June 2011 Deposit monthly return (Hard Copy of E-Filing) of VAT/CST for month of May 2011. NOTE : E payment of DVAT/CST Challans has been made mandatory by Delhi vat dept from April 2011 onwards for monthly dealers through net banking having a/c with SBI, HDFC, AX- IS. ICICI & PNB C M YCM Filing of Balance Sheet and Profit and LossMY Account in XBRL Tuesday, June 14, 2011CYCMY As such, now following class of companies are required to file their Balance K Sheet and Profit and Loss Account in XBRL Format:- o Listed Companies and their subsidiaries; o Companies having paid up capital of Rs. 5 Crores and above; o Companies having turnover of Rs. 100 Crores and above. However, banking, insurance, power Companies and NBFCs are exempt for XBRL Filing. Time Limit All companies, whose Balance Sheets are adopted in the Annual General Meeting held before 30.09.2011 are permitted to file upto 30.09.2011 with- out any additional filing fee. However, where companies hold the Annual General Meeting in the month of September 2011, they will file the Balance 44i i i i
  • 57. i ii i Sheet within 30 days from the date of adoption in the General Meeting as per section 220 of the Companies Act, 1956. 1. Creation of XBRL instance document: A. Map company’s each financial statement element to a corresponding element in published taxonomy Companies have the option to create their own XBRL documents in house or to engage a third party to convert their financial statements into XBRL form. The first step in creation of an instance document is to do tagging of the XBRL taxonomy elements with the various accounting heads in the books of accounts of the company. This would create the mapping of the taxonomy elements with the accounting heads so that the accounting information can be converted into XBRL form. C B. Create instance document for Balance sheet and Profit and loss M Account- Once the tagging of financial statement elements with the pub- lished taxonomy elements is done, the next step is to create the instance Y document. An instance document is a XML file that contains business re-CM porting information and represents a collection of financial facts and report-MY specific information using tags from the XBRL taxonomy.CY Separate instance documents need to be created for the following:CMY 1. Stand Alone Balance sheet of the company K 2. Stand Alone Profit and Loss Account of the company 3. Consolidated Balance sheet of the company 4. Consolidated Profit and Loss Account of the company The instance document should contain the financial information for both the current as well as the previous financial year. Consolidated balance sheet and Profit and Loss instance documents to be created only in case the same is applicable to the company. 2 – Download XBRL validation tool from MCA portal 45i i i i
  • 58. i ii i There shall be a tool provided at the MCA portal for validating the gener- ated XBRL instance document. Validating the instance document is a pre requisite before filing the balance sheet and profit & loss account on MCA portal. You are required to download the tool from the MCA website and validate the instance document before uploading. There shall also be a fa- cility to view and search the taxonomy. 3 – Use the tool to validate the instance document Once the tool has been downloaded, the next step is to validate the instance document. The following validations shall be performed by the tool- · Validating that the instance document is as per the latest and correct version of taxonomy prescribed by MCA · All mandatory elements have been entered · Other validations as per taxonomy C 4- Perform pre-scrutiny of the validated instance document through M the tool Y Once the instance document is successfully validated from the tool, the nextCM step is to pre-scrutinise the validated instance document with the help of theMY same tool. For pre-scrutinizing the instance document, a working internetCY connection shall be required. In the Pre-scrutiny, the server side validations (i.e. validations which are to be validated from the MCA21 system) shallCMY be performed. K Also, there shall be a feature provided in the tool to verify the appearance of the generated XBRL instance document using the built in Viewer. It is imperative that the company should use this feature to verify the accuracy of the instance document. 5- Attach instance document to the Form 23AC and Form 23ACA There shall be a separate set of Form 23AC and Form 23ACA available on the MCA portal for filing in XBRL form. First fill up the Form 23AC and Form 23ACA. Thereafter, attach the validated and pre-scrutinised instance document for Balance sheet to Form 23AC. Similarly, the instance docu- ment for Profit and Loss account is to be attached to Form 23ACA. Separate instance documents need to be attached with respect to Standalone financial statements and consolidated financial statements. 46i i i i
  • 59. i ii i 6- Submitting the Form 23ACA and Form 23ACA on the MCA por- tal After the forms are filled, you are required to perform pre-scrutiny of the form, sign the form and then upload the same as per the normal eForm filing process. It shall be validated that the attached instance documents are validated and pre-scrutinised from the XBRL validation tool. Viewing of balance sheet and profit and loss submitted in XBRL form on MCA portal: The XBRL instance documents submitted along with Form 23AC and 23ACA are in machine readable format. Therefore, for viewing the same in a human readable format, these shall be converted into human readable format by the MCA21 system. For viewing the same on MCA21 portal and for taking certified copies of the same, these converted documents shall be made available. Ministry has created a separate website for XBRL. The link is as under:- C http: // xbrl . icai . org M Note:- MCA website is likely to have options for XBRL reporting by 15th of July. Specific notific YCMMY इनकम टैक्स रिटर्न भरने से छूटCY Friday, June 24, 2011CMY K अगर आप नौकरी करते हैं और टैक्सेबल इनकम पांच लाख रुपये से कम है तो असेसमेंट ईयर 2011-12 यानी इस साल रिटर्न भरने की जरूरत नहीं है। सीबीडीटी की ओर से गुरुवार को जारी नोटिफिकेशन के अनुसार, ऐसे व्यक्ति जिनकी वित्त वर्ष 2010-11 में हर तरह के डिडक्शन के बाद वेतन के जरिए कुल टैक्सेबल इनकम 5 लाख रुपये से कम है, उन्हें इस साल टैक्स रिटर्न फाइल करने की जरूरत नहीं है। हालांकि, यह छूट उन लोगों को नहीं मिलेगी जिनकी सेविंग डिपॉजिट के ब्याज से होने वाली आय 10,000 रुपये से ज्यादा है। कैसे है फायदे का सौदा इस स्कीम के तहत 6.5 से 8 लाख रुपये सालाम इनकम वालों को फायदा मिलेगा। मसलन, आपकी आमदनी 6.5 लाख रुपये है। इसके बाद आप 47i i i i
  • 60. i ii i धारा 80 सी के तहत पीएफ, पीपीएफ, इंश्योरेंस आदि के जरिये एक लाख रुपये का निवेश दिखाते हैं, धारा 80 सीसीएफ के तहत इन्फ्रा बॉन्ड में 20,000 रुपये लगाते हैं और धारा 80 डी के तहत 35,000 रुपये मेडिकल इंश्योंरेस का प्रीमियम देते हैं। ऐसे में डिडेक्शन के बाद आपकी टैक्सेबल इनकम 4.95 लाख रुपये ही रह जाएगी। इसके अलावा होम लोन पर 1.5 लाख रुपये सालाना ब्याज भी देते हैं, तो 8 लाख रुपये सालाना आमदनी पर भी आप इस स्कीम में शामिल हो जाएंगे। किन्हें नहीं मिलेगी छूट 1.अगर आप दो जगह काम करते हैं तो आपकी इनकम कितनी भी क्यों न हो, आपको रिटर्न भरना होगा। 2. भले ही किसी व्यक्ति की वेतन से टैक्सेबल इनकम 5 लाख रुपये से कम हो, लेकिन अगर उसने साल 2010-11 में ही किसी समय अपनी नौकरी बदली हो तो उसे टैक्स रिटर्न भरना होगा 3. सेविंग अकाउंट से मिलने वाली ब्याज की राशि 10 हजार रुपये से ज्यादा है तो आपको रिटर्न भरना होगा। C M Y 4. ऐसे लोग, जो वेतन के अलावा किसी अन्य सोर्स से कमाई करते हैं या जिन्होंने रिफंड क्लेम किया है, वे भी इस स्कीम के दायरे से बाहर रहेंगे। यानी फिक्स्ड डिपॉजिट, शेयर या म्युचुअल फंड में निवेश के जरियेCMMY आमदनी होने पर रिटर्न दाखिल करना ही होगा। 5.अगर आपको इनकम टैक्स विभाग सेक्शन 142 (1) या 148 के तहतCY रिटर्न भरने के लिए नोटिस भेजता है या फिर सेक्शन 153 ए और 153CMY K सी के तहत रिव्यू के लिए आपसे रिटर्न भरने को कहा जाता है तो ऐसा करना होगा। विभाग ऐसा तब करने को कहता है, जब उसे पुराने भरे गए रिटर्न में आमदनी, इनवेस्टमेंट और अन्य आंकड़ों को लेकर संदेह पैदा हो। कंपनी को बताना होगा रिटर्न न भरने के लिए भी आपको कुछ कदम उठाने होंगे। अपनी स्थायी खाता संख्या (पैन) और बैंक ब्याज से होने वाली पूरी कमाई की जानकारी अपने नियोक्ता को देनी होगी। टैक्स रिटर्न दाखिल करने से राहत पाने के लिए सेविंग अकाउंट के ब्याज से होने वाली आय (10,000 रुपये से ज्यादा न हो) पर कंपनी के जरि टैक्स अदा करना होगा। इसके बाद फॉर्म 16 में टैक्स डिडक्शन का सर्टिफिकेट लेना होगा, जो आपके लिए रिटर्न का काम करेगा। 48i i i i
  • 61. i ii i KNOW YOUR PF BALANCE ONLINE Saturday, July 2, 2011 Beginning Friday (July 1, 2011), people with accounts in the Employees Provident Fund Organisation (EPFO) could check their PF balance on- line. By using a simple process using EPFO’s portal, people could get to know the balance. After checking into the link provided for the purpose, account holders need to provide their account number and their mobile number. De- tails of the PF balance would be SMSed after completing the verification process. The facility, however, is available for people with PF accounts with EP- FO’s offices in Delhi (North), Delhi (South), Laxmi Nagar (Delhi), Gur- gaon, Faridabad, Karnal and Bangalore. “Remaining offices will be added soon,” an EPFO official said. C M Here is the link : http: // www.epfindia.com/MembBal.html YCM Monthly Obligation Chart (July, 2011)MY Saturday, July 2, 2011CYCMY SERVICE TAX K 5th July 2011 Deposit of service tax in case of companies for the month June. 2011 & in other cases for the Qtr. Ending June, 2011. 6th July 2011 E- payment of service tax in case of companies for the month of June 2011.having gross service tax exceeding Rs 10 lakh in f/y 2010-11 INCOME TAX/T. D. S. 7th July 2011 49i i i i
  • 62. i ii i Deliver a copy of form 15G/15H/27C to CCIT or CIT for declarations re- ceived in the month of June. 2011 7th July 2011 Deposit of TDS /TCS in challans no. ITNS 281 for deductions/collections made in the month of June. 2011. 15th July2011 Submit quarterly statement of deduction of TDS in Form 24Q/26Q for quar- ter ending June.2011. 31st July2011 Issue TDS/TCS certificate for credit/payments made during the Qr. ending June.2011. C 31st July2011 M Filling of return of Income Tax and Wealth Tax for A/Y 2011-2012of all Y assessee if the assessee is not required to audit & file return by 30 Sep.,CM 2011.MYCY DVAT/CSTCMY K 15th July 2011 Deposits TDS (VAT) in challans DVAT 20 and issue certificate for TDS in form DVAT–43 for deductions in the month of May-08. 25th July2011 Deposit of DVAT/CST Challans and e-filing of return for the month / quarter ending June. 2011 for the dealers filing monthly returns./quarterly returns 28th July 2011 Deposit monthly return and Quarterly (Hard Copy of Electronic Filing) of VAT/CST for month/ quarter ending June 2011 alongwith month vise details of purchase and sales in Form 2A & 2B (proforma of Form 2A & 2B already send in earlier mail last month). 50i i i i
  • 63. i ii i 28th July2011 Deposit of DVAT/CST Challans for quarter ending June. 2011 for the deal- ers filing half yearly /yearly returns NOTE : E payment of DVAT/CST Challans has been made mandatory by Delhi vat dept from April 2011 onwards for monthly dealers through net banking having a/c with SBI, HDFC, AXIS. ICICI & PNB . Service tax Payable on billing basis from July 1 2011 (Clarification) Thursday, July 7, 2011 C M The Finance Act, 2011 has introduced with effect from April 1, 2011, Point Y of Taxation Rules in which, these rules will determine the point in timeCM when the services shall be deemed to be provided.MY The general rule will be that the time of provision of service will be theCY earliest of the following dates:CMY i. Date on which service is provided or to be provided K ii. Date of invoice iii. Date of payment Vide notification no.18/2011, these rules were made applicable from April 1, 2011, but these rules were amended vide notification no.25/2011 where in the tax payer was given an option to pay service tax on receipt basis till June 30, 2011 or pay service tax on billing basis from April 1, 2011. The option to pay service tax on receipt basis is only till June 30, 2011 hence all the assesses, except professionals, will have to pay service tax on billing basis from July 1, 2011. Now w.e.f. 1-7-2011 vide Notification No. 41/2011-ST dated 27.06.2011, one more service of consulting engineer has been added to aforesaid list of specified services. 51i i i i
  • 64. i ii i In simple terms, we can say that in case of following services, service tax is required to be paid on receipt basis provided that services provider is either individual, proprietorships or partnership firms:- Chartered Accountant, Cost Accountant, Company Secretary, Architect, Interior Decorator, Legal, Scientific, Technical consultancy services, and Consulting Engineer Service Cost Inflation Index for Financial Year C M 2011-2012 Notified Thursday, July 7, 2011 YCM NOTIFICATION NO. 35/2011 [F. NO. 142/5/2011-TPL]MY DATED 23-6-2011CY In exercise of the powers conferred by clause (v) of the Explanation to sec-CMY tion 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government K hereby makes the following amendment in the notification of the Govern- ment of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S. O. 709(E), dated the 20th August, 1998, namely :— In the said notification in the Table, after serial number 30 and the entries relating thereto, the following serial number and entries shall be inserted, namely :— “31 2011-12 785” 52i i i i
  • 65. i ii i FULL CHART OF COST INFLATION INDEX OF 1981 To-2011 IS GIVEN BELOW COST INFLATION INDEX Financial Year Cost Inflation Index Financial Year Cost Inflation Index 1981-1982 100 1996-1997 305 C 1982-1983 M 109 YCM 1997-1998MY 331CY 1983-1984CMY 116 K 1998-1999 351 1984-1985 125 1999-2000 389 1985-1986 133 2000-2001 53i i i i
  • 66. i ii i 406 1986-1987 140 2001-2002 426 1987-1988 150 2002-2003 447 1988-1989 161 C M 2003-2004 Y 463CM 1989-1990MY 172CY 2004-2005CMY K 480 1990-1991 182 2005-2006 497 1991-1992 199 2006-2007 519 54i i i i
  • 67. i ii i 1992-1993 223 2007-2008 551 1993-1994 244 2008-2009 582 1994-1995 259 2009-2010 C M 632 Y 1995-1996CM 281MY 2010-2011CY 711CMY K 2011-2012 785* Old: Cost Inflation Index for Financial Year 2010-2011 Notified Full Year Statutory Obligation Chart (2011-12) Thursday, July 7, 2011 S. NO PARTICULARS DUE DATE IF “E” PAYMENT MONTH ER – 1 All Assessees (Non SSI) MARCH 2011 (EXICISE) 10-04-2011 APRIL 2011 ER-2 EOUs MARCH 2011 (EXCISE) 10-04-2011 ER-6 55i i i i
  • 68. i ii i Units paying More than 1 crore duty(CENVAT + PLA) MARCH 2011 10-04-2011 PF PAYMENT DUE DATE MARCH 2011 15/04/2011 VAT & CST RETURN SUBMISSION – MARCH 2011 20- 04-2011 ER -3 FOR SSI IVTH QUARTER MARCH 2011 20-04-2011 ESI PAYMENT – MARCH 2011 21/04/2011 PF Monthly Return (Form No 12A, 5, 10, ) – MARCH 2011 25/04/2011 HALF YEAR- LY SERVICE TAX RETURN SUBMISSION OCT 2010 TO MARCH 2011 25-04-2011 MONTHLY TDS PAYMENT – FOR MARCH PRO- VISIONS 30-04-2011 ER – 7 ALL ASSESSIES (EXCISE) 30-04-2011 ER-5 Units paying More than 1 crore duty(CENVAT + PLA) Annu- ally YEAR ENDED MARCH 2011 30-04-2011 Annual Return, Form – 3A, 6A & Challan 30-04-2011 MAY2011 PAYMENT OF SERVICE TAX C 05-05-2011 EXICISE DUTY PAYMENT IN GEN & NOU – APRIL M 2011 Y 05-05-2011 05/06/2011 ER – 1 All Assessees (Non SSI) APRIL 2011CM (EXICISE) 10-05-2011 ER-2 EOUs APRIL 2011 (EXCISE) 10-05- 2011 ER-6 Units paying More than 1 crore duty(CENVAT + PLA)MY APRIL 2011 10-05-2011 TDS RETURN FOR THE QUARTER END-CY ED MARCH 2011CMY 15-05-2011 K PF PAYMENT DUE DATE APRIL 2011 15/05/2011 EXICISE DUTY PAYMENT FOR SSI – APRIL 2011 15-05-2011 16/05/2011 VAT & CST RETURN SUBMISSION – APRIL 2011 20-05-2011 ESI PAYMENT - APRIL 2011 21/05/2011 56i i i i
  • 69. i ii i PF Monthly Return (Form No 12A, 5, 10, ) – APRIL 2011 25/05/2011 ISSUE OF FORM 16 TO EMPLOYEES AND FORM 16A FOR QTR 30-05-2011 ADVANCE TAX WORKING FOR JUNE 01-06-2011 JUNE 2011 EXICISE DUTY PAYMENT IN GEN & NOU MAY 2011 05-06-2011 06/06/2011 PAYMENT OF SERVICE TAX 05-06-2011 C MONTHLY TDS PAYMENT 07-06-2011 ER – 1 All Assessees (Non M SSI) MAY 2011 (EXICISE) 10-06-2011 ER-2 EOUs MAY 2011 Y (EXCISE) 10-06-2011 ER-6 Units paying More than 1 crore du-CM ty(CENVAT + PLA) MAY 2011 10-06-2011 EXICISE DUTY PAY- MENT FOR SSI – MAY 2011MYCY 15/06/2011 16/06/2011CMY PF PAYMENT DUE DATE MAY 2011 K 15/06/2011 PAYMENT OF ADVANCE INCOME TAX @ 15% FOR CORPORATES 15-06-2011 COMMENCE PROCESS OBTAINING DETAILS NEEDED FOR INCOME TAX ASSESSMENT 15-06-2011 VAT & CST RETURN SUBMISSION – MAY 2011 20-06-2011 ESI PAYMENT - MAY 2011 57i i i i
  • 70. i ii i 21/06/2011 PF Monthly Return (Form No 12A, 5, 10, ) – MAY 2011 25/06/2011 ISSUE OF FORM 16A FOR THE QUARTER 30-06-2011 PAYMENT OF SERVICE TAX 05-07-2011 JULY 2011 EXICISE DUTY PAYMENT IN GEN & NOU- JUNE 2011 05-07-2011 07/06/2011 MONTHLY TDS PAYMENT 07-07-2011 ER – 1 All As- C sessees (Non SSI) JUNE 2011 (EXICISE) 10-07-2011 ER-2 EOUs M JUNE 2011 (EXCISE) 10-07-2011 ER-6 Units paying More than 1 Y crore duty(CENVAT + PLA) JUNE 2011 10-07-2011 EXICISE DUTYCM PAYMENT FOR SSI – JUNE 2011MY 15-07-2011CY 16/07/2011CMY REVIEW THE DATA COLLECTED FOR INCOME TAX ASSESS- K MENT 15-07-2011 TDS RETURN FOR THE FIRST QUARTER ENDED JUNE 2011 15-07-2011 PF PAYMENT DUE DATE JUNE 2011 15/07/2011 ER -3 FOR SSI 1ST QUARTER 20-07-2011 VAT & CST RETURN SUBMISSION – JUNE 2011 20-07-2011 58i i i i
  • 71. i ii i ESI PAYMENT - JUNE 2011 21/07/2011 PF Monthly Return (Form No 12A, 5, 10, ) – JUNE 2011 25/07/2011 ISSUE OF FORM 16A FOR THE FIRST QUARTER 30-07-2011 PAYMENT OF SERVICE TAX 05-08-2011 AUG 2011 EXICISE DUTY PAYMENT IN GEN & NOU – JULY 2011 05-08-2011 C M 08/06/2011 MONTHLY TDS PAYMENT 07-08-2011 ER – 1 All As- sessees (Non SSI) JULY 2011 (EXICISE) 10-08-2011 ER-2 EOUs JU- Y LY 2011 (EXCISE) 10-08-2011 ER-6 Units paying More than 1 croreCM duty(CENVAT + PLA) JULY 2011 10-08-2011 EXICISE DUTY PAY-MY MENT FOR SSI – JULY 2011CY 15/08/2011 16/08/2011CMY PF PAYMENT DUE DATE JULY 2011 K 15/08/2011 REVIW THE POSITION OF TAX AUDIT REPORT 15-08-2011 INTIATE THE PROCESS OF LISTING THE TDS TO BE CLAIMED 15-08-2011 REVIW THE ASSESSMENT PROCEEDING 15-08-2011 VAT & CST RETURN SUBMISSION – JULY 2011 20-08-2011 ESI PAYMENT - JULY 2011 59i i i i
  • 72. i ii i 21/08/2011 PF Monthly Return (Form No 12A, 5, 10, ) – JULY 2011 25/08/2011 REVIW STATUS OF TP REPORT WITH THE AUDITORS 31-08-2011 ADVANCE TAX WORKING FOR SEPTMEBER 01-09-2011 SEP 2011 DRAFT FIRST COMPUTAION OF INCOME 01-09-2011 PAYMENT OF SERVICE TAX C M 05-09-2011 Y EXICISE DUTY PAYMENT IN GEN & NOU -AUG 2011CM 05-09-2011MY 09/06/2011 MONTHLY TDS PAYMENT 07-09-2011 ER – 1 All As-CY sessees (Non SSI) AUG 2011 (EXICISE) 10-09-2011 ER-2 EOUs AUGCMY 2011 (EXCISE) 10-09-2011 ER-6 Units paying More than 1 crore du- K ty(CENVAT + PLA) AUG 2011 10-09-2011 EXICISE DUTY PAY- MENT FOR SSI – AUG 2011 15/09/2011 16/09/2011 PF PAYMENT DUE DATE AUG 2011 15/09/2011 PAYMENT OF ADVANCE TAX 15-09-2011 COMPLETE FIRST CUT OF ITR AND AS WELL AS COM- PUTAIONS 15-09-2011 REVIW THE ASSESSMENT PROCEEDING 60i i i i
  • 73. i ii i 15-09-2011 VAT & CST RETURN SUBMISSION – AUG 2011 20-09-2011 ESI PAYMENT - AUG 2011 21/09/2011 PF Monthly Return (Form No 12A, 5, 10, ) – AUG 2011 25/09/2011 FILING OF INCOME TAX RETURN 30-09-2011 FILING OF WEALTH TAX RETURN 30-09-2011 C M FILING FOR FORM 3CEB 30-09-2011 PAYMENT OF SERVICE TAX YCM 05-10-2011MY OCT 2011CY EXICISE DUTY PAYMENT IN GEN & NOU – SEP 2011CMY 05-10-2011 K 10/06/2011 MONTHLY TDS PAYMENT 07-10-2011 ER – 1 All As- sessees (Non SSI) SEP 2011 (EXICISE) 10-10-2011 ER-2 EOUs SEP 2011 (EXCISE) 10-10-2011 ER-6 Units paying More than 1 crore duty(CENVAT + PLA) SEP 2011 10-10-2011 EXICISE DUTY PAY- MENT FOR SSI – SEP 2011 15/10/2011 16/10/2011 PF PAYMENT DUE DATE SEP 2011 15/10/2011 REVIW THE ASSESSMENT PROCEEDING 15-10-2011 TDS RETURN FOR THE 2ND QUARTER ENDED SEP 2011 61i i i i
  • 74. i ii i 15-10-2011 ER -3 FOR SSI 2ND QUARTER 20-10-2011 VAT & CST RETURN SUBMISSION -SEP 2011 20-10-2011 ESI PAYMENT - SEP 2011 21/10/2011 HALF YEARLY SERVICE TAX RETURN APRIL 2011 TO SEPTEMBER 2011 25-10-2011 PF Monthly Return (Form No 12A, 5, 10, ) – SEP 2011 25/10/2011 ISSUE OF FORM 16A FOR THE THIRD QUARTER 31-10-2011 C M PAYMENT OF SERVICE TAX Y 05-11-2011CM NOV 2011MY EXICISE DUTY PAYMENT IN GEN & NOU -OCT 2011CY 05-11-2011CMY K 11/06/2011 MONTHLY TDS PAYMENT 07-11-2011 ER – 1 All As- sessees (Non SSI) OCT 2011 (EXICISE) 10-11-2011 ER-2 EOUs OCT 2011 (EXCISE) 10-11-2011 ER-6 Units paying More than 1 crore duty(CENVAT + PLA) OCT 2011 10-11-2011 HALF YEARLY PF RETRUN APRIL 2011 TO SEP 2011 11/11/2011 EXICISE DUTY PAY- MENT FOR SSI – OCT 2011 15/11/2011 16/11/2011 PF PAYMENT DUE DATE OCT 2011 15/11/2011 REVIW THE ASSESSMENT PROCEEDING 15-11-2011 VAT & CST RETURN SUBMISSION – OCT 2011 62i i i i
  • 75. i ii i 20-11-2011 ESI PAYMENT - OCT 2011 21/11/2011 PF Monthly Return (Form No 12A, 5, 10, ) – OCT 2011 25/11/2011 ER-4 Units paying More than 1 crore duty(CENVAT + PLA) Annual- ly YEAR ENDED MARCH 2011 30-11-2011 ADVANCE TAX WORKING FOR DECEMBER 01-12-2011 DEC 2011 EXICISE DUTY PAYMENT IN GEN & NOU -NOV 2011 C 05-12-2011 M 12/06/2011 PAYMENT OF SERVICE TAX Y 05-12-2011CM MONTHLY TDS PAYMENT 07-12-2011 ER – 1 All Assessees (NonMY SSI) NOV 2011 (EXICISE) 10-12-2011 ER-2 EOUs NOV 2011CY (EXCISE) 10-12-2011 ER-6 Units paying More than 1 crore du-CMY ty(CENVAT + PLA) NOV 2011 10-12-2011 EXICISE DUTY PAY- K MENT FOR SSI – NOV 2011 15/12/2011 16/12/2011 PF PAYMENT DUE DATE NOV 2011 15/12/2011 PAYMENT OF ADVANCE TAX 15-12-2011 VAT & CST RETURN SUBMISSION – NOV 2011 20-12-2011 ESI PAYMENT - NOV 2011 21/12/2011 63i i i i
  • 76. i ii i PF Monthly Return (Form No 12A, 5, 10, ) – NOV 2011 25/12/2011 PAYMENT OF SERVICE TAX 05-01-2012 JAN 2012 EXICISE DUTY PAYMENT IN GEN & NOU – DEC 2011 05-01-2012 01/06/2012 MONTHLY TDS PAYMENT 07-01-2012 ER – 1 All As- sessees (Non SSI) DEC (EXICISE) 10-01-2012 ER-2 EOUs DEC 2011 (EXCISE) 10-01-2012 ER-6 Units paying More than 1 crore du- ty(CENVAT + PLA) DEC 2011 10-01-2012 EXICISE DUTY PAY- MENT FOR SSI – DEC 2011 C 15/01/2012 16/01/2012 M PF PAYMENT DUE DATE DEC 2011 YCM 15/01/2012 TDS RETURN FOR THE THIRD QUARTER DEC 2011MY 15-01-2012CY ER -3 FOR SSI 3RD QUARTER 20-01-2012 VAT & CST RETURNCMY SUBMISSION – DEC 2011 K 20-01-2012 ESI PAYMENT - DEC 2011 21/01/2012 PF Monthly Return (Form No 12A, 5, 10, ) – DEC 2011 25/01/2012 ISSUE OF FORM 16A FOR THE THIRD QUARTER 30-01-2012 EXICISE DUTY PAYMENT IN GEN & NOU – JAN 2011 05-02-2012 64i i i i
  • 77. i ii i 02/06/2012 FEB 2012 PAYMENT OF SERVICE TAX 05-02-2012 MONTHLY TDS PAYMENT 07-02-2012 ER-6 Units paying More than 1 crore duty(CENVAT + PLA) JAN 2011 10-02-2012 ER – 1 All Assessees (Non SSI) JAN 2012(EXICISE) 10-02-2012 ER-2 EOUs JAN 2012(EXCISE) 10-02-2012 EXICISE DUTY PAYMENT FOR SSI – JAN 2012 15-02-2012 16/02/2011 PF PAYMENT DUE DATE JAN 2011 15/02/2011 VAT & CST RETURN SUBMISSION – JAN 2012 20-02-2012 C ESI PAYMENT - JAN 2011 M 21/02/2012 YCM PF Monthly Return (Form No 12A, 5, 10, ) – JAN 2011MY 25/02/2012 ADVANCE TAX WORKING FOR MARCHCY 01-03-2012CMY MAR 2012 K EXICISE DUTY PAYMENT IN GEN & NOU – FEB 2011 05-03-2012 03/06/2013 PAYMENT OF SERVICE TAX 05-03-2012 MONTHLY TDS PAYMENT 07-03-2012 ER – 1 All Assessees (Non SSI) FEB 2012. (EXICISE) 10-03-2012 ER-2 EOUs FEB 2012 (EXCISE) 10-03-2012 ER-6 Units paying More than 1 crore du- ty(CENVAT + PLA) FEB 2011 10-03-2012 EXICISE DUTY PAYMENT FOR SSI 15/03/2011 16/03/2012 65i i i i
  • 78. i ii i PF PAYMENT DUE DATE FEB 2011 15/03/2011 PAYMENT OF ADVANCE TAX FOR MARCH 2011 15-03-2012 PF Monthly Return (Form No 12A, 5, 10, ) – FEB 2011 25/03/2012 VAT & CST RETURN SUBMISSION – FEB 2012 20-03-2012 ESI PAYMENT - FEB 2011 21/03/2012 C E-Filing : Digital Signature Certificate made M mandatory w.e.f 1st July 2011 for Firms and Y IndividualsCM Thursday, July 7, 2011MYCY e-Filing for AY 2011-12 has been started (ITR-1(SAHAJ), ITR-2, ITR-3, ITR-4, ITR-4S(SUGAM), ITR-5 and ITR-6 are now enabled). DigitalCMY Signature Certificate made mandatory w.e.f 1st July 2011 for Firms and In- K dividuals whose accounts are required to be audited u/s 44 AB of the Income Tax Act’ 1961. Click here to download notification no. S. O. 1497(E) dtd 1st July 2011 in this regard. e-Filing Process – At a glance Thursday, July 7, 2011 E-Filing is Easy… Just follow the simple steps. J Last Date 31st July 2011… so Hurry Up…. Well before time….. 1 Select appropriate type of Return Form 66i i i i
  • 79. i ii i 2 Download Return Preparation Softwarefor selected Return Form. 3 Fill your return offline and generate a XML file. 4 Register and create a user id/password 5 Login and click on relevant form on left panel and select “Submit Re- turn” 6 Browse to select XML file and click on “Upload” button 7 On successful upload acknowledgement details would be displayed. Click on “Print” to generate printout of acknowledgement/ITR-V Form. 8 Incase the return is digitally signed, on generation of “Acknowledgement” the Return Filing process gets completed. You may take a printout of the Acknowledgement for your record. 9 Incase the return is not digitally signed, on successful uploading of e- C Return, the ITR-V Form would be generated which needs to be printed by M the tax payers. This is an acknowledgement cum verification form. A du- ly signed ITR-V form should be mailed to “Income Tax Department – Y CPC, Post Bag No – 1, Electronic City Post Office, Bengaluru – 560100,CM Karnataka, ” BY ORDINARY POST OR SPEED POST ONLY with-MY in 120 days of transmitting the data electronically.CY ITR-V sent by Registered Post or Courier will not be accepted. No Form ITR-V shall be received in any other office of the Income-tax De-CMY partment or in any other manner. In case, Form ITR-V, is furnished after K the above mentioned period, it will be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the assessee to electronically re-transmit the data and follow it up by submitting the new Form ITR-V within 120 days. This completes the Return filing process for non-digitally signed Returns. 10 To reset the password, click on the forget password link from the login page. In the password reset page, enter either of the following data : Enter your secret question and answer which you entered during registration (OR) Enter the assessment-year and acknowledgement number of any of the e- returns filed by you since assessment year 2007-08. Then enter the new password twice and then the text from the image below. Click on Reset Password to reset the password of your user. 67i i i i
  • 80. i ii i 11 For any assistance in electronic filing please contact the Public Relations Officer of the local Income Tax Office GOD is One Friday, July 15, 2011 *Dear friend, do you agree that we have 26 alphabets in English, as given below* * A B C D E F G H I J K L M N O P Q* * R* * 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18* * S T U V W X Y Z* * C 19 20 21 22 23 24 25 26** M With each alphabet getting a number, in chronological order, as above, study Y the following, and bring down the total to a single digit and see the resultCM yourself**MY Hindu* * S h r e e K r i s h n a* *CY 19+8+18+5+5+11+18+9+19+8+14+1=135=9*CMY K * M u s l i m M o h a m m e d* * 13+15+8+1+13+13+5+4=72=9* * Jain* * M a h a v i r* * 13+1+8+1+22+9+18=72=9* * Sikh* * G u r u N a n a k* * 7+21+18+21+14+1+14+1+11=108=9* 68i i i i
  • 81. i ii i * Parsi* * Z a r a t h u s t r a* * 26+1+18+1+20+8+21+19+20+18+1=153=9* * Buddhist* * G a u t a m* * 7+1+21+20+1+13=63=9* * Christian* * E s a M e s s i a h* * 5+19+1+13+5+19+19+9+1+8=99=18=9* * Each one ends with number ** **9** ** * C M * Y THAT IS NATURE’S CREATION TO SHOW THAT GOD IS ONE.* *CM BUT MAN FIGHTS WITH MAN ON THE BASIS OF RELIGION.*MYCYCMY CHECKLIST FOR INCOME TAX RETURN K (Nice Info.) Tuesday, July 26, 2011 Before filing the income tax returns for the previous year 2010-11, you can run through this checklist, to make sure you have complied with all the re- quirements. There are many minor requirements that are over-looked often, and may cause some problems later in terms of delay or inconvenience in filing the income tax returns. There are many cases where these points are thought of at the last minute, leading to hassles and sleepless nights. So, better to plan, organise and be comfortable. Go through this checklist and find out what is pending: Who needs to file returns? 69i i i i
  • 82. i ii i Every individual whose total income before allowing deductions under Chapter VI-A of the Income Tax Act exceeds the specified amounts needs to furnish his returns of income. In case of individuals below the age of 65 years (other than women) – Rs 1,60,000 In case of individuals who are of the age of 65 years or more at any time during the financial year 2010-11 – Rs 2,40,000 In case of women below the age of 65 years – Rs 1,90,000 Deadline Income tax returns need to be filed by individuals before July 31, 2011 No documents are required to be attached with the returns Form applicable ITR I or Sahaj This is applicable to most individual taxpayers. This is a two-page form. It is meant for individuals who have income from salary, house property (not C brought-forward losses from the previous years) and other sources (except M casual income). Y ITR IICM This is for an individual and Hindu Undivided Family (HUF) not having in-MY come from business or profession. This form is to be used when the incomeCY is from salary, house property, capital gains, and other sources only.CMY ITR III K This is for an individual and HUF who are partners in a firm and not carrying on a business or profession under any proprietorship. ITR IV or Sugam This form is applicable tosmall businessmen and commission agents. It is for individuals and HUFs having income from a proprietary business or profession. Organise documents Organise all documents and information so that the tax liability can be as- certained and the returns filed seamlessly Self-assessment tax 70i i i i
  • 83. i ii i Calculate your tax dues. In case the total tax deducted and advance tax paid is lesser than the tax liability you arrive at, you are required to pay selfassessment tax. You can now pay it online. The details of the self- assessment tax needs to be mentioned in the income tax returns. Bank details Fill up your bank details for a quick refund to your bank account, if due. Verification and sign The returns form needs to be verified and signed – either physically or dig- itally – depending on the mode being used to file the IT returns. Filing returns The returns can be filed with theIncome Tax Department either in paper form or electronically with a digital signature. You can also transmit the data in the returns electronically and thereafter submit a verification of the C returns on the returns form ITR V, or furnish bar-coded returns. M In case you plan to file it electronically, you need to register on the IT De- Y partment’s website. It is a simple process and requires details of yourPANCM and email address. In case of electronic filing without adigital signature,MY you should print out a copy of FormITR V (acknowledgement), sign it andCY send it by ordinary post to Post Bag No 1, Electronic City Office, Bangalore 560 100.CMY K Monthly Obligations – August 2011 Tuesday, August 2, 2011 INCOME TAX 7th August – TDS/TCS to be deposited for tax deduction made in the month July 2011 SERVICE TAX 5th August – Service tax to be deposited for the month July 2011 in case of companies 71i i i i
  • 84. i ii i 6th August E- Payment of Service tax to be deposited for the month July 2011 in case of companies having gross service tax exceeding R s 10 Lakhs in F-Y 2010-11 C S T / VAT 16th August - Deposit of TDS (VAT) in Challan no. DVAT-20 for tax deduction made in the month July 2011 25th August- Deposit of VAT/CST challan & Filing of e- Return for the month July 2011 For dealers filing monthly returns 28th August- Filing of Monthly (Paper return of e-filing print) Return for month July 2011 along with Annexure 2A & 2B C _____________________________________________________________________________ M (Finalization of Balance Sheet) Y 1. For Companies:CMMYCY • Due date for Income Tax E-Filing is 30/09/2011. Digital signature is mandatoryCMY K 1. For Partnership Firms/ Proprietorships & others ( Tax Audit cases) : • Tax Audit for assessee having turnover exceeding Rs 60 Lakhs ( Rs 15 Lakhs in case of specified professions ) Balance sheet for the year ended on 31/03/2011 is to be finalized and audited on or be- fore30/9/2011 • E -filing of Income tax is mandatory now for individuals/ Pro- prietorship firm & Partnership firms having tax audit. Digital signature is also mandatory now for all assessee having tax audit u/s 44 AB 72i i i i
  • 85. i ii i • Due date for Income Tax E-filing is 30/9/2011 HDFC Bank starts income tax payment facility through ATMs Thursday, August 4, 2011 Private sector lender HDFC Bank on Wednesday launched a service where- by its 115 lakh debit card holders can pay income tax through the bank’s ATMs. “With this facility, the bank has given its vast customer base the freedom from waiting in long queues at counters or logging into the internet to pay their taxes,” the bank said in a statement. The service was flagged off by Controller General of Accounts C R Sun- daramurti at the bank’s Deer Park branch here. C The service can now be accessed by the bank’s 115 lakh debit card holders M at 5,998 HDFC Bank ATMs in 1,111 cities across the country. Y For availing the service, customers will have to register themselves and theCM ATM payment option will be activated immediately, it said.MY For the quarter ended June 30, the bank’s total income was Rs 7,098 croreCY as against Rs 5,411.0 crore in the year-ago period. Net revenues Rs 3,968CMY crore in the first quarter of the fiscal as against Rs 3,392 crore in April-June, K 2010. Salaries of Chief Executives Monday, August 29, 2011 The Minister of State in the Ministry of Corporate Affairs Shri R. P. N. Singh recently informed the Lok Sabha that the Companies Act, 1956 has prescribed a ceiling on the remuneration of chief executive officers (CEOs) of companies . The total managerial remuneration to be paid to a Board level CEO of a company having only one Whole Time Director or a Manager is 5% of the 73i i i i
  • 86. i ii i net profit of the company and the total remuneration to be paid to all the Board level Directors together of a company, having more than one Whole Time Director or Manager, is 10% of the net profit of the company under Section 198 of the Companies Act, 1956. In case of companies having inadequate profit or making losses the remuneration is determined in accordance with the directions under Schedule XIII of the Companies Act, 1956. The companies may pay more than the prescribed ceiling to their CEOs who are holding Board level positions with the approval of the Central Government as per provisions of the Companies Act, 1956. The Minister was replying to a written question whether the Companies Act, 1956 has prescribed any ceiling on the remuneration of chief executive officers (CEOs) of companies; the details of the upper limit of the remuneration of CEOs and whether some companies are paying more than the prescribed ceiling to its CEOs and the action taken against such C companies? M YCM Electronic filing of service tax return madeMY mandatory for all w.e.f. 01st October 2011CY Monday, August 29, 2011CMY K [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDI- NARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 43/2011 – Service Tax New Delhi, the 25th August 2011 Bhadra 3, 1933 (Saka) 74i i i i
  • 87. i ii i G. S. R. 642 (E).- In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely :- 1. (1) These rules may be called the Service Tax (Fourth Amendment) Rules, 2011. (2) They shall come into force on the 1st day of October, 2011. 2. In the Service Tax Rules, 1994, in rule 7, – (a) in sub-rule (2), the proviso shall be omitted; (b) after sub-rule (2) as so amended, the following sub-rule shall be insert- ed, namely:- “(3) Every assessee shall submit the half-yearly return electronically”. C [F. No. 137/99/2011 – Service Tax] M (Deepankar Aron) Y Director (Service Tax)CM Note.- The principal rules were notified vide notification No. 2/1994 – Service Tax dated the 28th June 1994, published in the Gazette of India,MYCY Extraordinary, Part II, section 3, Sub-section (i), vide number G. S. R.CMY 546(E), dated the 28th June, 1994 and were last amended by notification K No. 35/2011 – Service Tax, dated the 25th April, 2011, vide number G. S. R. 343 (E), dated the 25th April, 2011. Procedure of Filling Service Tax Return Electronically Monday, August 29, 2011 75i i i i
  • 88. i ii i W.e.f. 1.10.2011, all the assessees are mandatorily required to file their return electronically irrespective of amount of service tax they have paid during the previous F/Y, in terms of Notification No. 43/2011-ST dated 25.08.2011. For this, one has to follow the procedure as follows:- (A) Get Registered with ACES 1. Fill the “ACES DECLARATION FORM” available on the website http: // www.servicetaxdelhi . gov.in and deposit it with the concerned Range Superintendent; 2. Please ensure to fill email-id correctly in the form because T-PIN and password will be communicated by the department to this email-id only; 3. After receiving the T-PIN and Password, visit the website http: // www.aces.gov.inand Click on the service tax button provided on the left side of ACES Homepage to login; C 4. Enter the T-PIN and password to log into the system. For first time M login, ACES will mandatorily prompt for changing the password; Y 5. Set the new password. It is to note that user id (called as T-PIN) onceCM selected can never be changed, even during the course of first time login;MY 6. For second and every subsequent login into ACES, take the note ofCY this user-id and Password as set aboveCMY · IT IS IMPORTANT TO NOTE THAT ALL THE ASSESSEE K WHO ARE NOT REGISTERED WITH ACES SHOULD GET THEMSELVES REGISTERED WITH ACES WELL IN ADVANCE, TO AVIOD LAST DAYS RUSH AND FILE THE RETUN WITHIN TIME. (B) How to fill the Return Electronically There are two methods of filling the return electronically, namely: 1. Online filling of data in service tax return and then submit it. 2. Offline filling of data using excel utility and then upload it. (1) Online Filing of data in Service Tax Return and Submit it i. Login into ACES by entering the user-id and password. Home page of the assessee will appear; 76i i i i
  • 89. i ii i ii. Under ‘RET’ Main menu, click on the ‘fill’ option of ‘fill ST-3’ sub-menu i.e. RET Menu Fill ST-3 Fill. iii. A page will appear listing the Premises code and Address of the registered premises of the assesssee. Premises code will appear as hyperlink. Click on the hyperlink to prepare the ST-3 Return; iv. After filling the return correctly, Click on the ‘SAVE’ Button appearing on last page and confirmation page of ST-3 will appear; v. To Amend, Click on the ‘Modify’ button or ‘Save’ to store the Return in the database; vi. To submit the ST-3 Return to the department, press “SUBMIT” button. Confirmation will appear for successful submission of ST-3 Return displaying the Unique No. for such Return; C vii. Return saved in ACES can be amended before submission by M the assessee by clicking on the “Amend ST-3” button under “Fill ST-3” sub-menu. YCM viii. In the same way, Return after submission can be revised once in 90 days by clicking on the “Revise ST-3” option of “Fill ST-3” submenu.MYCY (2) Offline filling of data using excel utility and then upload it;CMY i. Click on the ‘Download’ button provided on the left side of K ACES Homepage and download excel utility by clicking on the hyperlink “Download ST3 Return Excel Utility”; ii. Use the excel utility to prepare ST-3 return and click on “Validate & Submit” button on the last page to generate XML file; iii. The XML file will be saved in the same folder where the download utility is saved by the user; iv. To upload the ST-3 Return, login into ACES by entering the user-id and password. Click on “Upload File” option of “e-filing” submenu under “RET” Main Menu; i.e. RET Main Menu e-filing Upload file v. Click the “Save” button to save the return in the database of the assessee; Else click on “SUBMIT” button to file the return; 77i i i i
  • 90. i ii i vi. Confirmation will appear for successful uploading of Return without any Unique No.; vii. After uploading, click on “View Status” option of “e-filing” submenu under “RET” Menu to view status of Return. A return will be considered as filed only when its status is shown as ‘FILED’ which should be appeared on or before the last due date of 25th April/25th October, as the case may be, for treating the return ‘filed on time’. (3) THE ASSESSEES CAN ALSO ‘VIEW’, ‘SAVE’ AND ‘PRINT’ THEIR FIELD ST-3 RETURN AT ANY TIME BY CLICKING ON THE BUTTON ‘VIEW ST-3’ UNDER ‘RET’ MENU AFTER SUUCESSFUL LOGIN INTO ACES. Excel Tips : – Fast AutoFill C Monday, August 29, 2011 M Y The AutoFill feature in Excel is a great boon to certain types of editing. The basic use of the feature (clicking and dragging on the AutoFill handle)CM . There is another way you can use the AutoFill handle, however, that is aMY wonderful time-saving feature.CY Suppose you have a column full of values in column A. For instance, youCMY have values in the cells A3 through A417. Now, suppose you want to fill K adjacent cells in column B with a sequential values, 1 through 415. Try this: 1. In cell B3, place the value 1. 2. In cell B4, place the value 2. 3. Select the range B3: B4. 4. Double-click on the AutoFill handle. That’s it! No dragging at all, and you now have cells B5: B417 filled with sequential values. Cool, huh? J 78i i i i
  • 91. i ii i Service Tax on fees charged for issuance of Country of Origin Certificate Wednesday, August 31, 2011 Government has authorized Chambers of Commerce, Export Promotion Councils (EPC), some Trade Associations to issue Country of Origin Cer- tificate i.e. COOC. It is useful document in Import-Export Trade. This certificate indicates that the goods, which are being exported, are actually manufactured in a specific country mentioned therein. This certificate is generally used by exporters/importers for getting various benefits. Generally, exporter has to make an application to the Chamber or any au- thorised agency for issuance of COOC, in the prescribed form, along with a copy of commercial invoice and other documents and pays the prescribed fees. On the basis and verification of the information provided in the ap- C plication for COOC and the supporting documents with reference to the M goods sought to be exported, the Chamber or the authorised agency issues a COOC. Now CBEC vide Circular No. 145/14/ 2011 – ST dated 19th Au- Y gust 2011 has clarified that in cases COOC has been issued with referenceCM to national character of the goods upon examination of the origin of theirMY composition, service tax is applicable on fees charged by chamber etc forCY issuance of COOC under “Technical Inspection and Certification Agency Service”.CMY Further the circular also clarify that Service Tax paid on ‘Technical Inspec- K tion and Certification’ of export goods is eligible for refund under Notifica- tion 17/2009-ST dated 7thJuly, 2009. Format of reply to Penalty notice under section 272B for wrong quoting or non-quoting of PAN Wednesday, August 31, 2011 Nowadays Income tax department is issuing notice to the under section 272B of Income Tax Act 1961, to the Assessee’s who filed their Income 79i i i i
  • 92. i ii i tax Return, but filled wrong PAN or not filled PAN in their Income tax Returns . Under section 272B Assessing office can impose a penalty of Rs. 10,000/- on Assessee for wrong quoting or non-quoting of PAN in Income Tax Re- turn. Now a question arises what should Assessee reply if he filled wrong PAN or failed to file PAN? Given below a standard format of reply to the Assessing Officer which As- sessee may use if they received any such notice from Income Tax Depart- ment. To Date – . Applicant:- ________________________________ ________________________________ C M _________________________________ Y Subject: – Reply to Your Office notices under section 272B of Income TaxCM Act, 1961MY Ref: Your Office Letter No………….. Dated …………….CY Sir,CMY I refer to your aforesaid letter dated ……….by which your Honor proposed K to levy a penalty of Rs. 10,000/- for *wrong PAN/No PAN on income Tax Return and would like to submit as under:- 1. That I filed the return of income in your Honours office for the As- sessment year ………. On ……………… however due to some mistake I quote the *wrong pan number / Forgot to Quote the PAN on the Return. The correct pan number is as under: __________________________ 2. I hereby request your Honor to kindly accept the correct pan number. Prayer:- 80i i i i
  • 93. i ii i I would further like to request your Honor to accept the correct pan number and drop the penalty proceeding initiated u/s 272B as there was no malafide intention behind the *wrong quote/ No Quote of PAN. Your faithfully Sd. (Assessee Name) * Strikeout whichever is not applicable Gujarat HC upholds constitutional validity of service tax on renting of immovable property C Wednesday, August 31, 2011 M Y Cinemax India Limited V. UOI & Anr. (Gujrat HC) - While uphold- ing Sec.65[105][zzzz] of Finance Act, 1994 as amended by Sec.75[5][h]CM and Sec.76 of the Finance Act, 2010, we hold that the provision ofMY Sec.65[105][zzzz] introducing service tax is not attracted if [i] the vacantCY land is used solely for agriculture, acquaculture, farming, forestry, animalCMY husbandry, mining purposes; [ii] it is a vacant land, whether or not having facilities clearly incidental to the use of such vacant land; [iii] land is used K for educational, sports, circus, entertainment and parking purposes and; [iv] building is used solely for residential purposes and buildings are used for the purposes of accommodation, including hotels, hostels, boarding hous- es, holiday accommodation, tents, camping facilities. The said provision levying service tax will be attracted if the immovable property is rented for the use in the course of or for furtherance of the business of commerce. In view of the discussion as made above and as we find that the petitioners could not make out a case to declare Sec.65[105][zzzz] as unconstitutional or ultra vires any provisions of the Constitution ———————————— IN THE HIGH COURT OF GUJARAT AT AHMEDABAD 81i i i i
  • 94. i ii i SPECIAL CIVIL APPLICATION No. 8032 of 2010, 9661 of 2010, 11111 of 2010, 12933 of 2010, 707 of 2011 and 11032 of 2010 CINEMAX INDIA LIMITED THROUGH DIRECTOR – Petition- er(s) Versus UNION OF INDIA THROUGH SECRETARY & 9 – Respondent(s) Date : 23/08/2011 CAV JUDGMENT (Per : HONOURABLE THE CHIEF JUSTICE MR. S. J. MUKHOPADHAYA) 1. In these writ petitions, as common question of law is involved and va- lidity of Sub-clause [zzzz] of Clause[105] of Sec.65 of Finance Act, 1994 C as amended by Sec.75[5][h] and Sec.76 of the Finance Act, 2010 is under M challenge, they were heard together and are disposed of by this common judgment. YCM 2. In most of the petitions, the petitioners are tenants paying rents or li- cense fees or business conducting fees for leasing/licensing of immovableMY properties in their favour for conducting/operating business from the saidCY immovable properties in the course of business activities. Apart from theCMY rent paid in case of the properties taken on rent or conducting fees basis, the K petitioner companies pay ‘Common Amenities and Maintenance’ [“CAM”] charges on which service tax is charged and duly paid. They also reimburse dues for electricity and water on actual consumption and duly supported by the bills. 3. During the course of their operation, the petitioner companies also re- ceive rent or license fees or conducting fees for leasing, licensing or use of immovable properties. In these cases also, wherever agreements so provide, the petitioner companies get reimbursed in respect of dues for electricity, water, housekeeping, security etc, which are based on actual consumption and duly supported by bills. 4. The Finance Act, 2007 amended Sec.65 of the Finance Act, 1994 and defined ‘renting of immovable property’ including renting, letting, leasing, 82i i i i
  • 95. i ii i licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce with certain exclusions. Clause [105] of Sec.65 of the Finance Act, 1994, which defines ‘taxable service’ was also amended to introduce sub-clause[zzzz], which provided that a service provided by any other person in relation to ’renting of im- movable property’ for use in the course or furtherance of ‘business or commerce’. 5. By Notification No.24/2007-ST dated 22nd May, 2007, the effective date for levy of service tax on renting and leasing an immovable property was notified as 1st June, 2007. According to the petitioners, the entire ob- ject and purpose of the service tax provision was to tax certain categories of services ‘in relation to’ renting of any immovable property for use in the course or furtherance of business or commerce. Thus, according to the peti- tioners, what the Revenue sought to tax was not the ‘renting of immovable property’, but in fact any service provided or to be provided to any person, C by any other person, ‘in relation to renting of immovable property’ for use M in the course or furtherance of business of commerce. It was contended Y that on a bare reading of the provision itself, it was apparent that the sameCM does not impose a tax ‘on renting or taking the premises on rent’. This is, because, there is no value addition by any act of the owner of the premises,MY in renting his property to another person.CY 6. By Circular No.98/1/2008-ST, dated 4th January, 2008, the Ministry ofCMY Finance, Government of India authorized proceeding of recovery of service K tax on the same assumption that renting out of immovable property was by itself a service. One Iskrupa Mall Management Company Private Limited filed Special Civil Application No. 5269 of 2008 before this Court challenging the levy of the service on immovable property let out on rent by virtue of amendment made in Sec.65[105][zzzz] of the Finance Act, 2004, as amended and insert- ed by Finance Act, 2007, subsequent notifications and circulars were also challenged. This Court, by its order dated 28th March, 2008, restrained the respondents from making any coercive recovery of service tax in re- spect of the amount of license fees for use of immovable property. Similar directions were also issued by this Court in other writ petitions, including Special Civil Application Nos. 8179, 8735, 7096, 2981, 8346, 3664, 3666, 83i i i i
  • 96. i ii i 7653, 8176, 8177, 8178 and 5269, all of 2008, by common order dated 6th August, 2008. 7. One Retailers Association of India and another Multiplex Associ- ation of India of which one of the petitioners is a member, filed a writ petition being Writ Petition No. 1263 of 2008 before the Bombay High Court, challenging the levy of service tax on immovable property let out on rent by virtue of amendment made in Sec.65[105][zzzz] of the Finance Act, 2004, as amended by the Finance Act, 2007. Consequent notifications and circulars were also under challenge. The said case was also admitted by the Bombay High Court, wherein, interim relief was granted on 30th July, 2008, directing the Union of India and statutory authorities not to take any coercive step for recovery of service tax. 8. One Home Solution Retail India Limited filed a writ petition, being W. P. [C] No. 1659 of 2008 challenging the Notification No. 24/2007-ST dated C 25th May, 2007 and Circular No. 98/1/2008-ST, dated 4th January, 2008, which proceeded on an assumption that renting of immovable property was M taxable service. The said writ petition was heard by Delhi High Court along Y with other writ petitions preferred on the same issue.CM The respondent, Union of India, at that stage, moved before the SupremeMY Court by filing Transfer Petition [Civil] No. 807-821 of 2008 for stay andCY transfer of different cases pending in different High Courts to Delhi HighCMY Court relating to the common issue of service tax on renting of immovable property. Inview ofpendency of such petitions, many of the HighCourts did K not pass any order, in the meantime,in absence of any stay, the matters were heard anddisposed of by Delhi High Court by a commonjudgment andorder dated18th April, 2009. 9. In case of Home Solution Retail India Limited v. Union of India, reported in [2009] 158 DLT 722, Delhi High Court, by its judgment dated 18th April, 2009, held that Sec.65[105][zzzz] does not, in terms, entail that the renting out of immovable property would, by itself, constitute taxable service and, therefore, the notifications and circulars issued on the basis of such assumption were ultra vires the Act. Consequently, the same were set aside to the extent that they authorized levy of service tax on renting of immovable property per se. 84i i i i
  • 97. i ii i Delhi High Court further held that service tax is value added tax levied on value addition provided by some service provider; insofar as it relates to immovable property, any value addition would not be discerned, therefore, it cannot be regarded as service. Delhi High Court in the above judgment held as follows: ”35. From this analysis, it is clear that we have to understand as to whether renting of immovable property for use in the course or furtherance of busi- ness or commerce by itself is a service. There is no dispute that any service connected with the renting of such immovable property would fall within the ambit of Section 65(105)(zzzz) and would be exigible to service tax. The question is whether renting of such immovable property by itself constitutes a service and, thereby, a taxable service. We have already seen that service tax is a value added tax. It is a tax on the value addition provided by some service provider. Insofar as renting of immovable property for use in the course or furtherance of business or commerce is concerned, we are un- C able to discern any value addition. Consequently, the renting of immovable M property for use in the course or furtherance of business of commerce by itself does not entail any value addition and, therefore, cannot be regarded Y as a service. Of course, if there is some other service, such as air condition-CM ing service provided along with the renting of immovable property, then itMY would fall within Section 65(105)(zzzz).CY 36. In view of the foregoing discussion, we hold that Section 65(105)(zzzz)CMY does not in terms entail that the renting out of immovable property for use K in the course or furtherance of business of commerce would by itself con- stitute a taxable service and be exigible to service tax under the said Act. The obvious consequence of this finding is that the interpretation placed by the impugned notification and circular on the said provision is not correct. Consequently, the same are ultra vires the said Act and to the extent that they authorize the levy of service tax on renting of immovable property per se, they are set aside.” The aforesaid judgment has been challenged by the Union of India before the Supreme Court in Special Leave Petition [Civil] No. 13850 of 2009, but in spite of the petition for interim relief, the Supreme Court has not granted any stay and merely issued notice to the parties. 9. It appears that because of the decision rendered by the Delhi High Court, 85i i i i
  • 98. i ii i Union of India relooked into the matter on 26th February, 2010 and the Hon’ble Finance Minister of Union of India presented Budget 2010 before the Parliament, being Finance Bill 2010 which received Presidential assent on 11.5.2010 giving effect to the Finance Act, 2010. 10. Through Finance Act, 2010, by Sec.75[5][h] and Sec.76, the Union of India sought to introduce certain amendment retrospectively and thereby sought to validate all actions taken by Union of India notwithstanding any- thing in the judgment of Delhi High Court or other High Courts and also provided liberty to the tax authorities to make all recoveries of service tax with interest, penalty or fine along with other charges as if amendment to Sec.65[105][zzzz], in the Finance Act, 1994 by Finance Act, 2010, always stood incorporated retrospectively from 1st June, 2007. 11. By Notification No. 24/2010-ST dated 22nd June, 2010, the operative date of the provisions of the Finance Act, 2010 was notified as 1st July, 2010. C M 12. It is in this background the present petitions were preferred challenging the validity of Sec.75[5][h] and Sec.76 of the Finance Act, 2010, whereby Y amendment was made in Clause[105] of Sec.65, relevant portions of whichCM are reproduced hereunder:MY ”75. In the Finance Act, 1994, –CY [A] in section 65, save as otherwise provided, with effect from such dateCMY as the Central Government may, by notification in the Official Gazette, ap- K point, – xxx xxx xxx [5] In clause [105], –, xxx xxx xxx [h] in sub-clause [zzzz], – [i] for the portion beginning with the words “to any person” and ending with the word “business or commerce”, the follow- ing shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2007, namely:- 86i i i i
  • 99. i ii i ”to any person, by any other person, by renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce”; [ii] In Explanation 1, after item [iv], the following item shall be inserted, namely:- “[v] vacant land, given on lease or license for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce;” ”76. Any action taken or anything done or omitted to be done or purported to have been taken or done or omitted to be done under sub-clause [zzzz] of clause [105] of section 65 of the Finance Act 1994 [32 of 1994], at any time during the period commencing on and from the 1st day of June, 2007 and ending with the day, the Finance Bill, 2010 receives the assent of the President, shall be deemed to be and deemed always to have been, for all purposes, as validly and effectively taken or done or omitted to be done as if the amendment made in sub-clause [zzzz] of clause [105] of section 65, by C sub-item [i] of item [h] of sub-clause [5] of clause [A] of section 75 of the M Finance Act, 2010 had been in force at all material times and, accordingly, Y notwithstanding anything contained in any judgment, decree or order of anyCM court, tribunal or other authority, –MY [a] any action taken or anything done or omitted to be taken or done inCY relation to the levy and collection of service tax during the said period on the taxable service of renting of immovable property, shall be deemed to beCMY and deemed always to have been, as validly taken or done or omitted to be K done as if the said amendment had been in force at all material times; [b] no suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for the levy and collection of such service tax and no enforcement shall be made by any court of any decree or order relating to such action taken or anything done or omitted to be done as if the said amendment had been in force at all material times; [c] recovery shall be made of all such amounts of service tax, interest or penalty or fine or other charges which may not have been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, would not have been refunded, as if the said amendment had been in force at all material times. 87i i i i
  • 100. i ii i Explanation.– For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had this amendment not come into force.” 13. The challenge is made on the grounds that [i] the amendment is uncon- stitutional being beyond the legislative competence of the Parliament; [ii] Delhi High Court having held that renting of immovable property is not ser- vice in absence of any value addition, the Union of India cannot change the nature of tax by changing the event of transaction and; [iii] the amendment being not clarificatory in nature, it cannot be enforced retrospectively. 14. The ground taken by the Union of India for amending the provision is that renting of immovable property is taxable service if such renting is for use in the course of or for furtherance of business or commerce. 15. Mr. S. M. Soparkar, learned Sr. Counsel and Mr. Mihir Joshi, learned C Sr. Counsel appearing on behalf of one or the other petitioners, submitted M that renting of immovable property is, in fact, a transaction by which rights in or in relation to immovable property are transferred for a certain peri- Y od and for consideration. It is not an activity involving performance, skill,CM expertise or knowledge and the amount received by the lessor or licensorMY is merely consideration for transfer of right in or in relation to immovableCY property on the basis of the market value thereof; the same does not amount to service at all. It was further contended that the use which the licensee/-CMY lessee puts the property to, viz. end-use, is not determinative of the nature K of the transaction as to whether the same is taxable service or not. They placed reliance on some of the decisions of the Supreme Court and other High Courts which will be discussed at appropriate stage. 16. By analogy, it was submitted that concept of manufacture under the pro- visions of the Central Excise Act, 1944 is independent of the use to which article is put to. What is required is that there must be a manufacture and the goods so produced must satisfy the test of saleability and marketability. In fact, end-use is not considered as determinative even for the classifica- tion of the goods, far from being determinative for concluding whether such goods have been manufactured or not. The use of the goods/services is an occurrence which is post taxable event and therefore, is not relevant factor for considering whether or not the taxable event has occurred. 88i i i i
  • 101. i ii i 17. Therefore, according to the learned counsel for the petitioners, ‘end- use’ does not create taxable event, but at the highest, can bring about a valid classification for the purpose of taxation etc. Just as the goods have to be ‘manufactured’ or ‘produced’ for the purpose of attracting levy of excise duty, which is a concept independent of the use to which such goods are put, on the principle of equivalence, the services also have to be ‘manufac- tured’ or ‘produced’ and the use to which such services are produced is not determinative of the fact as to whether in fact, the services were so man- ufactured or produced. There is legislative indication of this proposition since Sec.65[90a] defines “renting of immovable property” as including renting etc. of immovable property for use in course or furtherance of busi- ness or commerce, meaning thereby that renting of immovable property for residence would be covered in the inclusive definition. However, what is sought to be taxed under the present regime is only that class of service which is renting for use in the course of or for furtherance of business or commerce. Sec.65[105][zzzz] expressly makes this classification of service C and excludes renting of building used solely for residential purposes etc. M 18. It was further contended that renting would not amount to a service since Y the lessee/licensee would only upon such renting not necessarily, carry onCM his business or commerce. Same would be the position even in case of ac-MY quisition of immovable property by purchase which would then enable theCY purchaser to use it for any purpose and may be in the course or furtherance of business or commerce. However, such purchase would certainly not al-CMY so be a service. Therefore, according to learned counsel for the petitioners, K renting enabling a person to carry on his activity or business or commerce would not amount to a service for the purpose of charging service tax. He, therefore, submitted that if renting of immovable property is not service at all, the utility value or use of the premises/immovable property is irrelevant for considering whether such transaction is or is not a service in the first place. 19. The next contention advanced on behalf of the petitioners is that the act of the consumer is not value addition contemplated for considering an activity ‘a service’. The value addition must be by the service provider. He relied upon the decision of the Supreme Court in the case of All India Fed- eration of Tax Practitioners and others v. Union of India and others, reported in [2007] 7 SCC 527 and in the case ofAssociation of Leasing 89i i i i
  • 102. i ii i and Financial Service Companies v. Union of India and others, report- ed in [2001] 2 SCC 352. Therefore, according to the counsel for the petitioners, in absence of any activity being undertaken by the lessor/licensor in the transaction of renting and there being no value addition on account of renting of immovable prop- erty simplicitor, albeit for commercial purpose, the same does not amount to a service, exigible to service tax. 20. Learned counsel would further submit that the contention of the respon- dents would lead the taxable event to a fortuitous circumstance of use by the service recipient. This may be explained by an example where landlord/- lessor/licensor may have premises which are capable of being used both for residential and/or for commercial purpose. If the same premises are rented and used for residential purpose, on the contention of the respondents, the taxable event would not have happened as there is no provision of any ser- vice by the lessor to the lessee, whereas if the same premises is rented and C thereafter used for commercial purpose or partly for commercial purpose M and partly for residential purpose, would be liable to tax on the ground that Y service had been provided by the service provider to the service recipient.CM There is no difference in the ‘activity’ undertaken by the lessor/licensor, nor value addition by him in the latter case and in fact, there is no qualitativeMY difference in the transaction undertaken at all, despite which, it would beCY considered as production of service in one case and not in the other. ThereCMY would be a similar irrationality even as regards service provided by real K estate agent in relation to renting of immovable property if the contention of the respondents is accepted. The issue is not that levy of service tax on renting for business or commerce is bad because no such tax is levied on renting for residence, since it is well settled that the legislature does not have to tax everything for taxing something. The issue is sustainability of a contention that renting of immovable property for any other purpose may not be a service but renting of immovable property amounts to provision of services if such property is used for commercial purpose. Such determina- tion of a taxable event would be irrational and the levy would consequently be rendered invalid. 21. Mr. P.S. Champaneri, learned Assistant Solicitor General appearing for the Revenue, opposed the prayer on the ground that the writ petitions are premature as no notice has been served on the petitioners and even in 90i i i i
  • 103. i ii i absence of such show cause notice, the present petitions have been preferred and therefore, they are fit to be rejected. 22. Referring to Sec.65[105][zzzz] of Finance Act, 1994 and the explana- tion given thereunder, he would submit that an immovable property used solely for residential purpose would not be covered under the definition of ‘immovable property’ for the purpose of taxing event. It is only in the event if immovable property is used for furtherance of business or commerce part- ly and partly for residential purpose or for any other purpose, the same shall be deemed to be immovable property for use in the course or for furtherance of business for the purpose of attracting service tax. 23. He would further contend that for valid classification of imposing ser- vice tax by defining ‘immovable property’ in the Service Tax and making it limited when services, to any person, by any other person by renting of immovable property or any other service in relation to such renting for use in the course or for furtherance of business of commerce, the legislature has C specifically made a class different than what is defined under other enact- M ment, namely Transfer of Property Act or any other Act. Y 24. Learned counsel submitted that in a transaction there may be two orCM more taxing events which may occur, therefore, any of them cannot be ig-MY nored. There is always value addition by rendering service of renting ofCY immovable property when it is in furtherance of business and commerce in favour of service recipient.CMY K 25. Challenging the locus standi of the petitioners, he would contend that service tax is imposed on service recipient. The petitioners herein, are the owners of the premises and they do not to bear the liability of paying service tax. In view of the principle enumerated under Sec.41[j] of the Specific Re- lief Act, in absence of having personal interest of the petitioners, this Court may not grant relief. The present petitions have not been filed in the nature of Public Interest Litigation nor in the representative capacity and therefore, the petitioners being not affected party, they have no right to challenge the Central enactment. They have also failed to show that any of their funda- mental and statutory rights has been infringed as they are not liable to pay tax and thus, the writ petitions at the behest of the service provider, are not maintainable. 91i i i i
  • 104. i ii i 26. Relying on the Supreme Court decision in the case of Union of India v. Harbhajan Dhillon, reported in 1971 [2] SCC 779, learned counsel would contend that if Central Act is challenged as being beyond the legislative competence of the Parliament, it is enough to enquire if it is a law with respect to matters of taxes enumerated in state list, if it is not, no further question arises. If the Central Act enters or invades the prohibited fields, there is no point in trying to decide as to under which list or Entry the Central Act will fit in. He also placed reliance on the Supreme Court decision in the case of Tamil Nadu Kalyan Mandapam Association v. Union of India, reported in 2004 [167] ELT 3 [S. C.] = AIR 2004 3757, and submitted that the definition of ‘taxable services’ includes renting in the course or furtherance of business. 27. Specifically with regard to providing service of renting a premises for business and commercial activities, learned counsel would contend that since the event of making available premises for industrial and business C purposes is a rendition of service, though it may be even event of leasing M or licensing under Transfer of Property Act and/or Easement Act, the con- cept of catering and rendering services is attracted. The fact that the tax Y on sale of goods involved in the said service can be levied does not meanCM that service tax cannot be levied on the aspect of catering. Similarly, rent isMY to be collected while providing service of renting the premises, it does notCY mean that service tax cannot be levied on the aspect of rendition of service of renting the premises. Reliance was placed on a decision of Punjab &CMY Haryana High Court in the case ofShubh Timb Steels Limited, reported K in 2010 [20] S. T. R. 737 [P & H]. 28. So far as the validation of Act is concerned, learned counsel for the Revenue would contend that the Act can be validated by the validation Act. It is settled law that competent legislature can validate any Act even ret- rospectively by an enactment or validation Act. It is within the domain of competent legislature to clarify or validate law retrospectively. The object of validating law is to rectify the defect in phraseology or lacuna and to ef- fectuate and to carry out the object for which earlier law was enacted. Now, the Parliament has made by way of amendment, even renting of immovable property as covered by definition of ‘taxable service’ instead of service ‘in relation to renting of property’; amendment is made by clarifying the in- tention of the legislation and curing the defects. He placed reliance on the decision of the Supreme Court in the case of Gujarat Ambuja Cement v. 92i i i i
  • 105. i ii i Union of India, reported in 2005 [4] Supreme Court Cases 214, where- in, while upholding the validation Act, the Supreme Court laid down the principle. 29. According to learned counsel for the Revenue, renting of commercial property internationally is considered as as provision/supply of service. The Apex Court, in the case of All India Federation of Tax Practitioners re- ported in 2007 [7] STR 625[SC] also held that; “service tax is on val- ue addition by rendition of services”. Similar views are expressed by the Supreme Court in the case of Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad reported in 1995 [76] ELT 241[SC], where- in it has been held that there is no difference between production and manu- facture of salable goods and production of marketable/salable services in the form of an activity undertaken by the service provider for consideration. 30. Learned counsel on behalf the Revenue would contend that the Court should give liberal approach to the taxing enactment as it is always burden C on the person who is challenging the same to prove violation of guarantee M of equal protection. In the economic and tax matters, classification by legis- Y lature is almost sustained by the Court which generally lacks expertise andCM familiarity with the local problem so necessary for making wise decision in respect of raising and disposing of public revenue. Reliance was placed onMY the Supreme Court decision in the case of R. K. Garg v. Union of India,CY reported in 1981 [4] SCC 675.CMY 31. He would further contend that the impugned provision has already been K upheld by Punjab & Haryana High Court in the case of Shubh Timb Steels Limited, reported in 2010 [20] S. T. R. 737 [P & H]. 32. We have heard the learned counsel for the parties, noticed their re- spective submissions and also perused relevant provisions and decisions rendered by one or the other Court and Supreme Court in particular. 33. Sub-clause [90a] of Clause-65 of the Finance Act,1994 defines ‘renting of immovable property’ which reads as follows: ”[90a]: ‘renting of immovable property’ includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include– 93i i i i
  • 106. i ii i [i] renting of immovable property by a religious body or to a religious body; [ii]renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre. Explanation.[1]- For the purposes of this clause, for use in the course or furtherance of business or commerce” includes use of immovable proper- ty as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings. Explanation.[2]- For the removal of doubts, it is hereby declared that for all the purposes of this clause “renting of immovable property” includes allow- ing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property;” 35. Clause [105] of Sec.65 defines ‘taxable service’ which means any ser- C vice provided and shown thereunder. Sub-clause [zzzz] brings renting of M immovable property or any other service in relation to such renting for the Y use in the course of or for furtherance of the business or commerce withinCM the definition of ‘taxable service’ which reads as follows:MY Section 65[105]: “taxable service” means any service provided, -CY xxx xxx xxxCMY [zzzz] to any person, by any other person, by renting of immovable property K or any other service in relation to such renting, for use in the course of or for furtherance of, business or commerce. Explanation1.–For the purposes of this sub-clause, “immovable property” includes– [i] building and part of a building, and the land appurtenant thereto; [ii] land incidental to the use of such building or part of a building; [iii]the common or shared areas and facilities relating thereto; and [iv]in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or es- tate, 94i i i i
  • 107. i ii i [v] vacant land given on lease or license for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce, but does not include- [a] vacant land solely used for agriculture, acquaculture, farming, forestry, animal husbandry, mining purposes; [b] vacant land, whether or not having facilities clearly incidental to the use of such vacant land; [c] land used for educational, sports, circus, entertainment and parking purposes; and [d] building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. C Explanation 2.–For the purpose of this sub-clause, an immovable prop- M erty partly for use in the course or furtherance of business or commerce Y and partly for residential or any other purposes shall be deemed to be im-CM movable property for use in the course or furtherance of business or com- merce;”MYCY Explanation-1 below sub-clause [zzzz] while defines ‘immovable proper- ty’, Explanation-2 thereunder makes it clear that for the purpose of the saidCMY sub-clause[zzzz], an immovable property partly for use in the course or fur- K therance of business or commerce and partly for residential or any other pur- poses shall also be deemed to be immovable property for use in the course or furtherance of business or commerce. 36. One of the thrusts of the arguments made on behalf of the petitioners is that renting of immovable property is a transaction by which right in or in relation to immovable property is transferred for certain period. It is not an activity involving performance, skill, expertise or knowledge and the amount received by the lessor/licensor is consideration for transfer of right in or in relation to immovable property. But such analogy cannot be applied in the case of renting of immovable property by a service provider to a service recipient, who hires the property for use in the course of or for furtherance of business or commerce. Such renting of immovable property 95i i i i
  • 108. i ii i is an activity which amounts to rendition of service in the course of or for furtherance of business or commerce. 37. It is true that in the normal course of renting of immovable property, provision of service tax is not attracted, in absence of any activity involv- ing performance, skill, expertise or knowledge. This is also accepted by counsel on behalf of the Revenue who relied upon the impugned provi- sion which stipulates that only when any person rents immovable property for use in the course or furtherance of business or commerce. The provi- sion of Sec.65[105][zzzz] specifically deals with exclusion category while defining ‘immovable property’. That definition of ‘immovable property’ as described in Explanation-1 below sub-clause[zzzz] does not include four categories of immovable property, which are as follows: ”[a] vacant land solely used for agriculture, acquaculture, farming, forestry, animal husbandry, mining purposes; C [b] vacant land, whether or not having facilities clearly incidental to the M use of such vacant land; Y [c] land used for educational, sports, circus, entertainment and parkingCM purposes; andMY [d] building used solely for residential purposes and buildings used for theCY purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities.”CMY K 38. In the case of All India Federation of Tax Practitioners reported in [2007] 7 SCC 527, the Supreme Court was considering the question of validity of levy of service tax on the services rendered by the Chartered Accountants, Cost Accountants and Architects. While so considering, the Supreme Court held that service tax is an indirect tax levied on certain ser- vices provided by certain categories of persons including companies, asso- ciations, firms, body of individuals etc., it covers wide range of activities, the service sector which is occupying center stage of the Indian economy has become an industry by itself. In the said case, the Supreme Court held as follows: ”7. In the light of what is stated above, it is clear that Service Tax is a VAT which in turn is destination based consumption tax in the sense that it is on commercial activities and is not a charge on the business but on 96i i i i
  • 109. i ii i the consumer and it would, logically, be leviable only on services provided within the country. Service tax is a value added tax. 8. As stated above, service tax is VAT. Just as excise duty is a tax on val- ue addition on goods, service tax is on value addition by rendition of ser- vices. Therefore, for our understanding, broadly #services# fall into two categories, namely, property based services and performance based ser- vices. Property based services cover service providers such as architects, interior designers, real estate agents, construction services, mandapwalas etc.. Performance based services are services provided by service providers like stock-brokers, practising chartered accountants, practising cost ac- countants, security agencies, tour operators, event managers, travel agents etc.” The Supreme Court added that service tax is a value added tax and value addition is on account of activity, as in the case of manufacture of goods and thereby it attracts service tax. In other words, the word ‘service’ is sub- C stituted in place of the word ‘goods’ by applying principle of prevalence. M In the case of Association of Leasing and Financial Services v. Union of Y India, reported in [2011] 2 SCC 352, the Supreme Court, while dealingCM with banking and other financial services observed that service tax is tax on activity whereas sales tax is tax on sale of thing or goods. Taxable event un-MY der the service tax is each exercise/activity undertaken by service providerCY and it is imposed every time service is rendered to customer/client, it is aCMY value added tax. Relevant observation is quoted hereunder: K ”38. In All-India Federation of Tax Practitioners Case this Court explained the concept of service tax and held that service tax is a value added tax [“VAT”, for short] which in turn is a destination based consumption tax in the sense that it is levied on commercial activities and it is not a charge on the business but on the consumer. That, service tax is an economic concept based on the principle of equivalence in a sense that consumption of goods and consumption of services are similar as they both satisfy human needs. Today with the technological advancement there is a very thin line which di- vides a “sale” from “service”. That, applying the principle of equivalence, there is no difference between production or manufacture of saleable goods and production of marketable/saleable services in the form of an activity undertaken by the service provider for consideration, which correspond- ingly stands consumed by the service receiver. It is this principle of equiv- 97i i i i
  • 110. i ii i alence which is inbuilt into the concept of service tax under the Finance Act, 1994. That service tax is, therefore, a tax on an activity. That, service tax is a value added tax. The value addition is on account of the activi- ty which provides value addition, for example, an activity undertaken by a chartered accountant or a broker is an activity undertaken by him based on his performance and skill. This is from the point of view of the professional. However, from the point of view of his client, the chartered accountant/bro- ker is his service provider. The value addition comes in on account of the activity undertaken by the professional like tax planning, advising, consul- tation, etc. It gives value addition to the goods manufactured or produced or sold. Thus, service tax is imposed every time service is rendered to the customer/client. This is clear from the provisions of Section 65[105][zm] of the Finance Act, 1994 [as amended]. Thus, the taxable event is each exercise/activity undertaken by the service provider and each time service tax gets attracted.” C 39. Mandap Keepers of Tamilnadu Kalyan Mandapam Association moved M before the Supreme Court, challenging the validity of tax and services pro- vided by mandap-keepers in relation to use of Mandap. While dealing with Y the said matter, the Supreme Court, in the case of Tamil Nadu KalyanaCM Mandapam Association v. Union of India, reported in [2004] 5 SCCMY 632 noticed that definition of ‘taxable service’ provided by mandap-keepersCY is not limited to providing of premises on a temporary basis for the pur- pose specified, but includes even other facilities supplied in relation thereto.CMY Mandap-keepers provided a variety of services apart from the services of K allowing temporary occupation of Mandap. Definition of ‘taxable service’ included service provided ‘in relation to use of mandap in any manner’ and includes ‘facilities provided to the client in relation to such use’ and also services ‘rendered as a caterer’. The Supreme Court observed and held as follows: “Taxable services, therefore, could include the mere providing of premises on a temporary basis for organising any official, social or business func- tions, but would also include other facilities supplied in relation thereto. No distinction from restaurants, hotels, etc. which provide limited access to property for specific purpose.” The Supreme Court further observed that service could not be struck down on the ground that it does not conform to a common understanding of the 98i i i i
  • 111. i ii i word ”service”. It further held that it does not certainly involve transfer of movable property nor does it involve transfer of movable property of any kind known to the law. The Supreme Court observed as under:- ”Therefore, a levy of service tax on a particular kind of service could not be struck down on the ground that it does not conform to a common under- standing of the word ”service” so long as it does not transgress any specific restriction contained in the Constitution.” 40. The stand of the Government of India has been made clear by letter dated 26th February, 2010 issued by the Revenue Department, Ministry of Finance, Government of India, Tax Unit, New Delhi. It was brought to the notice of the Court by the learned counsel appearing on behalf the Union of India that with regard to service of renting of immovable property, stand of the respondent is that it was introduced in the year 2007 with a view to tax all commercial use of immovable property higher. The tax on rent paid is available as input credit if the commercial activity involves provision C of taxable service or manufacture of dutiable goods. However, as Delhi M High Court, by its judgment dated 18th April, 2009, in the case of Home Y Solutions Retail India Ltd. & Others v. Union of India has struck downCM the levy by observing that renting of immovable property does not involveMY any value addition and, therefore, it cannot be regarded as service, in order to clarify the legislative intent and also bring any certainty in tax liability,CY relevant definition of tax service is being amended to clarify the activityCMY of renting of immovable property per se could constitute taxable service if K made or used in the course or furtherance of business or commerce. 41. We have noticed the stand taken by Union of India which is also clear from Explanation-1 below sub-clause [zzzz] of Clause-[105] of Sec.65 which does not include vacant land only used for agriculture, acquaculture, farming, forestry, animal husbandry, mining purpose having facilities in- cidental to the use of such vacant land, land used for educational, sports, circus, entertainment and parking purpose and building used solely for resi- dential purpose and building used for purpose of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. It is only ‘renting of immovable property’ which includes rent- ing, letting, licensing or other similar arrangements of immovable property for the use ‘in course or furtherance of business or commerce’. It comes within the definition of ‘taxable service’. 99i i i i
  • 112. i ii i Renting of any property ipso facto would not amount to service for the pur- pose of service charge. This is also accepted by learned counsel for the revenue. However, in case of renting of immovable property, if service re- cipient uses it in the course of or furtherance of business or commerce, it can safely be stated that the service provider has rendered service, enabling the service recipient in value addition. Thus, if renting of immovable prop- erty is made in the course of or for furtherance of business or commerce, value addition is made by service provider in favour of service recipient. Such activity undertaken by the service provider for value addition in the course of or for furtherance of business or commerce, i.e. to carry on activ- ity or business or commerce of the service recipient amounts to rendition of service and will fall within the meaning of definition of ‘service tax’. The meaning of ‘furtherance’, as per Black’s Law Dictionary, 6th Edition, 11th reprint, 1997, is “act of furthering, help forward, promotion, advance- ment or progress”. Furtherance of business will, thus mean, act of furthering C business, helping forward business, promotion of business, advancement of M business or progress of business. Therefore, if a service provider is renting Y the property in the course of or for furtherance of business or commerce, it will amount to an activity in favour of service recipient for helping forwardCM business, promotion of business, advancement of business and progress ofMY business. It automatically generates value addition and comes within theCY meaning of ‘service tax’ as defined under Sec.65[105][zzzz].CMY 42. The Supreme Court in the case of Tamil Nadu Kalyana Mandapam K Association v. Union of India, reported in [2004] 5 SCC 632, has already held that levy of service of particular kind of service would not be struck down on the ground that it does not conform to a common understanding of the word ‘service’ so long it does not transgress any specific restriction contained in the Constitution. 43. The aforesaid impugned Sec.65[105][zzzz] fell for consideration be- fore the Bench of Punjab & Haryana High Court in Shubh Timb Steels Limited v. Union of India, reported in 2010 [20] S. T. R. 737 [P & H]. In the said case, the Punjab & Haryana High Court upheld the validity of Sec.65[105][zzzz] and dismissed the appeal. 44. For the reasons aforesaid, while upholding Sec.65[105][zzzz] of Fi- nance Act, 1994 as amended by Sec.75[5][h] and Sec.76 of the Finance 100i i i i
  • 113. i ii i Act, 2010, we hold that the provision of Sec.65[105][zzzz] introducing ser- vice tax is not attracted if [i] the vacant land is used solely for agriculture, acquaculture, farming, forestry, animal husbandry, mining purposes; [ii] it is a vacant land, whether or not having facilities clearly incidental to the use of such vacant land; [iii] land is used for educational, sports, circus, entertainment and parking purposes and; [iv] building is used solely for residential purposes and buildings are used for the purposes of accommo- dation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. The said provision levying service tax will be at- tracted if the immovable property is rented for the use in the course of or for furtherance of the business of commerce. 45. In view of the discussion as made above and as we find that the peti- tioners could not make out a case to declare Sec.65[105][zzzz] as unconsti- tutional or ultra vires any provisions of the Constitution, we have no option but to dismiss the writ petitions in absence of any merit. The Writ petitions C are accordingly dismissed. There shall be no order as to costs. M [S. J. MUKHOPADHAYA, CJ.] Y [J. B. PARDIWALA, J.]CM pirzada/-MYCYCMY Cost Inflation Index meaning and Index for K all the years Wednesday, August 31, 2011 What is Cost Inflation Index (CII)? It is a measure of inflation that finds application in tax law, when computing long-term capital gains on sale of assets. Section 48 of the Income-Tax Act defines the index as what is no- tified by the Central Government every year, having regard to 75 per cent of average rise in the consumer price index (CPI) for urban non-manual employees for the immediately preceding previous year. Therefore, if we consider that price of a capital asset has risen in tandem with base price rise, then if one want to sell an asset and replace it, the cost allowed even after indexation will be lesser than the price payable for new asset. However, in 101i i i i
  • 114. i ii i case of many capital asset the price rise is lesser than market price and in many cases it is higher. How does CII help in capital gains computation? Capital gain, as you know, arises when the net sale consideration of a capital asset is more than the cost. Since “cost of acquisition” is historical, the concept of indexed cost allows the taxpayer to factor in the impact of inflation on cost. Consequently, a lower amount of capital gains gets to be taxed than if historical cost had been considered in the computations. Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost. For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold in A. Y. 2009 -10 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh. And the long-term capital gains would be Rs 21.51, that is Rs 80 lakh minus Rs 58.49 lakh. C Cost Inflation Index:- Cost inflation index (CII)as notified by Central Gov- M ernment alongwith analysis of the same is as under: Y FINANCIAL YEARCM COST INFLATION INDEXMYCY Increase in CII and 75% of percentage of real inflation allowedCMY Real inflation % of CII Increase allowed / 3 X 4 K 1981-1982 100 1982-1983 109 9 = 9% 12% 1983-1984 116 7= 6.422 102i i i i
  • 115. i ii i 8.563% 1984-1985 125 9=7.7586 10.344% 1985-1986 133 8=6.4 8.5333% 1986-1987 140 C M 7=5.263 Y 7.0173%CM 1987-1988MY 150CY 10=7.1428%CMY K 9.5237% 1988-1989 161 11=7.333% 9.7777% 1989-1990 172 11=6.8323% 9.1097% 103i i i i
  • 116. i ii i 1990-1991 182 10=5.8139% 7.7519% 1991-1992 199 17=9.340% 12.4542% 1992-1993 223 24=12.060% C M 16.080% Y 1993-1994CM 244MY 21=9.4170%CY 12.556%CMY K 1994-1995 259 15=6.1475% 8.1967% 1995-1996 281 22=8.494% 11.325% 1996-1997 104i i i i
  • 117. i ii i 305 24=8.5409% 11.388% 1997-1998 331 26=7.8549% 10.473% 1998-1999 351 20=6.0423% 8.0564% C M 1999-2000 Y 389CM 38=10.826%MY 14.435%CY 2000-2001CMY K 406 17=4.370% 5.827% 2001-2002 426 20=4.926% 6.568% 2002-2003 447 105i i i i
  • 118. i ii i 21=4.929% 6.573% 2003-2004 463 16=3.579% 4.773% 2004-2005 480 17=3.6717% 4.896% 2005-2006 C M 497 Y 17=3.5416%CM 4.7222%MY 2006-2007CY 519CMY K 22=4.4265% 5.902% 2007-2008 551 32=6.1657% 8.221% 2008-2009 582 31=5.6213% 106i i i i
  • 119. i ii i 7.501% 2009-2010 632 50=8.591% 11.455% 2010-2011 711 79=12.36% 16.485% 2011-12 785 C M 74=10.44% Y 13.8772%CMMYCY Your Monthly Obligation Chart forCMY September, 2011 K Friday, September 2, 2011 Important dates to Remember for the month of September 2011 INCOME TAX Due Date Obligation Challan/ forms 7 Sept. TDS/TCS Deposit, deducted in the Month of August 2011 281 15 Sept Advance Income Tax for companies (IInd Instalment) Challan 280 107i i i i
  • 120. i ii i 15 Sept Advance Income Tax for non Corporate Assesses (I Instalment) Challan 280 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. Finalization of Accounts and Tax Audit U/s 44AB of Income Tax Act in the case of Corporate & Non-Corporate Assessee. E- Filing of Income Tax Returns of All Corporate Assessee. C E- Filing of Income Tax Returns of All Partnership Firms having Tax Audit M U/s 44AB. Y E- Filing of Income Tax Returns of All Individual/ Proprietorship firm hav-CM ing Tax Audit U/s 44AB.MY Filing of Income Tax Returns of Partners of firms having Tax Audit U/sCY 44AB.CMY SERVICE TAX K 5 Sept 6th Sept Monthly Payment of Service Tax for the Month of August 2011 Other than Individual / Proprietary Firm or Partnership Firms. E- payment of service tax in case of companies for the month of august 2011.having gross service tax exceeding Rs 10 lakh in f/y 2010-11 GR-7 VAT/CST 108i i i i
  • 121. i ii i 15 Sept. Deposit TDS (VAT) in Challan no. DVAT 20 and issue certificate for TDS in form DVAT-43 for deductions in the month of August 2011 D-VAT 20 & D-VAT 43 25 Sept. E-Payment of VAT/CST and E-Filing Return of VAT/CST for the month of August 2011 DVAT-16 28 Sept. 30 Sept. Monthly Return (Hard Copy of E-Filing) of VAT’CST for the month of August 2011 C M Filing of Statutory Forms ( C/H/E/F) under CST Act for the Quarter ending 30th June 2010, 30th Sept 2010, 31st Dec 2010, 31st March 2011, (Extend- Y ed Date)CM DVAT-16/ FORM-1MYCY Important Note (HURRY LAST DATE 30-09-2011) Non filing of Income Tax Returns for all the assessee having tax audit U/s 44AB are liable for theCMY penalty amounting to Rs. 1,00,000/-. K Return of all assesses having tax audit u/s 44 AB is to be filed with Digital signature only, please ge How to rectify and avoid interest default in Payment of TDS and How to calculate interest on TDS defaults Friday, September 2, 2011 These days Income Tax Department displaying defaults in TDS returns filed on its website www.tin-nsdl.com (TAN registration login). The de- 109i i i i
  • 122. i ii i faults will be raised as & when processed and will be kept updated in this area. It will be in a Zipped Excel sheet (no password) and quarter wise separate files will be available. (for which defaults are identified). It is observed that most of the Assessee default on payment of TDS which results in payment of interest, penalty and may also lead to criminal prose- cution. Given below are the queries on interest which Assessee may have to pay for delayed payment of TDS, when this interest becomes payable, what is the due date of tds payment, when tds needs to be deducted, how to calculate interest on TDS, Example of Interest Calculation, how to avoid and rectify interest default. When is interest payable ? As per income-tax, interest is payable under the following two circum- stances 1. Tax is not deducted, when it was deductible 2. Tax once deducted, is not paid on or before due date C M When tax is to be deducted – TDS on all types of payments on which TDS Y is applicable is required to be deducted, at the time of credit or payment, whichever is earlier. What is the Due date of deposit of TDS ?CMMY The Tax deducted at source in accordance with the provisions of Chapter XVII-B of the Income tax Act, 1961 by deductors other than an office ofCY the Government shall be paid to the credit of the Central Government –CMY (i) on or before 30th day of April where the income or amount is credited K or paid in the month of March; and (ii) in any other case, on or before seven days from the end of the month in which the deduction is made; or income-tax is due under sub-section (1A) of section 192. What is the rate of interest ? If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall be liable to pay simple interest 110i i i i
  • 123. i ii i Interest Rate w.e.f 01-07-2010 (i) at one percent for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted and (ii) at one and one-half percent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. Such interest, if chargeable, has to be paid before furnishing of quarterly statement of TDS for each quarter. Interest Rate Prior to 01-07-2010 (i) From FY 2006-07 onwards for delayed deposit, from date of deduction till actual date of payment, rate of interest is 1.0% p.m. In Other words Prior to 01.07.2010 there was no interest payable for the period of delay in deduction of TDS. C Example of Interest Calculation M Date Of Payment Y Date of DeductionCM Due DateMYCY Date of DepositCMY Delayed Deposit K Delayed Deduction Months Rate Months Rate 01/04/2010 01/04/2010 07/05/2010 09/05/2010 111i i i i
  • 124. i ii i 2 1% - - 09/04/2010 09/04/2010 07/05/2010 09/05/2010 1 1% - C M - Y 01/07/2010CM 04/08/2010MY 07/09/2010CY 07/09/2010CMY K - - 2 1% 01/07/2010 04/08/2010 07/09/2010 15/09/2010 2 112i i i i
  • 125. i ii i 1.50% 2 1% What is the due date of payment of interest ? Interest must be calculated and paid before furnishing of quarterly statement of TDS for each quarter. How is interest to be calculated ? • Interest is to be calculated for every month or part of a month com- prised in a period, any fraction of a month shall be deemed to be a full month The amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off C shall be deemed to be the amount in respect of which the interest is M to be calculated. Y Avoiding Interest Default- To avoid interest default Assessee needs to doCM the following:-MYCY • Deduct tax at source in timeCMY • Deposit TDS by due date K • In case of delayed deduction / deposit, calculate interest and deposit the same • Show such interest properly in eTDS statement Rectifying Interest Default – • To rectify interest default we need to first login to our TAN ac- count. • Download default notices -Default Notice is a plain excel sheet with- out any password protection • Pay the interest as shown in default notice if the same is payable 113i i i i
  • 126. i ii i • After payment file correction statement by including the interest payment challan. Source : Internet eTDS Correction Returns – Common reasons for rejection of TDS Returns and solution for the same Friday, September 2, 2011 Correction Returns of TDS statements filed may in certain cases be rejected by the department. There are a number of common reasons of rejection of Correction returns. In some cases persons are unable to find the exact cause C of rejection even after having tried all possible methods. Below is a list of most common errors or rejection of ETDS revised return given as under M for your ready reference along with remedial action. We hope that after Y implementing the suggestions given below you may not have to file anyCM more correction statements in respect of TDS returns file by you.MY Sr. No.CY Error descriptionCMY Explanation K Course of action 1 Assessment Year of the statement cannot be updated Fields such as TAN, Form No, FY/AY and Quarter of a statement cannot be rectified by filing a correction statement Do not update mandatory fields by filing a correction statement. Deductor should ensure that correct details corresponding to the regular statement for which correction statement is being filed are provided in the mandatory fields while filing a correction statement 2 114i i i i
  • 127. i ii i Bank BSR code of the challan cannot be updated as payment details men- tioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 3 Bank Challan Number of the challan cannot be updated as payment details C mentioned in previous statement (Regular/Correction) has matched with de- M tails provided by Bank. Y Challan details from the TDS statement is verified with the correspondingCM payment information provided by the bank. If these details match then theMY status of challan is updated as ‘Booked’ and the tax credit is provided toCY the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowedCMY K Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 4 Book Cash Entry of the challan cannot be updated as payment details men- tioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to 115i i i i
  • 128. i ii i the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 5 Correction cannot be made as deductee for which updation/deletion is re- quired has been already cancelled by Correction statement. Record from the original statement for which correction is being made has already been deleted, hence correction cannot be applied Deductor should ensure that the record being updated vide correction state- ment is present in the TIN central system and not deleted vide earlier cor- C rection M 6 Y Correction cannot be made as statement has been cancelledCM Original statement for which correction has been filed has already been can-MY celled, hence correction cannot be appliedCY Deductor should ensure that the regular statement on which correction state-CMY ment is filed is present in the TIN central system and not deleted/cancelled K vide earlier correction. Deductor should check the status of the regular state- ment filed before filing any correction statement 7 Correction in Salary details is not applicable, as corresponding salary detail record is cancelled by filing correction statement filed earlier. Record from the original statement for which correction is being made has already been deleted, hence correction cannot be applied Deductor should ensure that the record being updated vide correction state- ment is present in the TIN central system and not deleted vide earlier cor- rection 8 116i i i i
  • 129. i ii i Date of Transfer Voucher/ Bank Challan cannot be updated as payment details mentioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 9 Deductee details with same record number is available in TIN Central Sys- C tem M Sequence of challan/salary/deductee detail record being added in a correc- Y tion statement should follow from the last sequence no for the said recordCM in the original statement.MY Deductor should ensure correct sequence number of the challan/deducteeCY details being added vide the correction statement. Deductor may request forCMY consolidated TDS/TCS statement from the TIN central system and prepare K correction statement on the consolidated statement 10 Either Previous Provisional Receipt No. provided is incorrect or combina- tion of Original Provisional Receipt No. and Previous Provisional Receipt No. is not in sequence Value in the field Previous provisional receipt no. (PRN) should be the PRN of last correction statement accepted at TIN. In case of the first correction being filed, he previous PRN should be the PRN of original statement Deductor should ensure that 1) the value in the field ‘Original Provisional receipt number’ should be that of the corresponding regular statement for which correction is being filed 2) the value in the field ‘Previous Provisional receipt number’ should be 117i i i i
  • 130. i ii i that of the last accepted statement corresponding to the regular statement for which correction statement is being filed; i.e. in case of first correction, PRN of the regular statement should be provided in both the fields. In case of subsequent correction, PRN of last accepted correction statement should be provided in the field ‘Previous PRN’ 11 File type of Regular and Correction file should be same (i.e. either both of them should be electronic or both of them should be Paper) If regular statement is in electronic, then corresponding correction should also be in electronic form If regular statement is in paper form, then corresponding correction should also be in paper form Deductor should ensure that the Provisional receipt number of the regular statement corresponding to the correction being made is quoted correctly in C the correction statement M 12 YCM For addition of challan details, Challan detail record number should be the next number of challan detail record number mentioned in last regular/cor-MY rection statement.CY Sequence of challan/salary/deductee detail record being added in a correc-CMY tion statement should follow from the last sequence no for the said record K in the original statement. Deductor should ensure correct sequence number of the challan/deductee details being added vide the correction statement. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 13 For addition of salary details, salary detail record number should be the next number of salary detail record number mentioned in last regular/correction statement. 118i i i i
  • 131. i ii i Sequence of challan/salary/deductee detail record being added in a correc- tion statement should follow from the last sequence no for the said record in the original statement. Deductor should ensure correct sequence number of the challan/deductee details being added vide the correction statement. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 14 Form no. of the statement cannot be updated Fields such as TAN, Form No, FY/AY and Quarter of a statement cannot be rectified by filing a correction statement Do not update mandatory fields by filing a correction statement. Deductor should ensure that correct details corresponding to the regular statement C for which correction statement is being filed are provided in the mandatory M fields while filing a correction statement Y 15CM Interest amount of the challan cannot be updated as the updation flag forMY challan is not present in the statement uploadedCY In case of update in the challan details then the prescribed updation flag forCMY challan details should be selected K Deductor should ensure that in case of updating values in the fields Interest or Others appropriate flag for updation as per prescribed file format should be selected which is 1 in case of ‘update’ and 0 in case of ‘no update’ 16 Interest Amount of the challan cannot be updated as payment details men- tioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed 119i i i i
  • 132. i ii i Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 17 Last Bank BSR code of the statement is not matching with corresponding statement details available at TIN Central System Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement C M 18 Y Last Bank challan serial number of the correction statement is not matchingCM with corresponding statement details available at TIN Central systemMY Certain fields in the e-TDS/TCS correction statement are used for verifica-CY tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned.CMY K Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 19 Last Date of Transfer Voucher/ Date of Bank Challan of correction state- ment is not matching with corresponding statement details available at TIN Central System Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. 120i i i i
  • 133. i ii i Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 20 Last Employee PAN of the statement is not matching with corresponding statement details available at TIN Central System. Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement C M 21 Y Last Employee PAN Reference number of the statement is not matchingCM with corresponding statement details available at TIN Central System.MY Certain fields in the e-TDS/TCS correction statement are used for verifica-CY tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned.CMY K Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 22 Last Gross Income provided in the statement is not matching with corre- sponding statement details available at TIN Central System Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for 121i i i i
  • 134. i ii i consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 23 Last TAN provided in correction statement is not matching with corre- sponding statement details available at TIN Central System Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 24 C Last Total Deposit amount value of the correction statement is not matching M with the corresponding statement details available at TIN Central System Y Certain fields in the e-TDS/TCS correction statement are used for verifica-CM tion of the statement. Details of these fields as present in the last acceptedMY TDS/TCS statement to be corrected should be mentioned.CY Deductor should prepare correction statement on the last TDS/TCS (reg-CMY ular/correction) statement submitted by them. Deductor may request for K consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 25 Last Total Income Tax Deducted at Source of the statement is not matching with corresponding statement details available at TIN Central System. Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 122i i i i
  • 135. i ii i 26 Last Total Tax deposited provided in the statement is not matching with corresponding statement details available at TIN Central System Certain fields in the e-TDS/TCS correction statement are used for verifica- tion of the statement. Details of these fields as present in the last accepted TDS/TCS statement to be corrected should be mentioned. Deductor should prepare correction statement on the last TDS/TCS (reg- ular/correction) statement submitted by them. Deductor may request for consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 27 Last Transfer Voucher Number of the correction statement is not matching with corresponding statement details available at TIN Central System C Certain fields in the e-TDS/TCS correction statement are used for verifica- M tion of the statement. Details of these fields as present in the last accepted Y TDS/TCS statement to be corrected should be mentioned.CM Deductor should prepare correction statement on the last TDS/TCS (reg-MY ular/correction) statement submitted by them. Deductor may request forCY consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statementCMY K 28 Others amount of the challan cannot be updated as the updation flag for challan is not present in the statement uploaded In case of update in the challan details then the prescribed updation flag for challan details should be selected Deductor should ensure that in case of updating values in the fields Interest or Others appropriate flag for updation as per prescribed file format should be selected which is 1 in case of ‘update’ and 0 in case of ‘no update’ 29 Period of the statement cannot be updated 123i i i i
  • 136. i ii i Fields such as TAN, Form No, FY/AY and Quarter of a statement cannot be rectified by filing a correction statement Do not update mandatory fields by filing a correction statement. Deductor should ensure that correct details corresponding to the regular statement for which correction statement is being filed are provided in the mandatory fields while filing a correction statement 30 Record for which updation or deletion is required is not present at TIN Cen- tral System Deductor to verify the record being corrected as correction cannot be ap- plied on a record which is not originally present in the NSDL central sys- tem Deductor should ensure that the correction being made should be on a record C which was earlier filed vide a regular statement or previous correction state- M ment. If the deductor wishes to add details vide a correction then the same should be provided in the correction statement in the ‘Add’ mode. If amend- Y ments to existing records is to be done then ‘Update mode’ should be se-CM lected.MY 31CY Record to be deleted has already been cancelled by filing correction state-CMY ment K Record to be deleted vide the correction statement has already been deleted vide an earlier correction, hence correction cannot be applied No action can be taken as correction cannot be applied on a deleted record 32 Salary detail record number provided in the statement is not in sequence Sequence of challan/salary/deductee detail record being added in a correc- tion statement should follow from the last sequence no for the said record in the original statement. Deductor should ensure correct sequence number of the challan/deductee details being added vide the correction statement. Deductor may request for 124i i i i
  • 137. i ii i consolidated TDS/TCS statement from the TIN central system and prepare correction statement on the consolidated statement 33 Section of the challan cannot be updated as payment details mentioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any C correction statement for updating the details of such challan M 34 YCM TAN mentioned in the statement is not at present available in TAN master.MY TAN is the identifier for any TDS/TCS statement. It is necessary that theCY TAN of the deductor quoted in the statement should be present in the TAN Master Database at the TIN central system, failing which the statement willCMY get rejected for this reason K 1) Deductor should file the statement with the correct TAN. 2) If the TAN quoted in the statement is correct, deductor should send the proof of TAN to NSDL at tin_returns@nsdl.co.in or to TIN, NSDL, Times Tower, 1st floor, Kamala Mills Compound, S B Marg, Lower Parel, Mum- bai – 400013 35 Total Cess of the challan cannot be updated as payment details mentioned in previous statement (Regular/Correction) has matched with those provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the 125i i i i
  • 138. i ii i status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 36 Total Deposit amount of deductees is more than Challan amount actually deposited in bank. Tax deposited as per a particular challan should be greater than or equal to the total tax deducted from deductees against that challan Statement has to be filed again with the amount of tax deducted less than or C equal to total amount deposited as per challan. M 37 Y Total Deposit amount of deductees mentioned in the transfer voucher isCM more than Transfer voucher amount intimated by PAOMY Tax deposited as per transfer voucher should be greater than or equal to theCY total tax deducted from deductees against that challanCMY Statement has to be filed again with the amount of tax deducted less than K or equal to total amount credited to government account through transfer voucher 38 Total Deposit amount of the challan cannot be updated as payment details mentioned in previous statement (Regular/Correction) has matched with de- tails provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed 126i i i i
  • 139. i ii i Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 39 Total Income Tax of the challan cannot be updated as payment details men- tioned in previous statement (Regular/Correction) has matched with details provided by Bank. Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at C Quarterly statement status view on the TIN website before preparation of M correction statement. If the status of challans is Booked then do not file any Y correction statement for updating the details of such challanCM 40MY Total Surcharge of the challan cannot be updated as payment details men-CY tioned in previous statement (Regular/Correction) has matched with detailsCMY provided by Bank. K Challan details from the TDS statement is verified with the corresponding payment information provided by the bank. If these details match then the status of challan is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan is ‘Booked’ no corrections in the challan details are allowed Deductor should check the status of challan in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challans is Booked then do not file any correction statement for updating the details of such challan 41 127i i i i
  • 140. i ii i Transfer Voucher Number cannot be updated as the payment details men- tioned in previous statement (Regular/Correction) has matched with the de- tails provided by PAO. Challan/Transfer voucher details from the TDS statement is verified with the corresponding payment information provided by the PAO. If these details match then the status of challan/transfer voucher is updated as ‘Booked’ and the tax credit is provided to the corresponding deductees with valid PAN. Once the status of challan/transfer voucher is ‘Booked’ no cor- rections in the challan/transfer voucher details are allowed Deductor should check the status of challan/transfer voucher in the TDS statement filed at Quarterly statement status view on the TIN website before preparation of correction statement. If the status of challan/transfer voucher is Booked then do not file any correction statement for updating the details of such challan/transfer voucher C 42 M Updation of PAN from valid to valid has exceeded the specified limit Y Deductor is not allowed to make corrections in a PAN of deductee/employeeCM more than once.MY Deductor should verify the PAN of the deductee before quoting the same inCY the TDS statementCMY Request for the consolidated TDS/TCS statement from the TIN website K which will faciliate preparation of correction statement. In order to avail this facility, you need to register your TAN online on the TIN website. Detailed procedure to register your TAN and request for consolidated TD- S/TCS statement are available at: Online TAN registration 128i i i i
  • 141. i ii i Income Tax Deductions under section 80C – Eligible Investments and Expenses Friday, September 2, 2011 DEDUCTION UNDER SECTION 80C As per section 80C, an employee will be entitled to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,00,000/-: (1) Payment of insurance premium to effect or to keep in force an insur- ance on the life of the individual, the spouse or any child of the individual. (2) Any payment made to effect or to keep in force a contract for a de- ferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, C provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of M the annuity; Y (3) Any sum deducted from the salary payable by, or, on behalf of theCM Government to any individual, being a sum deducted in accordance withMY the conditions of his service for the purpose of securing to him a deferredCY annuity or making provision for his spouse or children, in so far as the sumCMY deducted does not exceed 1/5th of the salary; K (4) Any contribution made : (a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies; (b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children ; [The Central Government has since notified Public Provident Fund vide NotificationS. O. No. 1559(E) dated 3.11.05. (c) by an employee to a Recognized Provident Fund; (d) by an employee to an approved superannuation fund; 129i i i i
  • 142. i ii i It may be noted that “contribution” to any Fund shall not include any sums in repayment of loan; (5) Any subscription :- (a) to any such security of the Central Government or any such de- posit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf; (b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by no- tification in the Official Gazette, specify in this behalf. [The Central Government has since notified National Saving Certifi- cate (VIIIth Issue) vide Notification S. O. No. 1560(E) dated 3.11.05.] (6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child, C a. for participation in the Unit Linked Insurance Plan, 1971 of the Unit M Trust of India; Y b. for participation in any unit-linked insurance plan of the LIC Mu-CM tual Fund referred to in clause (23D) of section 10 and as notified by theMY Central Government.CY [The Central Government has since notified Unit Linked InsuranceCMY Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide No- K tification S. O. No. 1561(E) dated 3.11.05.] (7) Any subscription made to effect or keep in force a contract for such an- nuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify; [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S. O. No. 1562(E) dated 3.11.05 and Jeevan Akshay-III vide Notification S. O. No. 847(E) dated 1.6.2006 ] (8) Any subscription made to any units of any Mutual Fund, referred to in clause(23D) of section 10, or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Re- peal) Act, 2002 under any plan formulated in accordance with any scheme 130i i i i
  • 143. i ii i as the Central Government, may, by notification in the Official Gazette, specify in this behalf; [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S. O. No. 1563(E) dated 3.11.2005] The investments made after 1.4.2006 in plans formulated in accor- dance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C. (9) Any contribution made by an individual to any pension fund set up by any Mutual Fund referred to in clause (23D) of section 10, or, by the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central Government may, by notification in the Official Gazette, specify in this behalf; [The Central Government has since notified UTI-Retirement Benefit C Pension Fund vide Notification S. O. No. 1564(E) dated 3.11.05.] M (10) Any subscription made to any such deposit scheme of, or, any con- Y tribution made to any such pension fund set up by, the National Hous-CM ing Bank, as the Central Government may, by notification in the OfficialMY Gazette, specify in this behalf;CY (11) Any subscription made to any such deposit scheme, as the Central Gov-CMY ernment may, by notification in the Official Gazette, specify for the purpose K of being floated by (a) public sector companies engaged in providing long- term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. [The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S. O. No.37(E), dated 11.01.2007, for the purposes of Section 80C(2)(xvi)(a)]. (12) Any sums paid by an assessee for the purpose of purchase or con- struction of a residential houseproperty, the income from which is chargeable to tax under the head “Income from house property” (or which would, if it has not been used for assessee’s own residence, have been 131i i i i
  • 144. i ii i chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self- financing or other scheme of any Development Authority, Housing Board etc. The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insur- ance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for con- struction or purchase of houses inIndia. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a co- operative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the C purpose of transfer shall also be covered. Payment towards the cost of house M property, however, will not include, admission fee or cost of share or initial Y deposit or the cost of any addition or alteration to, or, renovation or repairCM of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house byMY the assessee or after it has been let out. Payments towards any expenditureCY in respect of which the deduction is allowable under the provisions of sec-CMY tion 24 of the Income-tax Act will also not be included in payments towards K the cost of purchase or construction of a house property. Where the house property in respect of which deduction has been al- lowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no de- duction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly. (13) Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in 132i i i i
  • 145. i ii i India, for the purpose of full-time education of any two children of the em- ployee. Full-time education includes any educational course offered by any university, college, school or other educational institution to a stu- dent who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes. It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature. (14) Subscription to equity shares or debentures forming part of any eli- gible issue of capital made by a public company, which is approved by the C Board or by any public finance institution. M (15) Subscription to any units of any mutual fund referred to in clause Y (23D) of Section 10 and approved by the Board, if the amount of subscrip-CM tion to such units is subscribed only in eligible issue of capital of any com- pany.MYCY (16) Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framedCMY and notified by the Central Government, in the Official Gazette for these K purposes. [The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S. O. No. 1220(E) dated 28.7.2006] (17) Subscription to such bonds issued by the National Bank for Agri- culture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf. (18) Any investment in an account under theSenior Citizens Savings Scheme Rules, 2004. (19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981. 133i i i i
  • 146. i ii i It may be clarified that the amount of premium or other payment made on an insurance policy [other than a contract for deferred annuity mentioned in sub-para (2)] shall be eligible for deduction only to the extent of 20 per- cent of the actual capital sum assured. In calculating any such actual capital sum, the following shall not be taken into account: (i) the value of any premiums agreed to be returned, or (ii) any benefit by way of bonus or otherwise over and above the sum ac- tually assured which may be received under the policy. Download MCA-21 All ROC Forms Sunday, September 4, 2011 Forms Download Approval Services (Headquarters) C Description e-Form with Instruction kit e-Form Application to Central M Government for modification in the matters to be stated in the company’s Y balance sheet or profit and loss accountCM Form 23AAAMY Form 23AAACY Application for exemption from attaching the annual accounts of the sub-CMY sidiary companies K Form 23AAB Form 23AAB Application to Central Government for not providing depreciation Form 23AAC Form 23AAC Form of application to the Central Government for appointment of cost au- ditor Form 23C Form 23C 134i i i i
  • 147. i ii i Form for filing application for giving loan, providing security or guarantee in connection with a loan Form 24AB Form 24AB Form of application to the Central Government for obtaining prior consent for holding of any office or place of profit in the company by certain per- sons Form 24B Form 24B Form for filing application for declaration as Nidhi Company Form 63 Form 63 C M Form for filing application or documents with Central Government Y Form 65CM Form 65MY Form of application for approval for declaration of dividend out of re-CY servesCMY Form Form Form of application for removal of disqualification of direc- K tors Form DD-C Form DD-C Form of application for approval of the Central Government for the appoint- ment of sole selling agents by the company Form I Form I Form of application for approval of the Central Government for the appoint- ment of sole buying agent by a company Form II 135i i i i
  • 148. i ii i Form II Approval Services (Regional Director) Description e-Form with Instruction kit e-Form Application for confir- mation by Regional Director for change of registered office of the company within the state from the juridiction of one Registrar to the juridiction of an- other Registrar Form 1AD Form 1AD Form for filing application to Regional Director Form 24A Form 24A Form for filing application for opening branch(s) by a nidhi company C M Form 64 Y Form 64CM Approval Services (Registrar of Companies)MY Description e-Form with Instruction kit e-Form Application for ap-CY proval of the Central Government for change of name or conversion of aCMY public company into a private company K Form 1B Form 1B Form for filing an application with Registrar of Companies Form 61 Form 61 Application for striking off the name of company under the Easy Exit Scheme (EES), 2010 Form EES, 2010 Form EES, 2010 136i i i i
  • 149. i ii i Application for grant of immunity certificate under CLSS 2010 FORM FORM Application for striking off the name of company under the Easy Exit Scheme (EES), 2011 Form EES, 2011 Form EES, 2011 Application for striking off the name of company under the Fast Track Ex- it(FTE) Mode Form FTE Form FTE C Change Services M Description e-Form with Instruction kit e-Form Application form for Y availability or change of a nameCM Form 1AMY Naming GuidelinesCY Form 1ACMY K Application for approval of the Central Government for change of name or conversion of a public company into a private company Form 1B Form 1B Notice of consolidation, division, etc. or increase in share capital or increase in number of members Form 5 Form 5 Notice of situation or change of situation of registered office Form 18 137i i i i
  • 150. i ii i Form 18 Particulars of appointment of managing director, directors, manager and secretary and the changes among them or consent of candidate to act as a managing director or director or manager or secretary of a company and/ or undertaking to take and pay for qualification shares Form 32 Form 32 Return of alteration in the charter, statute or memorandum and articles of association, address of the registered or principal office and directors and secretary of a foreign company Form 49 Form 49 C Notice of (A) alteration in names and addresses of persons resident in India M authorized to accept service on behalf of a foreign company (B) alteration in the address of principal place of business in India of a foreign company (C) Y list of places of business established by a foreign company (D) cessation toCM have a place of business in IndiaMY Form 52CY Form 52CMY K Charge Management Description e-Form with Instruction kit e-Form Particulars for creation or modification of charges (other than those related to debentures Form 8 Form 8 Particulars for registration of charges for Debenture Form 10 Form 10 Appointment or cessation of receiver or manager Form 15 138i i i i
  • 151. i ii i Form 15 Particulars for satisfaction of charges Form 17 Form 17 Receiver’s or manager’s abstract of receipts and pay- ments Form 36 Form 36 DIN Forms Description e-Form with Instruction kit e-Form Application for allot- ment of Director Identification Number Form DIN 1 Form DIN 1 C Intimation of change in particulars of Director to be given to the Central M Government Y Form DIN 4CM Form DIN 4MY Company RegistrationCY Description e-Form with Instruction kit e-Form Application or declara-CMY tion for incorporation of a company K Form 1 Form 1 Application form for availability or change of a name Form 1A Naming Guidelines Form 1A Notice of situation or change of situation of registered office Form 18 Form 18 139i i i i
  • 152. i ii i Declaration of compliance with the provisions of section 149(i)(a), (b) and (c) of the Companies Act,1956 Form 19 Form 19 Declaration of compliance with the provisions of section 149(2)(b) of the Companies Act,1956 Form 20 Form 20 Declaration of the compliance with the provisions of section 149(2A) and (2B) Form 20A Form 20A C M Particulars of appointment of managing director, directors, manager and secretary and the changes among them or consent of candidate to act as a Y managing director or director or manager or secretary of a company and/ orCM undertaking to take and pay for qualification sharesMY Form 32CY Form 32CMY K Application by an existing joint stock company or by an existing company (not being a joint stock company) for registration as a public limited or private limited or an unlimited company Form 37 Form 37 Registration of an existing company as a limited company Form 39 Form 39 Documents delivered for registration by a foreign company Form 44 140i i i i
  • 153. i ii i Form 44 Application for rectification of mistakes apparent on record Form 68 Form 68 Compliance Related Filing Description e-Form with Instruction kit e-Form Statement of amounts credited to investor education and protection fund Form 1 Form 1 Return of allotment Form 2 Form 2 C Particulars of contract relating to shares alloted as fully or partly paid-up M otherwise than in cash Y Form 3CM Form 3MYCY Statement of amount or rate percent of the commission payable in respect of shares or debentures and the number of shares or debentures for whichCMY persons have agreed for a commission to subscribe for absolutely or condi- K tionally Form 4 Form 4 Return in respect of buy Back of Shares Form 4C Form 4C Statutory Report Form 22 Form 22 141i i i i
  • 154. i ii i Registration of resolution(s) and agreement(s) Form 23 Form 23 Information by Auditor to Registrar Form 23B Form 23B Return of appointment of managing director or whole time director or man- ager Form 25C Form 25C Form for submission of documents with Registrar of Companies C Form 62 M Form 62 YCM Form of annual return of a foreign company having a share capitalMY Form Form Form for filing cost audit report and other documents with theCY Central GovernmentCMY Form Form Report by a public company K Form DD-B Form DD-B Form for Information by Cost Auditor to Central Government Form 23D Form 23D Informational Services Description e-Form with Instruction kit e-Form Voluntary reporting of Corporate Social Responsibility (CSR) Form CSR Form CSR Particulars of person(s) or director(s) or changed or specified for the purpose of clause(f) or (g) of section 5 142i i i i
  • 155. i ii i Form 1AA Form 1AA Notice of the court or the company law board order Form 21 Form 21 Form of return to be filed with the Registrar Form 22B Form 22B Registration of resolution(s) and agreement(s) Form 23 Form 23 C M Notice of address at which books of account are maintained Y Form 23AACM Form 23AAMY Information to be furnished in relation to any offer of a scheme or contractCY involving the transfer of shares or any class of shares in the transferor com-CMY pany to the transferee company K Form 35A Form 35A Investor Services Description e-Form with Instruction kit e-Form Form for filing com- plaint(s) against the company Investor Complaint Form Investor Complaint Form Provisions related to Mangerial personnel 143i i i i
  • 156. i ii i Description e-Form with Instruction kit e-Form Form of application to the Central Government for increase in the number of directors of the com- pany Form 24 Form 24 Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing or whole-time director(s) or manag- er and commission or remuneration or expression of opinion to directors Form 25A Form 25A Form of application to Central Government for approval to amendment of provisions relating to managing, whole time or non rotational director C M Form 25B Y Form 25BCM Form of application for removal of disqualification of directorsMY Form DD-CCY Form DD-CCMY K Annual filing eForms Description e-Form with Instruction kit e-Form Form for filing annual return by a company having a share capital with the Registrar Form 20B Form 20B Particulars of annual return for the company not having share capital Form 21A Form 21A Form for filing balance sheet and other documents with the Registrar Form 23AC 144i i i i
  • 157. i ii i Form 23AC Form for filing Profit and Loss account and other documents with the Reg- istrar Form 23ACA Form 23ACA Form for submission of compliance certificate with the Registrar Form 66 Form 66 Form 67 (Addendum) Description e-Form with Instruction kit e-Form Form for filing adden- dum for rectification of defects or incompleteness C Form 67 (Add.) M Form 67(Add.) Y Description e-Form with Instruction kit e-Form Particulars of appoint-CM ment of managing director, directors, manager and secretary and theMY changes among them or consent of candidate to act as a managing direc-CY tor or director or manager or secretary of a company and/ or undertaking to take and pay for qualification sharesCMY K Form32 Addendum Form 32 Addendum Limited liability partnership (LLP) forms Description e-Form with Instruction kit e-Form Form for intimating to Registrar of Companies of conversion of the company into limited liability partnership (LLP). Form 14 Form 14 Refund eForm Description e-Form with Instruction kit e-Form Application for request- ing refund of fees paid Refund Form Refund Form 145i i i i
  • 158. i ii i HAPPY TEACHER’S DAY…… Monday, September 5, 2011 गुरु गोविन्द दोऊ खड़े काको लागूं पायं। बलिहारी गुरु आपने जिन गोविन्द दियो बताय।। HAPPY TEACHERS DAY How to interact with departmental officers Reply to SCN and adjudication- Service Tax Monday, September 5, 2011 C A Nice and useful Article I am sharing Thanks CAClub M J Y The service tax payer at times fears the interaction withCM the revenue officers whether in writing or otherwise.MY  Here are few suggestive approaches which could be used while interacting with the departmental officials, the said approaches are not new to the assessee, but usingCY of the said techniques appropriately at the right time inCMY K a proper way, would certainly bring in confidence in the assessee while interacting with the department.  Few Modes Of Communication  (a) Email  This mode of communication though of common use in corporate sector in most of the metros and other major cities has not yet reached the comfort zone of the officers. This is one of the easiest way of communicating with the department, however department lacks computer savvy officers, therefore practically this method of communication  most of the time would only 146i i i i
  • 159. i ii i lead to one way communication, however once the level of computer awareness among the officers develops, this option would be very effective, efficient  and faster. In fact the present e-filing option has been simplified as compared to cumbersome method which was not found in favor of the assessees. In time to come E-mail communication would certainly avoid personal interaction with the department. With e registration, efiling the way forward is clear.    (b) Telephone  With the large expansion of the telecommunication user with both cell phone and fixed line phone has become common source used by the department for the interaction with the assessee. The assessee is advised to request for written communication for providing any C information. This is to avoid unnecessary information M from being provided to unauthorized persons. Y  Wherever information is provided to the department itCM is always preferable to record the date, time, personMY and the details of the information by way of a letter to the department. An acknowledgement for the same should be obtained or it should be sent by RegisteredCYCMY Post Acknowledgement Due. (RPAD)  Where the matter is with respect to possible Show K Cause Notice then the information should invariably be in writing and preferably after consulting wherever required. (By RPAD)  Where queries are frequent, this mode maybe discourage to extent possible as it intrudes into the normal business transaction time. The requests for sending an email or written request could end up with no query being raised at all at times. (c) Letters from department 147i i i i
  • 160. i ii i  All letters received are to be marked with date of receipt and especially for Show Cause Notice/Adjudication/Appeal Order, the envelope cover should be retained as evidence for date of receipt.  All letter from the department should invariably be replied within one month, and if not possible the assesee should seek extension of time in replying to the letter received from the department. All communications should be perused to see which are in the direction of the enquiry.  If the communication is with respect to possible Show Cause Notice, if required seeking legal advice wherever required and filing a comprehensive reply providing the facts clearly along with the reasonable justifications along with legal grounds. This could avoid the issue of the SCN, C which consumed time, effort and money.  In the case irrelevant details of sensitive nature have M Y been asked for, the query as to the purpose maybeCM addressed with a copy to Higher Officer.MY  Under no circumstances any communication receivedCY from department should back dated. No back datedCMY acknowledgment should be given as the communication may be with respect to a demand. The communication could be through the post or by person at the option of K the assessee.  (d) Letter to department  All correspondences to the departmental officers should be duly acknowledged and if not done a copy should be sent by RPAD. RPAD can be used as a better alternative to hand delivery.  All the information provided should be factually correct and therefore maybe re checked. In the case of reply to SCN – All evidences and grounds for justification of action indicated along with copies of documents relied on 148i i i i
  • 161. i ii i should be duly enclosed along with reply to Show Cause Notice. This could be vital in higher levels of litigation.  The time limits specified in departmental correspondences should generally be adhered to unless the same is impractical or unreasonable and extension maybe requested wherever there is a delay providing the reasons thereof. The normal period for reply could be between 15 days to 30 days.  Where the stakes involved are large even if competent persons are in charge, the services of a competent counsel is advisable.   (e) Visits by department C  In normal course the officers are not supposed to visit the assessee at his premises even for verification of the address. Therefore in case of any visit, the identity M Y of the officer maybe verified preferably by the securityCM personnel who need not let them enter unless it isMY enquiry.CY  The visiting officers are required to record their visitCMY in the Visit Register with the purpose. Insistence on recording will lead to purposeful visits or avoid future visits. This restriction is also applicable for vigilance K and internal audit party. The officers sometimes take offence and refuse to do so. The same information maybe recorded with the remark that the same was refused. In case of repetitive visits a note to higher officer of the facts of visit maybe advisable.  Any document provided should be on a written request and duly acknowledged. The type of document provided may also be considered prior to handing over. A report to higher officer/for record wherever there is any doubt as to the straight forwardness of the inquiry is also advisable.  (f) Visit to department 149i i i i
  • 162. i ii i  The assessee may ask for Register to record your visit mentioning the date time and purpose in detail. If register is not available keep a private record of the visit with details of information provided, person met and the fact that there was no register available for making an entry. It is advisable to report to Higher Officer or for record when the behavior is not normal or improper.  If repetitive information asked for or undue delay encountered a polite letter to higher officer with a copy to concerned officer highlighting that the time of everyone is precious, which may solve the future problems.  Use Indian Postal Service to extent possible as a better alternative to visits. This would save the valuable time of the officer as well as the assessee. C (g) Search/Summons M  The authorization from the Commissioner of Central Y Excise(now these powers are given to Joint Commissioner of Central Excise by Finance Act, 2011) to the Assistant/Deputy Commissioner(this is substituted byCMMY Superintendent of Central Excise by Finance Act, 2011)CY can be asked to be produced in case of search. It isCMY not merely something the officer is required to flash. It maybe examined in details and the portion, which are typed and portions, which are filled up in pen maybe K observed. The same should have recorded the reason why such an inquiry is felt necessary and the documents sought. The Visit Register maybe entered.  Under no circumstances should the search be obstructed. All assistance asked for maybe provided. It is important that the power of arrest as contained in Section 13 of the Central Excise Act, 1994 has not been made applicable to service tax.  Factually correct information to be provided and when in doubt the same can be stated. The promise to provide the information later is also permissible. 150i i i i
  • 163. i ii i  Oral instruction to come to the department can be replied with a letter asking for specific reason for the same. The assessee may also ask for summons to be issued.  In the event a statement is to be recorded it has to be ensured that all questions asked and answers provided are recorded. The practice of noting down only a part of the answer and avoiding recording some questions and answers is incorrect as the same maybe relevant to the inquiry. It maybe confirmed that a copy of the statement would be provided at the end of the recording. In case of any difficulty in this regard a copy of the same maybe made prior to signing off. At end of summons and statement recorded the time should be noted.  In case the copy of the statement is not provided a C written statement providing all the details provided along M with the fact that written statement was not provided Y in spite of request maybe communicated within 24-48CM hours.MY  In case of use of coercion/high handed tactics, the retraction statement should be made immediately and the higher Officer informed as to the same with a copyCYCMY of the retraction. Provide all information to the best of K your knowledge.  The one year limit would apply in most points as no malafide can generally be established for honest assessees. The disclosure requirements should be in place.  The reply to unresolved audit point if the involved stakes are high should be done with care and advice or assistance of the legal counsel maybe taken.  What is set out is merely an effort to arm the honest assessee and his advisors to be confident against the departmental officers. This should ensure that there would be a reduction of corruption, increase in 151i i i i
  • 164. i ii i transparency and increased compliance by the service providers.  Provisions as to penalty  The provisions as to penalty under service tax are as follows –  n Section 76 – Deals with penalty to pay service tax at Rs. 200 per day of failure or at 2% of such tax per month whichever is higher, from the first day after due date up to the date of actual payment. Penalty however cannot exceed service tax payable. It is proposed to reduce the penalty by half of what is presently being levied.  n Section 78 – Deals with penalty for suppression of value of taxable service and the penalty shall not be less than the service tax and shall not exceed twice the C amount of service tax payable. This can be reduced M on payment of tax and interest within the stated period Y of 30 days as explained earlier, along with the penalty determined. (Where penalty is levied u/s 78, no penalty shall apply u/s 76)CMMYCY However the revised penal provisions which is effective from Finance Act 2011 as provided below:CMY K Situation Position in records Penalty and provision Mitigation Complete waiver No fraud, suppression etc Captured 1% of tax or Rs. 100 per day upto 50% of tax amount (Sec 76) Totally mitigated if tax and interest is paid before issue of notice 152i i i i
  • 165. i ii i On showing reasonable cause under section 80 Cases of fraud, suppression etc Captured true and complete position in records 50% of the tax amount (proviso to section 78) (a)    1% P. M: max of 25% if all dues paid before issue of notice (b)    25% of tax if all dues paid within 30 days (90 days for small assessee) On showing reasonable cause under section 80 Not so captured Equal amount section 78 C No mitigation M Not possible Y n Section 77 – Deals with penalty for a contraventionCM where no penalty is prescribed  under law –MY ParticularsCY Amount of penalty in Rs.CMY On account of failure to make payment and take registration under service tax K Rs. 200 per day of default or a sum of Rs. 5000 whichever is higher On account of failure to make electronic payment of tax Rs. 5000 Failure to maintain proper records or books Rs. 5000 Failure to furnish information called for under this chapter or Failure to furnish documents required under 153i i i i
  • 166. i ii i this chapter or Failure to appear before CEO when issued summons to appear or produce documents in an inquiry Rs. 200 per day of default or a sum of Rs. 5000 which ever is higher Failure to issue proper invoice or issuing invoice with incorrect or incomplete details or failure to account invoice in books Rs. 5000 Other cases Rs. 5000 (It is know proposed to enhance the penalty from Rs. 5000/- to Rs. 10,000/-) C M DEMANDS As per section 73 of Chapter V of Finance Act Y 1994 as amended, where the service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer handlingCMMY service tax can serve a Show Cause Notice on the personCY chargeable with service tax as to why he should not payCMY the amount specified in the notice. The notice shall state K the amount involved. This can be done within one year from the relevant date unless such short payment/ non-levy/refund was by reason of fraud or collusion or willful mis-statement or suppression of facts or contravention of the provisions of Chapter V or rules made there under with the intent to evade payment of service tax. In such cases, the time limit would be five years. There is an option of completing the proceedings by payment of the tax amount along with interest u/s 75 before issue of notice in cases pertaining to fraud, collusion etc., by paying the said tax and interest along with penalty of 25% of the service tax specified in the 154i i i i
  • 167. i ii i notice within i days from the date of communication of notice. (However Finance Act 2011, has omitted the said benefit with respect to closure of proceedings after payment of penalty under section 73(1A)) Demands under section 73 of Finance Act 1994, arise as a result of the desk review information of the assessee or on the basis of vigilance report, or Internal Audit Party audit, review of returns filed by the appellant or on the basis of the information seeked by the assessee from the department. In order to materialize any demand a Show Cause Notice is a must. Without a Show Cause Notice no demand can sustain. The department needs to be very C careful while drafting the Show Cause Notice, because when the legal proceedings began the department needs to be within the ambit of Show Cause notice and  the M Y department cannot go beyond the scope of Show CauseCM Notice. In case the department goes beyond the scopeMY of Show Cause Notice, the assessee should rebut back stating that the proceedings was going beyond the scope of Show Cause Notice.CYCMY Whenever a SCN is issued to an assesee, it is advisable to seek an opinion from a legal expert like CA or an K Advocate, and it is always advisable that the assesee himself does not reply to the SCN. Because the assesee can marshall the facts but fall apart on legal grounds, therefore experts like CA / Advocates opnion should be seeked wherein they would examine and suggest whether or not the issue is worth litigating. The demand proceeding will start only on issue of show cause notice 155i i i i
  • 168. i ii i A birds eye view of demand process in the following table: Initiation of proceedings under Section 73 Whenever there is a short levy/short payment or non-levy or non-payment, proceedings can be undertaken. Show cause Notice It is mandatory for the Department to issue a show cause notice. What is time limit for communication of show cause notice (a)  Involving fraud, collusion, willful misstate-ment or C suppression of facts or contravention of any provisions M with intent to evade payment of duty – notice should be Y served within 5 years from relevant date.CM (b)  In other cases – notice should be serviced within 1MY year from relevant date.CY (c)  Where the service of notice is stayed by court order, the period of such stay would be excluded in computing this time limit.CMY K From which date the time limit will be computed The date from which the time limit will be computed is defined as ‘Relevant date’. It means – (a)       In case of short levy/non-levy or short payment/non-payment the date on which the six monthly return is filed. If it is not filed, the date on which it was required to be filed; (b)       If there is no such time limit, date of payment of duty. 156i i i i
  • 169. i ii i (c)        In cases of provisional assessment, the date of adjustment of duty after final assessment. (d)       In case of erroneous refund, the date of such refund Payment to drop proceedings In case the service tax amount, interest as applicable under Section 75 and penalty of 25% of the service tax within 30 days of receipt of the notice then the entire proceedings shall be concluded. This provision has been done away with effect from 08.04.2011. Now in the course of audit, investigation or verification of the records some short payment is found then in such cases the assessee has the option to pay 1% penalty subject to maximum of 25%. Once an intimation is given, the C notice need not be issued.     M Voluntary payment Y In case the service provider pays the service tax alongCM with the interest and informs the department aboutMY such payment in writing, no notice will be served under this provision. In Finance Act 2010 explanation is added to clarify that no penalties are also imposable. NoticeCYCMY for penalty also cannot be served. Recording of assessees representation K Sub-section 2 to 73 makes it mandatory for the officer to consider the representation of the assessee. The officer has to comply with the principles of natural justice. Form of order It is mandatory for the officer to pass a speaking order. Speaking order is one, which gives the reasons for the decision. A simple letter asking for payment of duty is not an order. Payment on passing of the order 157i i i i
  • 170. i ii i The service provider can either pay the tax determined or on the other hand has right to challenge the order by going further appeal, which grants him rights of obtaining stay of demanded amounts in appeal.   Who can represent the Service Provider? A counsel being a person who is knowledgeable in the law of Central Excise as the requirement of specialized knowledge is of importance under this law. If representation services are envisaged, the counsel should in addition be a Chartered Accountant, a Cost Accountant, a Company Secretary, a post graduate or honors degree holder in Commerce, an advocate, or post graduate degree or diploma holder in Business administration or a retired employee of the Department of Central Excise or C Customs after rendering not less than 10 years service. M Y What is a Show Cause Notice?CM The show-cause notice (SCN) is needed for initiating any proceeding for raising demand of tax or interest andMY imposing penalties.CYCMY Normal Period: K According to section 73(1), Central Excise Officer may within a period of one year from the relevant date, serve SCN on a person chargeable with the service tax which has not been paid or which has been short levied or short paid or the person to whom service tax refund has been erroneously made requiring him to show cause why he should not pay the amount specified in the notice. Extended period Such SCN can be served within a period of five years (instead of one year) in cases of fraud, collusion, willful misstatement or suppression of facts. However, the 158i i i i
  • 171. i ii i fraud, collusion or wilful mis-statement must be “with the intention to evade duty”. Relevant date: 1.   The relevant date could be date of actual filing of the ST-3 return or 2.   Date on which the return should have been filed or 3.   Where no return required to be field date of payment of tax would be relevant date or 4.   Date of adjustment after provisional assessment is finalised or 5. Date of erroneous refund. C Extended time limit for issuing the show cause notice in terms of proviso M to section 73 Y Proviso to Section 73 provides that if there is fraud, collusion, willful misstatement, and suppression of fact and with intent to evading the payment of duty then theCMMY extended period of limitation will be applicable.CYCMY ADJUDICATION Once the Show Cause Notice is issued, subsequently a personal hearing is called for, on the K basis of the reply to Show Cause Notice and submissions made during the personal hearing adjudicating authorities passes an order. In case the assessee is aggrieved by such order, such assessee prefers an appeal against such order to Commissioner (Appeals) in case the order of the adjudicating authorities is that of Commissioner of Service tax, then the assesses directly files an appeal to CESTAT.  . Appeal to Commissioner (Appeals) As per section 85, the appeals shall be with CCE (Appeals). The Appeal shall be within three months 159i i i i
  • 172. i ii i from the date of receipt of the decision or order of such authority. Where the assessee has reasonable cause for delay in filing the appeal, the time limit can be extended by CCE (Appeals) for further period of 3 months. Beyond the said 3 months there is no provision for condonation of delay. Supreme court has ruled that beyond that period no condonation is possible. Orders would be passed in writing after a proper hearing. Further, there is a requirement of making pre-deposit of service tax demanded in the order before making an appeal. However an application may be made before the same authority seeking  waiver of the said pre-deposit. The Authority concerned may waive the said pre-deposit either in part or full. C Appeal to Tribunal The appeal shall be against the order passed by the Commissioner of Central Excise/ Service M Y Tax or the CCE (Appeals). The appeal shall be withinCM three months from the date of the order sought to beMY appealed against. The respondent shall then be required to file a memorandum of cross objections within 45 days of the receipt of notice as to appeal by the appellant.CYCMY The prescribed fee would have to be paid at the time of K Appeal. The scale would be as follows – n  Where the amount of tax + interest + penalty is Rs. 5 lakhs or less – Rs. 1000/- n  Where the amount of tax+ interest + penalty is more than Rs. 5 lakhs but less than Rs. 50 lakhs – Rs. 5000/- n  Where the amount of tax + interest + penalty is more than Rs. 50 lakhs – Rs. 10000/- The application for grant of stay, rectification of mistakes, restoration of appeal or an application or any other purpose would have a fee of Rs. 500/- 160i i i i
  • 173. i ii i The Board is also empowered to constitute a Committee of Commissioners/Chief Commissioners to refer matters to Board or to jurisdictional Chief Commissioner where it differs with the order passed by CCE or CCE (Appeals) Where appeals are filed, the amount of tax in dispute would have to be deposited by the assessee unless it can cause undue hardship in which case, an application would have to be filed with the CCE (Appeals) or the Appellate Tribunal as the case may be for dispensing with the requirement by virtue of section 35F of CEA 1944 read with section 83. It is a fact that as on date most of the cases which are litigated are judicially confirmed in favour of the assessee. This is resulting into a gross waste of national resource and increases the transaction costs. This is due the fact that frivolous cases are foisted and audit objections C are the basis of issue of notices. There is target based M tax administration. Y Now, we would look at each of the steps leading to issue of the SCN asCM well as answering thereto in detailMY DEPARTMENTAL AUDIT/ SCRUTINY Based on the deskCY review information of the assessee or on the basis ofCMY vigilance report, Service tax department would issue a notice asking for certain detailed information or may also issue notice asking the assessee to keep his books of K ready for the specified period for departmental audit. Assessee on receipt such notice is required to reply back to the said notice, wherein he may either confirm the dates of audit as stated in the notice issued by the department or in case otherwise, the assessee may seek extension of time from such audit, he shall also specify the reasons for which he is not ready for the departmental audit on the said dates. During the department audit, the assessee is accepted to keep all the records ready for the audit, and provide all information as desired by the audit team. On completion 161i i i i
  • 174. i ii i of audit, the audit queries would be put forth for decision between the auditor and auditee. Once the audit points are discussed, the assessee may either accept the liability and pay the demanded amount along with applicable interest, in case the assessee disagrees with the demand made by the audit team, the department would then proceed to issue a show cause notice, wherein the department would specify the reasons why said Show Cause Notice should not be issued on the assessee demanding tax along with applicable interest and penalties. SHOW CAUSE NOTICE A show cause notice may be issued demanding taxes C along with applicable interest and penalties, also the M show cause notice would specify the time limit generally Y of 30 days time from the date of communication of noticeCM to reply to the said notice.MY While drafting the reply to show cause notice, the assessee shouldCY ensure following pointsCMY i.  Time limit with respect to show cause notice and period of demand: In case the period of demand exceeds one year from the relevant date, the show cause notice K can be challenged on the basis of period of limitation U/s 73 of Finance  provided there is no short levied or short payment or erroneous refund of service tax by reason of fraud, collusion, wilful misstatement, suppression of facts or contravention of any provisions of this Chapter or of the rules made there under with intent to evade payment of service by the person chargeable with the service tax or his agent. ii. In case the extended period of limitation is evoked the period of demand cannot exceed the period of five years from the relevant date. 162i i i i
  • 175. i ii i iii. While drafting the show cause notice, ensure the jurisdiction of the officer issuing the show cause notice is correct. In case the officer issuing the show cause notice does not have a valid jurisdiction, the said show cause notice shall be an invalid show cause notice.    iv. Ensure the show cause notice is signed by the officer issuing the show cause notice. v. Ensure a valid reasoning is given in show cause notice, when a demand for tax is mentioned in the notice, without valid reasoning a show cause notice can be challenged to be an invalid show cause notice. vi. Ensure a show cause notice is supported with proper workings or computation annexure, in case the demand made is not supported with any annexure the same can C be challenged to be an invalid show cause notice. M vii. Show Cause Notice should be issued only after Y successful detailed investigation, in case a show cause notice is issued merely on the basis of  audit report, said show cause notice shall not sustain this view wasCMMY upheld in case of kirlosker Pneumatic and Co Ltd Vs CCECY 2010-TIOL-159-CESTAT-MUMCMY viii. A show cause notice should be drafted in the K following manner a. Heading of Show Cause Notice should contain the address of the Commissionerate issuing the show cause notice. b. Show Cause Notice reference no should be provided along with the address of the assessee. c. Brief facts of the case should be mentioned d. Reasons as to why the subject show cause notice was issued should be mentioned. 163i i i i
  • 176. i ii i e. The total amount of demand raised, interest and penalty demanded under the specified section should be mentioned in the show cause notice. f. The show cause notice reply should have grounds of submissions made by the assessee. g. Assessee should justify the reasons for which the show cause notice was wrongly issued. Assessee should refer to all the relied upon case laws along with citation while preparing submission. h. In case the assessee wishes to substantiate his reasoning along with other documentation or annexure, the same should form part of the annexure to reply to show cause notice. The evidences could  be the following: C n   Dept correspondences/ replies n   Contracts/ orders tenders M YCM n    Mails/ sales correspondencesMY n   Invoices- purchases / sales/ servicesCY n    Accounts- present and pastCMY n    Many others.. i. A personal hearing should be asked for in the written K submission made by the assessee. j. The show cause notice reply should also accompany a authorisation letter duly signed by the assessee, who authorises the representative to appear before the Assistant Commissioner or Commissioner on behalf the Assessee. PERSONAL HEARING ix. A personal hearing would be fixed before the Assistant Commissioner or Commissioner, wherein the authorised 164i i i i
  • 177. i ii i representative would reiterate his written submission and shall substantiate his submissions made. In case the authorised representative is willing to make additional submission, he shall do so. What are the requirements of an order? 1.   The order must specify the amount payable. The service tax payable would be quantified by the adjudicating authority. He cannot say that the amount would be calculated by his junior officer on basis of  guidelines issued by him. 2.   The order cannot go beyond the SCN. The order must be based on the points that are in SCN. An order which is not based on the points alleged is not sustainable. C 3.   The order must be with reasons. In keeping with M principle of natural justice the order should mention Y reasons for the demand confirmed.CM 4.   Addendum to order or change to order: Once theMY adjudicating authority issues the order, he can only make changes for clerical mistakes or error apparent on record. The supplementary demand or additional demand cannotCYCMY be made. The order once it is sined is final, even where K it is not communicated to the party. ORDER IN ORIGINAL   x.          The Assistant Commissioner or Commissioner of Service tax on the basis of written submissions made and on the basis of additional submissions made during personal hearing shall dispose of the case in Order –in – Original. 1. Appeal before Commissioner of Central Excise (Appeals) Any of the aggrieved parties, by the order of the original adjudicating authority shall file an appeal before the 165i i i i
  • 178. i ii i Commissioner of Central Excise (Appeals) in Form ST- 4 (ST-4 should give a detailed submissions which the Appellant wishes to rely upon) along with stay application, within three months from the date of the communication of order. In case the appellant fails to file the appeal in ST-4 within three months from the date of Communication of Order in original, shall be obliged to file a condonation of delay. Commissioner of Central Excise (Appeals) may at his disposal grant condonation of delay for further period of three month if the Commissioner(Appeals) is satisfied that the appellant had sufficient cause for not filing the appeals within the prescribed time limit. ST-4 should be accompanied with the following documents:  i.        Authorization letter C M ii.        Certified true copy of order in original Y iii.        Copy of reply to show cause notice alongCM with  annexures, if anyMY iv.        Copy of Show cause noticeCY  2. Personal hearing before Commissioner (Appeals) And Order -inCMY -Appeal K  On personal hearing the authorized representative shall appear before the Commissioner (Appeals) and he shall make submissions and /or additional submission if any. On the basis of hearing both sides Commissioner (Appeals) shall pass an Order in Appeals. Until the disposal of the case and until three months from the date of communication of the Order in Appeal the first stage adjudicating authority cant demand taxes. However on expiry of the time limit to file an application before CESTAT, the first stage adjudicating authority can initiate recovery proceedings provided the assessee had not preferred an appeal before CESTAT. 166i i i i
  • 179. i ii i Order In Appeal  3. Appeal to Tribunal  Any of the aggrieved parties, by the order of Commissioner (Appeals) shall file an appeal before CESTAT in Form ST-5 along with stay application, within three months from the date of the communication of order. In case the appellant fails to file the appeal in ST- 5 within three months from the date of Communication of Order in Appeal, shall be obliged to file a condonation of delay stating the reasons for such delay, if the CESTAT is satisfied as to sufficiency of reason for delay shall allow the appeal. ST-5 should be accompanied with the following documents: C i.        ST-5 application along with stay application M and related annexures Y ii.       Authorization letter iii.      Demand draft on the basis of quantum ofCMMY demand iv.      Certified true copy of Order in AppealCYCMY K v.       Reply to Order in original vi.      Copy of Order in original vii.      Copy of reply to show cause notice viii.     Copy of Show cause notice  The respondent would have a time limit of 45 days from the date receipt of notice to file cross objection memorandum. 4. PersonalHearing  On submission of ST-5 application, a personal hearing would be called for, wherein, on the basis of the merits of the case, the matter would be decided whether the matter 167i i i i
  • 180. i ii i is to be stayed or not. In case the matter is stayed, then the appellant would not in liable to pay any demand until the disposal of the case. In the case the stay application is rejected the appellant would be required to pay an amount as directed by the tribunal as pre-deposit. 5. Final Hearing  On final hearing of the matter, the detailed analysis of the case would be studied, evidences would be verified and other relied upon documentations would be looked into and decide the matter considering relevant judgments made in this regard and also the relevant provisions of the Act would be looked into. On the basis of the said analysis the matter would be decided. CESTAT would be the final fact finding authority, C  The order of the Tribunal would have to go to High Court generally however if the matter involves rate of tax or valuation the case can be taken directly to the M Y Supreme Court.CMMYCY Useful Information on “CIBIL”CMY Tuesday, September 6, 2011 K One of the revenue generating areas for finance institutions is retail loans segment that includes home loan, personal loan, car loan etc; In recent years, there has been an increase in number of borrowers who are mainly attracted by the easier repayment options, favorable credit terms etc; offered by the lenders. However, an increase in the number of borrowers has resulted in a number of defaulters who do not repay / fully settle the loans. Lenders now rely upon a eligible borrowers credit score, which is generated by CIBIL(www.cibil.com), before granting the loan. 168i i i i
  • 181. i ii i  CIBIl is an independent credit rating agency that gives a rating and credit information report of an individual. CIBIL gets information about an individuals credit history from CIBIL member sources like NBFCs, financial institutions, banks etc; Every loan that has not been repaid fully or yet to be settled by the borrower is reflected in the borrowers credit rating. CIBIL report helps the new lenders take an informed decision on whether to grant loans to the borrower or not. A new lender will grant the loan only if he is satisfied with the prospective borrowers credit history.  Among other things, a CIBIL report contains details of all the borrowings availed by an individual in the past, his past payment history, unsettled amount (if any) etc; Since the report is based on the information provided by C past lenders, even a part settlement is reflected in the report. For example, a credit card company may agree for a final settlement of Rs. 30000 against an overdue M Y amount of Rs. 50000, the CIBIL report will definitelyCM bring this to the notice of the new lender.MY  A CIBIL report is like a companys balance sheet.CY Just like a Companys balance sheet does not commentCMY anything about the financial performance of the company, the CIBIL report does not comment whether a loan should be granted to the individual or not. A CIBIL K report merely gives an overview of the borrowers credit history. It is the lender who makes a final decision on granting the loan to an individual based on their internal policies. Thus, whenever an individual apply for a loan, the prospective lender company will get the individuals credit report from CIBIL and will then decide about granting the loan based on the companys internal policies.  One of the revenue generating areas for finance institutions is retail loans segment that includes home loan, personal loan, car loan etc; In recent years, there 169i i i i
  • 182. i ii i has been an increase in number of borrowers who are mainly attracted by the easier repayment options, favorable credit terms etc; offered by the lenders. However, an increase in the number of borrowers has resulted in a number of defaulters who do not repay / fully settle the loans. Lenders now rely upon.  Every individual can maintain a clean credit history by ensuring prompt repayments of loan outstanding, ensuring that his loans are commensurate with his annual income and by minimizing the number of loans outstanding. An individual can access his credit report by paying Rs. 450 for Credit rating and credit report or Rs. 142 for credit report only. A credit score may range from a low of 300(unfavorable score) to a high of 900(favorable score). C  A eligible borrowers credit score, which is generated M by CIBIL (www.cibil.com), before granting the loan. Y  CIBIl is an independent credit rating agency thatCM gives a rating and credit information report of anMY individual. CIBIL gets information about an individuals credit history from CIBIL member sources like NBFCs, financial institutions, banks etc; Every loan that has notCYCMY been repaid fully or yet to be settled by the borrower is K reflected in the borrowers credit rating. CIBIL report helps the new lenders take an informed decision on whether to grant loans to the borrower or not. A new lender will grant the loan only if he is satisfied with the prospective borrowers credit history.  Among other things, a CIBIL report contains details of all the borrowings availed by an individual in the past, his past payment history, unsettled amount(if any) etc; Since the report is based on the information provided by past lenders, even a part settlement is reflected in the report. For example, a credit card company may agree for a final settlement of Rs. 30000 against an overdue 170i i i i
  • 183. i ii i amount of Rs. 50000, the CIBIL report will definitely bring this to the notice of the new lender.  A CIBIL report is like a companys balance sheet. Just like a Companys balance sheet does not comment anything about the financial performance of the company, the CIBIL report does not comment whether a loan should be granted to th individual or not. A CIBIL report merely gives an overview of the borrowers credit history. It is the lender who makes a final decision on granting the loan to an individual based on their internal policies. Thus, whenever an individual apply for a loan, the prospective lender company will get the individuals credit report from CIBIL and will then decide about granting the loan based on the companys internal policies. C  Every individual can maintain a clean credit history M by ensuring prompt repayments of loan outstanding, Y ensuring that his loans are commensurate with his annual income and by minimizing the number of loans outstanding. An individual can access his credit reportCMMY by paying Rs. 450 for Credit rating and credit report orCY Rs. 142 for credit report only. A credit score may rangeCMY from a low of 300 (unfavorable score) to a high of 900 K (favorable score). Modification in PPF Scheme: Deposit Limit Raised from Rs. 70,000 to Rs. 1,00,000/-(One Lac) Wednesday, September 7, 2011 Modification in PPF Scheme: Deposit Limit Raised from Rs. 70,000 to Rs. One Lac while Rate of Interest on Advances Against Deposits in PPF Scheme Raised from 1% to 2 Percentage Points 171i i i i
  • 184. i ii i The Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread. The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1%. The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate C on Government securities of similar maturities with a M positive spread of 25 basis points on all schemes except Y for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. Recommendations of the Committee have been referred to State GovernmentsCMMY and concerned Ministries/ Departments of CentralCY Government for their comments.CMY K Revised Schedule VI (shall be effective from 01.04.2011) Wednesday, September 7, 2011 General Circular No. 62/2011 F. No 17/244/2011-CL. V Government of India 172i i i i
  • 185. i ii i Ministry of Corporate Affairs 5th floor, ‘A’ Wing, Shastri Bhawan, Dr. Rajendra Prasad Road, New Delhi Dated the 5th Sept, 2011 To, All Regional Directors All Registrar of Companies. Sub: Clarification on Notification No S. O. 447 (E) dated 28.02.2011 on Revised Schedule VI (shall be effective from 01.04.2011) The undersigned is directed to refer to this Ministrys C notification no. S. O. 447 (E) dated 28.02.2011 regarding Revised M Schedule VI of the Companies Act, 1956 and to say that clarification has been sought that during the current year, Ministry has amended the Schedule VI which is YCM to take effect for accounts closing on 31st March 2012.MY During the Financial Year, in case companies intend toCY go for Initial Public Offer / Further Public Offer, they are expected to prepare accounts in the new schedule VI format. If previous figures are reclassified in accordanceCMY K with new Schedule VI, this will pose enormous amount of administrative work and difficulty in making such changes besides making comparison with previous year unrealistic. 2. The Ministry has examined this matter and clarifies that the presentation of Financial Statements for the limited purpose of IPO/FPO during the Financial Year 2011-12 may be made in the format of the pre-revised Schedule VI under the Companies Act, 1956. However, for period beyond 31 March 2012, they would prepare only in the new format as prescribed by the present Schedule VI of the Companies Act, 1956. Also the 173i i i i
  • 186. i ii i companies would ensure that it will prepare and file the Annual Accounts for the Financial Year 2011-12 as per revised Schedule VI of the Companies Act, 1956. 3. This issues with the approval of the Corporate Affairs Minister. Yours faithfully (J. N. Tikku) Joint Director Tele: 011-2338 1295 Online incorporation of companies within 24 hours Wednesday, September 7, 2011 C M General Circular No. 61/2011 Y No 2/10/2011-CL. VCM Government of IndiaMY Ministry of Corporate AffairsCY 5th floor, ‘A’ Wing, Shastri Bhawan,CMY Dr. Rajendra Prasad Road, New Delhi K Dated the 5th Sept, 2011 To, All Regional Directors All Registrar of Companies. Sub: Online incorporation of companies within 24 hours Sir, Please refer to this Ministrys General Circular No. 49/2011 dated 23 rd July, 2011 intimating that this Ministry is simplifying the procedures under the procedures to enable promoters to get their companies 174i i i i
  • 187. i ii i incorporated online within 24 hours. It has been stated that in case the e-forms 1, 18, 32 and e-form for Memorandum of Association (MOA) and Articles of Association (AOA) have been certified by the practicing professional regarding the correctness of the information and declarations given by the subscribers, the application shall be processed electronically and the digital certificate of incorporation shall be issued immediately online by the Registrar of Companies. 2. The matter has been re-examined in the Ministry and it is decided that since now companies are being incorporated with in 24-48 hours, on-line approval of incorporation forms i.e. STP mode of approval of e-forms 1, 18 and 32 on the basis of certification and declarations given by the practicing professional is not C going to be implemented yet. M Yours faithfully, Y -Sd/-CM (Monika Gupta)MYCY Assistant DirectorCMY Copy to: K 1. All concerned 2. PS to CAM and PS to MOS 3. PPS to Secretary, Additional Secretary, Joint Secretaries MCA Circular on e-filing to avoid last minute rush Thursday, September 8, 2011 175i i i i
  • 188. i ii i MINISTRY OF CORPORATE AFFAIRS GOVERNMENT OF INDIA DEAR CORPORATES, AS YOU ARE  AWARE THE LAST DATE FOR FILING OF YOUR COMPANYS BALANCE SHEET AND ANNUAL RETURN FOR THE CURRENT YEAR IS FALLING DUE SOON, TO AVOID LAST MINUTE RUSH AND SYSTEM CONGESTION IN MCA21 DUE TO HEAVY FILING IN LAST 10 DAYS OF THE MONTHS OF OCTOBER AND NOVEMBER, IT IS REQUESTED THAT FILING OF BALANCE SHEET AND ANNUAL RETURN MAY PREFERABLY BE DONE IN THE FOLLOWING ORDER :-) C Preferable Dates for filing M Y Company NamesCM September 2011MY October 2011CY November 2011CMY K starting with Alphabets A to D All days during the month 1 st Oct to 05 Oct 2011 1 st Nov to 05 Nov 2011 Alphabets E to K -do- 6 th Oct to 10 th Oct 2011 6 th Nov to 10 th Nov 2011 Alphabets L to Q 176i i i i
  • 189. i ii i -do- 11 th Oct to 15 th Oct 2011 11 th Nov to 15 th Nov 2011 Alphabets R S -do- 16 th Oct to 20 th Oct 2011 16 th Nov to 20 th Nov 2011 Alphabets T to Z -do- 21 st Oct to 25 th Oct 2011 21 st Nov to 25 th Nov 2011 C M Remaining/ Left Y -do-CM 26 th Oct to 31 st Oct 2011MY 26 th Nov to 30 th Nov 2011 out companiesCYCMY KINDLY PLAN YOUR FILING ACCORDINGLY. DURING THIS PERIOD, ROC FACILATION CENTRE / HELP K DESKS WOULD GIVE PRIORITY IN E-FILING ANSWERING QUERIES OF COMPANIES FALLING UDER THE ABOVE ALPHABETICAL ORDER. Due date for submission of ITR-V extended Thursday, September 8, 2011 The due date for submission of ITR-V for A. Y. 2010-11 has been extended upto 31.10.2011 or 120 days from the date of upload whichever is later. 177i i i i
  • 190. i ii i How To download FUV file from NSDL Website to revise e-TDS return Thursday, September 8, 2011 Deductors are required to file eTDS statement every quarter. Any error/ omission in original statement filed has to be rectified by filing a correction statement. It was possible to file multiple correction statement in respect of one original return, however this was not happening because of the following reasons • Non availability of original statement FVU file • Non availability of updated FVU file after incorporating corrections C NSDL has now started this facility of downloading latest TDS/TCS consolidated statement, incorporating all updates done via correction statements M Y The detailed Procedure to Download FUV from NSDL website is as follows:-CMMY Steps : How To download FUV file from NSDL Website 1. To revise the return, now you have to download the FVU file fromCY websiteCMY 2. Open the website. www.tin.nsdl.com K 3. Choose the Option TAN Registration 4. Type your login details. 5. Select TDS/TCS and then / View Consolidated file 6. Type Details 7. Fill the question asked 8. After filling the required details, you can able to download the FVU File. 178i i i i
  • 191. i ii i FAQ on XBRL regarding software Purchase, Training, Filing of form 23AC and 23ACA, How to upload and Taxonomy Thursday, September 8, 2011 1. I would like to know, whether the XBRL software has to be purchased from separate vendors and then install in our computers or MCA itself will provide us with the software. Which agency should I approach to get the XBRL software? XBRL instance document creation software has to be purchased from the software vendors in the market. This software is used to create XBRL instance documents that would be uploaded on the MCA portal. MCA21 system shall provide a facility for validation of the instance document and filing of the C same. MCA is not recommending any specific XBRL software. M Y 2. I am interested in taking training for filing in XBRL format. Kindly advice. ICAI, which is assisting MCA with conduct of XBRL training, has been instructed to develop standard TrainingCMMY module as well identify resource persons in consultationCY with XBRL training partners located at different parts onCMY the country. It is proposed to engage leading chambers of industry and other professional institutes, namely, ICWAI and ICSI in future trainings. Training will be held over K the next few months in most leading cities of India. Details of the same will be available on our website www.mca.gov.in/www.xbrl.icai.org. 3. When we are filing Balance Sheet in XBRL format, then whether the Previous Forms 23AC and 23ACA are still in existence or not? Existing Form 23AC and 23ACA shall continue to be there for filing by companies to which XBRL filing is not applicable; and for filing of earlier years documents. 4. How to upload the XBRL format? Kindly see the document ‘Steps for filing XBRL in MCA21.doc’ on the website. 179i i i i
  • 192. i ii i 5. How to retype ‘Notes to Accounts and Statements’ in XBRL format? This shall be catered by the XBRL instance document creation software 6. If the subsidiary Company’s paid up capital is less than Rupees 5 Crore, then I want to know whether it is to be filed in XBRL format. Subsidiary of listed company is required to file in XBRL format, irrespective of its paid up capital. 7. Please give proper understanding on XBRL Taxonomy. Why does the excel file contain five sheets. XBRL is a collection of standardized, machine-readable “tags” for line items in financial statements, including footnotes and schedules. It is similar in concept to bar codes used to identify products. Using XBRL, each line in a financial statement is assigned a standardized data tag. XBRL is a standards-based way to communicate business C and financial information. These communications are M defined by metadata set out in taxonomies. Taxonomies Y capture the definition of individual reporting concepts as well as the relationships between concepts and other semantic meaning.CMMY The taxonomy comprises of the following components:-CY • Schema – Defines the elements used in the linkbasesCMY K • Presentation linkbase – Which defines the structure for displaying the data, along with the preferred label attribute. • Calculation linkbase – Establishes the arithmetical relationship of simple addition and subtraction, which is done by way of a weight attribute (1 or -1) • Label linkbase – Stores the labels about the concepts (it is the human readable name of the element) 8. What are the other files to be used for given in xml / xsd format? The XML and XSDs actually make the real taxonomy. The excel sheet is just for you to view it. An XBRL 180i i i i
  • 193. i ii i processor (a computer software that understands and/or manipulates XBRL documents) will need those XML and XSD documents. 9. What is taxonomy? How to define the taxonomies? XBRL is a standards-based way to communicate business and financial information. These communications are defined by metadata set out in taxonomies. Taxonomies capture the definition of individual reporting concepts as well as the relationships between concepts and other semantic meaning. Source – MCA Income Tax Calculator C Thursday, September 8, 2011 M YCM Computer Tricks : Is your computer maleMY or female ?CY Friday, September 9, 2011CMY K Try it…. J Is your computer “male” or “female” ??? 1. Open Notepad 2. Type the following line in notepad: CreateObject(”SAPI. SpVoice“). Speak”I love you” 3. Save file as computer_gender.vbs 4. Run the file … If you hear a male voice, you have a boy, If you hear a female voice, you have a girl…………..!! (Thanks to Pankaj) 181i i i i
  • 194. i ii i Computer Tricks : Hear a PDF file instead of reading it Friday, September 9, 2011 Do you know? (Old feature but still a nice thing) You can listen to any PDF instead of reading with Adobe Reader 7.0 or 6.0, and the short cut is: Ctrl+shift+b – to hearthe entire Document Ctrl+shift+v – to hearthe page Ctrl+shift+c – to resume Ctrl+shift+e – to stop Open any PDFFile and test…. its unbelievable..! Njoy J Excel Tips : Automatic Row Height for Wrapped Text Saturday, September 10, 2011 C When you format a cell so that the information within it M Y can wrap to multiple lines, you may be surprised if ExcelCM doesnt adjust the row height to display all those lines.MY Heres why this can happen and what you can do about it.CYCMY Usually When we formatted some cells in his worksheet to wrap text within them. Even though the text in the cells wraps, Excel wont automatically adjust the row height to K show all the wrapped text.  we always wonders if there is a way to “reset” the row so that Excel will adjust its height based on the text being wrapped within the cells. By default, when you wrap text within a cell, Excel automatically adjusts row height so that all the text in the cell is visible. There are only two exceptions to this default: •The cell in which you are wrapping text is actually merged with another cell. 182i i i i
  • 195. i ii i •The height of the row in which the cell is located was previously changed. In Jordans case, there are no merged cells in the problem row. This leaves us with the second exception—it would appear that the height of the row in which the cell is located was explicitly set before wrapping was turned on in some of the rows cells. In this case, the solution is simple: Reset the row height. There are actually a couple of ways you can do this. First, you could select the row and then double-click the “boundary” between the row and an adjacent row. With C the row selected, take a look at the row header, to the left of column A. This area contains a row number, and the “boundary” you need to double-click is between this M Y row number and the next row number. It can be a bit tricky to get the mouse pointer in theCMMY correct location to do the double-clicking, so an approachCY I prefer is to select the row and simply choose FormatCMY | Row | Autofit. This allows Excel to determine the appropriate row height based on the contents of the row. If a cell in the row has wrapping turned on, then the row K height will automatically adjust to display the information in the cell. You can find additional information about this issue in the Microsoft Knowledge Base: http://support.microsoft.com/?kbid=149663 If you have quite a few rows that contain cells with wrapping turned on, and the height of none of the rows is adjusting, then you may be interested in a quick little macro that can do the adjustment for you: Sub AutofitRows() 183i i i i
  • 196. i ii i     For Each CL In UsedRange         If CL. WrapText Then CL. Rows. AutoFit     Next End Sub The macro steps through all the cells in a worksheet, and if the cell has wrapping turned on, it sets the AutoFit property of the row in which the cell is located. FAQ on e-TDS / Corrected/Revised Return / Preparation of Correction Statement More than Once on the Same Regular Statement C (Correction on Correction) M Tuesday, September 13, 2011 YCM -How many times can I furnish a correction TDS/TCS statement?MY A correction TDS/TCS statement can be furnished multiple times toCY incorporate changes in the regular TDS/TCS statement whereas aCMY regular TDS/TCS statement will be accepted at the TIN central system only once. What are the important points to be kept in mind while K preparing correction statement more than once on the same regular statement? You have to kept in mind, the following points while preparing correction statement more than once on the same regular statement: 1. The TDS/TCS statement on which correction is to be prepared should be updated with details as per all previous corrections. 2. Modifications/addition/deletion in correction statements accepted at the TIN central system only should be considered. The first correction filed by me contains three types of correction (three PRNs / Token Number) and one of the types of correction has got rejected at the TIN central system. What should I do? 184i i i i
  • 197. i ii i The steps as under should be followed: 1. You have to update modifications as per the accepted corrections in the TDS statement. 2. Identify the record for which correction was rejected earlier by its sequence no. and fields for identification 3. Correct the said record. 4. Correction statement should contain updated values as well as value of identification field as per regular statement. Which Provisional Receipt Number / Token Number should I quote while preparing correction statement more than once on the same regular statement? There are two fields for Provisional Receipt Number (PRN) / Token Number in a correction statement as under: a. Original Provisional Receipt Number / Token Number – PRN of the regular statement should be mentioned in this field. b. Previous Provisional Receipt Number / Token Number – PRN of the last accepted correction statement should be mentioned in this field. In case the value in this C field is incorrectly mentioned, the statement will get rejected at TIN M central system for the reason: “Either Previous Provisional Receipt No. provided is incorrect or combination of Original Provisional Y Receipt Number / Token Number and Previous Provisional ReceiptCM Number / Token Number is not in sequence” Example: SingleMY batch correction statement – Only one type of correction in theCY file a. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a single batchCMY correction statement having PRN / Token Number 010010300074112. K While preparing correction statement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and the PRN / Token Number 010010300074112 in the field Previous PRN. Multiple batch correction statement – different types of correction in a single file b. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a multi batch correction statement having three batches and corresponding PRNs / Token Numbers as 010010300074112, 010010300074123 and 010010300074134. While preparing the correction statement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and check the status of all the three PRNs of correction statement. • If all the three PRNs / Token Numbers are accepted at the TIN 185i i i i
  • 198. i ii i central system, you may mention any of the three PRNs / Token Numbers in the field previous PRN. • If any of the three PRNs / Token Numbers is rejected, then you should mention the PRN / Token Number which has been accepted at the TIN central system in the field Previous PRN. • If all the three PRNs / Token Numbers are rejected, then you must mention the PRN / Token Number of the regular statement, i.e. 010010200083255 in the field Previous PRN. How many times can I update PAN of a deductee/transacting party? Structurally valid PAN of a deductee in the regular statement can be updated to another structurally valid PAN only once. When does a statement get ‘Partially Accepted’? A correction statement containing updates in PAN of C deductee/employee may get Partially Accepted. This is possible M when the PAN in the any of the records being updated by you in the correction statement is invalid, i.e. PAN not present in PAN Master Y Database. In such a scenario, the said record gets rejected resulting inCM partial acceptance of the statement. What should I do if the status ofMY correction statement filed by me is ‘Partially accepted’?CY In case correction statement is in status ‘Partially accepted’, youCMY have follow steps as under: 1. You have to update modifications K as per the accepted records in the TDS statement. 2. Identify the deductee/salary record which has got rejected due to invalid PAN. 3. Rectify the incorrect PAN 4. Correction statement should contain value of identification keys as per regular statement along with the updated values. What could be the cause of rejection of TDS/TCS statement for the reason “Total Deposit amount of deductees is more than Challan amount actually deposited in bank”? The total tax deposited amount as per challan should be greater than or equal to the total tax deposited amount as per deductee details, else a regular TDS/TCS statement will not get validated through FVU. If you file a correction statement for adding deductee records under a particular challan, the total tax deposited as per challan in regular statement should be greater than or equal to the total tax deposited 186i i i i
  • 199. i ii i in deductee details as per regular as well as correction statement. Note: Amount in the fields Interest and others in the challan is not considered in the total tax deposited as per challan. Provisional Receipt Number is now referred as Token Number with effect from FY. 2010-11 onwards. Documents pertaining to the transactions in relation to which PAN to be quoted Tuesday, September 13, 2011 All documents pertaining to the transactionsin relation to which permanentaccount number to be quoted for the purpose of clause C (c) of sub-section (5) of section 139A. 114B. Every person shall quote his permanent account M Y number  in all documents pertaining to the transactionsCM specified below, namely :—MY (a)  sale or purchase of any immovable property valuedCY at five lakh rupees or more;CMY (b)  sale or purchase of a motor vehicle or vehicle, as K defined in clause (28) of section 2 of the Motor Vehicles Act, 1988  (59 of 1988), which requires registration by a registering authority under Chapter IV of that Act : [Provided that for the purposes of this clause, the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle;] (c)  a time deposit, exceeding fifty thousand rupees, with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); 187i i i i
  • 200. i ii i (d)  a deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank; (e)  a contract of a value exceeding  [one] lakh rupees for sale or purchase of securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956  (42 of 1956); (f)  opening an account  [not being a time-deposit referred to in clause (c)] with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); (g)  making an application for installation of a telephone connection (including a cellular telephone connection); (h)  payment to hotels and restaurants against their bills C for an amount exceeding twenty-five thousand rupees at M any one time ; Y [(i) payment in cash for purchase of bank draftsCM or pay orders or bankers cheques from a bankingMY company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) for anCYCMY amount aggregating fifty thousand rupees or more during K any one day; (j) deposit in cash aggregating fifty thousand rupees or more, with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) during any one day; (k)payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time. Explanation.—For the purposes of this clause, — 188i i i i
  • 201. i ii i (a) “payment in cash in connection with travel” includes payment in cash towards fare, or to a travel agent or a tour operator[, or to an authorized person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)], or for the purchase of foreign currency; (b) the expression “travel to any foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as may be specified by the Board under Explanation 3 of sub-section (1) of section 139 ;] [(l)  making an application to any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit [or debit]card; C (m)  payment of an amount of fifty thousand rupees or more to a Mutual Fund for purchase of its units; M Y (n)  payment of an amount of fifty thousand rupees or more to a company for acquiring shares issued by it;CMMY (o)  payment of an amount of fifty thousand rupees or more to a company or an institution for acquiringCYCMY debentures or bonds issued by it; (p)  payment of an amount of fifty thousand rupees or K more to the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) for acquiring bonds issued by it;] [(q) payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer as defined in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938); (r) payment to a dealer, — (i) of an amount of five lakh rupees or more at any one time; or (ii) against a bill for an amount of five lakh rupees or more, 189i i i i
  • 202. i ii i for purchase of bullion or jewellery:] [Provided that where a person, making an application for opening an account referred to in clause (c) and clause (f) of this rule, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number of his father or mother or guardian, as the case may be, in the document pertaining to the transaction referred to in said clause (c) and clause (f): Provided furtherthat any person who does not have a permanent account number and who enters into any transaction specified in this rule, shall make a declaration in Form No. 60 giving therein the particulars of such transaction .] C M Income Tax – Notified long-term Y infrastructure bond U/s. 80CCF Wednesday, September 14, 2011CMMY SECTION 80CCF OF THE INCOME-TAX ACT, 1961 –CY DEDUCTION – IN RESPECT OF SUBSCRIPTION TO LONG-CMY TERM INFRASTRUCTURE BOND– NOTIFIED LONG-TERM K INFRASTRUCTURE BOND NOTIFICATIONNO. 50/2011 [F. NO. 178/43/2011-SO(ITA.1)], DATED 9-9-2011 In exercise of the powers conferred by section 80CCF of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies bonds, subject to the following conditions, as long-term infrastructure bonds for the purposes of the said section, namely:-  (a)  Name of the bond – The name of the bond shall be “The Long Term Infrastructure Bond” 190i i i i
  • 203. i ii i  (b)  Issuer of the Bond – The Long Term Infrastructure Bonds to be issued in the financial year 2011-12 shall be issued by – 1.  The Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948); 2.  The Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956); 3.  The Infrastructure Development Finance Company Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956); 4.  The India Infrastructure Finance Company Ltd.; a company formed and registered under the Companies Act, C 1956 (1 of 1956); and 5.  A Non-Banking Finance Company classified as an M Y Infrastructure Finance Company by the Reserve Bank ofCM India.MY  (c)  Limit on issuance – (i) The Bond will be issuedCY during the financial year 2011-12; (ii) the volume ofCMY issuance during the financial year shall be restricted to twenty-five per cent of the incremental infrastructure investments made by the issuer during the financial year K 2010-11; (iii)‘investments’ for the purposes of this limit shall include loans, bonds, other forms of debt, quasi- equity, preference equity and equity.  (d)  Tenure of the bond – (i) The tenure of the Bond shall be for a minimum period of ten years; (ii) the minimum lock-in period for an investor shall be five years; (iii) after the lock-in period the investor may exit either through the secondary market or through a buyback facility, specified by the issuer in the issue documents at the time of issue; (iv) the bond shall also be allowed as pledge or lien or hypothecation for obtaining loans 191i i i i
  • 204. i ii i from Scheduled Commercial Banks, after the said lock- in-period.  (e)  Permanent Account Number (PAN) to be furnished:- It shall be mandatory for the subscribers to furnish their PAN to the issuer;  (f)  Yield of the bond:- The yield of the bond shall not exceed the yield on Government securities of corresponding residual maturity as reported by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as on the last working day of the month immediately preceding the month of the issue of the bond;  (g)  End-use of proceeds and reporting or monitoring mechanism – (i) The proceeds of the Bond shall be utilized C towards ‘infrastructure lending’ as defined by the Reserve M Bank of India in the Guidelines issued by it; Y   (i)  the end-use shall be duly reported in the Annual Reports and other reports submitted by the issuer to the Regulatory Authority concerned, and specifically certifiedCMMY by the Statutory Auditor of the issuer;  (ii)  the issuer shall also file these along with termCYCMY sheets to the Infrastructure Division, Department of K Economic Affairs, Ministry of Finance within three months from the end of financial year. FAQs on File Validation Utility (FVU) and How to Verify correctness of e-TDS/TCS return Prepared Wednesday, September 14, 2011 After I prepare my e-TDS/TCS return, is there any way I can check/verify whether it conforms to the prescribed 192i i i i
  • 205. i ii i data structure (file format)? Yes, after you have prepared your e-TDS/TCS return you can check/verify the same by using the File Validation Utility (FVU). This utility is freely downloadable from the NSDL-TIN website. What is File Validation Utility (FVU)? FVU is a program developed by NSDL, which is used to ascertain whether the e-TDS/TCS return file contains any format level error(s). When you pass e-TDS/TCS return through FVU, it generates an ‘error/response file’. If there are no errors in the e-TDS/TCS return file, error/response file will display the control totals. If there are errors, the error/response file will display the error location and error code along with the error C code description. In case you find any error, you can rectify the error and pass the e-TDS/TCS return file again through the FVU till you get an error-free file. M Y What is the ‘Upload File’ in the new File Validation Utility?CMMY Earlier the e-TDS/TCS return file after validating using File Validation Utility (FVU) had to be filed with TIN-FC.CYCMY Now ‘Upload File’ that is generated by the FVU when K the return is validated using the FVU has to be filed with TIN-FC. This ‘upload file’ is a file with the same filename as the ‘input file’ but with extension .fvu. Example ‘input file’ name is 27EQGov.txt, the upload file generated will be 27EQGov.fvu. What are the platforms for execution of FVU? For Annual Returns, FVU can be executed on any of the Windows platforms mentioned below: Win 95/Win 98/Win 2K Professional/Win 2K Server/Win NT 4.0 Server/Win XP Professional. 193i i i i
  • 206. i ii i For Quarterly Returns, Java has to be installed to run FVU. Details are given in FVU section of NSDL-TIN website. What are the Control Totals appearing in the Error/Response File generated by validating the text file through File Validation Utility (FVU) of NSDL? The Control Totals in Error/Response File are generated only when a valid file is generated. Otherwise, the Error/Response File shows the nature of error. The control totals are as under: • Number of deductee/party records : In case of Form 24/24Q, it is equal to the number of employees for which TDS return is being prepared. In case of Form 26/27/26Q/27Q, it is equal to the total number C of records of tax deduction. 10 payments to 1 party M would mean 10 deductee records. Y • Amount Paid : This is the Total Amount of allCM payments made on which tax was deducted. In case of Form 24/24Q, it is equal to the Total Taxable Income of all the employees. In case of FormMYCY 26/27/26Q/27Q, this is equal to the total of all theCMY amounts on which tax has been deducted at source. K • Tax Deducted : This is the Total Amount of tax actually deducted at source for all payments. • Tax Deposited : This is the total of all the deposit challans. This is normally the same as Tax Deducted but at times may be different due to interest or other amount. Are the control totals appearing in Form 27A same as that of Error/Response File? Yes, the control totals in Form 27A and in Error/Response File are same. 194i i i i
  • 207. i ii i What if any of the control totals mentioned in Form No. 27A do not match with that in e-TDS/TCS return? In such a case the e-TDS/TCS return will not be accepted by the TIN-FC. You should ensure that the control totals generated by FVU and that mentioned on Form No. 27A match. In case of any difficulties/queries, you should contact the TIN-FC or TIN Call Centre at NSDL. CBDT may recommend VDIS scheme to bring back black money outside India Thursday, September 15, 2011 A special voluntary disclosure scheme for bringing back C black money stashed away in tax havens abroad may be M in the offing. The Central Board of Direct Taxes (CBDT) Y is understood to be ‘seriously considering’ recommending to the government a scheme on the lines of the Voluntary Disclosure of Income Scheme (VDIS) announced in 1996CMMY to tap funds lying abroad for productive use in India. Sources said the issue gained momentum recently whenCYCMY captains of industry and business met Finance Minister K Pranab Mukherjee and impressed on him the need for encouraging disclosure of unaccounted money kept in tax havens which could be used to fund infrastructure projects in the country. A proposal for ushering in a similar scheme was proposed earlier by an expert group on black money to the government. The thinking in the government comes in the midst of a raging debate over unearthing black money and illegal funds parked abroad. The Ministry is considering the formulation of such a scheme in the backdrop of India receiving fresh 195i i i i
  • 208. i ii i information under Tax Information Exchange Treaties (TIEAs), DTAA and the OECD automatic exchange route. Under the scheme in the making, according to sources, the source of money will not have to be disclosed but criminal action would be taken if the assets or money stashed pertain to proceeds of crime. Official sources said committee on black money headed by the CBDT Chairman is expected to discuss and decide on the proposal during its proposed meeting later this month. Incidentally, an expert group on black money had earlier suggested that an offshore voluntary scheme may be considered by the government to collect tax on C undisclosed bank accounts and assets held by resident M Indians abroad. Y Experts on the subject said that such a scheme is prevalent and has been implemented in many European countries, the US, UK, Germany, France, Greece, ItalyCMMY and Portugal among others. Sources said that now that the countrys efforts to reviveCYCMY and implement the various tax treaties have started K giving results, such a scheme could be operationalised as compared to the earlier practice where it was very difficult to obtain bank accounts and assets data of such a taxpayer. The nitty-gritty of such a scheme and the amount of penalty etc on the disclosure of such funds stashed abroad could be worked at a later stage, the sources said. The CBDT through the Income Tax department has taken several measures in the recent past to update the article concerning exchange of information in existing DTAAs to specifically allow for exchange of banking information and information without domestic interest. 196i i i i
  • 209. i ii i India has also decided to negotiate TIEAs with priority countries and jurisdictions. In the last two years, India has concluded negotiation of 16 TIEAs, 18 new DTAAs and renegotiation of 21 existing DTAAs. (Agencies) How to make correction or Revision in Salary Details of e- TDS return already filed? Thursday, September 15, 2011 C Can I update a salary detail? M Yes. You can update a salary detail record. Y How can I update a salary record?CM You can update salary details viz; Name and PAN of employee, salary amount, deductions etc. Steps forMYCY updating salary record are as under: • Identify the salary detail record byCMY K – its sequence number as per regular statement – Value in the field ‘Gross total Income’ as per regular statement. • Update the salary details as required • Along with updated values, Gross Total Income as per regular statement should also be provided in the correction statement. 197i i i i
  • 210. i ii i Can I add a salary record? Yes. You can add a salary record.. How can I add a salary record? You can add a new salary records as per following procedure. 1. Maintain the sequence of the new challan record in continuation to the sequence number of the last challan as per regular statement and add details of challan in this record.. Example Regular statement filed by you has three salary records and you wish to add one more salary record 1. Sequence of new record being added should be 4 in the Annexure II. C 2. Add new salary record. M Can I delete a salary record? YCM Yes. You can delete a salary record.MY How can I delete a salary record?CY Steps for deleting a salary record are as under: • Identify the salary record to be deleted byCMY K – its sequence number as per regular statement – Gross total income as per regular statement • Flag the salary detail record to be deleted. • Along with flag for deletion, correction statement should also contain value of the field Gross total Income as per regular statement. 198i i i i
  • 211. i ii i Can I update the Assessment Year of a regular TDS/TCS statement by filing a correction statem No, the fields TAN, Form no., quarter, FY and A. Y quoted in a regular statement cannot be updated by furnishing a correction statement What is the significance of a identifying a record while updating/deleting the same? While preparing a correction statement, the record to be updated/deleted is required to be identified by its sequence number as well as values of certain fields as per regular statement. List of fields used for identifying a record are as under: 1. Challan detail – CIN details and deposit amount 2. Deductee detail – PAN of the deductee, total tax deducted and total tax deposited 3. Salary details – Gross total income. C The correction statement should contain values of the fields referred to above as per regular statement along M Y with the corrections made. Once the correction statementCM is received at TIN central system, the values of theMY identification fields are verified with the correspondingCY values as per TIN central system.CMY If the values match, the correction statement will get accepted. If the values do not match, the correction statement will get rejected at the TIN central system. K Example: If the value in the field Last Bank challan no. (i.e. challan no. as per regular statement) in the correction statement does not match the corresponding details as per the regular statement in the TIN central system, the correction statement will get rejected for the reason “Last Bank challan serial number of the correction statement is not matching with corresponding statement details available at TIN Central system”. Can I rectify the details of a challan if the status of the same on the NSDL website is displayed as 199i i i i
  • 212. i ii i Once the challan is updated with status ‘Booked’ modifications or rectifications to the details of the said challan are not allowed. As a result any correction TDS/TCS statement with modifications/rectifications on a booked challan will get rejected at the TIN central system. Source- NSDL TDS deductor may soon be able to view PAN-wise ledger and different views available for Tax Payers on NSDL-TIN website C Thursday, September 15, 2011 M From which financial year will the Annual Statement under Sec. Y 203AA (Form No. 26AS) be issued?CM The annual statement (Form No. 26AS) will be issued for all tax deducted and tax collected at source from FYMYCY 2005-06 onwards after the expiry of the financial year.CMY How will the PAN-wise ledger account be created by NSDL in respect K of payment of TDS made by deductors in banks? The PAN-wise ledger account will be created after matching the information in the TDS/TCS statements filed by the deductor/collector and the details of tax deposited in banks coming through On Line Tax Account System (OLTAS). What essential information should be given in the quarterly statements to enable accurate generation of PAN-wise ledger account? The accuracy of PAN-wise ledger account will depend on: • Correct quoting of TAN by the deductor. 200i i i i
  • 213. i ii i • Correct quoting of PAN of deductor. • Correct and complete quoting of PAN of deductee. • Correct quoting of CIN (Challan Identification Number) wherever payment is made by challan. Will a deductee be able to view his ledger account on NSDL-TIN website? Yes. The scheme for such views is expected to be notified by ITD soon. Can the e-TDS/TCS return be filed online? Yes e-TDS/TCS return can be filed online under digital signature. What are the different views available for Tax Payers? On the NSDL-TIN website, three types of views are C available for a tax payer: M a) Access without authentication. Y b) Access with Digital Signature Certificate (DSC).CM c) Access through TIN-FC.MY What is access without authentication?CY On providing the TAN and provisional receipt numberCMY / Token Number, the deductor can view the following K details: • Whether quarterly statements have been uploaded to TIN central system by TIN-FC. • Whether quarterly statements have been accepted by TIN central system. • Whether challans in statements have been matched with challans uploaded by banks. • Number of deductees whose PAN accounts have been booked. • Line no. of deductees in statements whose PAN accounts could not be booked. 201i i i i
  • 214. i ii i • Confirm whether a specific PAN account has been booked. What is access with authentication? To access this view, the tax payer should have a Digital Signature Certificate (DSC) which has to be registered with NSDL in advance. (Details of the same are available at Online Uploads section of the NSDL-TIN website.) The tax payer has to authenticate its identity using the DSC. All the views mentioned above will be available with financial details. What is access through TIN-FC? Deductors can access details of their statements through the TIN-FC who has uploaded their statements. Will the Paper TDS data be available online on TIN? Yes, the Paper TDS data will also be available in TIN database after the digitalization of the Paper TDS return by the e- C M intermediary. Y Provisional Receipt Number is now referred as Token Number withCM effect from FY. 2010-11 onwards.MY Will the TIN-FC give any acknowledgment/receipt after acceptance ofCY e-TDS/TCS return? If the e-TDS/TCS return file is completeCMY in all aspects, TIN-FC will issue a provisional receipt to K you. The provisional receipt issued by TIN-FC is deemed to be the proof of e-TDS/TCS return filed by you. What if my e-TDS/TCS return is not accepted by TIN-FC, how will I know the reason for rejection? In case of non-acceptance of your e-TDS/TCS return file, TIN-FC will issue a Non-Acceptance Memo which will state reason for rejection. Source- NSDL 202i i i i
  • 215. i ii i 15th September, 2011 – Last Date for Payment of Advance Tax Thursday, September 15, 2011 Friends,  Pay your Advance Tax installment in time.  Ist installment for Non-company and 2nd for Company cases is due on 15th September for payment of Advance Tax on your estimated Income.  Advance Income Tax liability rises only when Income Tax on estimated income comes Rs. 10000 or above.   If the tax payer does not make payment of advance tax voluntarily, the assessing officer can issue a notice at any time during the financial year, but not later than the last day of February asking him to pay the advance C tax in specified installments. Such notice is ordinarily based on the assessed income of the tax payer for the latest year. The assessee in that case has an option M Y to pay advance tax on the basis of his own estimate ifCM he considers that his current income during the relevantMY accounting period would be less than the income on the basis of which advance tax has been demanded from him. The assessing officer can modify his notice of demandCYCMY in certain circumstances. Similarly, the assessee can K also revise his estimate any number of times and after adjusting the amount already paid, if any, pay the balance in installments falling due after the revised estimate.  Consequence of Default of Delay Delay in furnishing the return attracts charge of interest for every month or part of a month for the period of dealy on the amount of tax found due on the proceesing of return or on regular assessment (refer para 13.6) after giving credit for advance tax and tax deducted at source. In case of failure to file the return such interest is to be calcuted upto the date of best judgement assessment under sec.144.  203i i i i
  • 216. i ii i A person liable to tax is required to file a return of income with the Assessing Officer having jurisdiction over his case. The return forms for the purpose can be obtained from any Income Tax Office or from a specified Post Office. The assessee before filing the return is expected to compute the tax on his returned income by way of self- assessment and if there is any additional liability of tax, the assessee is required to pay the same. The unpaid tax if any is recovered according to the procedure specified in the Act.  For the convenience of non-residents liable to Indian Income Tax, Non -residents Circles have been created in big cities namely, Bombay, Delhi, Calcutta, Madras, Cochin and Ahmedabad. Any person who is a non- resident and has not yet been assessed to tax any where C in India, may file his income tax return in any of the above mentioned Non-resident Circles. However, once he files return in any of these Circles, Jurisdiction over M Y his case will continue to be with circle unless it is changeCM under orders of the appropriate authority.MYCYCMY Service Tax Notification No. 45/2011-ST K dated 12.09.2011 – Legal Services provided by business entity to business entity Thursday, September 15, 2011 Prior to insertion of Finance Act, 2011 Legal Services provided by Business Entity to Business Entity were only covered under Service Tax. Thereafter, Central Government vide Finance Act, 2011 has enlarged the scope of Legal Services so as to, interalia, include services provided by an arbitral tribunal to any business entity in respect of arbitration. Now Central Government vide Notification No. 45/2011-ST dated 12.09.2011 has excluded these services from levy of service tax. 204i i i i
  • 217. i ii i After this amendment service tax is payable only in respect of following legal services:- Ø  Services provided by business entity to any person in relation to advice, consultancy or assistance in any branch of law, Ø  Services provided by any person to any business entity in relation to representational services before any court, Tribunal or authority. Introducing NEFT in MCA Thursday, September 15, 2011 Ministry is introducing payment of MCA fees via NEFT (National Electronic Fund Transfer) mode, in addition to already existing payment methods. To know more about C the same please refer User Guide ·         M YCM Download Updated NEFT User GuideMY -Source MCA WebsiteCYCMY K Useful : Download Links for 35 Indian Accounting Standards Thursday, September 15, 2011 Download Links for (Source MCA Website) 35 Indian Accounting Standards ·         Indian Accounting Standards(Ind AS) 1  ·         Indian Accounting Standards(Ind AS) 2  ·         Indian Accounting Standards(Ind AS) 7  ·         Indian Accounting Standards(Ind AS) 8  ·         Indian Accounting Standards(Ind AS) 10  205i i i i
  • 218. i ii i ·         Indian Accounting Standards(Ind AS) 11  ·         Indian Accounting Standards(Ind AS) 12  ·         Indian Accounting Standards(Ind AS) 16  ·         Indian Accounting Standards(Ind AS) 17  ·         Indian Accounting Standards(Ind AS) 18  ·         Indian Accounting Standards(Ind AS) 19  ·         Indian Accounting Standards(Ind AS) 20  ·         Indian Accounting Standards(Ind AS) 21  ·         Indian Accounting Standards(Ind AS) 23  ·         Indian Accounting Standards(Ind AS) 24  ·         Indian Accounting Standards(Ind AS) 27  C M ·         Indian Accounting Standards(Ind AS) 28  Y ·         Indian Accounting Standards(Ind AS) 29 CM ·         Indian Accounting Standards(Ind AS) 31 MY ·         Indian Accounting Standards(Ind AS) 32  ·         Indian Accounting Standards(Ind AS) 33 CYCMY K ·         Indian Accounting Standards(Ind AS) 34  ·         Indian Accounting Standards(Ind AS) 36  ·         Indian Accounting Standards(Ind AS) 37  ·         Indian Accounting Standards(Ind AS) 38  ·         Indian Accounting Standards(Ind AS) 39  ·         Indian Accounting Standards(Ind AS) 40  ·         Indian Accounting Standards(Ind AS) 101  ·         Indian Accounting Standards(Ind AS) 102  ·         Indian Accounting Standards(Ind AS) 103  206i i i i
  • 219. i ii i ·         Indian Accounting Standards(Ind AS) 104  ·         Indian Accounting Standards(Ind AS) 105  ·         Indian Accounting Standards(Ind AS) 106  ·         Indian Accounting Standards(Ind AS) 107  ·         Indian Accounting Standards(Ind AS) 108  Amends Central Excise Rules, 2002 (Fourth Amendment) thereby making e-filing of Central Excise returns mandatory in ACES Friday, September 16, 2011 C G. S. R ( E ) . – In exercise of the powers conferred by section 37 M of the Central Excise Act, 1944 ( 1 of 1944), the Central Government Y hereby makes the following rules further to amend the Central Excise Rules, 2002, namely :- 1. Short title and commencement.- (1) TheseCM rules may be called the Central Excise(Fourth Amendment ) Rules,MY 2011. (2) They shall come into force on the 1st day of October,CY 2011. 2. In the Central Excise Rules, 2002, – (a) in rule 12, –CMY (i) in sub-rule (1), the fourth proviso shall be omitted; (ii) in sub- rule (2), the proviso to clause (a) shall be omitted; (iii) after sub- K rule (4), the following sub-rule shall be inserted, namely :- “(5) Every assessee other than assessees availing the exemption under notification No. 49/2003-Central Excise, dated the 10th June 2003 or notification No. 50/2003-Central Excise, dated the 10th June 2003, shall file electronically the return or the statement, as the case may be, specified in this rule.” (b) in rule 17, - (i) in sub-rule (3), after the words “The unit shall,” the word “electronically” shall be inserted. (ii) the proviso to sub-rule (3) shall be omitted. F. No. 201/10/2011-CX.6 (V. P. Singh) Under Secretary to the Government of India Note: The principalrules were published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), dated 1st March, 2002 vide Notification No. 4/2002-Central Excise (N. T) dated the 207i i i i
  • 220. i ii i 1st March, 2002, [GSR 143(E), dated the 1st March, 2002] and were last amended, vide Notification No. 19/2011-Central Excise (N. T) dated 28th July,2011. Repo rate, reverse repo rate hiked by RBI; home, auto loan EMIs to go up Friday, September 16, 2011 All loans are set to become costlier, with the Reserve Bank on Friday hiking the key interest rate for the 12th time since March, 2010, by 25 basis points to rein in high inflation. C With todays decision, the short-term lending (or repo) rate at which banks borrow from the RBI stands increased M to 8.25 per cent and the short-term borrowing (reverse YCM repo) rate at which banks park their funds with the RBIMY to 7.25 per cent.CY Headline inflation rose to 9.8 per cent in the month ofCMY August from 9.2 per cent in July this year. K Despite the RBI hiking rates several times since March, headline and food inflation are close to double digits. “As such, a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. It is, therefore, imperative to persist with the current anti-inflationary stance,” the RBI said in its mid-quarter review of the monetary policy. Going forward, the RBIs stance will be influenced by signs of downward movement in the inflation trajectory, to which a moderation in demand is 208i i i i
  • 221. i ii i expected to contribute, besides the implications of global developments, it said. “The step is consistent with the RBI monetary stance for the first half of 2011-12 and overall concerns on growth sustainability in the medium term. “I am hopeful that measures taken would get us back a more comfortable inflation situation earlier rather than later, while having scope for growth to pick up in the second half of the year,” Finance Minister Pranab Mukherjee said. Commenting on the rate hike, IOB Chairman and Managing Director M Narendra said banks need to pass on the hike to customers as the cost of funds has gone up. C “I believe banks would wait till the month-end before M taking a call on an interest rate hike,” he said. Y The RBI said food inflation is near double digits, despiteCM the normal monsoon, underlining the fact that it is drivenMY by structural demand-supply imbalances and cannot beCY dismissed as a temporary phenomenon.CMY After a slight moderation in July, non-food manufactured products inflation rose again in August, suggesting continuing demand pressures, it said. K For the week ended September 3, food inflation stood at 9.47 per cent. The monsoon has been normal so far, it said, adding that the first advance estimates for the 2011-12 kharif season hint at record production of rice, oilseeds and cotton, though output of pulses may decline. Meanwhile, it said the hike in petrol prices by Rs 3.14 per litre with effect from September 16, 2011, will have a direct impact of 7 basis points on WPI inflation, in addition to an indirect impact with a lag. 209i i i i
  • 222. i ii i Source : Economic Times After petrol price hike, EGOM meet on LPG gas cylinder subsidy deferred Friday, September 16, 2011 The meeting of a panel of ministers headed by Finance Minister Pranab Mukherjee on limiting the supply of subsidised LPG has been deferred after apparent objections from some UPA constituents. The Empowered Group of Ministers (EGoM) was scheduled to meet at 1330 hours today, but the meeting C was preponed to 1230 hours. However, the meeting M was called off at the last moment. Y Official sources said the meeting was called off “due toCM non-availability” of certain members of the panel and no new dates have been notified. The meet was to consider limiting the supply of subsidised LPG cylindersMYCY to 4-6 per household in a year to cut down theCMY governments subsidy outgo by over Rs 12,000 crore. K However, the move was opposed by key UPA allies, the DMK and TMC. DMK leader and Fertiliser Minister M K Azhagiri had decided not to attend the meeting to show his partys opposition to the proposal, sources in the Chennai-based party said. The Trinamool Congress, too, was opposed to the move, but its representative in the EGoM and Railway Minister, Dinesh Trivedi, was to attend the meeting to voice his partys strong opposition to the proposal. Other members of the EGoM include NCP leader and Agriculture Minister Sharad Pawar, Power Minister Sushilkumar Shinde, Road Transport Minister C P Joshi, 210i i i i
  • 223. i ii i Oil Minister S Jaipal Reddy and Planning Commission Deputy Chairman Montek Singh Ahluwalia. Both the petroleum and finance ministries were keen on the proposal, as it would have plugged the diversion of subsidised LPG for commercial use and cut down the governments subsidy outgo. The last meeting of the EGoM, which considered the recommendations of the Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser, had deferred a decision on limiting the supply of subsidised LPG. The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income-tax list. At present, records of LPG distributors C of public sector companies show that many households M are taking as many as 20-30 cylinders each year. Y The EGoM was to consider giving every household only 4-6 LPG cylinders at a subsidised price of Rs 395.35 in Delhi and asking them to pay the market price of RsCMMY 666 per bottle for any requirement beyond that. ईंधन की कीमतों पर विचार-विमर्श के लिए मंत्रियों के समूह की शुक्रवारCY को होने वाली बैठक अनिश्चितकाल के लिए स्थगित कर दी गई है।CMY K यह बैठक आज 12.30 बजे होनी थी जिसमें विशेषकर रसोई गैस के सिलेंडर पर दी जाने वाली सब्सिडी को लेकर चर्चा होने की संभावना थी। केन्द्र की संयुक्त प्रगतिशील गठबंधन (संप्रग) सरकार के दो प्रमुख घटको तृणमूल कांग्रेस और द्रविड़ मुनेत्र कषगम (द्रमुक) ने रसोई गैस की सब्सिडी को घटाने पर अपनी नाराजगी जताई थी। गौरतलब है कि पेट्रोल की कीमतों में कल वृद्धि किए जाने पर भी तृणमूल कांग्रेस ने भी अपनी नाराजगी व्यक्त की थी। 211i i i i
  • 224. i ii i FEMA – RBI increased the limit for Transfer of security by way of gift in calendar year to USD 50,000 Friday, September 16, 2011 A person resident in India who proposes to transfer, by way of gift, to a person resident outside India any security including shares/convertible debentures is requiredto obtain prior approval of the Reserve Bank. However, the value of security to be transferred together with any security transferred by the transferor, as gift, to any person residing outside India which was not to exceed the rupee equivalent of USD 25,000 during a calendar year has been enhanced to USD 50,000 per financial year. RBI/2011-12/175 C A. P. (DIR Series) CircularNo. 14 M September 15, 2011 To YCMMY All Banks Authorised to Deal in Foreign ExchangeCY Madam / Sir,CMY Foreign Investmentsin India – Transfer of security by way of gift – K Liberalisation Attention of the Authorised Dealer (AD) banks is invited to the Regulation 10 A (a) of the Notification No. FEMA 20/2000-RB dated 3rd May 2000 viz. Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000, as amended from time to time, read with A. P. (DIR Series) Circular No. 08 dated August 25, 2005 in terms of which a person resident in India who proposes to transfer any security, by way of gift, to a person resident outside India, is required to make an application to the Reserve Bank. 212i i i i
  • 225. i ii i 2.   The Committee to Review the Facilities for Individuals under the Foreign Exchange Management Act, 1999 in its Report has suggested that general permission may be made available to individual residents in India to gift shares / securities /convertible debentures, etc. to their NRI/PIO close relative (relative as defined in Section 6 of the Companies Act, 1956) subject to certain conditions. 3. On a review, it has been decided that as hitherto, a person resident in India who proposes to transfer, by way of gift, to a person resident outside India any security including shares/convertible debentures is required to obtain prior approval of the Reserve Bank. However, the value of security to be transferred together with any security transferred by the transferor, as gift, to any C person residing outside India which was not to exceed the rupee equivalent of USD 25,000during a calendar year has been enhanced to USD 50,000 per financial M Y year. 4. All other conditions as specified in Regulation 10 A (a)CMMY of Foreign Exchange Management (Transfer or issue ofCY Security by a Person Resident outside India) RegulationsCMY 2000 dated May 3, 2000 shall remain unchanged. K 5. The necessary amendments to the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations 2000 notified vide Reserve Bank Notification No. FEMA 20/2000-RB dated May 3, 2000, are being issued separately. 6. AD banks may bring the contents of this circular to the notice of their constituents/customers concerned. 7. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law. 213i i i i
  • 226. i ii i Yours faithfully, (Meena Hemchandra) Chief General Manager In-Charge VIEW TAX CREDIT (FORM 26AS) FROM BANK SITE THROUGH NET BANKING FACILITY Saturday, September 17, 2011 If your company hasnt given your Form 16, which gives details of your tax deducted at source (TDS), dont fret yet. Now, taxpayers can check online if the tax deducted from the salary has actually gone to the department on a new facility set up by the income tax (I-T) department. C M Also, in the absence of Form 16, a taxpayer can use Y this new facility to get details of TDS and file returnsCM accordingly.MY The facility is available to all taxpayers, including thoseCY who file returns manually. “One only needs to have a Permanent Account Number (PAN),” said a senior I-T official.CMY K A taxpayer has to just register himself by providing personal details on the departments online system. Once registered, a person can see his TDS details from the financial year 2005-06. The new facility will not only benefit the salary class, but also businessmen and people who take on contract work and receive payments from different people. Payments in such cases are made after deducting tax. “Sometimes the person making the payment avoids giving the TDS certificate. In such cases, it could be checked if 214i i i i
  • 227. i ii i the TDS has actually gone to the department,” the official said. He added that in some cases while making the payment, people deduct the tax and give certificate, but do not deposit the same (tax) with the department. “It not only happens with small businessmen, but also with big groups,” the official said, adding that now an employee or payment receiver can find out the details and inform the department in case he or she finds any discrepancy. The new facility is taxpayer friendly. Now all assesses, whether salaried or non-salaried, can view their tax credit statements by registering free. Online view of Tax Credit Statement (Form 26AS) of taxpayer is also available to net banking account holders of registered banks for the C benefits of the tax payer. The Tax credit Statement (Form 26AS) helps M to taxpayers in following:- Y 1. Preparing income tax returnsCM 2. Verify detail of tax deducted at source (TDS) 3. Verify detail of tax collected at sourceMYCY 4. Verify detail of tax payment made by taxpayer (advance tax/self assessment tax)CMY K 5. Detail of refunds The Tax Credit Statement (Form 26AS) are generated wherein valid PAN has been reported in the TDS returns as well as in the OLTAS challans. One of the modes through which tax payer can avail view of Tax Credit Statement (Form 26AS) is through net banking facility provided by banks. To avail this facility, the PAN holder is required to have net banking account with any of authorized bank, where in view of Tax Credit Statement (Form 26AS) can be made available to PAN holder which is mapped to that particular account. To 215i i i i
  • 228. i ii i provide this facility to net banking account holder, bank should get registered them self with National Securities Depository Limited (NSDL). List of banks registered with NSDL for providing view of Tax Credit Statem 1. Allahabad Bank 2. Axis Bank Limited 3. Bank of Baroda 4. Bank of India 5. Bank of Maharashtra 6. Canara Bank 7. Citibank N. A. C 8. City Union Bank Limited M 9. Corporation Bank 10. ICICI Bank Limited YCM 11. IDBI Bank LimitedMYCY 12. Indian Overseas BankCMY 13. Indian Bank K 14. Karnataka Bank Limited 15. Kotak Mahindra Bank Limited 16. Oriental Bank of Commerce 17. State Bank of Hyderabad 18. State Bank of India 19. State Bank of Mysore 20. State Bank of Patiala 21. State Bank of Travancore 22. The Federal Bank Limited 216i i i i
  • 229. i ii i 23. The Karur Vysya Bank Limited 24. The Saraswat Co-operative Bank Limited 25. UCO Bank 26. Union Bank of India 27. Vijaya Bank (First Published on 09.07.2010 – Republished with modifications on 17.09.2011) Income Tax Case Law : Claim of bad debts allowable even if debts are of the same C year – ITAT Mumbai Saturday, September 17, 2011 M DCIT v. Rediff.com India Limited (ITAT Mumbai) – A. O. YCM disallowed the claim of bad debts on the ground thatMY the transactions pertain to the current year and the same was written off by the assessee in the same year itself. According to the A. O. the bad debt claimed by theCY assessee has in fact not yet matured to claim it as badCMY K and irrecoverable. We find the CIT(A) allowed the claim of bad debts on the ground that the assessee fulfilled the conditions of section 36(1)(vii) r.w.s. 36(2) of the Act. We find this issue has now been decided in favour of the assessee by the decision of Honble Supreme Court in the case of TRF Ltd. Vs. CIT 323 ITR 397 wherein it has been held that after the amendment of section 36(1)(vii) of the I. T. Act, 1961 w.e.f. April 1, 1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. Since the assessee has written off the amount of bad debts in the books of account, therefore, in view of the decision cited above, 217i i i i
  • 230. i ii i we do not find any infirmity in the order of the CIT(A) in allowing the claim bad debts written off. Dy. Commissioner of Income tax Vs. M/s Rediff. Com India Pvt. Ltd. ITAT MUMBAI ITA No.905/Mum/2008 Assessment Year : 2002-03 M/s Rediff. Com India Pvt. Ltd., Vs. Dy. Commissioner of Income tax ITA No. 1120/Mum/2008 Assessment Year : 2002-03 Dy. Commissioner of Income tax Vs. M/s Rediff. Com India Pvt. Ltd., C ITA No.906/Mum/2008 Assessment Year : 2003-04 M YCM ORDERMY PER BENCH.CY ITA No. 905/Mum/2008 ITA No. 1 120/Mum/2008CMY are cross appeals and are directed against the separate orders dated 14.11.2007 of the ld. CIT(A) – VII, Mumbai relating to A. Y. 2002-03. ITA No. 906/Mum/2008 filed by K Revenue is directed against the order dated 14.11.2007 of the ld. CIT(A)- VII, Mumbai relating to A. Y. 2003-04. For the sake of convenience, these were heard together and are being disposed of by this common order. ITA No. 1 120/Mum/20-08 (By the assessee for A. Y. 2002-03) 2. In ground No. 1, the assessee has challenged the order of CIT(A) in treating the software and product development expenses of 4,24,37,733/- as capital in nature as against revenue expenditure claimed by the assessee. In the alternate contention, the assessee has also raised a ground that in case the same is treated as 218i i i i
  • 231. i ii i capital in nature, depreciation is to be allowed @ 60% as against 25% held by the A. O. and upheld by the CIT(A). 3. Both the parties fairly agreed that the issue has to go back to the file of the A. O. for fresh adjudication in the light of the decision of Special Bench of ITAT in the case of Amway Enterprises vs. DCIT 301 ITR [AT] 1 (Del) (SB). In view of the above submission made by both the sides, we set aside the order of CIT(A) and restore the matter to the file of the A. O. with a direction to decide the issue afresh in the light of the decision of the Special Bench of ITAT cited supra and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Ground No. 1 of assessees appeal is accordingly treated as allowed C for statistical purpose. M 4. In ground No. 2, the assessee has challenged the Y order of CIT(A) in confirming the addition of non-compete fee of 16,00,000/- paid to Foot Forward Communications Pvt. Limited.CMMY 5. Facts of the case, in brief, are that the A. O. during the course of assessment proceedings noted that during theCYCMY year under consideration, the assessee has claimed non- K compete expenses of 16 lacs after reducing the amortised amount claimed during the year 2000-01. On being questioned by the A. O. to explain and give the details of non-compete expenses of 19,59,667/-, the assessee filed certain details only. Subsequently, the A. O. asked the assessee to explain and justify the allowability of non-compete expenses and under which provisions these expenses have been claimed as allowable expenditure. However, no reply was filed by the assessee. From the details furnished by the assessee, the A. O. noted that the assessee company has entered into an agreement dated 30.06.2000 for a period of 4 years and the expenditure of 32 lacs is to be equally distributed in the 4 years. This 219i i i i
  • 232. i ii i being the second year, the A.o. held that only 8 lacs can be allowed and the balance amount of 16 lacs will be disallowed. He, accordingly, disallowed an amount of 16 lacs. 6. In appeal, the CIT(A) confirmed the action of the A. O. by holding that the fee has been paid to restrict the promoter to compete in the line of Internet portal, which is the main business of the assessee. The payment of 32 lacs paid as non-compete fee does lead to enduring benefit as by making the payment the company has obtained an advantage in terms of a better competitive positioning by eliminating one competitor amongst various others. Aggrieved by such order of the CIT(A), the assessee is in appeal before us. 6. The ld. Counsel for the assessee, at the outset, C submitted that the Tribunal in assessees own case in the M preceding A. Y. has restored the matter to the file of the Y CIT(A) for passing a speaking order. Since the CIT(A) has not given any finding on the claim of the assessee that non-compete fee paid by the assessee to M/s FootforwardCMMY Communications Pvt. Ltd. was a revenue expenditureCY and since during the impugned A. Y., the assessee has notCMY at all claimed any expenditure in the PL account, and, since the lower authorities have not decided the issue properly, therefore, the matter should go back to the A. K O. or CIT(A) as the Bench decides, for fresh adjudication. The ld. D. R. fairly conceded that she has no objection if the matter is sent back to the file of A. O. or CIT(A) for fresh adjudication. 7. After hearing both the sides, we find merit in the submission of the ld. Counsel for the assessee that the matter should go back to the file of A. O. for fresh adjudication. Admittedly, the assessee has not claimed any expenditure on account of non-compete fee during the year since amortisation of miscellaneous expenditure of 1,87,15,371 / – claimed in the PL account has been 220i i i i
  • 233. i ii i disallowed in the computation of total income. The A. O. shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. Ground No. 2 of assessees appeal is accordingly allowed for statistical purpose. 8. In ground No. 3 4, the assessee has challenged the order of CIT(A) in confirming the disallowance of 75,31,489/- and 6,43,07,700/- on the ground that the assessee had not deducted tax as required u/s 40(a)(i) of the Act. 9. At the outset, the ld. Counsel for the assessee submitted that the amount of 75,31,489/- has been paid towards legal and professional fees and editorial fees paid to residents of USA and UK. Similarly, the payment of  6,43,07,700/- has been paid to Rediff. Com Inc. for C obtaining certain services in connection with the North M American edition of the Rediff.com.website. He submitted Y that before the A. O. no details could be filed because the Accounts Department of the assessee company was not well organised. Before the CIT(A), all details were filedCMMY but unfortunately the CIT(A) has not at all discussed theCY various submissions given by the assessee. He submittedCMY that although the details were filed before the CIT(A), the assessee, as a precaution, has also filed application for admission of additional evidence since those details K were not filed before the A. O. He submitted that the matter should be restored to the file of CIT(A) for fresh adjudication of the issue in the light of the documents filed before him and in the light of the decision of Honble Supreme Court in the case of G. E. Technology Centre (P) Ltd. Vs. CIT Another 327 ITR 456 (SC). 10. The ld. D. R., on the other hand, submitted that the decision in the case of G. E. Technology Centre (P) Ltd. (supra) is not applicable to the facts of the present case. Since the assessee has not filed the requisite details before the A. O., the A. O. disallowed the amount which 221i i i i
  • 234. i ii i has been upheld by the CIT(A). She submitted that the additional evidences should not be admitted at this stage since the assessee has not given any valid justification as to why those details could not be filed before the A. O. 11. We have considered the rival submission made by both the sides, perused the orders of A. O. and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the decision relied on by the ld. Counsel for the assessee. There is no dispute to the fact that the assessee has not filed any details before the A. O. for justifying non-deduction of tax on account of payment to residents of USA and UK. We find that although various details were furnished before the CIT(A), it is not clear from his order as to whether he has accepted or rejected those additional evidences filed before him. He has not at C all considered the details filed before him. Therefore, in the interests of justice, we deem it proper to restore the above issues to the file of CIT(A) for fresh adjudication. M Y The CIT(A) shall decide the issue in the light of theCM documents submitted by the assessee and in accordanceMY with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Grounds of appeal No. 3 4 are accordingly allowed for statisticalCYCMY purpose. 12. In grounds of appeal No. 5(a) and 5(b) the assessee K has challenged the order of CIT(A) in confirming the addition of 64,60,337/- made by the A. O. as prior period expenses. 13. Facts of the case, in brief, are that the A. O. during the course of assessment proceedings noted from the details furnished before him that the assessee has paid expenses pertaining to earlier year to the extent of 64,60,337/- and also received income relating to earlier year to the extent of 9,35,780/- and has debited the net amount of 55,24,557/- in the PL account as prior period expenses. According to the A. O., the legal position 222i i i i
  • 235. i ii i is that income pertaining to earlier years is taxable on receipt basis u/s 41 of the Act but expenses pertaining to earlier year are not allowable as they are not pertaining to the year under consideration. He further noted that the assessee company has not filed any documentary proof in support of its claim that the prior period expenses actually crystallised during the year under consideration. Rejecting the various explanation given by the assessee and relying on a couple of decisions, the A. O. treated the receipt of 9,35,780/- as income of the year. He, however, disallowed the claim of 64,60,337/- and added to the total income of the assessee. 14. In appeal, the CIT(A) confirmed the addition made by the A. O. by holding as under:– “The argument of the appellant fact of the case have C been considered. In the assessment order it has been M mentioned that the appellant has claimed the expenses Y pertaining to earlier year to the extent of 64,60,337/- and the appellant has also received income relating to earlier year to the extent of 9,35,780/- . The appellantCMMY has adjusted these two amounts, which has not beenCY allowed by the A. O. The income pertaining to the earlierCMY year is taxable u/s 41 of the Act. While the expenses incurred for the prior period is not allowable unless it is established that the liability to pay the amount actually K crystallized during the year. The AO had provided the appellant an opportunity to explain the position. However, the appellant had not filed any documentary proof in support of its claim that the prior period expenses have crystallised during the year. Even during the appellate proceeding the appellant has mentioned a number of the case laws, however, no effort is made to produce any documentary evidence to show that the expenses actually crystallised during the year. Hence the disallowance made by the A. O. on this account is quite justified. The disallowance is, therefore confirmed.” 223i i i i
  • 236. i ii i 15. Aggrieved by such order of the ld. CIT(A), the assessee is in appeal before us. 16. After hearing both the sides, we do not find any infirmity in the order of the CIT(A). It is the settled proposition of law that for claiming any expenditure as allowable deduction, the onus is always on the assessee to substantiate with evidence to the satisfaction of the A. O. that the same is genuine business expenditure. Undoubtedly, the assessee in the instant case has failed to justify the allowability of claim of prior period expenses of 64,60,337/- during the year before the A. O. CIT(A) by showing that the expenditure has crystallised during the year. Even before us also the assessee could not substantiate that the expenses have crystallised during the year under consideration. Therefore, the addition of C 64,60,337/- made by the A. O. and sustained by the CIT(A) is justified. We do not find much force in the submission of the ld. Counsel for the assessee that the same M Y should have been netted off and the balance only couldCM have been disallowed as a deduction during the relevantMY previous year. In our opinion, the addition of prior period income of 9,35,780/- is governed by provisions of section 4 1(1) whereas the allowability of prior period expensesCYCMY of 64,60,337/- is governed by the provisions of section K 37(1) of the Act. Further, the A. O. had also given a finding that the prior period expenses have not been incurred for earning the prior period income. Nothing has been brought on record to controvert the finding given by the A. O. In this view of the matter we do not find any infirmity in the order of the ld. CIT(A) and uphold the same. The grounds raised by the assessee are accordingly dismissed. ITA 905/Mum/2008 (By the Revenue for A. Y. 2002-03) 17. Grounds of appeal No. 1 2 reads as under:- “1. On the facts and in the circumstances of the case and in la, the CIT(A) erred in directing the Assessing Officer 224i i i i
  • 237. i ii i to verify whether ‘software usage expenses’ of 68,45,718/- had been included in disallowance of ‘Software Product Development expenses’ of 4,24,37,733/- and if so, rectify the assessment order without appreciating the fact that under sec. 251(1) of the I. T. Act the CIT(A) himself ought to have verified and quantified the relief and ought to have given direction accordingly.” 2. On the facts and in the circumstances of the case and in la, the CIT(A) erred in directing the Assessing Officer to verify whether ‘fixed assets’ purchased by the assessee of 23,00,000/- has been already capitalised by the assessee as ‘Fixed assets’ and if so, rectify the assessment order without appreciating the fact that under sec. 251(1)of the I. T. act the CIT(A) himself ought to have verified and quantified the relief and ought to have given direction C accordingly.” M 18. As can be seen from the above grounds, the grievance Y of the Revenue is that the CIT(A) has no power u/s 251(1) to set aside the matter to the file of the A. O. for verification.CMMY 19. Both the sides have fairly agreed that although the CIT(A) has no power to set aside the issue, however, theCYCMY Tribunal has the power to set aside the issue to the file K of the A. O. for verification and adjudication of the issue in accordance with law. We, therefore, restore the above two issues to the file of the A. O. for verification and fresh adjudication in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds of appeal No. 1 2 are accordingly allowed for statistical purpose. 20. Grounds of appeal No. 3 reads as under:– “On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow the assessees claim of bad debts of 3,54,984/- without appreciating the fact that bad debt 225i i i i
  • 238. i ii i pertained to the current year under consideration and the assessee could not fulfil the basic conditions laid down u/s 36(1)(vii) r.w.s. 3692) of the I. T. Act, 1961.” 20.1 After hearing both the sides, we find the assessee company had debited bad debts written off amounting to 3,54,984/-. We find after going through the full details filed by the assessee, the A. O. disallowed the claim of bad debts on the ground that the transactions pertain to the current year and the same was written off by the assessee in the same year itself. According to the A. O. the bad debt claimed by the assessee has in fact not yet matured to claim it as bad and irrecoverable. We find the CIT(A) allowed the claim of bad debts on the ground that the assessee fulfilled the conditions of section 36(1)(vii) r.w.s. 36(2) of the Act. We find this C issue has now been decided in favour of the assessee by the decision of Honble Supreme Court in the case of TRF Ltd. Vs. CIT 323 ITR 397 wherein it has been M Y held that after the amendment of section 36(1)(vii) of theCM I. T. Act, 1961 w.e.f. April 1, 1989, in order to obtainMY a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. Since the assessee has writtenCYCMY off the amount of bad debts in the books of account, K therefore, in view of the decision cited above, we do not find any infirmity in the order of the CIT(A) in allowing the claim bad debts written off. The ground raised by the Revenue is accordingly dismissed. 21. Grounds of appeal No. 4 being general in nature is dismissed. ITA No. 9061Mum12009 (By the Revenue for A. Y. 2003-04) 22. The only ground raised by the Revenue reads as under:- “On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to revised the depreciation on 33,57,040/- representing 226i i i i
  • 239. i ii i various software acquired by the assessee during the year under consideration @ 60% as against 25% allowed as per I. T. rules by the Assessing Officer without appreciating the fact that rate of 60% is effective only from A. Y. 2004-05.” 23. After hearing both the sides, we are of the considered opinion that the issue has to go back to the file of the A. O. for fresh adjudication of the issue in the light of the ratio of the decision of the Special Bench of the Tribunal in the case of Amway Enterprises vs. DCIT reported in 301 ITR (AT) 1 (Del SB) Accordingly, we deem it proper to restore the issue to the file of the A. O. for fresh adjudication in the light of the decision cited above and in accordance with law after providing due opportunity of being heard to the assessee. The ground C of appeal raised by the Revenue is accordingly allowed M for statistical purpose. Y 24. In the result, the appeal in ITA No. 1 120/M/2008 for A. Y. 2002-03 is partly allowed for statistical purpose and appeals in ITA No. 905 906/Mum/2008 for A. Yrs.CMMY 2002-03 2003-04 are allowed for statistical purposes. Order pronounced on this 25th day of May, 2011.CYCMY K Tribunal can issue direction beyond the scope of the appeal for correction of error – Delhi HC Monday, September 19, 2011 Insilco Limited Vs CIT (Delhi High Court) – HonourabTribunal has rightly given the aforesaid directions, which are nothing but pointing out what the AO was required to do under the law. This issue was very much before the Tribunal and the Tribunal has given 227i i i i
  • 240. i ii i these directions to give complete effect to the orders passed in quantum proceedings. It is trite law that nobody can be allowed to enrich itself unjustly and in the matter of calculation once an error is found that can always be directed to be corrected. Therefore, we do not agree with the submission of the learned counsel for the appellant that the Tribunal has exceeded its jurisdiction. Various judgments cited by the assessee on the premise that the Tribunal has set up a new case are not applicable, as no such new case has been set up by the Tribunal. IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA No.179 of 2009 RESERVED ON: MAY 05, 2011 PRONOUNCED On: JULY 11, 2011 C INSILCO LIMITED VERSUS COMMISSIONER OF INCOME M YCM A. K. SIKRI, J.MY 1.           This appeal was admitted on the followingCY questions of law:CMY “1. Whether the Tribunal was correct in law in issuing directions to the AO K to recalculate the amount of refund, which refund had been allowed to the assessee on the basis of an order passed under Section 254/143(3) dated 25.02.2004/28.06.2004, which order had become final and was also not the subject matter of appeal before it? 2. Whether the directions given in order in para 20 were necessary and did not amount to setting up a new case, which case was not set up in the order made u/s 154 of the Act and was the subject matter of appeal?” 2. The questions of law as formulated while clearly demonstrate that a very limited issue, in a narrow compass, arises in this appeal preferred by the appellant/assessee. Challenging a portion of the order 228i i i i
  • 241. i ii i passed by the Income Tax Appellate Tribunal (hereinafter referred to as „ the Tribunal ) has impugned certain observations and issued directions to the Assessing Officer (AO) to recalculate the amount of refund allowable after tax deductable at source allowable thereon under Section 244A of the Income Tax Act („ the Tax in short). The AO included substantial income earned by the assessee while computing the taxable income. The Tribunal was dealing with the appeal preferred by the Revenue and the Revenue questioning the order of the CIT(A) whereby CIT(A) had deleted the interest charged by the AO under Section 220(2) of the Act. To this extent, the Tribunal affirmed the order of the CIT(A) and dismissed the appeal. However, thereafter the Tribunal made certain observations and issued the aforesaid directions. According to the assessee, when the Tribunal had upheld the order of the Commissioner C M of Income Tax (Appeals), it could not travel beyond the Y scope of the appeal preferred by the Revenue and issued such directions which are not only beyond the scope of the appeal, but also in excess of jurisdiction andCM authority of the Tribunal under Section 254(1) of theMYCY Act. As per the Tribunal, it was nothing, but a necessaryCMY consequence, on the facts of this case, to give complete effect to the orders passed by the Tribunal in the quantum proceedings. In order to appreciate the controversy, K we need to traverse the necessary facts, which are as follows: The assessee had filed return of income for the Assessment Year 1992-93 declaring „ NIL income. In response, the assessee received intimation dated 29.06.1993 granting return of Rs. 10,15,480/- comprising of TDS amount to Rs. 8,83,022/- and interest of Rs. 1,32,458/- thereupon calculated under Section 244A of the Act. Within three months thereafter, however, the assessee filed revised return along with further TDS certificate in the sum of Rs. 60,15,566/-. Pursuant 229i i i i
  • 242. i ii i thereto, the assessee received another intimation dated 30.03.1994 granting refund of Rs. 64,36,655/- (TDS of Rs. 60,15,566 + interest of Rs. 4,21,089/-) under Section 244A of the Act. The assessment was thereafter carried out in assessment orders dated 30.03.1994. This was, however, revised to Rs. 2,83,96,346/- in view of the orders passed by the CIT(A). The assessee paid demand for tax and interest on this assessed income by way of adjustments of refunds/payments. The matter, on merits, was, however, taken in appeal before the Tribunal which appeal was disposed of vide orders dated 17.09.2002. 3.     The Tribunal disposed of this appeal on 17.09.2002 directing the AO to assess the interest of Rs. 2,69,84,301/- in the Assessment Year 1993-94. We may note here that the present controversy has arisen C while giving effect to this order passed by the Tribunal. M 4. The AO passed orders dated 25.02.2004 under Section Y 254/143(3) of the Act giving effect to the aforesaid order of the Tribunal. As per this order, a total income is assessed with Rs. 9360/- and tax relief was givenCMMY calculating the amount refundable to the assessee at Rs.CY 2,26,40,638/-. Interest on this refundable amount wasCMY also calculated and arrived at Rs. 2,37,76,490/- thereby showing a sum of Rs. 4,64,09,202/- as a total refundable income. As pointed out above, in the revised return K filed by the assessee on 13.09.1993, it had filed TDS certificate of Rs. 60,15,566/-. This certificate pertains to the aforesaid interest income and when the interest income was found relatable to the Assessment Year 1993- 94, the assessee was naturally not entitled to TDS credit of the aforesaid amount in the Assessment Year 1992- 93. Finding this error in the orders passed by the AO dated 25.02.2004, the Tribunal gave direction to the AO to rectify its order by withdrawing credit for TDS for the Assessment Year 1992-93 and allowed the same in the Assessment Year 1993-94. 230i i i i
  • 243. i ii i 5. The AO, in these circumstances, issued notice under section 154 of the Act proposing to rectify intimations passed under Section 143(1)(a) of the Act earlier to withdraw the credit for TDS at Rs. 68,98,588/- in Assessment Year 1992-93 and allow to the same in the Assessment Year 1993-94. This obvious effort was accepted by the assessee as well who gave his no objection dated 26.02.2004 to the aforesaid proposed rectification. The AO issued rectification orders dated 26.08.2004 revising tax computation raising demand of Rs. 74,52,135/-. The position upto this, is not disputed and the assessee agreed to pay the aforesaid amount. However, it so happened that in the orders dated 28.06.2004, while raising the demand of Rs. 74,52,135 on re-computation, the AO also charged interest under Section 220(2) of the Act. C 6. The interest of Rs. 1,30,10,582/- was calculated under the aforesaid provision. The assessee felt aggrieved M Y by this part of the order whereby it was called uponCM to pay the interest under the aforesaid provision. He,MY thus, preferred appeal before the CIT(A) against the aforesaid portion of the order. Though in the meantime, the demand raised vide order dated 28.06.2004 wasCYCMY recovered by way of adjustments, in appeal before the K CIT(A), the assessee succeeded. The CIT(A) held that there was no reason or occasion to charge interest under the aforesaid provision which was not even applicable in the facts of this case. While taking this view, the CIT(A) relied upon the judgments of the Apex Court in the case of Vikrant Tyres Ltd. Vs. First ITO [247 ITR 821] holding as under: “In respect of certain assessment years, assessment orders were served on the assessee and demand notices were issued and the assessee complied with the demands by paying the tax due thereunder within time. The appellate authority allowed the assessee s appeals against the assessment orders and the taxes paid by the assessee 231i i i i
  • 244. i ii i were refunded. The  appellant Tribunal dismissed the appeals of the Department; but, on a reference, the High court upheld the assessment orders. Thereafter, the Department made fresh demands and the assessee repaid within time the taxes as assessed and demanded. The Department demanded interest under Section 220(2) of the Income Tax Act, 1961, on the tax assessed for the period commencing from the date of refund of the tax upon the appellate order till the date the taxes were finally paid after disposal of the reference. The assessee filed writ petitions in the High Court challenging the demand of interest, contending that it was not in default because it had paid the taxes in compliance with the original notices of demand and it had not failed to comply with the demand and it had not failed to comply with the demand made under Section 156. The High Court C dismissed the writ petitions holding that Section 3(2) M of the Taxation Laws (Continuation and Validation of Y Recovery Proceedings) Act, 1964, kept alive the earlier demand notices even though payment in full had been made pursuant thereto and treated those earlier noticesCMMY as having been kept alive till the assessment orders wereCY upheld by the higher forum. On appeals to the SupremeCMY Court: K Held, reversing the decision of the High Court, (i) that the condition precedent under section 220 was that there should be a demand notice and there should be a default in paying the amount so demanded within the time stipulated in the notice. The assessee satisfied the demands under the notices issued under section 156 and nothing was due pursuant to the notices of demand. After the judgment of the High Court on a reference fresh demand notices were issued and in satisfaction of those demands the assessee had paid the amounts as demanded within the time stipulated therein. In such a situation, on a literal meaning of section 220(2), the Department had no right to demand interest for the period commencing 232i i i i
  • 245. i ii i from the date of refund of the tax upon the appellate order till the taxes were finally paid after disposal of the reference.” 7. The CIT(A) opined that the interest could be charged under the aforesaid provision only when there was a demand notice and there is a default in paying the amount demanded even after the time stipulated in the notice. In the present case, since the interest was charged from the issue of date of refund to the date of withdrawal of refund in spite of demand notice issued for the first time in June, 2004, the charging of interest from July 1993 to June 1994 was impermissible. He, thus, deleted the interest levied by the AO. 8. Another incidental fact which may be pointed out here is that the assessee had also taken a plea that the C AO had withdrawn tax credited of Rs. 68,98,588/- in M this Assessment Year (i.e. Assessment Year 1992-93), Y but had also given tax credit of only Rs. 61,58,732/- in the Assessment Year 1993-94. On this basis, it was contended that the tax credited of Rs. 7,39,856/- shouldCMMY have been allowed by the AO in the Assessment YearCY 1992-93. That is only the amount of Rs. 61,58,732 shouldCMY have been withdrawn in this year for which credit was given in the Assessment Year 1993-94. This contention was also accepted by the CIT(A) directing the AO to K rightly bifurcate the credit of TDS in the Assessment Year 1992-93 and Assessment Year 1993-94 in relation to the income assessed in two years. CIT(A) further held that the AO had to give credit TDS deducted either in the Assessment Year 1992-93 or Assessment Year 1993- 94. The Revenue was not satisfied with the aforesaid outcome and filed appeals challenging the order of the CIT(A) deleting the interest charge charged by the AO under Section 220(2) of the Act. 9. Insofar as this challenge is concerned, the Tribunal has not accepted the contention of the Revenue and has 233i i i i
  • 246. i ii i affirmed the order on this ground. 10. At the same time, the Tribunal also found that once charging of interest under Section 220(2) of the Act is held to be invalid, the issue relating to withdrawal of credit of TDS allowed in the Assessment Year 1992- 93 hangs in the air. These observations came to be passed as in the light of discussion by the Tribunal, in the earlier part of the order dealing with the contention of the Revenue that while giving effect to the order of Tribunal, the AO had prepared two ITNS-150, instead of one. If he had prepared one ITNS-150, the demand by way of reversal of refund on account of credit for TDS shifted to Assessment Year 1993-94 would have been first adjusted from the refund of Rs. 2,26,40,638/- and interest under Section 244A would have been computed on the C balance refund payable to the assessee. Therefore, the assessee was eligible for lesser refund on account of interest under Section 244A of the Act. It was pointed M Y out that as a result of deleting interest under SectionCM 220(2) of the Act, the assessee had got more refund thanMY what was legitimately due to it and the Revenue should not be made to suffer because of mistake committed by the AO in making two separate ITNS-150 for single orderCYCMY passed under Section 154 of the Act. The assessee had K countered the aforesaid submission by asking that the AO had passed two separate orders, one under Section 254/143(3) of the Act dated 25.02.2004 to give effect to the order of the Tribunal and another order dated 28.06.2004 under Section 154/143(1)(a) of the Act to rectify intimation earlier issued. The Tribunal dealt with these contentions and accepted the position that the AO committed mistake while giving effect to the orders of the Tribunal. It noted that the AO intended to rectify the mistake by issuing notice under Section 154 of the Act on 17.06.2004 to the assessee. The assessee gave no objection to proposed rectification of order under Section 143(1)(a) subject to the condition that interest 234i i i i
  • 247. i ii i was properly charged/allowed. Therefore, the assessee agreed for payment of interest on demand and right to receive interest on refunds as per the provisions of law. The AO vide orders dated 28.06.2004 has specifically stated that in order passed on 25.02.2004 under Section 254/143(3) of the Act, the credit for TDS amounting to Rs. 68,98,588/- on the interest income was wrongly allowed although the interest income on which afore- mentioned TDS was deducted was reduced from income for Assessment Year 1992-93. The AO after discussing the provisions of Section 199 read with provisions of Section 192 to 194 withdrew the credit for TDS from the Assessment Year 1992-93. Thus, the AO passed order under Section 154 of the Act rectifying order under Section 254/143(3) dated 25.02.2004, which is clear from the language employed in the said order. C No order rectifying intimation dated 30.03.1994 was M passed. In order to compute the refund payable by the Y Department, the office of the DCIT prepared two (Income- tax Computation Form) ITNS­150, one for allowing refund consequent upon giving effect to the Tribunal s order andCM the other for withdrawing the refund already granted.MYCY The column No.7 8 of the two “Income ComputationCMY Forms” were filed up as under: K In first ITNS-150: 1. Order under Section : 254/143(3) 1. Date of Order : 25.2.1995/28.6.1994 In second ITNS-150 235i i i i
  • 248. i ii i 1. Order under Section : 154/143(1)(a) 1. Date of Order : 28.6.2004 11. In view of the above facts, these two “income tax computations forms” one for refund due to and other for amount payable by the assessee cannot be seen in isolation of each other. They are complementary to each other and to be read together. For this conclusion, the Tribunal referred to the judgment of the Supreme Court C in the case of Kalyankumar Ray Vs. Commissioner of Income Tax [191 ITR 634] holding that that the ITNS-150 Form is a part of assessment proceedings and dealt with the mistake of M Y the AO in the following manner: “From the above discussion and the decision of theCMMY Hon ble Supreme Court in the case of Kalyankumar RayCY (supra), it is clear that ITNS-150 forms part of theCMY assessment proceedings. The word „ assessment is used in the Act in a number of provisions in a comprehensive sense and includes all proceedings starting with the K filing of the return or issue of notice and ending with determination of tax payable by the assessee as held by Hon ble Supreme Court in the case of S. Sankapa Vs. ITO [1968] 68 ITR 670(SC). The assessing officer in order to rectify the mistake of non-withdrawal of TDS credit in assessment year 1992-93 in order to rectify the mistake of non-withdrawal of TDS credit in assessment year 1992-93 in the order passed under section 254/143(3) on 25.02.2004, passed order under section 154 on 28th June, 2004 and two different ITNS- 150 forms prepared by the office and signed by the 236i i i i
  • 249. i ii i assessing officer are complementary to each other and will constitute part and parcel of order passed under section 154 on 28th June, 2004. The order passed under section 154 on 28th June, 2004. The order passed under section 154 on 28.06.2004, thus, will be rectification of order dated 25.02.2004 passed u/s 254/143(3) giving effect to the order of ITAT.” 12. The position which emerges from the foregoing discussion is encapsulated and recapitulated in the following manner: The assessee was earlier given the TDS credit in the Assessment Year 1992-93 and refunded that amount along with interest calculated under Section 254A of the Act. When the AO was giving effect to the orders of the Tribunal and passed the orders under Section 254/143(3) of the Act shifting the interest income from C M the Assessment Year 1992-93 to the Assessment Year Y 1993-94, it again calculated the interest on the amountCM which became refundable. However, the AO did not shift the TDS credit as well from the Assessment Year 1992- 93 to 1993-94. While correcting this mistakeMYCY and passed rectification order (to which the assesseeCMY had no objection), the mistake committed by the AO K was that he did not first adjust the refund of Rs. 2,26,40,638/- and interest under Section 244A thereupon, instead he charged interest under Section 220(2) of the Act. Though charging of such an interest was wrong, at the same time, the proper calculation would have been to first adjust from the refund of Rs. 2,26,40,638/- , the credit of TDS and interest under Section 220(2) of the Act. Since this was not done having regard to the aforesaid position in law, as explained by the Tribunal, the Tribunal has only directed to recalculate the same by correcting the arithmetical error. Otherwise, as rightly pointed out by the learned counsel for the Revenue and noted by the Tribunal also, the assessee 237i i i i
  • 250. i ii i would be benefitted unreasonably by getting more refund than what is legitimately due to it. It is a mere case of calculation and once this calculation was bought to the notice of the Tribunal and detected by the Tribunal, it is totally misconceived on the part of the assessee to allege that while giving these directions, the Tribunal has exceeded its jurisdiction. 13. This becomes crystal clear from the following analysis of the Tribunal given in para 20 after upholding the deletion of interest charged under Section 220(2) of the Act: “20. However, a balance has to be maintained in the findings made in the order. We have also held that after regular assessment, intimation drawn u/s 143(1)(a) cannot be rectified as the same does not survive. Once C charging of interest u/s 220(2) in the second ITNS-150 M is held invalid, the issue relating to withdrawal of credit Y of TDS allowed in assessment year 1992-93 hangs in air. The assessing officer has followed wrong procedure to withdraw refund allowed to assessee by preparing twoCMMY separate ITNS-150 instead of drawing one consolidatedCY ITNS-150. In consolidated ITNS-150, from the total taxCMY paid by way of TDS and regular payment he should have deducted the amount of refund already granted and on balance refund payable interest u/s 244A should have K been paid. This is a procedural lapse on part of assessing officer who can be rectified as per the law. In our view TDS credit (refund) for assessment year 1992-93 can be withdrawn by drawing one and only consolidated ITNS- 150. The assessing officer has not prepared any such consolidated ITNS-150. If it is not done the Revenue will be put to loss as the assessee has received undue interest u/s 244A on the refund of Rs.74,52,135/- already granted which is not permissible in law. It is interesting to note that on one hand assessee is objecting to charging of interest u/s 220(2) which is nothing but an action to set off interest allowed u/s 244A on refunds in first ITNS- 238i i i i
  • 251. i ii i 150. On the other hand, he is keeping silence on undue interest allowed to him. The assessee can claim what is due to it from the department and nothing else. The TDS credit is to be given in assessment year 1993-94. It will be taken in assessment year 1993-94 from very beginning meaning thereby that refund of TDS amount granted thereon will be withdrawn in assessment year 1992-93. Therefore the amount of Rs.74,52,135/- will be deducted from tax paid by the assessee. The assessing officer should have computed interest u/s 244A on net amount of refund after reducing from amount of the tax paid by refund already granted. Therefore, in our considered opinion it will be fair and proper to set aside the matter to the file of assessing officer with the directions to prepare one consolidated ITNS-150 giving effect to order of ITAT in assessment year 1992-93, withdrawing TDS credit in C assessment year 1992-93 and allowing refund of correct M amount of tax paid and interest thereon u/s 244A of the Y Act.”CM 14. We are, thus, of the opinion that the TribunalMY has rightly given the aforesaid directions, which are nothing but pointing out what the AO was required to do under the law. This issue was very much before theCYCMY Tribunal and the Tribunal has given these directions to K give complete effect to the orders passed in quantum proceedings. It is trite law that nobody can be allowed to enrich itself unjustly and in the matter of calculation once an error is found that can always be directed to be corrected. Therefore, we do not agree with the submission of the learned counsel for the appellant that the Tribunal has exceeded its jurisdiction. Various judgments cited by the assessee on the premise that the Tribunal has set up a new case are not applicable, as no such new case has been set up by the Tribunal. 15. Question of law stands decided against the assessee. This appeal is accordingly dismissed with a cost quantified at Rs. 25,000/-. 239i i i i
  • 252. i ii i TIPS TO TACKLE OFFICE POLITICS Tuesday, September 20, 2011 Today I received this on my mail I would like to share this with you so I am posting this here I think this is very useful for most of us. ---------------------------------------------------------------------------------------- ------------------------------------------ Here are some tips to tackle office politics: 1. Be polite with your subordinates and others. Understand clearly that people around you are human beings and not robots or machine. They also have heart. They can also make errors. Dont shout or become angry on them. C 1. MIND YOUR OWN BUSINESS. Dont interfere with other peoples work. M YCM 1. Speak only the matter which is important. Unnecessary talk will waste your and others time and energy.MYCY 1. Don’t always go for the obvious. Consider the moral aspect also. This ability of distinguishing what is right and what is wrong will be developed when you getCMY matured slowly, till that time take the guidance of K your parents, elders and teachers. 1. Always be honest with the employer. Give the most of your output so that he is satisfied with your performance. Let all the thousands of employees of the company be against you, if you are with the employer, then you are doing your duty properly. In this context one quote of the great Politician Chanakya is worth mentioning: 240i i i i
  • 253. i ii i “A moon can give more light that thousands of stars cannot. Similarly a learned and cultured son is far better that hundreds of son deprived of good qualities.” Following the lawful orders of the employer, can be learnt from this small story: A Gurkha soldier, from the British Army was severely wounded during the war and was on the verge of death. The doctors met the Commander Chief and told that the Gurkha will die unless he shows some will to live. The Commander Chief immediately rushed into the room where the wounded Gurkha was lying, and barked, “live”. And the Gurkha obeyed. 1. Don’t waste time worrying about what others think about you. They are, on the contrary thinking, what you think about them.  C M 1.  If criticism is getting you down, always remember, “A statue was not erected in honor of a critic” YCMMY 1. Utilize your free time for knowledge up-gradation,CY instead of gossiping.CMY 1. Dont try to be superman and fight if there is a clash, K go through proper channel, like HR, Manager, Director etc. If all the methods are not workable, then go by Tit for Tat method. 1. All the good people should not always tolerate injustice. One of our Indian Saints has once said that “If we take MALA (for chanting GOD’s name), then sometimes we should take BHALA (weapon) also.” We were ruled by Mughals for some centuries, then, because of the efforts of Shivaji Maharaj, Maharana Pratap and other great personalities, we got freedom, then the Britishers ruled us for  150 years, now we got freedom because of great freedom fighters, now its 241i i i i
  • 254. i ii i our duty to maintain the peace and freedom of our country. 1.  I will end this article with this very important statement: “ALL MEN CAN SEE THESE TACTICS WHEREBY I CONQUER, BUT WHAT NONE CAN SEE IS THE STRATEGY OUT OF WHICH VICTORY IS EVOLVED Amends Notification No. 17/2004-Service Tax, dated the 10th September, 2004 Tuesday, September 20, 2011 NotificationNo. 47/2011 – Service Tax,   New Delhi, the 19th C M September, 2011 G. S. R. (E).- In exercise of the powers conferred by YCM sub-section (1) of section 93 of the Finance Act, 1994MY (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in notificationCYCMY of the Government of India in the Ministry of Finance K (Department of Revenue) No. 17/2004-Service Tax, dated the 10th September, 2004, which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i), vide number G. S. R. 591 (E), dated the 10th September, 2004, namely:-  In the said notification, for the words, figures and brackets “amount of cess paid on the said transfer of technology under the provisions of Section 3 of the Research and Development Cess Act, 1986 (32 of 1986).”, the following words, figures and brackets  shall be substituted, namely:- 242i i i i
  • 255. i ii i “amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986 (32 of 1986), subject to the following  conditions, namely:- (A)        the said amount of Research and Development Cess is paid within six months from the date of invoice or in case of  associated enterprises the date of credit in the books of account:             Provided that the exemption shall be available only if the Research and Development Cess is paid at the time or before the payment for the service; (B)        records of Research and Development Cess are maintained for establishing the linkage between the invoice or the credit entry, as the case may be, and the C Research and Development Cess payment challan. M This notification shall come into force on the 2. date of Y publication in the Official Gazette.CM  [F. No. 354/140/2011-TRU]MY (Samar Nanda)                                           UnderCYCMY Secretary to the Government of India Note.- The principal notification No. 17/2004-Service Tax, K dated the 10th September, 2004, which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G. S. R. 591 (E), dated the 10th September, 2004. 243i i i i
  • 256. i ii i Amends Notification No. 18/2002-Service Tax, dated 16th December, 2002 Tuesday, September 20, 2011 NotificationNo. 46/2011 – Service Tax, Dated-  19th September, 2011 G. S. R.  (E).- In exercise of the powers conferred by sub- section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 18/2002-Service Tax, dated the 16th December, 2002, which was published in the C Gazette of India, Extraordinary, Part II, Section 3, Sub- M section (i), vide number G. S. R. 823 (E), dated the 16th Y December, 2002, namely:-CM In the said notification, for the words, figures andMY brackets “amount of cess paid on the said transfer of technology under the provisions of Section 3 of the Research and Development Cess Act, 1986 (32 of 1986).”,CYCMY the following words, figures and brackets  shall be K substituted, namely:- “amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986 (32 of 1986), subject to the following  conditions, namely:- (A)        the said amount of Research and Development Cess is paid within six months from the date of invoice or in case of  associated enterprises the date of credit in the books of account:             Provided that the exemption shall be available only if the Research and Development Cess is paid at the time or before the payment for the service; 244i i i i
  • 257. i ii i (B)        records of Research and Development Cess are maintained for establishing the linkage between the invoice or the credit entry, as the case may be, and the Research and Development Cess payment challan. This notification shall come into force on the 2. date of publication in the Official Gazette. [F. No. 354/140/2011-TRU] (Samar Nanda) Under Secretary to the Government of India Note.- The principal notification No. 18/2002-Service Tax, dated the 16th December, 2002, which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G. S. R. 823 (E), dated C the 16th December, 2002 and was last amended vide  M notification No. 23/2008-Service Tax, dated the 10th May, 2008, which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide Y number G. S. R. 368 (E), dated the 10th May, 2008.CMMYCYCMY Form 3CD with annexures, 3CA, 3CB and K Caro Report in Excel Format (Updated) Tuesday, September 20, 2011 International companies answerable to Indian consumer courts for service deficiency – Supreme Court Tuesday, September 20, 2011 International companies are answerable to Indian 245i i i