Wednesday, April 24, 2013

ICL top-up - good faith?TG ; itatonline - harassment of taxpayers ! ;Taxmann RENT ? concept explained !, et al

On concept of 'Good Faith' -?!
Good faith in Contract Law   >> WHAT about its implications/significance under a STATUTE?!
25 Apr 2013

IMPROMPTU (intent to provoke more thoughts)
"..English contract law does not recognise a general duty of good faith......"

May be so, but with all those usually trailing "ifs and buts" ; perhaps, even under the Indian contract law. Provided that, one is concerned with a contract of the kind in which the impact/effect is confined to only the rights and interests of merely /solely the 2 parties to the contract agreement; And in one's conviction, however, certainly not of the kind involving the rights and interests of 'third' parties (e.g. stakeholders).

Incidentally, an interesting point, but for wrong reasons, has surfaced , centered on the very concept of 'good faith' in relation to performance of his duties by an officer under the I T Act; with partcular reference to his entitlement to claim immunity/protection from pesonal action against- ref. section 293 (may be, within the ambit of section 280 as well) .

If interested,attention is invited to the lately reported and discussed tax cases in which the lakhs of taxpayers' woes / grouses have come to be exposed, consequent upon the tax officers not acting strictly in accordance with but in violation /disregard/disobeyance of the mandates of the law, so also of the mandamus issued by courts; in the result, causing hardships/harassment to lakhs of taxpayers, of such a magnitude as never ever heard of before.

To get a glimpse, one may begin with a reading of the court case in front line @Taxguru, titled - "HC issued guidelines to end TDS credit & refund adjustment harassment of Assessee by CPU" ; and the BL article @ "Take up TDS problems with deductors, Delhi High Court tells taxmen" as well.

For more, suggest to read individual's viewpoints aired through the related blogs @ swamilook.

One more feather to the 'cap'; not a jewel to the crown !

Delay caused due to administrative mechanism of Government not condonable

April 26, 2013

The excuse /explanation given by the concerned tax authority for such a long delay of over 3 years is bound to go down in the history of tax administration as a monumental blunder of all times. By paradoxically attributing it to so called ‘administrative mechanism’ there has been a tacit admission , rather self betrayal, of the gross in-built deficiencies or systemic failure in the tax administration.

That such delays continue to occur, with no let-up, despite the warnings and directions of the courts, so also of the higher ups –in the department and the ministry, -bear testimony to the fact that the officers entrusted with the duty of timely filing of such petitions (also appeals) have nothing but scant respect to what the law requires even in such simple matters . Notwithstanding that, as has been in the instant case, such delays, having no reasonable cause, entail costly consequences to the Revenue; an irreparable / irretrievable loss to the exchequer.

According to a view, perhaps, the only solution/resort to put an end to the recurrence of such uncouth events would be for the courts to fix the personal responsibility of compensating for the loss to the Treasury, on the guilty officer (s). Another strong reason, – even small delays in the filing process itself , in turn, go to add up and heavily contribute to delayed administration of justice.

On the inordinate delays in the administration of justice prevailing for long, Nani A Palkhivala, an eminent and erudite scholor-lawyer of our times, said, with a mild but sharp touch of sarcasm:

“… We as a nation have some fine qualities, but a sense of the value of time is not one of them. Perhaps there are historical reasons for our relaxed attitude to time. Ancient India had evolved the concepts of eternity and infinity. So what do ..years, wasted in a litigation, matter against the backdrop of eternity? Further, we believe in reincarnation. What does it matter if you waste this life? You will have many more lives in which to make good.”

(Source: “WE, the Nation THE LOST DECADES”)

Another Story unfolded !

Vijay Prakash Agrawal vs. CIT (Allahabad High Court)

The observations of the court in the instant case, just as in a series of reported cases of the kind , especially in recent times, are, from the viewpoint of the taxpaying community, required to be read and understood in proper light. For such purpose, it is not but imperative to keep focused on the inescapable but glaringly obtaining supervening realities.

The law on income-tax is just one of the many; besides and same way as on any other subject , of every concern to the ‘subjects’ (the people). Lately, the judiciary has, by way of meeting the crying need of the hour, rather to say in modern terms, - exhibiting sense of judicial activism , (that is, its courage of conviction), off and on, more often than ever before, been compelled to, without mincing words, pinpoint the ongoing worrisome irregularities, in the implementation and administration of the tax law, strictly both in its letter and spirit. Some of the recently reported cases have brought to surface the alarmingly growing actual factuality that the lower authorities have been acting in blatant disregard of the specific directions, advice, so on, of their own superiors; unwittingly or otherwise, without hardly realising that such a conduct is , besides being a dereliction of duty (ies) , is tantamount to ‘insubordination’ of a grave and serious nature /highest order. The recently reported Delhi HC Order on a closely related topic (TDS Woes /Blues) (Ref. HC issued guidelines to end TDS credit & refund adjustment harassment of Assessee by CPU (a rare instance of court actiing in exercise of ts epistolary jurisdiction) ; also, the article @ Take up TDS problems with deductors, Delhi High Court tells taxmen ) is clarificatory and revealing enough to import the message/moral of the story!

The detailed Order, it may be noted, bears on its sleeves the unfortunate scenario; the harsh indisputable fact that both the AOs and the in-charges of CPC, not to speak of others to be blamed, have not taken seriously even the court’s ‘diktats’ (in the form of ‘mandamus’), thereby holding themselves out as directly responsible for the varying types of hardships and harassment meted out to the taxpayers; including the salaried class, who by any yardstick, could only be regarded to have invariably been honest ; in comparison, more so than any other category.

As rightly remarked by the court in the instant case, -“Time has come for the heads of the departments to keep a strict vigil on such shirkers and to fix their responsibility”. One is tempted to add that, the quoted words of caution are necessarily to be regarded as primarily addressed to the CBDT, it being the highest empowered executive authority, in control and hence ultimately responsible or entitled to commends, for a profoundly proper administration and implementation of the law, of which it is a creature, and, as such, answerable to every action or inaction of its subordinates, which is not strictly within the frame work, or runs counter to the mandates, of the law.

One has remained wondering for long, why certain provisions of the Act namely, section 293 and section 280, though pushed to the tail end/ an obscure corner of the enactment, have remained to be even looked at , much less the objective and implications thereof, obvious or hidden, to be explored and invoked as appropriate in a given case. To put it differently, it has been one’s longstanding conviction that , those provisions being very much part and parcel of the Act itself, if construed in the true spirit, do seem to hold the effective but ultimate solution to improving upon the largely prevailing deplorable state of affairs. This is an aspect which might be worth exploring by, not barring the Government / Revenue, by the so called advising tax experts and their aggrieved hapless clientele, alike. The individual viewpoints on this unique vital aspect as brought out in the published article, – (2008) 169 Taxmann (journal) 14-21 (para 2.1), may be of help for a grass root grip of the whole matter.

(Above being one’s own sporadic thoughts/reactions, still shared, are open to be edited by experts having field exposure/hand-on experience!)

< Honest tax-payer should not be subjected to unnecessary harassment – HC

Should the ongoing battle (turned war!) of wits be perceived insightfully and analysed incisively, it will be realised that the instant court case, so also several related others recently reported/narrated (one of them being – “HC issued guidelines to end TDS credit & refund adjustment harassment of Assessee by CPU”) go to succinctly bear out a basic fallacy; in that, by any logic or sound reasoning,to project it as case (s) of ‘harassment’ is too mild a description to qualify as a fitting reprimand or reproach in the eyes of even the common law and in the context of principles of natural justice. For, these are clearly instances, where a ‘public servant’, actng in disregard or disobedience of, or failing to act strictly according to, the diktats (mandates) of the law, so also the repeated judicial pronouncements, departmental directives and binding instructions,so on.To be precise,if strictly viewed, it is, indisputably, tantamount to disobedoience or insubordination of the gravest kind /venial order, by any standard unexpected of a ‘public servant’; so grave that he cannot be regarded to qualify and avail of the otherwise possible defence namely,-as anything done ‘in good faith’ or ‘intended to be done under this Act’, -as envisaged by the law (in particular, in section 293 of the Act). If that be the right, nay righteous, premise, then all the lawful consequences must unquestionably follow.

Key Note: Deliberately left open to be commented/elaborated, after a devoted study and intellligent deliberation, by right minded experts at large; also to sincerely take on, for the common good,the confronting problems with an impartial but multidimentional approach, have a free and frank discussion with the people in governance, to the end of a lasting solution.

For a few thoughts on the facets hinted at above, one may refer the published article- (2008) 169 Taxmann (journal) 14-21 (para 2.1); which may be of help for having a grass root grip of the whole matter.
Passing On To >

www.taxmann.comWednesday, April 24, 2013
Taxmann Daily
A Tax & Corporate Laws Daily

Landlord-tenant relationship attracts sec. 194-I; no liability arises on mere reimbursement of rent
In the instant case, the assessee-company took over the running business of 'IISPL' and entered into an agreement with it to use the tenanted premises registered in name of IISPL for a period of six months. All the payments were remitted to various parties by IISPL on behalf of the assessee-company. In turn, assessee reimbursed said payments to IISPL and deducted tax at source in terms of provisions of section 194C on the amount of reimbursement on actual basis. However, AO held that tax was required to be deducted in terms of provisions of section 194-I from said payments. Consequently, the AO raised the demand for short deduction of tax under section 201 and levied interest under section 201(1A). The CIT(A) reversed the order of AO by concluding that the assessee was under no legal obligation to deduct tax at source and, therefore, no interest was chargeable for non-deduction of tax at source. Thus, revenue filed the instant appeal against the order of CIT(A).
The Tribunal held in favour of assessee as under:
1) The fact that the assessee was allowed to use premises by IISPL, couldn’t lead to the conclusion that the assessee had any interest as a lessee, sub-lessee or a tenant over the various premises. The existence of a landlord-tenant relationship or a licensor-licensee is a must before a payment can be termed as a rent;
2) No such material was evident from the order of the AO nor did the DR bring any such material evidencing existence of a landlord-tenant relationship or a licensor-licensee;
3) As the revenue hadn’t placed any material controverting the aforesaid findings recorded by the CIT(A) nor brought any tenancy or sub-tenancy agreement between the assessee and IISPL, the order of CIT(A) had not to be interfered with – ACIT(TDS) v. SERCO BPO (P.) LTD. [2013] 32 223 (Delhi - Trib.)

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