Sunday, September 13, 2015

Sub: E'Filing of itr of any person By LRs- Requiurement of CPC to Register 'LH'- A Critical Analysis

Arun Ganesh Jogdeo vs. UOI (Bombay High Court)

Dept directed to follow directions of Delhi High Court in 352 ITR 273 and to be vigilant and ensure that such mistakes do not occur. Dept directed to set up a self-auditing vigilance cell to redress taxpayers' grievances
The Income Tax authorities shall follow the directions given by the Delhi High Court in case of Court On Its Own Motion v. Commissioner of Income-tax 352 ITR 273 in other cities, including the city of Mumbai, in Maharashtra State. We hope and trust that the Income Tax Department will be more vigilant and ensure that such mistakes will not occur in future. We also direct the Income Tax Department to form a Vigilance Cell to ensure that there is a monitoring authority, which would monitor various policy decisions which are taken and a self auditing mechanism is required to be formulated to ensure that the income tax assessees are not made to run from pillar to post for the purpose of redressal of their grievances

Faulted Requirement -

Official Page Link:
Register Legal Heir - Income Tax E Filing


OFFHAND (To share Own viewpoints):

That  is seen to have fairly summed up, in substance, the long list of do’s and don’ts on the subject of, – E-filling Of Tax Audit Report (TAR) & Income Tax Return, To one's understanding, these pertain to specific areas of relevance to persons required to comply with the TAR requirement and tax return filing of the law.

In some of the contexts, the term “legal heir” has been employed. This, however, is not seen to be a term used as such, anywhere in the IT Act. In particular, ‘legal heir ‘is not the concept adopted for the purposes of Sec. 139 and /or of the related /connected sections in CHAPTER XV – LIABILITY IN SPECIAL CASES.
Anyone having an exposure or statutory obligation to compliance with the requirements of the IT Act, including among others the tax return filing, needs to take a conscious note of and be reasonably aware of the implications of the referred provisions. In short, as read and understood by one, those are provisions which must be of every concern not only to a person who is a ‘legal heir’ within its legal meaning but also quite a few others to whom CHAPTER XV , in terms , applies.
With the foregoing in mind, in one’s independent perspective, the guidelines from the Revenue as summed up in the write-up do not cover all such cases being other than ‘legal heir’ as envisaged there under. To put it simply, the requirement of special “Legal Heir – Registration”, etc., do not seem to call for compliance by all others who are obligated to file a tax return as “legal representatives” or “representative assesses” coming within the purview of the “SPECIAL CASES”.
No need to add, the foregoing aspects are of every relevance, also to tax return filing under the status of ‘individual’, on behalf of ‘deceased’ , as his legal representative, including a designated nominee, in respect of ‘income’ accruing or arising or received up to the date of demise, for which a separate tax return has to be filed. Recommend to have a mindful look into the applicable separate guidelines/FAQs available online, to have a clear-cut understanding, with no unwarranted confusion in anyone’s own mind.
Over to the law experts at large, particularly in tax practice, to make an in-depth study; and take up the matter suitably with the CBDT , to the end of having resolved all the problems faced or foreseen in e-filing , at the earliest.
In pith and substance, the suggestion is that, should it be called for, the shortcomings/deficiencies in the CPC in place should be plugged in with necessary correctives, so that e-filing is made quite simple, taxpayer friendly and hassle- free.

To add:
Suggest that any professional in practice, having had any hand-on experience, should usefully share the outcome, for the benefit of the rest, ON: had an attempt been made, and also succeeded, in e-filing by an ‘individual’ as LR of a deceased ‘individual’,- by simply ensuring to fill in the Verification his PAN, but clearly indicating on the face of the return, in slots wherever allowed, that it is a return of income of the deceased , with so and so PAN, for whom he is acting as a LR as per the scheme of the Act. Depending on the success or otherwise of such an attempt, of course, if not successful, the problem would be required to be taken on with, and try and have resolved by, the Revenue by making an effective representation.
Hope the suggestion is clear enough for anyone to get a grip of it.

TO attempt and dilate further:

In one’s honest view, the idea silently given shape and stealthily introduced via back door deserves to be given more insightful thoughts; and to keep doing so, until the inherent short comings /deficiencies come to be realised. It is now left to one and all concerned, especially advising /assisting CAs and lawyers in tax practice, in the larger interests of their clientele / taxpayers obligated to comply, to intelligently probe, from all angles, into the subject requirement brought in as part of the CPC in function. And if agreed / conceded, they are expected to pursue with the CBDT to having the things set right. For this purpose, the CBDT needs to be made to realize that the subject requirement, if considered in proper light, is not warranted at all; and is not likely to stand the tests of common sense, being bereft of any sound logic ; and, if were to be challenged, is quite unlikely to find favourable consideration by the judiciary. To be precise, in one’s well thought out viewpoint, going by wisdom to be gathered in hindsight, the said requirement , seemingly brought in ‘impulsively’, suffers from the same faulty logic, fallacy and deficiencies as the other idea of ‘Form V’ rolled out ( – the reference is to the obligation imposed on tax payers, to send a hard copy of the acknowledgment and further ensure to having it received and taken on record by the CPC)- as originally introduced , but had to be later rolled back.
For knowing more, the viewpoints shared on the related/closely connected topic of, – TDS woes , and the genuine bickering of / hardships meted out to taxpayers as given vent and to be found in public domain , might have to be purposely looked into.

To probe further:
Anyone, especially a CA or lawyer in tax practice, is expected to be aware and have made a conscious note of the several aspects with which the Delhi HC has dealt with in its landmark judgment and given useful directions to the Revenue. Those are aimed at resolving the varying types of woes faced by taxpayers in the matter of being allowed proper credit for TDS; more particularly, all such woes requiring to be additionally remedied in the aftermath of the CPC coming into being.

In the judgment, one such aspect, to which the court’s attention was drawn, is noted to be set out, as under:


6.... the Returns of the assesses who have expired are filed by legal heirs, and, in case of refund, the same is issued by CPC in the name of dead person only. This causes great harassment to get the same rectified online or through assessing officer.


As may be readily seen, much emphasis, rather exclusively, has been laid on, (a) tax returns filed by ‘legal heirs’ (LHs), and (b) harassment confronted with in refund claims filed online. Further, so far as could be seen (subject to/pending a thorough reading of the judgment), the referred grievance has not been gone into in any greater details, or argued out, in all its ramifications; hence the court has not been persuaded to issue appropriate directions to the Revenue, comprehensive enough to cover all possible types of situations. To mention just one, besides others, not so covered, is instance of return filed not by LH (in its legal meaning), but by say, an executor or administrator of the deceased estate, pending full and final distribution of the estate to its beneficiaries as willed by the deceased.
Turning to the newly introduced and mandated online registration of LH, one’s independent viewpoints have been shared herein before, in brief though, so also elsewhere, to the best of own limited ability. Now, It is left only to the learned professionals in tax practice, presumed to be knowledgeable, and duly equipped, to take on and pursue to the end of having the inherent problems sorted out, amicably, with the ideally desired co-operation of the Revenue; without unwittingly waiting for the “moment of truth “ (- of crisis ?) to come heavily knocking.

ALSO to Read:

While it may be getting tougher to fill in the details sought by the ITR forms, the actual process of filing the return has become simpler over the years, thanks to e-filing. Official statistics on e-filing show that

                             <| By Parvatha Vardhini C

Top of Form

Anyone, especially a CA or lawyer in tax practice, is expected to be aware and have made a conscious note of the several aspects with which the Delhi HC* has dealt with in its landmark judgment and given useful directions to the Revenue. Those are aimed at resolving the varying types of woes faced by taxpayers in the matter of being allowed proper credit for TDS; more particularly, all such woes requiring to be additionally remedied in the aftermath of the CPC coming into being.....

*Court On Its Own Motion vs. CIT (Delhi High Court .

@ ‘Moneylife’

Online Financial Planning India

      Key Note: The noted problem calls for an anxious consideration; more so because, -as pinpointed in posts on the website of ‘Money life’ and elsewhere, - Banks, being one of the source through which income arises (e.g. interest on FDs) are totally confused and abysmally ignorant, and prefer to remain so thus far; that is,- on the demise of an account holder, two separate tax returns are required to be filed by the LR (< designated nominee), one accounting for taxable income to date of demise, and another for income of later period (s). So much so, Banks, in their books, idiotically fail to account for interest payable and TDS thereon, separately and in different names as warranted, – to date of demise, in the name of deceased, and for later period, in the name of nominee, so as to match with , apart from the attendant reality, the law on income-tax as well.

All else said, also done, -there is one aspect about which there has been nothing said, hence woefully left to be done; that is, if and when the Revenue’s attention is effectively drawn to certain apparent incongruity and comes to be taken a conscious note of, and suitable correctives, if so warranted as urged, are plugged in and put into function. The concern relates to the newly introduced upfront requirement of registration, online, by a’ legal heir’ (LH); in order to go ahead and succeed in e’filing return of income of a deceased, in the capacity of ‘legal representative’ (LR), to the date of demise in a given ‘previous year’, as mandated by the law. Attempts made individually to provoke and get the benefit of views of most directly concerned others, particularly of tax experts at large, infield practice, and if any different, have so far turned out to be unsuccessful and futile.

A Repeat :
As viewed independently, founded on one’s own study and understanding of the law, to say the least, the write-up has oversimplified the procedure laid down for the e’filing of tax return of a deceased by his ‘LR’. In other words, the referred procedure, in one’s conviction, has limited application; for, it does not provide for e’filng tax return of a deceased, by any other person as ‘LR’ within its wider meaning, unless he is a ‘LH’. For knowing precisely and appreciation of the viewpoints urged in proper light, anyone interested may look up and go through the copious input shared on the website of Taxguru *; on my page (SWAMINATHAN VENKATARAMAN) of the Facebook as well. Incidentally, there has been no helpful response despite the open Invitation extended to tax experts , in practice, at large , should there be any counterview. As was not unexpected, no clarification for proper guidance is known to have been forthcoming neither from the Revenue nor from any other enlightened circle.

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Once an individual passes away, it is the responsibility of his legal representatives to file the deceased’s tax return.
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For ready reference:
Steps involved in Legal Heir Registration – New Request
Step 1 - Login to e-Filing portal using Legal Heir Credentials
Step 2 - My Account à Register as Legal Heir
Step 3 - Select the Type of Request – New Request
Step 4 - Enter the details of Deceased   PAN  Date of Birth  Surname  Middle Name  First Name
Step  5 – Select the files to upload 
Step 6 – Attach a Zip File with the below scanned documents:
 Copy of the Death Certificate 
 Copy of PAN card of the deceased
 Self-attested PAN card copy and 
 Legal Heir Certificate Or Affidavit in presence of a Notary Public
Step 7 - Click Submit Note: Following documents will be accepted as Legal Heir certificate:
 The legal heir certificate issued by court of law
 The legal heir certificate issued by the Local revenue authorities.
 The certificate of surviving family members issued by the local revenue authorities
  The registered will  The Family pension certificate issued by the State/Central government.

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