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| DATE: | July 9, 2014 (Date of publication) |
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| Click here to download the judgement (mohan_bansal_CPC_harrassment.pdf) |
CPC hauled up for harassing assessee by imposing tax of 60% on LTCG & refusing to rectify
An intimation u/s 143(1) was passed by the ACIT (CPC) in which the long-term capital gains were charged to tax at 60% instead of the applicable rate of 20%. The assessee filed an on-line rectification application. However, no order thereon was passed. Instead, the assessee was informed on telephonic enquiry that the appluication was rejected. The assessee filed an appeal to the CIT(A). The CIT(A) dismissed the appeal by raising hypothetical questions and going into irrelevant issues. On appeal by the assessee to the Tribunal HELD:
In the entire Income-tax Act, there is no provision charging a tax rate of 60% on long term capital gains. The Delhi High Court has issued remedial directions to improve hardships faced by tax payers while processing the e-returns at CPC, Bangalore. The Court has discussed the background that in order to fasten the processing of returns, the revenue has introduced electronic filing of income tax returns, TDS returns, e-tax payments and it operates Centralised Processing Centre (CPC) at Bangalore. This is manned by Higher Ranking Officers of Income Tax Department. The problem is faced by tax payers, when demand is raised or refund reduced on account of either suo motu adjustment by the Income Tax Department and refund against tax demands or mismatch of TDS credit or any other adjustment or disallowance of claim made by tax payer in the return and uploaded by the assessee in its e-returns. This is a general grievance among the tax payers that the AOs do not adhere to the time limit specified for the disposal of rectification applications and tax payers are invariably called upon to file duplicate application or new application. Further, no record or no receipt counters or registers for receipt of such applications are maintained. Thus, there is no record/register remained with the AO with details or particulars of rectification application made u/s. 154 of the Act as is evident from the present case. Similar directions were issued by the Delhi High Court in the case of its own motion Vs. CIT, WP(C) No. 2659/2012 dated 14.03.2013. The Delhi High Court vide para 18 has issued dictum as under: “18. Each application under Section 154 has to be disposed of and decided by a speaking order. This is the mandate of the Act. The order has to be communicated to the assessee and there is a relevant column to be filled in the register, which is now required to be maintained. The Board should issue specific directions to ensure that there is full compliance of the said requirements and directions by the Assessing Officers, Dak counters and Aayakar Sewa Kendras. This is the first mandamus or direction we have issued in the present judgment“. As the facts in the present case are very clear that charging of long term capital gain can only be @ 20% in assessment year 2011-12 and not @ 60% as charged in intimation u/s 143(1) of the Act by CPC, Bangalore which according to the provisions of the Income Tax Act is not legal. Hence, we quash the intimation and appeal of assessee is allowed. The jurisdictional AO is directed to amend the intimation issued by CPC, Bangalore, while giving appeal effect to this order.
CPC although processing IT returns fast but not efficiently. Personally encountered with many basic and silly errors by CPC while processing the returns.
And when filing the rectification online their telephonic inquiry team is so too harshing the assesses for the fault of IT Deptt.
Wonder, how a prosecutor can play judge?
Blackstone in his commentaries on English constitution made clear, If Parliament do not give power to any authority, then the authority is bound by law that is what Limitation prescription, so it s unclear though we follow how Taxman assumes a power not granted to him! Besides tax man assumes powers of 60% of LTCG when he can only take 20% as TDS PER Act, it means the taxman behaves as if he is very parliament himself.
In USA in 1760s when British govt levied Tax Stamp on documents MA Legislators protested as also CJ Thomas Hutchinson reported the resistance on Stamp Act, of Parliament… ‘ the prevailing reason is that the Act of Parliament is against Magna Charta, and the natural rights of English men , and therefore according to Coke ‘Null and Void’!
Any way another US Legislature said Stamp Act is a precursor for the American Revolution. Does it mean India needs a Revolution for real independence as the delegated Authority acts in an unbridled way? would be a question in the minds of tax payers as every citizen is paying one way or other either direct or indirect taxes in India today as legislatures in India also behaving arbitrary authority not sanctioned by Constitution, as constitution Art. 265 clearly says no tax could be levied without a due process meaning meaningful power!
so taxman is obviously atrociously Arbitrary. that means court in the writ should have just declared tax man action clearly Null and Void, had i been a CJ I would have done that denying government the revenue even 20% on LTCG! Such action by courts in india could bring these worthies to senses!
Problems are today none in authority appreciates how much is their power that could be used. Any arbitrary action leads to dangers.
Americans are fiercely independent oriented people and Dr.BR Ambedkar liked that way the American constitution as a most tested one over some centuries and it succeeded well. that way he wanted india also need to be so.
As a member of constituent Assembly he wanted the Constitution need be honored in letter and spirit then only people would obey is the right perception he had.
Laws made by legislatures themselves are not sacrosanct as the legislators go beyond Lakshmana Rekha several times. so Attorney General Iredal of North Carolina in his private statement said ‘The vilest collection of trash ever formed by a legislature’
He said ..I have… no doubt, continued, Iredall, ‘that the power of Assembly is limited and defined by the Constitution. It is a creature of the Constitution’. When so , how an executive department of the said legislature thru a government in power usurp the powers and act arbitrarily is the question before the people , that is popular will… democracy by majority is also itself indeed arbitrary as the limited powers of legislature per se as it is a creature of the constitution so too all other departments and all such authorities too.
In the circumstance, popular sovereignty actually requires Judicial review whenever any exceed authority arbitrarily is the perception.
In Trevett v Weeden, in 1786 James Varnum argued in Rhode Island when Rhode Island passed a statue that compelled merchants to accept paper money as a legal tender which devalued quickly. Merchants were loath to accept paper tender.
The legislature passed a ‘force’ of law…. James Varnum argued the force of Act was very ‘Unconstitutional’ because it denied the the defendant ‘trial by Jury or by jury trial.
Case attracted a lot of attention far and near.
Varnum a distinguished revolutionary War General, a lawyer himself highlighted the importance of and novelty of his claim that the judges should strike( down) the law unconstitutional.
After all what is a law? A kind of contractual obligation if mutually accepted under a Constitution, if that law is a doubtful phenomena naturally quarrel ensues, that is what we call a litigation that gets settled by a third party, not by the profounder of law, that way the idea of ..Prosecutor cannot be a judge.. if it happens naturally the prosecutor would not be impartial is the doctrine… like that goes.
St. George Tucker , later became famous for publishing an American version of Blackstone commentaries of English (British) constitution in his opinion in Kemper v Hawkins, 3 Va.20 Virginia (Gen.Ct 1793) relied heavily upon the importance of a written constitution.. he said, ..’With us , the Constitution is not an ideal thing but a real existence, it can be produced in a visible form: its principles can be ascertained from the living letter.
So there is nothing sacrosanct in any Act of parliament unless properly backed by the Constitution as constitution is a public document accepted by fore fathers of the citizens and so it has to be retained in its own form not to be meddled with that way even today in USA judges go by American constitution and well accepted Amendments.. first amendment, fourteenth amendment and so on..
So the summum bonum is no authority should bypass the written Act as long as that Act is accepted and not unqestioned as on the date of any issue.. that is all is the perception that is wrought about!
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