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New Rule 8D – A lesson in tight rope walking?

Shri. Anant Pai

New Rule 8D – A lesson in tight rope walking?*

CA Anant N. Pai

The author argues that Rule 8D can be invoked only when it is not possible to work out the disallowance correctly say due to the complexity involved in the accounts or lack of some vital information.

1. Over period of time, Rules have traditionally played hand maids to Statutory Provisions. This is discipline that was religiously followed both by the law makers and the judiciary. Rules were always meant to be subservient to the Statute. A conflict between the Statute and the Rules was therefore always resolved in favour of the former. The role of Rules, as subordinate legislation, was well understood. Even where Rules were created not by delegated legislation, but by the law makers themselves, they did not enjoy the same force as a principal enactment. This principle was well observed by the Gujarat High Court in its tax decision in the case of CIT vs. Satellite Engineering Ltd. [1978] as reported in 113 ITR 208, 223 (Guj).

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Overview of Tax Proposals

Shri. K. Shivaram

Overview of Tax Proposals*

Dr. K. Shivaram, Advocate

The author has made a critical analysis of the provisions of the Finance Bill 2008 and argues that some of its provisions may be unconstitutional.

1. Introduction This year’s budget is also full of promises and very little on accountability. Unless the concept of accountability is introduced in the Income-tax Act as per the recommendation of Raja Chellia Committee (1992) 197 ITR st. 177 (257), whatever may be the law, the honest tax payers will have to face the difficulties of high-pitched assessment, recovery etc. The Hon’ble Finance Minister has stated that “Debt relief won’t be there every year, it is just a one –time distress measure”. I am of the view, we may not be surprised, similar to amnesty schemes for dishonest taxpayers once in five years, every Finance Minister before election once in five years definitely will try to give some amnesty scheme to farmers so that they will be get the desired support from the masses. Shri N.A. Palkhivala in his article on the occasion of Golden Jubilee celebration of ITAT stated that “Today the Income-tax Act, 1961, is a national disgrace. There is no other instance in Indian jurisprudence of an Act mutilated by more than 3,300 amendments in less than 30 years. Simple provisions like Sections 11 to 13 (which deals with exemptions of the income of charitable trusts) have suffered no less than fifty amendments

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Principles of Natural Justice

Justice Sujata Manohar

Principles of Natural Justice*

Justice Smt. Sujata V. Manohar, Supreme Court of India (Retd.)

The learned Judge has made a succinct analysis of the basic and fundamental principles of natural justice

It gives me great pleasure to give this inaugural lecture on the Principles of Natural Justice in this year’s orientation and training programme for the new members of the Income Tax Appellate Tribunal.

Those of you who have practiced as lawyers must have come across the concept of natural justice. Of course, the laws of nature are designed to promote survival rather than justice. Nature is governed by principles such as the survival of the fittest and prevalence of might over right. When a herd leaves its weak members behind there is no question of the weak being supported or protected. Therefore, ‘natural’ justice is not justice found in nature; it is a compendium of concepts which must be naturally associated with justice, whether these concepts are incorporated in law or not. Justice is a great civilizing force. It ensures that the rule of law rather than the rules of nature prevail in regulating human conduct.

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Address by the President at Orientation and Training Programme

Shri. Vimal Gandhi

Address by the President at Orientation and Training Programme
for New Members*

Hon’ble Shri Vimal Gandhi, President, ITAT

The Hon’ble President gives important pointers on the factors that new Members should bear in mind when sitting on the Bench.

The Hon’ble Chief Guest of this afternoon, Justice Madam Sujata Manohar, former Judge of the Supereme Court of India, Vice President, Mumbai, Shri G. E. Veerbhadrappa and Vice-President, Mumbai Zone Shri K.P.T. Thangal, Members of Mumbai Benches of the Tribunal and the Members who have joined and are on orientation and training.

It is a matter of great pride for all of us to, have our Chief Guest Justice Madam Sujata Manohar, a unique personality, not only one of the best judges of this country who has delivered hundreds of landmark judgments, but a fighter for the right of every individual, to live with dignity, particularly unprivileged and destitute women.

I am not sure whether Madam remembers my meeting with her for the first time about two decades ago in Indore in 1986-87 where I was posted as a Judicial Member. Smt. Roopmati, a young widow had become Sati in Rajasthan and in connection with that issue three lady judges, Madam, Justice Musammad Fatima Biwi and one lady judge from Calcutta High Court were invited to speak at a seminar at Indore. Justice Madam Sujata Manohar at that time impressed everybody with her view point and her concern regarding, difficulties a common woman has to face. Thereafter Justice Madam Sujata Manohar was elevated as a judge of Supreme Court, and we all know how she always remained champion in the cause of justice and fair play. She has stood for the independence of Judicial bodies. We are very lucky, and thankful to her, for sparing her time, to attend and inaugurate this programme, of “Orientation and Training” for new Members.

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Evolution of ITAT — Historical Perspective and Vision

Shri. R. P. Garg

Evolution of ITAT — Historical Perspective and Vision*

Hon’ble Shri R. P. Garg, Vice President, ITAT, Ahmedabad

The Hon’ble Vice President gives a fascinating perspective of the history of the Tribunal and also traces out his vision for the growth of this venerable institution.

Independence in redress of grievance to the assesse was the cry of mid forties and that has been the root cause for the emergence of the Income Tax Appellate Tribunal. From the insurgence of the Tax Legislature in 1868 until 1921 there was only one appeal and that was to the appellate authority designated and named from time to time as District Collector, or the Collector of Division, or the Chief Revenue Authority of the Division or the Commissioner of Income Tax. Second Appeal was not known in tax matters at that time. In 1922 Act, the concept of Second Appeal came into being – First Appeal was provided to the Assistant Commissioner of Income Tax and the Second Appeal against his order to the Commissioner of Income Tax. Both these authorities under the hierarchical system being under the control of Board of Inland Revenue, imbibed no independence in deciding appeals, and thus, there was a total absence of an independent forum to redress the grievance of the assessees.

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