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The basic tenets of Profession

Anil R. Dave Chief Justice, AP High Court

The basic tenets of Profession*

Anil R. Dave Chief Justice, AP High Court

The author lucidly highlights a few basic tenets of the profession which have held the field since the times of Manu Smriti and Chanakya.

My esteemed Brother Justice B. Prakash Rao, Mr. Bharatji Agrawal, Mr. P.V. Subba Rao, Dr. M.V.K. Murthy, V. Narendra Prasad, delegates of the Conference, and distinguished invitees, guests, ladies and gentlemen.

I am very glad to be associated with this National Tax Conference on “Tax Profession, Challenges and Opportunities” organized by All India Federation of Tax Practitioners, South Zone and other Tax Bar Associations connected with this Conference.

I congratulate the organizers for selecting the theme — Tax Profession, Challenges and Opportunitites. In legal profession, in my opinion, the tax practice is a real challenge and it gives ample opportunities to mint money to the professionals.

I say this as a challenge for the reason that one has to be upto date in the subject. Every year, the law is changing. Of course, the society is dynamic and the law is bound to go on changing periodically. But in the case of taxation practice, the law changes very fast every year. Therefore, it is a very good opportunity for all lawyers who are practising on taxation side. With a changed law, in my opinion, normally no assessee will be comfortable with filing his return, He has to approach a tax practitioner and that will be a very good opportunity to a tax practitioner.

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The bane of retrospective amendments

Shri. N. M. Ranka, Advocate

The bane of retrospective amendments*

Shri. N. M. Ranka, Advocate

The author laments the prevalent tendency to enact retrospective legislation to nullify judgements that are unpalatable to the Finance Ministry. He argues that this tendency undermines the sanctity of the rule of law and shows scant respect to the judiciary.

1. Introduction

We, the people of India, that is Bharat, resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRTIC REPUBLIC in order to secure to all our citizens : Justice, social, economic and political; Liberty of thought, expression, belief, faith and worship; Equality of status and of opportunity; and to promote among all of us Fraternity, assuring the dignity of the individual and the unity and integrity of the Nation. The Legislature, the Executive, and the Judiciary are its three limbs; and they draw their powers, privileges and limitations from the Constitution. To govern is the duty of the Executive, headed by the President. To legislate is the duty of the Parliament and State Legislatures. It is for the judiciary to keep a watch, vigil and see that the freedoms enshrined in the Constitution reach to every citizen and is not jeopardized or tinkered with or obstructed by the executive or any person in authority or otherwise. Rule of Law is fundamental to maintain social order. Obedience and respect for law should be commended and commanded through the force of law and not by the law of force. Article 265 of the Constitution mandates that no tax shall be levied or collected except by the authority of law. The Constitution puts some limitations by specific articles. Many amendments have been/are made by the Finance Acts.

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Vision 2020 for the Appellate Tribunal

Shri. Ashok Bhan

Vision 2020 for the Appellate Tribunal*

Hon’ble Mr. Justice Ashok Bhan

The author highlights a few points that we in the Tribunal must bear in mind as we prepare to face the challenges of the future.

Mr. Vimal Gandhi, President of the Income Tax Appellate Tribunal, Mr. Justice Rebello, Mr. Justice J. S. Narang, Mr. Dastur, President of the Income Tax Appellate Tribunal Bar Association, Mr. Sunil Talati, President, of the Institute of Chartered Accountants of India. It is my pleasure to be here today and interact with you and it is my pleasure also to inaugurate this very important conference which is taking place today.

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My tryst with the legendary N. A. Palkhivala

Shri. H. S. Serna, IRS

My tryst with the legendary N. A. Palkhivala*

H. S. Serna, IRS

The author fondly reminisces the time when he, as an Income-tax Officer, met the legendary Nani Palhivala and how the latter cast a spell on him with his arguments.

Having retired from Income Tax Department after having served for long years, one can look back and reminisce some very interesting incidents and episodes which stick on in one’s memory as images which just do not go away!

One such episode dates back to the time in late sixties when I was posted as a Senior Grade Income Tax Officer in Companies Circle-I, in Calcutta West Bengal (now-Kolkata). This was sometimes in 1967. Earlier I had worked in a Company Circle at Kanpur and had already honed my skills as an enthusiastic young officer seeking to make a mark in the service.

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Analysis of recent Supreme Court judgements

Shri. Kapil Goel

Analysis of recent Supreme Court judgements

CA Kapil Goel

The author has made a critical analysis of four recent and important decisions of the Supreme Court in R & B Falcon vs. CIT, Goetze India vs. CIT 284 ITR 323, Honda Siel vs. CIT 295 ITR 466 and CIT vs. Alagendran 293 ITR 1 and highlighted the nuances thereof.

1. R&B Falcon vs. CIT


The importance of above ruling is highlighted by the fact that same is first Indian judicial and that too from SC, in context of Fringe Benefit Tax (FBT) provisions introduced in the Income Tax Act (Act) by Finance Act, 2005 with effect from AY 2006-2007.

Background in brief

Assessee (R& B Falcon) incorporated in Australia, is engaged in business of supplying Mobile Offshore Drilling Rig (MODR) along with off-shore supporting staff, to units operating in oil and gas industry like ONGC etc. Word “off-shore” here signifies operating in off-shore area. In relation to the subject MODR’s, assessee provided staff/crew to operate the same and since the conditions in MODR are not congenial to working, employees (here residents of foreign country), worked on the MODR on “commuter basis” that is, they come to India and stay in the Rig (MODR) for 28 days and go back to their country of residence and so on and so forth. The transportation costs for commutation in terms of provision of air tickets was borne by employer. In this connection, assessee in relation to its subject contract with ONGC applied to Authority for Advance Ruling (AAR) seeking its views on:

“Whether transportation cost incurred by R and B Falcon (A) Pty Limited (hereinafter referred to as the “Applicant”) in providing transportation facility for movement of offshore employees from their residence in home country to the place of work and back is liable to Fringe Benefit Tax (‘FBT”)?

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Conduct on and off the Bench

Shri. Pradeep Parekh

Conduct on and off the Bench*

Hon’ble Shri P. P. Parikh, Vice President, ITAT, Hyderabad Bench

The author has given invaluable tips on the delicate subject of how a Member of the Tribunal should conduct himself inside and ouside the court room.

1. At the outset, I welcome you all to the family of this august institution and I thank the Hon’ble President for giving me this opportunity to interact with you all. I have been directed by the Hon’ble President to talk on a very delicate subject. I consider it to be delicate because, generally, our conduct flows directly from our inherent nature. If our conduct is not in consonance with the expected norms, then to mould it, to fit within the norms, we are expected to change our nature which, it is believed, is very difficult, or almost impossible. Therefore, at the end of the talk, if you feel that you need to undergo some transformation, then, also keep in mind that merely listening to a lecture on conduct or reading some material about it, is not going to help you. A constant, conscious and conscientious effort will be required on your part, to reach the expected levels. Let it be known, that my role here, is not to sermonise. Whatever I am going to say, is not my own creation. They are words of wisdom handed over to us from our esteemed seniors, both present and past and also by acclaimed jurists of this country. Right now, you all may be wondering as to how you will feel when you actually sit on the regular bench and that how you will be accepted by your colleagues and the Bar. Well, let me assure you, if your conduct is conducive, you have won half the battle. How — we now proceed to see, somewhat in detail.

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The Art of Writing Judgments

Shri. M. A. Bakshi

The Art of Writing Judgments*

Hon’ble Shri M. A. Bakshi, Vice President, ITAT, Chandigarh Bench

The author explains that a judgment is not a piece of literature to be written in the style of Shakespeare or Milton but its language should be simple, yet elegant, containing phrases and expressions which convey with lucidity the legal ideas to the reader.

I consider it my privilege to have been assigned the task of sharing my views with my distinguished colleagues on “Art of Writing of Judgments”. The real purpose of sharing thoughts with you is introspection, recapitulations and refreshing our knowledge which is necessary to keep the institution in good health. Without wasting any time, I revert back to the subject that has been assigned to me.

The topic assigned to me is “The Art of Writing Judgments”. Before dealing with the topic it is imperative to understand the meaning of the expression “Judgment”.

As you know, section 2(9) of the Civil Procedure Code, 1908 defines the term ‘Judgment’ to mean “The statement given by the Judge of the grounds of a decree or order”.

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Opinion – Failure to deduct TDS –Whether amounts not deductible?

Shri. K. Shivaram

Opinion – Failure to deduct TDS –Whether amounts not deductible?*

Dr. K. Shivaram, Advocate

The author opines that if the payee has paid the tax, no disallowance can be made in the hands of the payer who has failed to deduct tax at source.

The above named Querist has forwarded to me a case for opinion through its representatives. I had the benefit of discussing the case with these representatives and being instructed by them.

Based on the facts as cited to me, the discussions with Querist’s representatives and the case laws referred by me above, I have accordingly framed this opinion.


The facts, as cited to me, are reproduced below:—

1. The Querist is a private limited company engaged in the manufacturing. The Querist makes payments to various agencies for carrying out their various assignments and work like payment to clearing and forwarding agents, professional fees, bus hiring charges etc. and they deduct income tax as required under various provisions of Income-tax Act, 1961 and deposit the same regularly with the Government Treasury.

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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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