The learned author has raised the seminal question whether if a judge of the High Court is appointed President of the ITAT, he constitutes a “Member” and has the jurisdiction to hear and decide appeals u/s 252 and 255 of the Income-tax Act, 1961. He has argued that such a President is restricted to doing administrative work and has no jurisdiction to do judicial work
Section 252(3) of the Income-tax Act, 1961 was substituted w.e.f. 1/6/2017 to empower the Central Government to appoint a sitting or retired Judge of High Court and who has completed at least seven years of service as a Judge in a High Court, as the President of the ITAT. Before the substitution of the section, a President was appointed from amongst the Vice-Presidents or the Sr. Vice-President. Vice Presidents are appointed under Section 252(4) of the Act from amongst members of the Appellate Tribunal. Therefore, before the section was substituted, the pool from which a Vice President or a President was to be appointed was amongst the members of the ITAT. Under the substituted Section 252(3) of the Act, a qualified Judge is appointed directly as President and not from amongst the pool of Members of the ITAT.
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Advocate Neelam C. Jadhav has prepared a compilation of important judgements relating to the taxability of unaccounted black money deposited in bank accounts in the wake of demonetisation. The compilation of judgements will prove invaluable to tax professionals and tax payers in the wake of the heavy litigation between the tax payers and the income-tax department that is likely to ensue shortly
1. S. 4: Income – Chargeable as – Assessee’s books actually showing a cash balance of above Rs.38,000 as on the day immediately preceding the date of demonetisation. – In the absence of material before the Tribunal, it could not have held that only 22 out of 28 high denomination notes represented cash balance and the remaining 6 constituted income from undisclosed sources.
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Dr. K. Shivaram, Senior Advocate, has hailed Demonetisation as a great move and a bold step to reduce the black money circulation in our country. He has called it a “War against corruption and black money” and opined that the move of the Government deserves to be appreciated and encouraged. He has also given important pointers on whether the disclosure of black money will attract penalty under s. 277A and other provisions of the Income-tax Act
The Press release issued by the Government of India Ministry of Finance Department of Economic Affairs reads as under “With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contraband in to India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs 500 and Rs 1000, issued by RBI till now. This will take effect from the end of 8th November, 2016”
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Dr. K. Shivaram, Senior Advocate, is upset at the inaction of the Government in appointing Vice-Presidents to the ITAT. He explains that this inaction demoralizes the hardworking Members of the ITAT and robs them of the prospects of promotion. The author has also expressed grave reservations at the proposal of the Government to merge all the Tribunals into one body. He explains that the proposal is ill-conceived and has been mooted without paying regard to the specialized knowledge that is required to decide complex income-tax cases
Why is the Government not appointing the Vice-Presidents of the ITAT? Whether the move of the Government to merge the ITAT with other Tribunals is justified?
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Dr. K. Shivaram, Senior Advocate, points out that while Courts are dutifully issuing directions and strictures with the sincere objective of putting the income-tax department on the right path, there is no feedback from the department as to whether these directions and strictures are being implemented by them. He submits that the Bar is under the bounden duty to be vigilant and play a proactive role to ensure that the department abides by its obligations and is made accountable for its misdeeds.
In public interest, time and again, High Courts have passed strictures against tax administration for failure to follow the due process of law in the course of assessment, recovery and quasi judicial-If directions of High Court are followed, it may be communicated by press release or by a circular – If not, then what remedial action has been taken?
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Prime Minister Narendra Modi and Finance Minister Arun Jaitley spare no opportunity to talk about how they intend to usher in a “transparent, stable and predictable” tax regime. However, there is a big disconnect between the high-sounding words and the reality at the ground level. The author has put together a simple and easy-to-follow guide for the law makers to implement if they are really serious about bringing about radical and structural changes to the taxation regime of the Country
The Honourable Prime Minister of India, Shri Narendra Modi, in his address on the eve of Make in India week at Mumbai on 13th Feb, 2016, has promised more economic reforms and a stable tax regime. It is beyond doubt that the Government is making a very sincere attempt to bring about ease of doing business in India, so as attract more investments to India. We hope that the vision of the Honourable Prime Minster of India and the Honourable Finance Minister gets ingrained at the grass root level. Tax professionals highly appreciate the unequivocal steps taken by the Government to bring stability in tax laws and the firm assurance against any retrospective tax amendments. We are of the opinion that for achieving the dream of Honourable Prime Minster and Honourable Finance Minister following suggestions may be considered:
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The author, an eminent senior advocate, compliments the Supreme Court for having struck down the National Judicial Appointments Commission Act. He warns that the Act would have, if upheld, grossly undermined judicial independence. He, however, candidly concedes that the existing Collegium system of appointment of Judges has several deficiencies and that it has enabled undeserving candidates to be elevated to high judicial positions. He has identified those deficiencies and offered suggestions on how they can be resolved
In a landmark judgment, the Supreme Court has declared the National Judicial Appointments Commission (NJAC) unconstitutional. The collegium system where judges appoint judges, will continue, as according to the Supreme Court the NJAC Act interfered with the independence of judiciary.
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The author, an eminent senior advocate, points out that the orders passed by the ITAT have severe ramifications on the taxpayers and the department and that it is essential that its Members undergo rigorous training before being permitted to exercise their powers. The author expresses concern that the newly appointed Members of the Tribunal do not appear to have undergone an “orientation” course and have been straightaway permitted to hear matters and pass judgements. He urges that the old practice of formally tutoring the new Members of their duties and responsibilities and of apprising them of the basic fundamental characteristics of a judge should be revived and implemented immediately. He emphasizes that the orientation course and judicial training will help the new Members to discharge their duties more efficiently and uphold the dignity and honour of the Tribunal
Income–tax Appellate Tribunal which was established on 25-1-1941 will be celebrating its platinum jubilee on 25-1-2016. Today, the Tribunal is considered as one of the finest institutions in our country. The credit must go to the Hon’ble Members who administer the justice and to the Tax Bar which represents matters before the Bench. Very recently, the Government has appointed 36 new members, many of who are very young and they have a long tenure to serve as members of the Tribunal. They have greater responsibility to preserve the purity and integrity of this Institution being one of the finest institutions in our country.
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The author expresses concern over the proposal of the Income-tax department to launch prosecution proceedings against taxpayers without waiting for the outcome of the appeals filed by them. He argues that this proposal is ill-advised and will result in grave miscarriage of justice
In recent days, some assessees have received the show cause notices for launching of the prosecution as soon as the penalty is confirmed by the Tribunal.
With respect, mere confirmation of penalty by the Tribunal cannot be a ground to initiate prosecution proceedings. Assessee may otherwise be filing returns regularly and paying the taxes and only in one year, unable to substantiate the claim of deduction. Can such an assessee be considered as tax evader?
Many times penalties are confirmed because the facts are not properly presented before the tax authorities and the appellate authorities. Read more ›
The author has raised the alarm that appointing the President and Members for the ITAT is not sufficient. He reminds the Government that it also needs to urgently appoint several Vice Presidents to fill the impending vacancies. If the Government drags its feet in the matter, the cause of justice will suffer, he warns
All tax professionals highly appreciate the appointment of 45 new members to the ITAT. As on date, there are more than 1 lakh appeals pending before the ITAT. Filling up of these vacancies will help certainly the case of ‘satvarnyay’ before the ITAT. One would appreciate that the ITAT has a sanctioned strength of 63 Benches at 27 different locations in our country. To ensure better administration, it is divided into nine zones and each zone is headed by a Vice–President and as per administrative orders, the ITAT should have one Senior Vice-President and 9 Vice-Presidents. However, the Government has not appointed any Vice-President since 2009 and Senior Vice-President since 2010. As a result, now, the ITAT has only four Vice-Presidents and out of them one is due to retire in coming October, 2015. Thus, this scenario is quite disturbing for the administration of justice, requiring very prompt action by the Hon’ble Law Minister.
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