The author, an eminent advocate, is unable to hide his frustration at the continued indifference of the Government towards the welfare of the Income Tax Appellate Tribunal. Though three long years have passed and three Law Ministers have come and gone, nobody has bothered to address the core problems being faced by the Mother Tribunal. The author again lists out the core issues and urges the Government to shed its apathy, get its act together and act speedily to save this majestic judicial Institution from decay
The Income -tax Appellate Tribunal, which has completed 72 years of existence, is considered as one of the finest institutions of our Country. The former President Shri Vimal Gandhi retired on 3-6-2010, however, till date, no permanent President is appointed, Senior-Vice President / Vice-President is acting as Officiating President. It is for the first time that for more than two years and ten months Vice-President has been functioning as an Officiating President. By not appointing the President, Senior Vice President and Vice Presidents, the Government is sending a wrong message that, we have no members who deserve to be appointed to lead the institution. If that is so, how the citizens will have confidence in the Institution.
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What was in the realm of fantasy till yesterday in now in the realm of reality, thanks to technological advancements. The author, a crusader for making legal justice affordable to the common man, argues that if setting up Benches of the Supreme Court in various cities is not possible then an alternative viable solution is for the Supreme Court to hear out-station matters by video-conferencing for the benefit of the common man. The pioneering steps taken in this regard by the Tribunal show that the concept is practical, feasible and cost-effective says the author
All India Federation of Tax Practioners have made a representation to Government of India from time to time to constitute four Benches of Apex court in different regions. The Bar Council of Maharashtra & Goa vide letter dated 11/4/2000 also endorsed the view of the Federation. However, full Bench of the Apex Court was not in favor of having the Benches of Supreme Court in different regions. It seems the Government may not initiate the proposal to constitute Benches of Supreme Court in four regions. At present common man of our country cannot think of approaching the Apex Court for justice it is beyond his reach. Shri Ashok H. Desai, Sr. Advocate and Former Attorney General of India in his speech stated that every adjournment in Supreme Court costs the client minimum of about Rs.1 lakh. If this is the minimum cost for an adjournment, one can imagine how expensive it would be for citizens to approach the Supreme Court for justice.
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There have been a number of landmark judgements in the year 2012 and making a short-list of just 10 of them is not an easy task. Yet, the author, thanks to his experience and expertise, achieves this task. Of course, he can’t resist the temptation to make a “honourable mention” of several other important judgements. See, if you agree with his choice of the top-10 and his analysis of the judgements
1. Vodafone International Holdings B.V. vs. UOI (Supreme Court)
(Please, can we now end this soap opera)
Vodafone enjoys the pride of place as the numero uno landmark judgement of the year though it has now, despite its path-breaking and revolutionary stance over tax-planning and substance vs. form, attained the dubious status of a never ending soap opera.
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The appointment of Dr. Parthasarthy Shome as advisor to the Finance Minister augers well for tax payers in the Country because Dr. Shome is a man of wisdom and experience and is committed to creating a tax-payer friendly administration and simplified law and procedure, says the author. The author urges all tax payers & tax professionals to support Dr. Shome in his endeavor and starts off by listing 13 critical issues that need Dr. Shome’s immediate attention
Hon’ble Finance Minster speaking at the Delhi Economics Conclave on 14/12/2012 stated that “We have made it clear that our objective is to have clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary.” I am of the opinion that by appointing Dr. Parthasrthy Shome as advisor to Hon’ble Finance Minister will achieve the goal of the Hon’ble Finance Minister. Dr. Parthasarthy Shome is a man of action, knowledge, integrity and has rich experience to understand the business laws of world.
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The author agonizes that though four long years have elapsed since the controversy over the alleged corruption in the Tribunal broke out, nothing tangible appears to have been achieved. He warns that an important issue like this cannot be left unresolved for too long as it will otherwise begin to undermine the taxpayer’s confidence in the great Institution. Instead, the Government should take proactive steps to bring the truth in the open and the best way to do it is to appoint an experienced Judge to conduct an impartial probe, he says. He also implores the Law Minister to take a speedy decision over the long-pending issue of appointment of a permanent President and filling up vacancies in the posts of Sr. Vice Presidents
(a) To initiate the proposal of appointing, permanent President of ITAT, Senior Vice President, and Vice-Presidents by the selection panel:
The Income Tax Appellate Tribunal, which was founded on 25th January, 1941 will be entering into 73 years of its existence, by 25h January, 2013. The Income tax Appellate Tribunal is also referred as mother Tribunal of all the Tribunals of our country. However, it is very unfortunate that ever since, the former President Shri Vimal Gandhi retired on 3-6-2010, the Ministry of Law and Justice of Government of India, for reasons best known to them has not initiated the proposal to appoint a Permanent President to this premier institution.
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The debate over whether the Supreme Court’s verdict in Vodafone International is right or wrong will never cease. While some hail the verdict as “revolutionary“, others can’t conceal their contempt for it for permitting India to become a “banana republic” where foreigners can “loot its resources” without even paying due taxes. We are now at a critical juncture where the Govt is debating whether the retro amendments should be rolled back or not.
This issue is important now because Prime Minister Manmohan Singh announced that a decision would be taken soon on whether the retrospective amendments seeking to supersede the Vodafone verdict would be implemented or not.
Joining the chorus of respected voices who consider the Vodafone verdict to be wrong are two respected voices. That of Ex Chief Justice of India J. S. Verma and Ex Additional Solicitor General Bishwajit Bhattacharyya.
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The author goes ballistic over the recent judgement of the Supreme Court in PWC‘s case that s. 271(1)(c) penalty cannot be imposed if the assessee carelessly makes a wrong claim. He argues that the judgement neutralizes the deterrent effect of s. 271(1)(c) and is prone to abuse in the present regime of no scrutiny assessments. He fears that in the absence of a deterrent effect, assessees will be encouraged to ‘take a chance’ with bogus claims
The judgement of the Supreme Court in Price Waterhouse Coopers vs. CIT makes for startling reading and leads to unsatisfactory consequences. An assessee caught red-handed trying to smuggle in an untenable claim for deduction is able to escape penalty u/s 271(1)(c) for concealment/ filing inaccurate particulars of income by putting on a sheepish face and pleading that the untenable claim was because of some confusion at his end.
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On the occasion of the 150th Anniversary of the Bombay High Court, the author pays rich tribute to the stalwarts of the Bombay Bar who were fearless in their fight for the Country’s independence and also in the fight for preserving the basic structure of the Indian Constitution. The Tax Bar has contributed in its own little way towards the development of tax laws and the process of building the Nation while keeping the flag of the Bombay High Court flying high, says the author, and implores all professionals to emulate the Stalwarts and work for the benefit of the Nation.
Bombay High Court which was established on 14th August 1862 has celebrated its 150 years Anniversary. On this memorable occasion a publication was published by Maharashtra Judicial Academy & Indian Mediation Centre and Training Institute, titled “ A Heritage of Judging”. The Bombay High Court through one hundred and fifty years. An Exhibition is being held from 14th August 2012 to 2nd October 2012. The historical items, patriotic pictures which were displayed in the exhibition made me and many of our fellow lawyers feel proud that we are Advocates of Bombay High Court wherein our father of Nation Shri Mohandass Karmchand Gandhi, Mr. M.A. Jinnah, founding father of Pakistan, Dr B.R. Ambedkar who drafted the Constitution of India , and many more legal luminaries practiced. I thanked the destiny for making me a lawyer of Bombay High Court.
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The author argues that Vodafone’s offer to settle the controversy on payment of tax and waiver of interest & penalty is a god-sent opportunity for the Government to salvage the situation. It will save the Government the ignominy of the retrospective amendments being struck down in Court and also boost its image in the International community. If handled properly, even Manmohan Singh can be made to look like a real Statesman with vision and courage, adds the author
Vodafone’s Chairman Analjit Singh went on record yesterday that Vodafone was open to settle with the Government pursuant to which it would pay tax of Rs. 8,000 crores if the Government waived the levy of interest and penalty.
Here’s why the deal makes immense sense and why Finance Minister P. Chidamabaram should immediately grab it.
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The author suggests to the Prime Minister, who is now also in charge of the Finance Ministry, that if the Government is serious about reforming taxation law, it should listen to professionals who practice the subject day-in and day-out. Professionals know where the problem areas are and why citizens are loath to comply with the law. The author lists out a few burning issues that are crying out for reform. If these are addressed, the taxpayers confidence in the administration will be restored and there will be a marked improvement in compliance with the law, and collection of taxes, promises the author
Our respected hon’ble Prime minster is holding the charge of Ministry of Finance, hence I have made an attempt to put forward the views of tax professionals for his consideration. I am of the opinion that it is the professional organizations and professionals, who make the suggestions objectively, in the interest of nation without any fear, favour or vested interest, therefore if an opportunity is given, they will make a presentation to the Hon’ble Finance Minster and his team, if it is considered objectively, it will benefit the nation. Some of the thoughts which can be debated and considered are:
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