Month: May 2020

Advocate Parveen Kumar Bansal (Former ITAT Vice President) and CA Gaurav Bansal have pointed out that the Central Processing Centre (CPC) is making adjustments u/s 143(1)(a) of the Income tax Act for alleged “mistakes” in the returns of income, without considering the objections of the assessee and giving reasons. The ld. authors have pointed out that this practice of the CPC is contrary to the law and CBDT Circulars and is leading to wasteful litigation and harassment. They have requested the CBDT to intervene and issue necessary directions. A pdf copy of the article is available for download

CA Mohit Gupta has pointed out that under section 153D of the Income-tax Act, 1961, the prior approval of the JCIT is necessary before an assessment under sections 153A and 153C of the Act is passed. He has drawn attention to important judgements which have held that if the approval is granted by the JCIT in a mechanical manner and without application of mind, the assessment is vitiated. A pdf copy of the article is available for download

CA Nidhi Surana has pointed out that as a Covid-19 relief measure, the Government has granted an extension in the due dates and also directed issue of pending refunds to assessees. However, it has maintained a studied silence on the issue of stay of demand. She has argued that if the Department is permitted to exercise coercive measures to recover demands, businesses will collapse and there will be an economic calamity. She has pleaded that the CBDT should issue immediate instructions and stay recovery of outstanding demands

In PCIT vs. Maruti Suzuki India Ltd 107 375, the Supreme Court considered the important issue whether proceedings initiated by the Department against a person who ceases to exist due to death or amalgamation is valid or not. CAs Nehal Shah and Tanupriya Patel have explained the true scope of the judgement and raised several pertinent follow-up questions. One of the interesting questions raised is whether, if the assessee’s successor omits to inform the Department of the death or amalgamation of an entity, the proceedings against the entity are curable and valid. A pdf copy of the article is available for download

Advocate Parveen Kumar Bansal (Former ITAT Vice President) and CA Gaurav Bansal have raised the interesting question whether the amendment to section 115BBE by the Taxation Laws (Second Amendment) Act, 2016 to tax unexplained cash credits, investments, expenditures etc under sections 68 etc at the higher tax rate of 60% can have retrospective application. The ld. authors have canvassed the convincing argument that the increased tax rate is prospective and should be confined only to additions made on account of unexplained demonetized currency and not for other additions. A large number of judicial precedents have been relied upon to support the argument. A pdf copy of the article is available for download

Advocates Devendra Jain and Radha Halbe have pointed out that the disruption caused by the Covid-19 pandemic is likely to lead to defaults in payment of salaries, rent, business transactions, execution of contracts etc. The ld. authors have systematically analyzed the tax implications of these defaults and explained whether the income will still be assessable in the hands of the assessee. A plethora of important judgements have been referred to by the ld. authors in support of their analysis

Advocates Mahendra Gargieya and Hemang Gargieya have explained the law relating to “full and true disclosure of material facts” in the context of reopening under sections 147 and 148 of the Income-tax Act, 1961. The ld. authors have explained the fine distinction between the obligation of the assessee to disclose the “material facts” and the requirement to disclose the “inferences” to be drawn from those facts. They have opined, by relying on judgements of the Apex Court, that while the assessee is required to disclose the former, he is not obliged to disclose the latter

CA Tilak Chandna has analyzed in a meticulous manner the definition of the term “benami transaction” in section 2(9) of the Prohibition of Benami Transactions Act, 1988. He has explained precisely which transactions are, and which are not, covered by the definition of the term. All the important legal precedents on the issue, of the Indian Courts as well as that of the foreign courts, have been referred to

Advocate Sameer Bhatia has dealt with the interplay between sections 2(47) and 45 of the Income-tax Act, 1961 and the provisions of the Transfer of Property Act, 1882 and the Registration Act, 1908. He has also dealt with the controversial question whether a “transfer” is complete on the date of the agreement to sell or on the date of physical possession/registration of documents. All the relevant judgements as well as Circulars of the CBDT have been referred to by the Ld. Author

Advocate Divesh Chawla has conducted a comprehensive analysis of the Benami Law. He has explained the impact of the statutory provisions, the process involved, and the consequences in civil and criminal law. He has also explained the conflict between the Benami Law, the Income-tax Act and the Money Laundering Act. He has also provided valuable advice on the precautions to be taken by the concerned persons and third parties to avoid falling foul of the law