Top Brass Of The Income-Tax Department Explain Important Aspects Of The Income Declaration Scheme 2016

The Chamber of Tax Consultants organized a seminar on 5th August 2016 which was addressed by senior officials of the Income-tax Department such as Ms. Nishi Singh, Member, CBDT, Mr. Saxsena and Mr. Patwari, both Principal Commissioners of Income-tax. The officials of the department explained important and hitherto unknown aspects of the Income Declaration Scheme. Dr. K. Shivram, Senior Advocate, also furnished his objective views on the Scheme. A power point presentation prepared by Mr. D. C. Patwari, Pr. CIT, which highlights all the important nuances of the Scheme is available for download.

Ms. Nishi Singh Member CBDT addressing on the subject stated that the tax consultants must play a proactive role advising the assessees to come clean and join the nation building process. She stated that IDS is not the revenue earning measure. If any doubt on the scheme, the associations can send their queries and the Board will try to clarify the issues. Some of the members asked the query stating whether there is any possibility of extending the scheme as the Chartered accountants and tax consultants are busy with filing of the return up to 30-09-2016. Honourable Member categorically stated that there will not be any extension of the Scheme and those who have to avail the scheme has to comply with the same before due date specified in the scheme. She made an appeal to the participants that the queries may be sent to her through the President of the Chamber of Consultants, Mr. Hitesh Shah, and she will try to get the clarification from the Board at the earliest. Honourable member also clarified the number of queries raised by the participants to their satisfaction.

Mr Saksena, Pr. Commissioner of Income Tax, addressing on the occasion made an appeal to the audience that, if any issues on the IDS the officials of the department to be ready to help and clarify the issue. He also made a request to the participants to convince assessees to take advantage of the scheme. He assured the participants that the updated list of the Valuers will be hosted in the Income tax website of Mumbai Zone.

Mr Patwari, Pr. Commissioner of Income tax, has made a good presentation on the subjects on – “The Income Declaration Scheme 2016” Which highlighted the categories of issues they have the information and the issues the assesses can make disclosure and clean the balance sheet. (Refer Presentation) He addressed on the New Money laundering Act and its effect. He also stated that the issues raised by Dr K shivaram in his speech will be taken up with the Board for further clarification. He also thanked Dr. K. Shivarm Sr. Advocate for highlighting the legal issues.

Mr Mahendra Sangvi highlighted the various issues on the subject and requested the member Board and Chief Commissioners to clarify the issues.

Editorial Note. Board has issued further clarification Circular No. 29 of 2016 dt. 18/8/2016.

Gist of the important issues mentioned in the lecture delivered by Dr. K. Shivaram Sr. Advocate on the subject “Income Disclosure Scheme, 2016-Provisions and issues-An over view.” To the Chamber of tax consultants on 5.08-2016

1. Introduction:

Till date 16 Schemes have been introduced by the Govt. from time to time,it is for the first time the Honourable Prime Minster of India has assured the declarant of the IDS that complete confidentiality will be maintained and no enquiries will be made. Honourable Finance Minster while interacting with tax professionals at Ahmadabad along with, Honourable, Revenue Secretary, Mr. Hashmukh Adhia has also given an assurance of confidentiality and no harassment to the declarants. Explaining the Income Disclosure Scheme, then as Members Central Board of Direct taxes, Mrs. Rani Singh Nair , present Chair Person of CBDT and Mr. S.K. Sahai, Member CBDT have made an appeal to the tax payers “You trust us we will trust you.” www.itatonline.org.

Budget speech (2016) 381 ITR 9 (St.) (35 )

One of the objectives relates to “Reducing litigation and providing certainty in taxation”. Para 159 to 161 of the Budget Speech deal with Income Declaration Scheme announced by him and read as under:

“159. We are moving towards a lower tax regime with non-litigious approach. Thus, while compliant taxpayers can expect a supportive interface with the department, tax evasion will be countered strongly. Capability of the tax department to detect tax evasion has improved because of enhanced access to information and availability of technology driven analytical tools to process such information. I want to give an opportunity to the earlier non-compliant to move to the category of compliant.

160. I propose a limited period Compliance Window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is total of 45% of the undisclosed income. There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed, subject to certain conditions. The surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy. We plan to open the window under this Income Disclosure Scheme from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration.

161. Our Government is fully committed to remove black money from the economy. Having given one opportunity for evaded income to be declared once, we would then like to focus all our resources for bringing people with black money to books.

IDS Scheme is after 20 years of VDIS, 1977.In the VDIS 1997 rate of tax was only 30 % tax and value declaration was at cost. It was challenged before Bombay High Court and then Supreme Court by the All India Federation of tax Practitioners v. UOI (1997) 228 ITR 68 (Bom.)(HC), All India Federation of tax Practitioners v. UOI (1991) 231 ITR 24 (SC), on the ground that it was discrimination against honest tax payers. Possibly the rate would have been at 30% the honest tax payers would have challenged once again, therefore to take care of such a situation, tax rate is prescribed @ 45% which includes Krishi Cess and penalty. Some of the tax Practitioners are of the view that payment of total tax including Krishi Cess which is 45%, is very high. If one considers the interest and penalty, the tax rate of 45 % is not high, one may recollect in the year 1972-73, above five lakhs of taxable income, rate of tax was 85% with surcharge of 15 % . With this background one has to judge whether 45 % payment is excessive or reasonable, when an Assessees can take advantage of scheme from 1962 for any year earlier to AY. 2017-2018.

Tax consultants may have to explain the assesees that this is not an “Amnesty scheme” . This is the scheme for the assessees who have inadvertently or knowingly have not complied with tax provisions, given an opportunity to come clean and participate in the nation building process by paying the taxes rightfully due to the Government, Which is the mandate of our Constitution of India to pay the tax to the Government which is rightfully due, neither more nor less. Conditions prevailing 20 years back and now has changed, because of technology , earlier there was no mechanism to get the information from RBI or sales tax or central exercise, now Revenue gets the information from many sources because of reporting systems. One may refer the answer to Question No 9.Circular No. 25 of 2016 dt.30-06-2016. “ The income tax department is in receipt of large volume of information from various sources such as registrars of property, banks, financial institutions, stock exchanges, tax deductors, etc. The Department has launched a comprehensive data–mining and compliance management programme, “Project in sight“, which will generate a large volume of reliable information about financial transactions undertaken by the tax payers and the relevant year in which the transactions were undertaken “schedule for making payments under the Scheme up to 30-09-2017.

CBDT also came out with four clarifications, in a questions and answers format to bring clarity on the scheme. Govt also by Press Release dated 14th July, 2016 has relaxed the time (www.itatonline.org). This proves very positive approach of the Govt.

The purpose of introduction of the IDS is laudable, however the success depends upon the confidence that the tax administration is able to inspire amongst tax consultants who are the bridge between the assesses and tax administration. If tax professionals play a proactive role then only the scheme can achieve the desired objects. Therefore it an opportunity to the assesses to take advantages of the Scheme.
I am told most of you have attended the study circle meetings, lectures, hence I don’t have to discuss the scheme, let me share with you, those who desire to know more. Also visit www.itatonline.org and ask a query on IDIS and one will be able get all the information regarding circulars, Finance Minster’s speech and answers by experts panel, comparison with earlier schemes.etc

2. Let me discuss some of the controversial issues.

Chapter IX (S.181 to 198) of the Finance Act, 2016 (Act), “The Income Declaration Scheme,2016”. Only 19 Sections.

S. 182 : Definition.

S. 182(c). All other words and expression used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in the Act. Person is not defined under the Finance Act, hence definition as defined in the Income –tax Act is applicable. All persons defined u/s 2(31) of the Income –tax are eligible to file the declaration under the scheme

There is no definition of undisclosed income in the Finance Act or under the Income tax Act. Whereas there is a separate definition under the Back money Act. Black money Act section 2(11) defines the meaning of “ undisclosed asset located outside India “ and 2 (12), defines meaning of “ Undisclosed foreign income and asset”

S. 183 : WHICH INCOME OR ASSETS CAN BE DECLARED BY ELEIGIBLE PERSON:

Section 183 of the Finance Act provides that every eligible person can make declaration under the Scheme in respect of the undisclosed income earned in any year prior to 1.4.2016. Eg. Certain assets received by inheritance, gift or certain capital receipts which are not chargeable to tax need not be disclosed. We have to see the year of acquisition of asset. Is it chargeable to tax as per the law applicable to that particular year? if it is not chargeable to taxes, no question of disclosure.

S. 188 : Undisclosed income declared not to be included in total income.
The amount of undisclosed income declared in accordance with section 183 shall not be included in the total of the declarant for any assessment year under the Income tax Act, if the declarant makes the payment of tax and surcharge referred to in section 184 and the penalty referred to in section 185, by the date specified under sub section (1) of section 187.

When we compare with VDIS 1977. S. 68.

Income declared cannot be included in total income of any previous year under the I.T. Act, 1961, subject to credit of income in books and payment of taxes. Also, Commissioner of Income -tax, will issue certificate on application being made.

There is no specific provision for passing an entry in the books of account. Therefore other agencies will not have any opportunity to look in to the disclosure under IDS.

In Girdhari Lal Nannelal vs. Sales Tax Commissioner (1977) 109 ITR 726 (SC)

Cash credit in the name of wife of partner was Assessed as undisclosed income of the firm. Sales tax authorities have Added the said undisclosed source as turnover on sales the Court held “the approach which may be permissible for imposing liability for payment of Income–tax in respect of unexplained acquisition of money may not hold good in sales tax cases. For the purpose of levy of sale tax , it would be necessary not only to show that the source of money has not been explained but also to show the existence of some material to indicate that the acquisition of money by assesse had resulted from transactions liable to sale tax and not from other source“

Therefore declaration in IDIS may not have any implication under the VAT Act provisions.

S. 190 : Benami transactions- There was no exemption under VDIS 1997.
The provisions of the Benami Transactions (Prohibition ) ACT , 1988 shall not apply in respect of declaration of undisclosed income made in the form of investment in any asset, if the asset existing in the name of Benamidar is transferred to the declarant, being the person who provides the consideration for such asset, or his legal representative, within the period notified by the Central Government.

Q. NO 2. Circular No 25 of 2016 dt.30-06-206.S.190, grants exemption from the provisions of Benami Transactions (Prohibition) Act, 1988, if the property is transferred in the name of beneficial owner by 30.09.2017.

Issue: If for any unavoidable reason or on account of some pending litigation, the property cannot be transferred by 30.09.2017, the exemption shall not be available. The Principal Commissioner / Commissioner should be authorized to grant further time in genuine cases.

S. 190 : Benami property.

Refer Circular No 27 of 2016 dt.14thday of July, 2016 [385 ITR 41] Q.No.4.

Q. In a case where the declarant gets the benami asset transferred in his name without payment of any monetary consideration to the benamidar, whether capital gains would be chargeable in the hands of benamidar consequent upon such transfer and whether the tax at source @ 1 % would be deducted in such case ?.

Ans. In this case the consideration for acquisition of benami property has already been paid by the beneficial owner and the fair market value of the property has been declared by the beneficial owner under the scheme. Since, the transfer of property from the benamidar to beneficial owner is only to regularize and there will be no involvement of monetary consideration for transfer of immovable property by the benamidar in the name of declarant, the question of capital gains in the hands of benamidar and deduction of tax at source therein shall not apply.

S. 191 : No Refund of tax paid on voluntary disclosure. Similar to section 70 of the VDIS 1997.

Q. If the tax was paid beyond prescribed period due to which the declaration is rejected, can he get back the amount of tax paid?

Ans. Circular No. 16 of 2016 dated 20-5-2016, explanatory notes on provision of the IDS, 2016, in para. 8(b) states that “Any tax, surcharge or penalty paid in pursuance of the declaration shall, however, not be refundable under any circumstances”, The language used in section 191 of the Finance Act 2016, is similar to the language used in S.70 in the VDIS, 1997.

In Sajan Enterprises v. CIT (2006) 282 ITR 636 (Bom)(HC),relying on Hemlata Gorgya v. CIT (2003) 259 ITR 1 (SC) held that , where entire tax liability was not paid within a period of three months as contemplated under VDIS, declarant was not entitled to get benefit of scheme and in such case , amount paid by assessee beyond period of 90 days under the scheme was to be refunded to the petitioner. Similar view was taken in R. Ranganatha Reddiar v. ITO (2005) 194 CTR 479 (Ker) (HC). The Hon’ble Apex court had directed the Revenue authorities “to refund or adjust the amounts already deposited by the assesses in purported compliance with the provisions of the Scheme to the concerned assesses in accordance with law”. Applying this ratio in a case where the declaration is rejected due to delay in payment of tax, the assesse may be able to claim the refund by approaching the Court by way of Writ petition.

S. 192 : Declaration not admissible in evidence against declarant.

Notwithstanding anything contained in any other law for the time being in force, nothing contained in any declaration made under section 183 shall be admissible as evidence against the declarant for the purpose of any proceeding relating to imposition of penalty , other than the penalty leviable under section 185 or for the purpose of prosecution under the Income–tax Act, or the Wealth tax Act, 1957.

Central Board of Direct Taxes has issued a Circular No. 16 of 2016 dated 20th May, 2016 (2016) 384 ITR 144 (St.) by way of explanatory notes on the provisions. Para 9 (b) says “The contents of the declaration shall not be admissible in evidence against the declarant in any penalty or prosecution proceedings under the Income-tax Act and the Wealth-tax Act.” (Page 148 St.)

Circular No. 17 of 2016 dated 20th May, 2016 (2016) 384 ITR 148 (St.) has been issued by way of clarification. Question No. 13 with its answer is extracted hereunder :-

Question No. 13 : Will the declarations made under the Scheme be kept confidential?

Answer: The Scheme incorporates the provisions of section 138 of the Income-tax Act relating to disclosure of information in respect of assesses. Therefore, the information in respect of declaration made is confidential as in the case of return of income filed by assesses. (Page 152 – 153 St.)

It says the information is confidential and at par with the return of income. It says shield is Section 138 of the I.T. Act.

Circular No 27 of 2016 dt. 14thday of July,2016, [385 ITR 41] CBDT once again clarified in response to (Q. No. 5).

Under what provision can a declarant be sure that the information contained in valid declaration shall not be shared with any other law enforcement agency and also shall not be shared within the income-tax department for investigation ?

Ans. Section 195 of the Act provides that provisions of section 138 of the Income –tax Act shall apply in relation to the proceedings under the Scheme . Vide notification S.O 2322(E) dated 06-07-2016 , an order has been passed by the Central Government directing that no public servant shall produce before any person or authority any such document or record or any information or computerized data or part thereof which has come into his possession during the discharge of official duties in respect of a valid declaration made under the Scheme.

Supreme Court while dealing with the provisions of Section 138 of the Income Tax Act, in Dangiram Pindi Lal v. Trilok Chand Jain (1992) 194 ITR 228 has held that in compliance of order of the Court the records and documents would be required to be sent to the Court.

S. 196 : Scheme does not apply to certain persons – Initiation of prosecution.

FIR (First information report) is filed under the Code of Criminal Procedure 1973 (CRPC), can the assessee avail the benefits of the IDIS schemes?

The Hon’ble Uttaranchal High Court in the case of CIT v. Meena Goyal (Smt.) (2011) 334 ITR 428 (Uttaranchal)(HC) held that prosecution gets initiated when summons is issued by Court on the report made by the investigating officer , therefore , the benefit of Scheme cannot be denied to a person against whom only FIR is filed. As the wordings of 196(b) of IDIS are identical to 78(b) of VDIS 1997, the ratio may hold good even for interpretation of IDIS, 2016.

S. 197 : For the Removal of doubts three clauses in the section provide as follows:

a) Provides that benefit of the scheme shall not be available to person other than the declarant.

b) Clause (b) provides that where amount due under the scheme is not paid then income disclosed shall be treated as income of the previous year in which the declaration is filed.

c) Where any undisclosed income or asset has accrued or arisen prior to commencement of the scheme and declaration is not made , then it shall be treated as income of the year in which notice under section 142, 143(2) or 148 or 153A or 153C is issued and provisions of income –tax Act 1961 shall apply accordingly.

CBDT Circular No. 24 /2016 dt.27.06.2016 (Q.No.4). [385 ITR 35]
If undisclosed income relating to an assessment year prior to AY. 2016-17, say AY. 2001-02 is detected after the closure of the Scheme, then what shall be the treatment of undisclosed income so detected?

Ans. : As per the provisions of section 197 (c) of the Finance Act, 2016, such income of A.Y. 2001-02 shall be assessed in the year in which the notice under section 148 or 153A or 153C, as the case may be, of the Income-tax Act is issued by the Assessing Officer. Further, if such undisclosed income is detected in the form of investment in any asset then value of such asset shall be as if the asset has been acquired or made in the year in which the notice under section 148/153A/153C is issued and the value shall be determined in accordance with rule 3 of the Rules.

Circular No 27 of 2016 dt 14thday of July, 2016 [385 ITR 41]

Q. No 2. If an undisclosed income represented in the form of an asset or otherwise pertains to a year falling beyond the time limit allowed under section 149 of the Income-tax Act, 1961 and the said undisclosed income is not declared under the Scheme , then as per the provisions of section 197(c ) of the Finance Act, 2016 , the said undisclosed income shall be treated as the income of the year in which a notice under section 148 of the Income –tax Act has been issued . The said provision is inconsistent with the existing time lines provided under the Income –tax Act, for reopening of a case . Please clarify ?

Answer: Question no 4 of Circular No 24 of 2016 may be referred where the tax treatment of such income has been clarified . Since the Scheme contained in Chapter IX of the Finance Act , 2016 is a later law in time , the provisions of the Scheme shall prevail over the provisions of earlier laws.

Questions which may arise in the mind of the Assessee/Practitioners in the future:

Q.1) Is it legally correct in the view of the interpretation given by the CBDT on S.197(c) of the Income Disclosure Scheme about whether notice u/s. 148 can be issued after the expiry of six years from the end of the relevant assessment year ?

There was no similar provision in either VDIS 1997, VDIS 1976. However, provisions under The Black Money and Imposition of Tax Act, 2015 throw some light on the issue and hence Comparing with The Black Money,(Undisclosed Foreign Income and assets) and Imposition Act, 2015:

Charging section – Section 3 .

S. 3 Charge of tax.

(1) There shall be charged on every assesse for every assessment year commencing on or after the 1st day of April 2016 , subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty percent , of such undisclosed income and asset:

Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer.

(2) For the purpose of this section, “value of an undisclosed asset” means the fair market value of an asset (Including financial interest in any entity) determined in such manner as may be prescribed.

S. 10 deals with provision of assessment.

S. 72 . Removal of doubts

For the removal of doubts, it is hereby declared that –

(a) save as otherwise expressly provided in the Explanation to sub section (1) of section 69 , nothing contained in this chapter shall be construed as conferring any benefit , concession or immunity on any person other than the person making the declaration under this Chapter;

(b) where any declaration has been made under section 59 but no tax and penalty has been paid within the time specified under section 60 and 61 the value of such asset shall be chargeable to tax under the Act in the previous year in which such declaration is made;

(c) Where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly.

Black Money (Undisclosed Foreign Income and Assets) and imposition of tax Act, 2015 is a separate Act passed by the Parliament, separate assessment under the said Act, appeal provisions, etc , hence the Black money Act, has overriding effect on Income –tax Act , 1961 . There is no limitation prescribed for issue of notice under section 10 of the said Act. However whether the notice can be issued beyond sixteen years itself is a doubtful proposition. Whereas IDS is part of the Finance Act, 2016 which is part of Income tax Act hence assessment has to be done after considering the limitation provisions prescribed under the Income –tax Act.

Under IDS only two sections i.e. S. 184, 185, start with notwithstanding contained in the Income –tax Act or in any Finance Act, S. 192 starts with notwithstanding anything contained in any law for the time being in force.

No such ‘notwithstanding’ clause in section 197 of IDS.

Finance Act is not a separate Act, it is the part of Income –tax Act, therefore, since we do not have similar provisions in the Income Disclosure Scheme as mentioned under The Black Money and Imposition Act and The Benami Transactions (Prohibition) Amendment Bill, 2016, hence, section 197(c) of the IDIS cannot have overriding effect over the limitation provisions prescribed under the Income tax Act.

When a section begins with ‘Notwithstanding anything contained in the Income-tax Act’

“it is with a view to give the enacting part of section, in case of conflict , an overriding effect over the Act, or provision mentioned in the non-obstante clause”

UOI v. G.M Kokil AIR 1984 SC 1022

“It is well known that a non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some other enactment , that is to say , to avoid the operation and effect of all contrary provisions”

Chandravarkar Sita Ratna Rao v. Ashalata S. Gauram, AIR 1987 (SC) 117.

Supreme Court in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. (1993) 2 SCC 144, has held that in uncertain terms where two statues contain similar non obstacle clauses, it is latter which is to prevail over the former, for the legislature is supposed to be aware of the fact that the statute already in force contains a non obstante clause but still incorporate such non obstante clause in order to obliterate the effect of the non obstante clause contained in the former statute.

Benami Transactions (Prohibition) Amendment Bill, 2016-As passed by Loksabha as on 27-07-2016 and Rajyasabha as on 2-08-2016.

Act to have overriding effect.

S.67. The provisions of this Act, shall have effect, notwithstanding anything inconsistent there with contained in any other law for the time being in force.

The Central Board of Direct Taxes has issued answer to Question No. 4 of Circular No. 24 of 2016 and again reiterated its view in the answer to Question No. 2 of Circular No. 27 of 2016. It says : “the Scheme is a later law in time, the provisions of the Scheme shall prevail over the provisions of earlier laws”. The view taken by the department appears to be debatable and contrary to the ratio laid down by the following case laws:

Parashuram Pottery Works Co Ltd v. ITO (1977) 106 ITR 1 (10)(SC);
K.M. Sharma v. ITO (2002) 254 ITR 772 (SC) and
Emgeeyar Pictures (P) Ltd v. Dy.CIT (2016) 159 ITD 1 [TM](Chennai)(Trib.)

Hence the view of department may not be good in law and the assessee can approach the Court in this regard in an appropriate cases.

Clarifications are binding on revenue.

Q.2) Whether interpretation and clarification given by the CBDT on IDS is binding on the revenue ?

119(1) of the Income-tax Act, 1961, specifically empowers the CBDT to issue general circulars for the general administration of the Act and such instructions issued are binding on the Officers of the Department . In Navnit Lal C. Javeriv.AAC ( 1965) 56 ITR 198 (SC), Ellerman Lines Ltd v.CIT (1971) 82 ITR 913 (SC) and K.P. Varghese v. CIT (1981) 131 ITR 597 (SC) the Supreme Court laid down that the circulars are binding on the revenue authorities and they are bound to follow them. Even though the circulars were not strictly accordance with law , still the Supreme Court held that such circulars are binding.

In UOI v. Azadi Bachao Andolan (2013) 263 ITR 706( SC), Supreme Court held that a circular which does not specifically state that it was under section 119 has still to be treated as one so issued. In Spentex Industries Ltd v.CCE( 2016) 1 SCC 780 (SC), the Apex Court held that Central Board of Direct Taxes and Government are bound by their own interpretation. However the assesee can challenge the correctness of Circulars in appellate proceedings(CIT v. Hero Cycles Pvt. Ltd. (1997) 228 ITR 463 (SC),Commissioner of Customs v. Indian Oil Corporation Ltd ( 2004) 267 ITR 272 (SC)(277).

Assurance whether binding on revenue.

Q.3) Whether assurance given by the Honourable Finance Minister and answers given by the Department on IDIS, 2016 is binding on revenue?
Ans. Yes. In J.B. Boda & Co. v. CBDT (1997) 223 ITR 271 (SC), the Court held that the Finance Minister’s speech is relevant for interpretation of a provision . In Allied Motors (P) Ltd. v. CIT (1977) 224 ITR 677 (SC), the Court held that the budget speech of Finance Minster and memorandum explaining the Finance Bill as also the Department circular showing the departmental understanding are relevant in considering a provision. In Kerala State Industrial Development Corp Ltd v.CIT(2003) 259 ITR 51 (SC).

Conclusion.

One must appreciate that it is for the first time the Honourable Prime Minster of India Shri Narendra Modi addressed the Chief Commissioners and requested them to bring the culture of tax service, which the Chamber was making representations from time to time. This is a very positive change. I hope with the active participation of the tax administration and tax consultants the many tax payers will take advantage of the scheme and will became partner in the process of nation building.

Compiled by KSA Legal Research team