The author is indignant at the proposal of the Government to discriminate between the retirement age of heads of Tribunals and the retirement age of other Members. He argues that it is illogical to have different retirement ages for members of the same Institution. He, however, is in favour of a general increase in the retirement age and argues that retirement at an age when the Judges’ intellectual faculties are at their peak results in a sheer waste of abilities, expertise and experience
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Sam, Nandan .. we have a problem!
The author, who is usually very critical of the Government for its indifferent attitude to the Judiciary, is full of praise this time at the grant of Rs. 5,000 crores in the Budget for modernization of the justice delivery system. He urges that much more has to be done and makes the radical suggestion that visionaries like Sam Pitroda and Nandan Nilekani should be nominated to prepare a road map to reform the judicial process
Finance Bill 2010: Grasim superseded .. but whither accountability?
However, the larger issue that still remains to be addressed is the gross negligence by the department in filing appeals to the High Court. It is common experience that even in matters involving huge revenue implications, appeals are routinely filed after a gross delay. The delay is not just a few days or weeks but several months and even years! Several appeals are dismissed because the officer concerned cannot even think of reasons to justify the delay on his part. Imagine the loss to the public exchequer!
Finance Bill 2010: Ishikawajima superseded .. finally!
Finance Bill 2010: Judgement of the Supreme Court in Ishikawajima-Harima Heavy Industries 288 ITR 408 superseded by the Explanation to section 9 (1) (vii)
Goodbye NTT, Hello ITAT!
The author is full of appreciation at the stellar roles played by the ITAT and the Bombay High Court in reducing arrears. He argues that the dwindling pendency of matters has rendered the concept of the NTT redundant. He makes out a strong case for increasing the role of the ITAT by making non-appeallable orders appeallable to the ITAT
A MATter of interest!
“Higher wisdom has to prevail over better wisdom” is the mantra judges mumble when they are forced to follow a precedent that they don’t quite agree with. However, judges do find ways of getting out of having to follow a judgement of a higher court. The latest salvo on this front is the Third Member judgement in Kanel Oil which shows that a High Court judgement, though superior in status to the Tribunal, may have to yield to the latter. In this case, the Bench was faced with a piquant situation. It had to decide whether an assessee liable to pay Minimum Alternate Tax (“MAT”) under section 115JA of the Act was also liable to pay advance tax under sections 234B and 234C for default in paying advance tax. The issue as such was covered against the assessee by the decision of the Special Bench in Ashima Syntex 117 ITD 1 but the assessee must have been very smug during the hearing because there was a subsequent judgement of the Bombay High Court in Snowcem India 313 ITR 170 which held, following the judgement of the Supreme Court in Kwality Biscuits 284 ITR 434, that assessees paying tax on book profits u/s 115JA were not liable to pay advance tax. The Judicial Member did oblige and decided in favour of the assessee by following the judgement of the Bombay High Court. However, the Accountant Member wrote a detailed dissenting judgement and followed the judgement of the Special Bench. This is how the matter landed up before the Third Member.
Depreciation Dreams Dashed
The twin losses in quick succession on the depreciation front have put depreciation – aficionados in a sense of gloom. First, in Techno Shares & Stocks, they were told in no uncertain terms that their esoteric arguments on the intangible assets front was far fetched. Second, in Plastiblends, they were told that their gambit to extract maximum deduction u/s 80-IA while postponing the claim for depreciation for later years when the s. 80-IA relief would run out was not going to work.
Death of a Circular
Circular No. 23 dated 23rd July 1969 held the fort valiantly for 40 years but in the end met an unceremonious death. The Circular, issued in an era where fair play was still respected, was a masterful analysis of section 9 which provided a tax liability on non-residents from income accruing or arising through or from business connection in India. The Circular was essentially a series of illustrative instances and guidelines designed to guide befuddled taxpayers from the labyrinth of tax laws. Written in a simple and easy-to-understand style, it told you in clear terms whether your transaction was taxable or not and the reasons for the same.
Temporary reprieve from Daga Capital
The decision of the President of the ITAT to stay hearing of appeals involving Daga Capital 119 TTJ 289 (Mum) (SB) has provided temporary reprieve to beleaguered assesses reeling under the twin losses of Daga Capital and Cheminvest. In Daga Capital, it was held that Rule 8D though inserted vide notification No. 45/2008 dated 24th March 2008 would apply to pending matters as well. Though the Special Bench was not concerned with the mechanics of Rule 8D, its ruling cast a gloom because Rule 8D, if literally applied, can result in the quantum of disallowance exceeding the quantum of exempt income! Of course, the correct interpretation, according to some experts, is that Rule 8D is meant as a measure of last resort only; i.e., when it is not possible to work out the disallowance correctly having regard to the accounts.
A Code Full Of Problems!
The author is chillingly polite when he says that even the draftsmen of the Direct Taxes Code have not realized the far reaching consequences that their proposals will have. He identifies ten conceptual problems with the Code and warns that unless these are addressed, the Direct Taxes Code will become a draconian piece of legislation. He implores tax professionals to rise to the occasion and come forward with objective suggestions which will help simplify and rationalize tax laws and procedures