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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The author, an eminent senior advocate, is deeply anguished that the ITAT, which was at one time hailed as a “Model Tribunal”, is today facing the ignominy of being subjected to repeated strictures from the High Courts. The author has analyzed the reasons for this sorry state of affairs and offered valuable recommendations on what can be done to rectify the situation. He has also sent the clarion call to all stakeholders to rise to the occasion and work tirelessly towards restoring the glory and prestige of this august institution
The Income-tax Appellate Tribunal which is considered as mother Tribunal of all Tribunals which was established on 25th January, 1941 will be celebrating its 75th year on 26th January 2016. An honest attempt should be made by the Bar and the Bench to retain its glory as one of the finest Institution of Our Country.
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The author, an eminent senior Advocate, points out that while the goal of the Hon’ble Prime Minister to bring ‘Acche Din’ for the common man is laudatory, the same will not be fulfilled unless drastic reforms are incorporated in the Income-tax laws to bring about accountability for income-tax officials and to prevent the on-going rampant corruption. He also points that the long delay in getting justice from the Courts compels the taxpayers to grease the palms of the officials. He has also listed out a few core issues which according to him require immediate attention of the Hon’ble Prime Minister
Professionals and honest tax payers are having great expectations that this year’s Budget will be a vision document of the Honourable Finance Minister to have a simplified tax structure and better tax administration. The Federation has short listed some of the issues for the kind consideration of the Honourable Finance Minister which can be deliberated upon:
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The author, an eminent Senior Advocate and champion of judicial independence points out that what was in the realm of a dream till now, namely, the constitution of regional Supreme Court Benches, may soon become reality. The Hon’ble Chief Justice of India, Mr. H.L. Dattu, has clearly indicated that he is in favour of such regional Benches. The Hon’ble Prime Minister’s Vision of “Digital India” may help lawyers at remote places to argue matters before Supreme Court Judges sitting in Delhi or before the regional Benches.
The Free Press Journal on 13-10-2014 carried a news item that the Honourable Chief Justice of India Mr. H. L. Dattu is in favour of setting up regional Benches of the Supreme Court. The Law Commission of India in its 229threport dated 5th day of August, 2009, after a detailed study strongly recommended having four regional Benches of the Supreme Court. One of the reasons stated by the report is quoted below:
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The author, an eminent Sr. Advocate and a champion of judicial integrity and independence, expresses grave apprehension that the National Judicial Appointments Commission Bill, 2014, which seeks to replace the present Collegium system of appointment of Judges by a Committee, comprised partly of politicians, will severely hamper the independence of the Judiciary. He reminds us that the Government is the biggest litigant in the Country and warns that Judges may feel apprehensive of taking bold decisions against the Government in the fear that their chances of promotion to the higher Court would be jeopardized. The author also argues that the present Collegium system is working well and the few defects in it can be rectified. He offers practical suggestions on how this can be done.
One of the objects of the All India Federation of Tax Practitioners (the Federation) is “To strive and work for independence of Honourable Courts–“. The Tax Bar has always played a paramount role in warding off threats to the independence of the Judiciary. It was due to the labours of the Tax Bar that the independence of the Income-tax Appellate Tribunal (ITAT) could be preserved [Ajay Gandhi v. B.Singh (2004) 265 ITR 451(SC), ITAT v.V.K.Agarwal (1999) 235 ITR 175 (SC)].
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