The author is enthused by the impending training programme for the Hon’ble Members of the Tribunal on “International Taxation and Transfer Pricing“. It is a step in the right direction he says and adds that the time is opportune for all stake-holders to contribute their thoughts on how to improve the functioning of the Tribunal. On his, part, the author cannot resist the temptation to list a few issues that need to be paid attention to for making the Tribunal’s functioning even better than it is today

Income-tax Appellate Tribunal which was founded on 25th January, 1941 has completed its 72 years of existence, and it is for the first time President of ITAT, has taken initiative to hold a Residential Refresher Course for Hon’ble Members from 11th August to 20th August, 2012 at Maharashtra Judicial Academy & Indian Mediation Centre & Training Institute, Bhayandar. I am pleased to know that the Hon’ble Members will be discussing in details the law relating to International Taxation issues and Transfer Pricing. The Hon’ble Members will also be learning Yoga as well as spiritual knowledge by the guidance of experts in the field. For this innovative Residential Refresher Course contribution of Hon’ble President and Vice-Presidents deserves to be acknowledged. According to me, this should be the annual feature.

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The author clears the misconception in the minds of the public that the verdict of the Supreme Court in Vodafone had delivered a body blow to the Government by deciding in favour of the assessee. Instead, large parts of the verdict, when stripped out of context, are in the tax department’s favour and the Government has shrewdly nullified the parts that were against it whilst retaining the parts that are in its favour says the author

When the judgement of the Supreme Court in Vodafone International vs. UOI 341 ITR 1 came out, a lot of people were shocked and thrown into despondency. How could billions of dollars earned from India be said to be tax-free only because the investments were routed through a shell company in a tax haven perplexed everybody.

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The UK Govt’s not-so-subtle threats to India over the Vodafone retrospective amendments have irked the author. The author cites two controversial retrospective amendments effected in the UK to supersede well settled judicial precedents and fumes that a Government which itself indulges in questionable legislative practices has no moral right to preach to others.

The question whether the Vodafone retrospective amendment is the right thing or not is one issue. The question whether the UK Government has the moral authority to threaten the Indian Government to withdraw the retrospective amendments is a separate issue.

When UK’s Finance Minister Gordon Brown and Chancellor of the Exchequer George Osborne criticized India over the Vodafone retrospective amendments, a lot of people nodded sagely, agreeing with their dire prognosis that the amendments seeking to nullify the judgement of the Supreme Court were improper and ought to be withdrawn forthwith as it would otherwise “dampen enthusiasm about India’s investment climate“.

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The author, one of the innumerable victims of the department’s gross inefficiency in matters of TDS credit & refunds, sees a ray of hope in the High Court’s tough stand in seeking to rein in the department’s wayward ways. The author urges all affected tax payers to raise their voices against the department’s harassment and strengthen the Court’s hands.

“Courts are not meant only for the rich and the well-to-do, for the landlord and the gentry, for the business magnate and the industrial tycoon, but they exist also for the poor and the down-trodden the have-nots and the handicapped and the half-hungry millions of our countrymen” Bhagwati J. in Peoples Union for Democratic Rights v. Union of India (AIR 1982 SC 1473)

When Anand Parkash, FCA, wrote a letter dated 30.4.2012 to the High Court, he did so in a sense of utter helplessness and frustration. He was voicing the angst of millions of tax payers across the Country at the numerous difficulties faced by them due to the faulty processing of Income-tax returns and TDS credit. In heart-felt emotion but with a clarity that years of professional training as a Chartered Accountant had bestowed, Anand Parkash meticulously listed out his litany of woes. Anand Parkash pointed out that in processing the s. 143(1) intimation, there was invariably a mismatch between the TDS credit claimed and the TDS credit granted and demands were raised on this score. The department ignores the figure of TDS credit claimed and mechanically grants credit for the credit shown in the online computer records of Form No.26AS. If the assessee writes a letter to protest against the department’s action and produces proof of the TDS, he is ignored. Against the bogus demand so raised, future refunds are adjusted.

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The author compliments the Supreme Court for its sagacity in dealing with a potentially explosive communal issue in a sensible & mature manner whilst rapping the Government hard on its knuckles for perpetrating loot by the system of patronage and granting of favours in the guise of the “Goodwill Hajj Delegation”

It started as a political stunt with an eye on the powerful Muslim vote bank but over the years, the expenditure was ever-increasing and putting an enormous strain on the exchequer. Thanks to the burgeoning population and inflation, the number of pilgrims and cost for the Haj Pilgrimage soared from 21,035 pilgrims and Rs. 10.51 crores in 1994 to 125,000 pilgrims and Rs. 685 crores in 2011. While the air-fare was Rs.54,800, the pilgrims were charged Rs.16,000 and the balance of Rs.38,000 was borne by the State as a “subsidy”. One would have thought that in a secular State pledged to treating all religions equally, singling out one community for preferential treatment would smack of discrimination but surprisingly, in an earlier judgement in Prafull Garodia vs. UOI, the Supreme Court upheld the constitutional validity of the subsidy.

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