Messages

It is mentioned in the BMR new article that on day 18 of the hearing, Mr Rohington Nariman, Learned Solicitor General  arguing the vodafone case before the Hon'ble Apex Court argued that "Azadi Bachao" case was wrongly decided and Mcdowell ,a decision by larger Bench must prevail but it seems that one thing has been missed, Azadi Bachao was an appeal by the Union of India against the  Delhi High Court decision  wherein Mcdowell was applied   ,, what you fellow have to say

[any other law for the time being in force]

After the decision of the Hon'ble Bombay High court in "Lawyers collective " the Right to practise in Litigious and Non Litigious matters may now be confined to persons practising the profession of law under the Advocates Act 1961. This plainly implies that practising under tax laws is not an exception. Apart from Lawyers various other categories of persons including C.A's, ITP's etc are in substantial number and manner, practising in both the Non litigious and Litigious matters before Tax Authorities and Tribunals.

Section 33 of the Advocates act while restricting the scope of practice to Advocates alone provides exception in two cases, one, otherwise provided in the Advocate Act itself and second otherwise provided in any other law for the time being in force. Persons who are eligible to act as Authorised representative before Income Tax Authorities and Tribunal are prescribed in section 288 of the I.T.Act. Thus section 288 of the I.T.Act may prevail over the provisions of section 33 of the Advocates Act so far as the practice of Income Tax Law is concerned by virtue of the exception provided therein.

New Direct Tax Code intends to repeal the Act of 1961. In the Direct Tax Code too there is analogous provision under the proposed section 270 of the code but the issue arises whether the Direct Tax code when enacted would qualify to be termed as "  otherwise provided in any other law for the time being in force" under section 33 of the Advocates Act of 1961

Recently a number of pathbreaking judgments on Deemed Dividend have come from the Jaipur Bench of the Tribunal. The Hon'ble Bench has observed that for treating the payment of any sums by way of loans or advances to a share holder by a company , not being a company in which the public are substantially interested out of accumulated profits, as deemed dividend within the meaning of section 2(22)(e) of the I.T.Act, it is to be seen whether the company is in actual "control" and "posession" of the profits. It further observed that if the assessee comapny's profits get invested in the assets of the company then it can not be said that the company is in "possession" and "control" of the profits or accumulated profits. The Hon'ble Bench in the cirucmstances when profits were claimed to have been invested in the assets of the company held that the company was no more in possession of accumulated profits and hence the provisions of section 2(22)(e) are not applicable.

  Since the profits would always remain with the company in one or the other form of assets i,e, fixed assets or stock in trade or liquid asset,  in every case it can be safely argued that profits or acumulated profits are no more in possession or control as the same are held in the form of some assets and not as profits as such, the rigours of section 2(22)(e) may not be attracted. Thus the provisions of section 2(22)(e) of the Act can not be invoked in any case. some of the decisions are in ITA No 88/JP/2008 &89/JP/2008 in the case of Smt Madhuwanti Singh and Sh Bhim Singh respectively, the decision is dated 19/9/2008. These decisions have subsequently been followed in decision dt 27/11/2009 in ITA 1661/JP/2008.