Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: form 3cd :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: VAT RATES :: Central Excise rule to resale the machines to a new company :: cpt :: empanelment :: ACCOUNTING STANDARDS
 
 
« News Headlines »
 Filing of online return for 4th quarter of 2016-17 — extension of period thereof
 CBDT simplifies ITR filing process from FY18
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned

Cause I'm the taxman
March, 07th 2008
One of the more egregious aspects of this years Budget is the increase in the discretionary powers of the taxman and the changes in the tax law made with retrospective effect. The government has sought to clothe these changes in the garb of clarifications and rationalisation and simplification of administrative and compliance procedures. The courts have had mixed views on the subject. While there are enough rulings allowing retrospective amendments, there have also been a few against this practice in 1985, a five-judge Supreme Court bench, including the then Chief Justice YV Chandrachud and Justice PN Bhagwati, ruled against retrospective changes which had a tax impact.
 
The best example of how sweeping the taxmans powers have become is the amendment, under the rationalisation sub-head, to Section 271(1) that deals with penalties. For instance, if the taxman disallows marketing expenses of Rs 50 crore, the assessee will in the ordinary course pay the tax and interest due on the sum. If, however, it is considered a case of wilful misrepresentation, the assessee can also be liable for penalties of 100-300 per cent. Under the current law, the taxman has to record his reason for believing there this is wilful misrepresentation before penalties can be levied a detailed statement on the reasons has to stand up to scrutiny, including in court. What is now proposed is that the assessment order which disallows the expenses and asks for extra tax is deemed to be enough, and the taxman can decide if you have to pay a 100-300 per cent penalty or not. The assessee can still challenge the order, but the payment of penalty will have to be upfront. What is worse, this amendment goes all the way back to April 1, 1989. It is not difficult to imagine the scope for harassment if, each time the taxman adds back expenses into an assessment, he automatically has the power to penalise taxpayers.
 
Section 115JB, which deals with the minimum alternate tax (MAT), has similarly been clarified with effect from 2001 (when MAT was first brought in), to include deferred taxes. Tax experts say that one should expect IT/ITeS firms, who have so far not been paying taxes but report deferred taxes as part of their US GAAP requirements, to get notices under this amended section. There is also what is come to be called the Vodafone clarification Section 201 on deducting tax at source has been amended from June 1, 2002, to strengthen the taxmans case against Vodafone for not deducting tax on the payments it made when it bought Hutchisons stake in the Indian company.
 
Even more curious is the amendment made to Section 80-IB(9), though this does not fall in the category of retrospective amendments. This deals with the 100 per cent tax deduction of profits from commercial production or refining of mineral oil. Currently, this includes petroleum and natural gas production, but both now stand excluded from the section. So, petroleum and natural gas will be classified as mineral oils in other places but not in 80-IB(9), which affects their taxation. As the Budgets explanatory memorandum puts it, For the purpose of this section, the term mineral oil does not include petroleum and natural gas, unlike in other sections of the Act. An interesting aside is that there is no mention of this in the Finance Bill itself, though the explanatory memorandum is supposed to explain the provisions in the Bill. Given the governments predilection to clarify/amend laws to the disadvantage of taxpayers, and to do so with retrospective effect, the courts need to take a fresh and comprehensive look at the legal validity of this practice.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions