Opinion Of Eminent Legal Luminaries On Controversial Issues

QUERY: Whether company secretaries are entitled to appear before ITAT? If yes under which provision / rule /case laws?
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Rule 50 of the Income-tax Rules, 1962 recognises the accounting examination, which inter alia, includes final examination of the Institute of Company Secretaries of India, New Delhi” for the purpose of section 288(2)(v) of the Act. Therefore, company secretaries are entitled to appear before ITAT

QUERY: A farmer's co-op. society, situated in a remote area which works for the benefit of farmers such as to get them seeds, fertilizers etc., the society received some amounts from some members as cash deposits exceeding ` 20,000/- which were subsequently repaid by account payee cheques by the society.
The case was under scrutiny for the A.Y. 2010-11, the Assessing Officer did not discuss anything or issue any notice to the assessee till the order passed under Section 143(3) on March 01, 2013. The Joint Commissioner of Income tax thereafter issued notice under Section 271D of the Act, on January, 2014 i.e., after 11 months.
The objection was taken for the proceedings as barred by limitation as per provision of Section 275(1)(c) of the Act along with the submission but the penalty under Section 271D of the Act was levied and order was passed. Whether JCIT was justified?
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Under Section 271, recording of satisfaction before initiation of penalty in the course of proceedings is a condition precedent for imposition of penalty for specified defaults. Under Sections 271D and 271E there is no such requirement of recording of satisfaction in the course of any proceeding

QUERY: As per section 270A in the case of misreporting of income the penalty leviable is 200% of the amount of tax payable. In case the income is assessed u/s. 68 to 69D, the tax payable is 60% of income. So now in this case what will be levy of penalty?
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Section 115BBE provides for taxing income under sections 68 to 69D. The section prescribes a flat rate of 60% for all income brought to tax for lack of proof as to the source under sections 68 to 69D, plus surcharge @ 25% of the tax. This would mean that such income would be taxed on standalone basis, whose aggregate income including such income falling under the provisions falls below taxable limit.

QUERY: During the course of search income declared pertaining to the previous year for which the return was not filed and was not due or that pertains to the broken period in the year in which the search took place. The ROI was filed post search disclosing the undisclosed income and taxes and interest due have been paid on or before filing the ROI. In view of this whether penalty u/s. 271AAB(1A) is mandatory?
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It is optional. Section 271AAB(1A) provides that notwithstanding contained in any other provisions of this Act, the Assessing Officer may direct, that in case where search has been initiated under sections 132 on or after the date on which the Taxation Laws (Second Amendment) Bill, 2016 receive the assent of the President, the assessee shall pay by way of penalty, in addition to tax, if any payable by him.

QUERY: The assessee purchased material for construction of his factory building and partly for use of his manufacturing process. The A.O. held the purchase as bogus and added amount to total income. The A.O. levied penalty u/s. 271(1)(c) on entire sum added in spite of fact that major part was not claimed under any head (capital expenses debited to building account). Is there any way for exclusion of the said amount? Can any sum not chargeable under the law be considered for penalty u/s. 271(1)(c)?
ANSWER: Click here to read the full answer of the expert
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Section 271(1)(c) of the Act provides for levy of penalty for concealing the particulars of income or furnishing inaccurate particulars of such income.

QUERY: Whether cash aggregating to rupees two lakh or more can be received by a bank after insertion of Section 269ST under the Income-tax Act?
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A person can deposit / make payment otherwise than by account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account to any Government, Banking Company, Post office Saving Bank or co-operative bank.

QUERY: If an invoice of Rs. 5,00,000/- of jewellery is adjusted by exchange of old gold worth of Rs. 3,00,000/- and balance Rs. 2,00,000/- is paid off in cash is hit by section 269ST?
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The object for introducing this provision has been explained in the Memorandum Explaining the Provisions relating to Direct Taxes. The Memorandum states that in India, the quantum of domestic black money is huge which adversely affects the revenue of the Government creating resource crunch for its various welfare programmes. Black money is generally transacted in cash and large amount of unaccounted wealth is stored and used in form of cash.

QUERY: Does levy of fee for delayed filing of return apply to the below taxable income return? Moreover, if income is below taxable after deduction under Chapter VI-A, (for example net income is Rs. 3,90,000/- and deduction under section 80C is Rs. 1,50,000/-), will the late fee be levied in this case? (for A.Y. 2018-19).
ANSWER: Click here to read the full answer of the expert
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Question of levy of fee will not arise as income is below taxable limit and therefore he is not liable to file return of income

QUERY: Can fee paid under Section 234E be claimed as deduction while computing the total income under the head "Profit and gains of business or profession"?
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Fee paid u/s. 234E is not a penalty or interest under the Income-tax Act, 1961. It is a fee which is for late filing of statement of tax deduction at source u/s. 200(3) of the Act. Similarly fee paid for late filing of statement of tax collected at source u/s. 206C(3) of the Act. Hence there is no loss to the revenue, as tax deducted or tax collected had to be paid before filing the statement.

QUERY: A tax consultant is maintaining accounts on cash basis.
During the F.Y. 2016-17 amount has been given on loan @ 15% p.a. interest. On March 31, 2017, the borrower deducted TDS @ 10% on interest income accrued and paid to Department which has been claimed by lender in his I.T. Return for Assessment Year 2017-18 but did not show interest income because books are maintained on cash basis.
Hence, the querist wishes to know –
1) Whether the Department can tax the interest income accrued and not received as TDS claimed.
2) Whether the Department can refuse to grant credit of TDS certificate as income accrued thereof is not shown taxable.
ANSWER: Click here to read the full answer of the expert
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Thus section 198 is an enabling provision treating the tax that is deducted at source as the income of the payee. This stands to reason because the assessee would get credit for the same from the Assessing Officer on his filing the return.

Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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