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03.01.2019 - Voice of CA presents - Latest Updates
Thursday, January 3, 2019

  I. Headlines Today:   

  1. Modi's benami law has companies running for cover  (Click for detail)
  2. CBDT issues circular on tax deductions from salaries for FY 2018-19  (Click for detail)
  3. CBIC issued resolution methodology of various errors relating to IGST export refund  (Click for detail)
  4. CBIC clarifies CENVAT credit of service tax paid would be available as transitional credit under GST law  (Click for detail)
  5. Govt. proposes to partially reimburse employers for maternity benefits  (Click for detail)
  6. Cabinet approves of amendment to the Trade Unions Act, 1926 to make provisions regarding recognition of Trade Unions  (Click for detail)
  7. Pr. DGIT lays down procedure, formats and standard for issue of PAN; enable e-PAN also  (Click for detail)
  8. Govt waives late fee for non-filers of GST returns between July '17-Sept '18  (Click for detail)
  9. Jewellery exporters welcome govt move to exempt gold import from IGST  (Click for detail)
  10. Real estate firms pin hope on GST rate cut to end six years of struggle  (Click for detail)
  11. RBI enforces Rs 14-crore penalty on 7 banks for flouting norms  (Click for detail)

  II. Direct Taxes Case Law: 

1.  Shah-E-Naaz Judge Vs. Addl. DIT (Inv), W.P.(C) No. 5937/2016, Date of Decision: 30.11.2018, High Court of Delhi

Whether locker search warrant and proceedings u/s 153A be quashedif the authority failed to prove that such locker contained undisclosed income?

Answer: Yes

Brief facts:
Search & seizure operation was conducted at the premises of Karamjit Singh Jaiswal i.e. cousin of the petitioner.During the course of search, three lockers keys were found which were belonged to the petitioner.Search warrant was issued in respect of three lockers. Nothing was found and seized in two lockers whereas jewellery was found in the third locker which was in the name of Shah-E-Naaz Judge and Nagina Judge i.e. cousin of the petitioner.The satisfaction note is silent on any business connection, link and association between the petitioners and the Jaiswal Group or Karamjit Singh Jaiswal, who had been subject to search and seizure operations. Lockers were not subjected to search to unearth undisclosed and concealed assets of Jaiswal Group or Karamjit Singh Jaiswal. Satisfaction note does not state that any attempt was made to verify and ascertain facts post discovery of the locker key.

The Hon’ble Court held that the respondent authorities had failed to disclose the material and information on the basis of which they had entertained the belief recorded that the lockers contained money, jewellery, valuables and other articles representing disclosed income. Formation of belief by the authorities justifying the search must be based upon relevant information or material to satisfy the mandate of Section 132 (1) of the Act. This decision clearly holds that the law requires existence of “reasons to believe” and not “reasons to suspect”. Validity of search has to be decided and adjudicated on the basis of satisfaction note; whether satisfaction note satisfies the statutory requirements and the respondents have acted in accordance with law. For these reasons, the question is answered in favour of the petitioner and against the revenue.
Hence, the appeal was held against the revenue and in favour of the petitioner.

Cases cited:
Pooran Mal Vs. the Director of Inspection (Inv.), (1974) 1 SCC 345 (SC)
Madhu Gupta Vs. DIT (Inv.) (2013) 350 ITR 598 (Delhi- High Court)
Lajpat Rai v. CIT(1995) 215 ITR 608 (Allahabad- High Court)
Ameeta Mehra Vs. Addl. DIT (2017) 395 ITR 185 (Delhi- High Court)

(Please click here for judgment)

2.  Rajender Kumar Sehgal Vs. ITO, W.P.(C) No. 11255/2017, Date of Decision: 19.11.2018, High Court of Delhi

Whether notice u/s 148 issued against a deceased assessee be quashed and renders the revenue liability of a deceased individual imposing upon a legal representative fatal and prohibit the AO from conducting proceedings for reassessment if the Act does not provide any mechanism for issuing and carrying on reassessment in respect of a dead person?

Answer: Yes

Brief facts:
The deceased assessee had filed return for AY 2010-2011& was processed, in a routine manner and the deceased assessee was intimated about it. The assessee was died on 17.01.2015. A notice under section 148 of the Act was issued to the deceased assessee on 29-03-2017 for A.Y.2010-11. The Petition was filed by Rajendra Kumar Sehgal, the legal representative of the deceased.The petitioner approached the court, seeking the reliefs that she has claimed, on the ground that the Act does not provide any mechanism for issuing and carrying on reassessment in respect of a dead person, if the reassessment notice is issued against a deceased.

The Hon’ble Court held that when the notice was issued, the assessee was already dead. If the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31st March 2017 by issuing a notice to the LRs of the deceased. Beyond that date it could not have proceeded in the matter even by issuing notice to the LRs of the assessee. If the original assessee had lived and later participated in the proceedings, then, by reason of Section 292BB, she would have been precluded from saying that no notice was factually served upon her. When the notice was issued in her name- when she was no longer of this world, it is inconceivable that she could have participated in the reassessment proceedings. Held that the absence of any provision in the Act, to fasten revenue liability upon a deceased individual, in the absence of pending or previously instituted proceeding, renders fatal the effort of the revenue to impose the tax burden upon a legal representative. For these reasons, the question is answered in favour of the assessee and against the revenue.
Hence, the appeal was held against the revenue and in favour of the assessee.

Cases cited:
Vipin Walia Vs. ITO (2016)382 ITR 19 (Delhi HC)

(Please click here for judgment)


Golden Rules:

  "Don't look into the past because you have already been there,
focus on the future since that's where you are going..." 


Thanks & Regards


Voice of CA 

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