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04/04/2020 - Voice of CA presents - Useful Updates
Saturday, April 4, 2020

  I. Headlines Today:   

  1. Form 3CD - Schema Change Document Version 1.18  (Click for detail)
  2. COVID-19 pandemic: OECD releases guidance on issues related to PE, POEM, and residential status  (Click for detail)
  3. CBDT extends validity of nil/lower deduction certificate by 3 month due to outbreak of COVID-19  (Click for detail)
  4. Govt. brings Ordinance to extend various time limits under Taxation and Benami Acts  (Click for detail)
  5. New CBIC circular: Import, export of goods without furnishing bonds to Customs authorities allowed  (Click for detail)

II. Useful Presentation:

1.  The Taxation and other Laws (Relaxation of certain provisions) Ordinance, 2020
                [As Promulgated by Hon’ble President of India on 31.03.2020]

        (Please click here)  

  [ Contribution by CA. Sanjay K. Agarwal, Founder-Voice of CA and contributor is available at eMail-id: ]


III. Direct Taxes Case Law: 

1.  New Delhi Television Ltd. Vs. DCIT, Civil Appeal No. 1008 of 2020, Date of Judgement - 03.04.2020, Supreme Court of India

I.    Whether revenue is justifiable in issue a notice u/s 148 of the Income Tax Act, 1961 after expiry of 4 years, where assessee has disclosed all the primary facts required during the original assessment?
Held: No

II.    If the AO intends to rely upon the second Proviso to section 148 of the Act for the extended period of 16 years limitation, the same should be stated either in the notice or in the reasons in support of the notice.
Held: Yes

Brief Facts:
Assessee, being an Indian company engaged in running television channel filed its ROI on 29.09.2008 for AY 2008-09. The case of assessee was selected for scrutiny and an order u/s 143(3) was passed on 03.08.2018 making an addition on account of guarantee fee for acting as guarantor in arranging the finance to one of its subsidiary company.  On 31.03.2015, a notice u/s 148 of the Act was issued upon assessee for the reason that the finance arranged by assessee for its subsidiary company was nothing but sham and bogus transactions and that these transactions were done with a view to get the undisclosed income, for which tax had not been paid, back to India by this circuitous round tripping. However, assessee challenge the notice issued u/s 148 of the Act and filed its objection stating that there had been no failure on the part of assessee to disclose fully and truly all material facts necessary to make an assessment.  Ld. AO disposed of the objection filed by assessee on the ground that assessee had failed to disclose material facts during the original assessment. Aggrieved, the assessee filed writ petition before high court challenging the notice issued u/s 148 of the Act, which was dismissed by Hon’ble High Court. Against this assessee is in now appeal before Hon’ble Supreme Court.

I.    Hon’ble Supreme Court following the judgement passed in the case of Calcutta Discount Co. vs. ITO (SC), held that “the assessee disclosed all the primary facts necessary for assessment of its case to the assessing officer. What the revenue urges is that the assessee did not make a full and true disclosure of certain other facts. We are of the view that the assessee had disclosed all primary facts before the assessing officer and it was not required to give any further assistance to the assessing officer by disclosure of other facts. It was for the assessing officer at this stage to decide what inference should be drawn from the facts of the case. In the present case the assessing officer on the basis of the facts disclosed to him did not doubt the genuiness of the transaction set up by the assessee. This the assessing officer could have done even at that stage on the basis of the facts which he already knew.”

II.    Hon’ble Supreme Court Held that “If the revenue is to rely upon the second proviso and wanted to urge that the limitation of 16 years would apply, then in our opinion in the notice or at least in the reasons in support of the notice, the assessee should have been put to notice that the revenue relies upon the second proviso. The assessee could not be taken by surprise at the stage of rejection of its objections or at the stage of proceedings before the High Court that the notice is to be treated as a notice invoking provisions of the second proviso of Section 147 of the Act. Accordingly, we answer the third question by holding that the notice issued to the assessee and the supporting reasons did not invoke provisions of the second proviso of Section 147 of the Act and therefore at this stage the revenue cannot be permitted to take benefit of the second proviso.”

(Please click here for judgment)


Golden Rules:

  Reflection Cannot Be Seen In Boiling Water.
The Same Way, Truth Cannot Be Seen In A State Of Anger.
So "Analyze Before Finalize"


Thanks & Regards


Voice of CA 

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