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25.06.2012 - Voice of CA Presents - Updates
Monday, June 25, 2012

I.  Today's News:   

  1. IT Cir. No. 4 – Section 119 of IT Act, 1961, Authorization of AOs in certain cases to rectify/reconcile disputed arrear demand  (Click for detail)

  2. Ex-minister loses appeal in tax returns case  (Click for detail)

  3. Income Tax department cracks whip on refund frauds  (Click for detail)


II.  Useful Case laws:

1.   Smt. A Kowsalya Bai Vs. Union of India, W.P. No. 12780 - 12782/2010, Date of order: 05/06/2012, High court of Karnataka

PAN not required if income of persons below the taxable limit.

U/s 139A, only persons whose income is chargeable to tax are required to obtain a PAN. However, section 206AA compels even persons without a taxable income to obtain a PAN to avoid TDS. This creates difficulty for poor and illiterate persons who make small investments and discourages them to invest money. Section 206AA runs counter to section 139A and is discriminatory.

Though the Legislature’s intention is to bring maximum persons under the income-tax net, it may not insist that even persons whose income is below the taxable limit have to compulsorily obtain a PAN. If any tax avoidance is detected, that can be taken care of by penal provisions. Accordingly, section 206AA is read down as being inapplicable to persons whose income is less than the taxable limit. Banks & financial institutions should not insist upon PAN from such small investors. It continues to apply to persons whose income is above the taxable limit.

(Please click here for judgment)


2.  DIT Vs. MARUTI CENTER FOR EXCELLENCE, ITA No. 1335/2010, Date of Decision: 21/05/2012, High court of Delhi

Whether the CIT (Appeal) are bound by judgment delivered by  ITAT in earlier assessment year.

Held that CIT (Appeal), has not recorded any independent findings but merely recorded that the issue was decided by the tribunal in the earlier assessment year and he was bound by the said decision. In view of the aforesaid position, the tribunal will examine the factual matrix and position in the light of legal position mentioned above. Before applying the ratio/law, they shall first examine and record finding on facts relevant and which are to be examined. The appeals are accordingly disposed of. 

(Please click here for judgment)


3.  M/s. Agni Briquette Pvt. Ltd. Vs. ACIT, MA Nos. 73/Ahd/2012, Date of Pronouncement : 15/06/2012, ITAT- AHMEDABAD

Whether ITAT has a power to condone in filling rectification petition u/s 254(2) of Income tax Act.

An appeal is to be decided by the Tribunal within a period of four years by the end of the Financial Year in which such appeal is filed u/s.253(1) of the I.T.Act. Thereafter, another four years has further been granted for filing a petition u/s.254 (2) by the Statute. If within the said long period of “eight years” an appellant is not vigilant about the fate of its appeal, then such an appellant cannot be termed as a serious litigant interested in getting an appeal finalized within a reasonable period. In the present case, the appeal in respect of the ITA No.497/Ahd/2003 was filed on 6/2/2003. Likewise, the appeal in respect of ITA No.498/Ahd/2003 was filed on 6/2/2003. Both these appeals remained pending uptill February-2007 and then on 23/02/2007 these appeals were decided ex-parte by the impugned orders by the Respected Co-ordinate Bench.

Meaning thereby the appellant has never enquired in the said four years between 2003 to 2007 about the fate of his appeals although those were filed in the year 2003. After the lapse of 8 years, undisputedly a long gap, now this assessee is seeking a favourable decision which may tantamount to re-writing the Statute.

(Please click here for judgment)


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Thanks for your valuable time


"Voice of CA"  

CA. Sanjay 'Voice of CA' Agarwal
Mob: 9811080342,      
CA. Sidharth Jain, Co-Moderator  
CA. Mukesh K Bansal, Co-Moderator-FEMA 

CA. Avinash Gupta, Co-Moderator-International Taxation 


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