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04.02.2013 - Voice of CA Presents - Updates
Monday, February 4, 2013

I.  Headlines Today: 


 II.  Useful Case Laws: 

1. [Contribution by CA Sanjeev Singhal, and contributor is available at ]

Delhi Chartered Accountants Society Vs Union of India & Ors., W.P.(C) 4456/2012 & C.M.No.9237/2012,  Judgment delivered on: 01.02.2013

CBEC Circulars on CA’s liability to pay higher service tax rate on services rendered/ invoice raised before 01.04.2012 but payment received thereafter is ultra vires

As per Rule 4, whenever there is a change in the effective rate of tax in respect of a service, the point of taxation shall be determined in the manner set out in the Rule. Sub-clause (ii) of Clause (a) of Rule 4 provides that where the taxable service has been provided before 01.04.2012 and the invoice was also issued before 01.04.2012, but the payment is received after 01.04.2012, then the date of issuance of invoice shall be deemed to be the date on which the service was rendered and, consequently, the point of taxation.

The result is that where the services of the chartered accountants were actually rendered before 01.04.2012 and the invoices were also issued before that date, but the payment was received after the said date, the rate of tax will be 10% and not 12%. The circulars in question have not taken note of this aspect, and have proceeded on the erroneous assumption that the old Rule 7 continued to govern the case notwithstanding the introduction of the new Rule 7 which does not provide for the contingency that has arisen in the present case. Consequently, the circulars are quashed as being contrary to the Finance Act, 1994 and the Point of Taxation Rules, 2011. A Circular which is contrary to the Act and the Rules cannot be enforced (Ratan Melting & Wire Industries followed)

(Please click here for judgment)


2. [Contribution by P.C.Yadav, Advocate - Supreme Court of India ]

Shivalik Bimetal Controls Ltd. Vs ITO, W.P.(C) 7087/2012, Judgment delivered on : 24.01.2013, High Court of Delhi

What material fact has not been disclosed by the assessee is not clear in order rejecting the objections issue of notice 148 is invalid.

The proviso to section 147 of the said Act imposes an injunction on the revenue authorities prohibiting them from taking any action beyond the said period of four years unless (i) any income chargeable to tax has escaped assessment for such assessment year, (ii) by reason of the failure on the part of the assessee (a) to file a return under section 139 of the said Act or in response to a notice issued under sub-section (1) or section 147 or section 148 of the said Act or (b) to disclose fully or truly all material facts necessary for the assessment for that assessment year.

In the present case, the impugned reasons behind the notice dated 28.03.2012, which we have extracted above, does not even carry a whisper that there has been a failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment. Even the order rejecting the objections does not indicate as to what material fact has not been disclosed by the assessee.

(Please click here for judgment) 


III.  Tender Info.: 

  1. National Council of Educational Research & Training
    Sales Tax consultants for filing Central Sales Tax return & Sales Tax return
    New Delhi

    (Click for detail)
  2. MTNL
    Consultation firms to suggest scope of Network Audit, Certification
    New Delhi

    (Click for detail) 

 Golden Rules:

"Life is at its weakest when there are more doubts than trust,
but life is at its strongest when you learn how to trust 
even if there are doubts


  Thanks & Regards

  Team - Voice of CA    




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