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04.06.2014 - Voice of CA presents - Updates
Thursday, June 5, 2014

  I. Today's Headlines:    

  1. Income Tax Noti. No. 28: New Income Tax Return Forms notified*-Income-tax (6th Amendment) Rules, 2014  (Click for detail)

  2. Customs Noti. No. 40: FICCI/TAITRA Carnet (Form of bill of entry and shipping bill) Regulations, 2014  (Click for detail)
  3. ICAI Submits Pre Budget Memoranda 2014  (Click for detail)

  4. Budget 2014: 10 tax issues the government needs to address  (Click for detail)

  5. FM to start pre-budget interactions from tomorrow  (Click for detail)
  6. You can now Invest up to $125,000 Overseas  (Click for detail)

  7. 86% of Indian businesses want more tax guidance  (Click for detail)

  8. RBI likely to keep key rates unchanged  (Click for detail)


II.  Direct Tax Case laws:

1.  Income Tax Officer, Vs. Smt. Rosamma Korah, ITA Nos. 646 & 663 (COCH.) of 2013, Date of Order: 07.03.2014, ITAT - COCHIN

'Due date' mentioned u/s 54F is due date for filing return u/s 139(1)

The Apex Court had an occasion to interpret the provisions of Income-tax Act in Prakash Nath Khanna v. CIT [2004] 266 ITR 1/135 Taxman 327 (SC), more particularly, the term 'due date' and held that due date means the due date for filing the return under section 139(2) and not section 139(4). The Apex Court further found that had the intentions of the Legislature was to permit the assessee to file the return u/s 139(4) also, the use of the expression "section 139" alone would have been sufficed. The Legislature would not have said that it should be filed u/s 139(1). When the Legislature specifically refers to section 139(1), it cannot be the intention to permit the assessee to file the return u/s 139(4) also. The Supreme Court specifically observed that it cannot be said that the Legislature without any purpose or intent specified only the sub-sections (1) and (2) and the conspicuous omission of sub-section (4) has no meaning or purpose behind it. Sub-section (4) of section 139 cannot by any stretch of imagination control the operation of sub-section (1) wherein a fixed period for furnishing the return is stipulated.

(Please click here for judgment)


2.  Rajeev Kumar Agarwal Vs. Additional Commissioner of Income Tax  Range 3, ITA No.: 337/Agra/2013, Date of Pronouncement: 29.05.2013, ITAT - Agra

No disallowance to be made us. 40(a)(ia) upon failure to deduct TDS on payment if payee has offered amount to tax. Second proviso to s. 40(a)(ia) shall operate retrospectively since 01.04.2005

The second proviso to s. 40(a)(ia), introduced by the Finance Act 2013 w.e.f. 01.04.2013, read with s. 201, provides that despite failure to deduct TDS, disallowance of the expenditure shall not be made if the resident payee has (i) furnished his return of income u/s 139, (ii) taken into account such sum for computing income in such ROI, (iii) paid the tax due on the income declared by him in such return of income and (iv) furnishes a certificate to this effect from an accountant in the prescribed form. The scheme of s. 40(a)(ia) is aimed at ensuring that an expenditure should not be allowed as deduction in the hands of an assessee in a situation in which income embedded in such expenditure has remained untaxed due to tax withholding lapses by the assessee. It is not a penalty for tax withholding lapse but it is a sort of compensatory deduction restriction for an income going untaxed due to tax withholding lapse. S. 40(a)(ia), as it existed prior to insertion of second proviso thereto, went much beyond the obvious intentions of the lawmakers and created undue hardships even in cases in which the assessee’s tax withholding lapses did not result in any loss to the exchequer. Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced.

(Please click here for judgment)


 Golden Rules:

  "All efforts cannot be translated into success
but they can act as a foundation stone for a glorious future"


  Thanks & Regards


Voice of CA 

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