| RECALLOFPRE-2005BANKNOTES |
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NewDelhi,26January FromApril1,as people rush tobank branches to exchange their pre-2005 notes,theincome-tax(I-T)department will also be on its toes.Thedepartmentis gearing itselftouseinformationfrom banksto nab taxevaders. TheReserveBankofIndia(RBI)had on Wednesdaydecidedtowithdrawallcurrencynotesissuedbefore2005andsaid bank would exchange all such notes broughttotheir branches bycustomers,as well as non-customers.Inthe caseofnon customers,the centralbankhadsaid,those exchangingmorethan10piecesof₹500 and₹1,000 notes after June would have to furnish proof of identity and residence. The I- T department is considering seeking information on individuals exchanging high-denomination notes in huge numbers. It will then match banks'information with its own.If there is a mismatch in the income reported by a person and cash exchanged by him,the taxman will go deeper. The department had not made any request for withdrawal of these notes from circulation,but it stands to eventually gain from the RBI move,say officials.The move could help officials probe any money trail established by the information from banks. But RBI has provided an easy three month window for exchange of notes. Details of identity and residence will not be required for exchange of notes between April1 andJune30.TheI-Tdepartmentis concerned that many individuals with black money might take advantage ofthis. "Itcould helpus collect some data.If somebody issitting onahugeamount,he can be traced.But since it is not demonetisation,all the blackmoney cannotbe unearthed.People have time tillJune(to exchange notes in bulk without giving any information),"said a tax official,asking not to be named. TheI-T department is already using a lot of banking transaction details for profiling taxpayers and nabbing evaders.It receives intheformof Annual Information Returns information like cash deposits of atleast₹10 lakh in savings bank accounts in a year and payment so far atleast₹2lakhin a year through credit cards.But the department doesn't have enough tools to track cash transactions between individuals outside the banking system. TurntoPage7> MAKING IT COUNT January22: RBI decides tofully withdraw from circulation al lcurrency notes issuedbefore2005;asks the public to visit bank branchesafterMarch 31for exchange of notes April1toJune30: Banks will exchange allpre-2005currencynotes broughtbytheircustomersaswellas non-customers July1onwards: To exchangemore than10piecesof₹500and₹1,000 notes,non-customers will haveto furnishproofofidentityandresidence;I-T officials intend to usethis information toprobeanyblack moneytrail |
| Click: Article continued from…RECALLOFPRE-2005BANKNOTES |
| I- T dept may use info from banks to nail tax evaders |
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Though the central bank had clarified it regularly withdrew soiled and old notes from circulation and this was a routine exercise, the move was seen as significant because of its timing — ahead of the Lok Sabha elections, likely in the middle of April. Also, the conditions set this time led many to believe it might be an effort to unearth black money. RBI Governor Raghuram Rajan had, however, later said the assumptions were not correct as the motive was to replace old notes with new ones with greater security features. The demand to replace less secure notes had come from the finance ministry, he had added. |
| BRIEF CASEN M J ANTONY |
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In arbitration between a public authority and a private firm, the authority cannot claim that it is a government agency to avoid legal obligations according to the award. All government organisations are not "extended wings of the state or part of the government", the Supreme Court stated in the judgment, Kanpur Jal Sansthan vs Bapu Constructions. In this case, there was an arbitration award against the Jal Sansthan. It moved Allahabad High Court to quash the award, invoking the Arbitration and Conciliation Act. The high court, in its interim order, directed the Jal Sansthan to deposit the entire awarded sum in the court as security. It moved the Supreme Court, arguing that as it is a wing of the Uttar Pradesh government, it could not be asked to furnish security. It cited Order XXVII Rule 8A of the Civil Procedure Code to claim immunity for government agencies. Rejecting the contention, the Supreme Court explained that the CPC protection is available only to the government and not to instrumentalities or agencies of the state. Jal Sansthan is not extension of the government. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SC says no to clubbing units to claim benefit The Supreme Court ruled last week that when a sales tax benefit is granted to an industrial unit on the basis of its production, that benefit cannot be claimed after clubbing the unit with its sister units. The apex court set aside the judgment of the Punjab and Haryana High Court in the case, State of Haryana vs Bharti Teletech Ltd, and upheld the view of the revenue authorities and the sales tax tribunal. In this case, the company was granted the tax exemption on condition that it shall continue its production at least for the next five years not below the level of average production for the preceding five years. If the company fails to keep the promise, the tax benefit should be returned with interest. The taxation commissioner, while monitoring thee production level, found that the company had lesser production than stipulated under the provisions. When he issued a show- cause notice, the company challenged it, contending it had established another unit as an expansion of the existing unit and the total production would satisfy the condition. The tribunal did not agree, but the high court accepted the argument. On the state's appeal, the Supreme Court upheld the authorities' stand. The judgment stated that though tax exemption rules should generally be read liberally, it could not be done in when the conditions are violated by the assessee. When the benefit is unit- specific, it cannot be clubbed with other units to claim exemption, the court said. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Interest from date of accident The Supreme Court has declared that compensation and interest on it under the Workmen Compensation Act must be paid from the date of the accident and not from the date of the award by the commissioner under the Act. In this case, the fatal accident took place in 1996. The commissioner decided the compensation application only in 2010. He directed National Insurance Company to pay compensation with 12 per cent interest to the widow of the driver who died in the road accident from the date of the accident. The insurance company moved the Gujarat High Court, which relied upon wrong judgments and awarded compensation from the date of the award by the commissioner and asked the widow to return the excess paid to the government corporation. The widow, Saberabibi, appealed to the Supreme Court. It quashed the high court decision and underlined that interest must be paid from the date of the accident. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SC rap for luxury litigation The Supreme Court has severely criticised government authorities for indulging in unnecessary litigation over small amounts. " It has become the definite attitude of the officials not to take any responsibility even for petty issues and would waste public money approaching this court. Government departments would spend any amount on litigation instead of paying petty amount to the other party," the court lamented in the case, Haryana Dairy Development Cooperative Federation vs Jagdish Lal. The dispute was over ₹ 8,724 claimed by an employee as medical reimbursement. The corporation lost in the high court. It appealed to the Supreme Court, spending money on litigation many times over. Dismissing the appeal of the corporation against the high court judgment, the Supreme Court asked the managing director of the corporation to pay personally the legal expenses incurred in the litigation. The order, which was sent to the chief secretary of the state, further said: "We are being burdened with cases where the litigation cost may be hundred times more than the amount involved." >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Challenge to Sarfaesi rejected The Delhi High Court has dismissed several petitions moved by M/ s Holystar Natural Resources Ltd and others assailing the constitutional validity of the definition of nonperforming assets ( NPA) in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) as well as a Reserve Bank of India ( RBI) circular of last year. It was argued NPA was defined vaguely and without guidelines, as it did not explain what is " substandard, doubtful or loss asset". It gave uncontrolled discretion and arbitrary power in the hands of financial institutions/ RBI to declare any entity as an NPA. It was unconstitutional. Rejecting the contentions, the high court declined to exercise its power of judicial review of statutes dealing in fiscal matters where discretion is conferred on high- ranking statutory authorities like the RBI. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Blacklisting frowned upon The Delhi High Court has criticised NTPC Ltd for blacklisting M/ s Deccan Mechanical & Chemical Industries Ltd for three years without giving any reasons and not hearing the affected firm. " Reasons form indispensable component of the decision- making process and are the link between the order and the mind of its maker," the judgment said while ordering rehearing of the company before passing the order. The court said the firm was supplying chemical products to NTPC for the past 25 years without complaint. Moreover, a Council of Scientific & Industrial Research report on the chemical supplied, alleged to be sub- standard, wasn't given to the company for explanation. Therefore, the court modified the NTPC order granting partial relief to the supplier. |
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