What is KYC? Why is it required? Response: KYC means 'Know Your Customer'. It is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks' services are not misused. The KYC procedure is to be completed by the banks while opening accounts and also periodically update the same.
PFA
In the operation which started yesterday across Mumbai and Chennai The CBI, Anti Corruption Branch, Chennai has caught Sallong Yaden, Joint Commissioner, Income Tax, Range-VI, Nungambakkam, Chennai red handed while accepting a bribe of Rs 8 lakhs from a chartered accountant, Shreyans Bhandari of S.H. Bhandari & Co., Chartered Accountants. Bribe was to give a […]
CBI arrests JCIT, 2 CAs & Businessmen in bribery case
In the operation which started yesterday across Mumbai and Chennai The CBI, Anti Corruption Branch, Chennai has caught Sallong Yaden, Joint Commissioner, Income Tax, Range-VI, Nungambakkam, Chennai red handed while accepting a bribe of Rs 8 lakhs from a chartered accountant, Shreyans Bhandari of S.H. Bhandari & Co., Chartered Accountants. Bribe was to give a favourable report on the Income Tax search conducted on a private company based in Chennai.
The others arrested are Chartered Accountants Sanjay Bhandari and Shreyas Bhandari and Managing Director of Chennai-based real estate firm SPG and RG Hitesh Kawad, they said, adding several other companies were also under scanner. Chartered Accountants acting as middlemen, according to the sources.
During the searches at 16 places, several incriminating documents, files relating to the questioned Assessments, computers, laptops, cellphones, huge cash, huge quantities of gold jewellery and silver bars were recovered till the last reports came in. Searches are further continuing, said CBI.
The sources said several more senior Income Tax officers from Mumbai and Chennai are under scanner.
SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - GENERAL - CLARIFICATION AS TO WHETHER PROVISION OF SECTION 143(1D) PERMITS PROCESSING OF RETURNS HAVING A REFUND CLAIM, WHERE NOTICE UNDER SECTION 143(2) HAS BEEN ISSUED
INSTRUCTION NO.1/2015 [F.NO.225/319/2014-ITAT.II], DATED 13-1-2015
Sub-section (1D) of section 143 of the Income-tax Act, 1961 ('Act') provides that where a notice has been issued to a taxpayer under sub-section (2) of section 143 of the Act, it shall not be necessary to process the return in such a case.
2. Some doubts have been expressed, in view of the words "shall not be necessary" used in the said sub-section, as to whether this provision permits processing of returns having a refund claim, where notice under section 143(2) of the Act has been issued.
3. The matter has been examined by the Board. Sub-section (1D) of section 143 of the Act was introduced by the Finance Act, 2012 with effect from 01.07.2012. The purpose of introduction of this sub-section has been stated in the Explanatory Note to the Finance Act as under:
"Under the existing provisions, every return of income is to be processed under sub-section (1) of section 143 and refund, if any, due is to be issued to the taxpayer. Some returns of income are also selected for scrutiny which may lead to raising a demand for taxes although refunds may have been issued earlier at the time of processing.
It is therefore proposed to amend the provisions of the Income-tax Act to provide that processing of return will not be necessary in a case where notice under sub-section (2) of section 143 has already been issued for scrutiny of the return."
Thus, in cases where an unprocessed return is selected for scrutiny, the legislative intent is to prevent the issue of refund after processing as scrutiny proceedings may result in demand for taxes on finalisation of the assessment subsequently.
4. Considering the unambiguous language of the relevant provision and the intention of law as discussed above, the Central Board of Direct Taxes, in exercise of the powers conferred on it under section 119 of the Act hereby clarifies that the processing of a return cannot be undertaken after notice has been issued under sub-section (2) of section 143 of the Act. It shall, however, be desirable that scrutiny assessments in such cases are completed expeditiously.
5. This may be brought to the notice of all concerned for strict compliance.
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The Law In S. 56(2) On Taxation Of Gifts Encourages Cash Transactions
The author, an eminent Senior Advocate, argues with conviction that the law on taxation of gifts in s. 56(2) of the Income-tax Act, 1961 is a big irritant that actually compels honest taxpayers to pay in cash to avoid its draconian consequences. He explains how even genuine transactions fall foul of this ill-drafted provision
The Law In S. 56(2) On Taxation Of Gifts Encourages Cash Transactions
The Law In S. 56(2) On Taxation Of Gifts Encourages Cash Transactions
Beni M. Chatterji, Senior Advocate
The author, an eminent Senior Advocate, argues with conviction that the law on taxation of gifts in s. 56(2) of the Income-tax Act, 1961 is a big irritant that actually compels honest taxpayers to pay in cash to avoid its draconian consequences. He explains how even genuine transactions fall foul of this ill-drafted provision
Chorus from all quarters has started pouring in for simplification of the Income Tax Act as the budget day is drawing close. But in my opinion Indian Income Tax laws are most simple in the World, unless they are made complicated by the executing officers. Most of the issues under Income Tax Act are settled by various courts of law, therefore, any kind of tinkering with basic structure of Income Tax Act might lead to quantum jump in litigation, but few irritants of Income Tax Act need to be resolved.
One such irritant is concerning the provisions of taxing gift or something like a gift, indirectly, under section 56 (2) (V) (VI) (VII-a), which mandates the recipient of Gift more than the value of the amount stipulated therein to pay tax on the same. This creates a very funny situation, as a poor patient, who requires immediate help for major ailment and has been assisted by some benefactor, will have to pay tax on such assistance. As it is a common knowledge that the treatments like heart surgery, cancer ailment or kidney failure will cost much more than the exempt amount. Imagine a person who can't afford his treatment, will have to pay tax under compulsion, even if someone pays for his treatment out of generosity. Similarly, poor brilliant students will also have to meet the same fate if they are helped monetarily to fulfill their dream of pursuing higher studies in India or abroad.
It is pertinent to note that The Gift Tax Act was repealed with effect from 01/10/1998, however, the provisions of section 56 (2) were inserted by the Amendment Acts with effect from the respective notified dates, could be treated as an Indirect intrusion of an already repealed law.
In my opinion, the aforesaid or like situations do circumstantially compel the concerned persons to transact in cash.
The present Government is very forward looking, visionary and action oriented, therefore it can be expected that it will look into these and related issues.
PFA
The Apex Court in Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4 SCC 602 held that a law which affects the substantive rights of any of the parties, the law cannot be retrospective. Every party has a vested right in substantative law but no such right exists in procedural law.
PFA
Most of the cases selected for Scrutiny are through Computer Aided Scrutiny Selection (CASS). Only a particular class of cases such as those involving Search, Survey and Reopening of Assessment etc. come under Compulsory Scrutiny. A small Number of cases are manually selected by the Assessing Officers where they consider the Income of a particular […]
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