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Recent Posts

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It is very difficult to come out of  the situation once the taxes are not paid as per the declaration made under ids ..... there is a possibility that the department may reopen the assessment and therefore will be subjected to further harassment.

first of all without consulting any professional, your wife has accepted the departments demand and consequently paid the part of the corresponding taxes also... in my opinion there is no way you can come out of the situation except filing a writ in court  or else the chief Commissioner of Income Tax concerned may be approached and situation may be appraised.... As per provisions, there is no possibility...... other than this there is no solution.....
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          Whether non payment of advance tax as per the order of Assessing Officer u/s 210(3) attracts penalty and prosecution.  Of late, people are receiving notices from IT department that they should show cause as to why prosecution should not be launched against them for non payment of advance tax during the current financial year when compared to last financial year.

          Before going into intricacies, whether the recovery provisions of incometax act 1961, ie.e sec. 222 to 229 are applicable to the advance tax.  Sec. 221 and 222 starts with the language " When an assessee is in default or deemed to be in default in making a payment of tax,.......

Whether "advance tax" defined in sec. 2(1) amounts to tax as envisaged in the above sentence. Let us examine.. Till 1989, advance tax is not separately defined in incometax act. Therefore, we can say tax includes advance tax also. But however, the position was  changed with effect from 01.04.1989 as advance tax is separately defined u/s 2(1) which was introduced vide finance Act 1987. "TAX" was defined in sec. 2(43). Though, tax was separately defined in sec. 2(43) what made the legislature to bring one more definition in the form of advance tax in sec. 2(1) was neither explained in circular 495 which is explanatory memorandum of finance act, 1987 nor in the finance act itself.  However, it was separately defined. Since Advance tax was separately defined,  we safely conclude that both are not one and the same and are different. Therefore, the recovery measures which are meant for 'TAX" collections are not attracted to "ADVANCE TAX'.

           For advance tax,  a different demand notice is prescribed as per IT Rules 1962. i.e. Form 28 which says non payment of advance tax will attract penal interest u/s 234B and 234C. Other than these interests nothing else is mentioned in form 28 whereas in form 7 which is meant for regular tax collections, interest u/s 220(2), penalty u/s 221(1) and recovery measures sec. 222 to 229 and 232 are all mentioned and it was clearly specified  that non payment of the demand specified in the notice will attract all these interest/penalties besides the demand mentioned therein. 

           On further verification, it is observed that form 28 as existed before 1989 { before the date of 01.04.1989 wherein advance tax was separately defined in sec. 2(1)}, it was clearly mentioned that non payment of advance tax will attract penalty u/s 221(1). However, recovery measures like sec. 222 to 229 and 232 were neither mentioned in the form 27 before 1989 nor amended form 27 which is applicable from 1989.   Whether the omission of penalty u/s 221(1) in form 28 is intentional nor a typo graphical (clerical) mistake. That too, form 28 is statutory form and cannot be changed as per whims and fancies. Therefore, It can safely be concluded that the legislature has intentionally omitted the penalty u/s 221(1) in form 28 as it has brought out statutory interests u/s 234B and 234C and also the definition of advance tax in sec. 2(1).

Thus, it is evident that Advance tax is tax only upto 1989 and thereafter it is separately defined in sec. 2(1) as such it is not tax for any purpose of income tax act, 1961. It can never be recovered by resorting to measures 222 to 229 and 232 nor any penaltyU/s 221(1)  is leviable for non payment of advance taxes as on date.

      since in prosecution provisions ie. 276C also  it is mentioned as tax  only but not advance tax as such non payment of advance tax will not attract prosecution ..

Any contrary view in this regard is whole heartedly welcome. 

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Queries and replies relating to black money / forceful declaration of IDS by ITO
« Last post by subhas on March 29, 2017, 09:12:45 AM »
Hello,

I had booked a property(plot) in 2006 for 1,37,500.00 with monthly payment scheme offer by builder. I paid total amount from 2006 to 2010.The property was booked in my name & payment made by my wife from saving/salary account.
The property was registered in 2014 by builder @ booking amount of Rs 1,37,500.00. But market value in May 2014 when property was registered was Rs 10,95,000.00. All plot pymts were made to builder by cheque & stamp duty was paid for Rs10,95,000.00.
In Aug 2015 , IT Officials sent me letter to provide source of income stating the property is undervalued (registered @Rs137,500.00 instead of market value Rs10,95,000.00.
As i am working abroad , the ITO harassed my wife, trapped us in IDS  & threatened her saying that i will be prosecuted if we dont fill IDS form. Then ITO dictated my wife to fill IDS form on my behalf.
In the IDS form the ITO declared Rs10,95,000.00 - Rs 1,37,500.00 = Rs 9.50 Lacs approx as my undisclosed income. However this amount is the appreciation amount of my plot from 2006 to 2014.
ITO forcefully made my wife to fill form-1  (IDS Form) & passed the order to issue form -2 to make pymt of Rs 4.30 lacs approx as penalty.
Further my wife paid Rs 1.0 Lac in Nov 2017 without consulting me.
I would like to know the procedures
1.to withdraw the IDS form
2.collect back Rs 1 lac paid to IT Dept.
3.to isuue legal notice against ITO including IPC section under which i can give legal notice for harassment , manhani , torture, threatening for prosecution.

Pls. advise urgently.
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Discussion / service tax on municipality parking contractor
« Last post by vakil.cdrana@gmail.com on March 22, 2017, 10:27:43 AM »
Service tax paid by contractor on behalf of principal directly to service tax department during survey at contractor's site. Whether principal can demand service tax paid during survey from contractor saying that it must have been paid through him?

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It has been observed by the undersigned that many members have been posted in their home town means the area where they have done practice, this is clear cut violation of Ajay gandhi Judgement of Hon'ble Apex Court. It appears that one more PIL is required to be filed in the Supreme Court.

I will request Mr Akhay Pundir to do the same and very soon we will file one PIL in Supreme Court as well as contempt of Supreme Court then whosoever is responsible for this will be answerable in Apex Court
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Discussion / housing loan interest
« Last post by BEENA PANICKER on February 26, 2017, 03:52:25 PM »
Any one please clear my doubt. if housing loan is availed jointly by husband and wife and if the property is owned jointly by both whether deduction of interest of 2 lakhseach can be availed from salary by both of them.
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What you are expecting. Where is the need of issuing 143(2).. See the section 143(2)..... it starts with the words....Where a return has been furnished u/s 139(1), or in response........which means notice u/s 143(2) is required only when a return is filed. in the given case, there is no return.. then where is the question of issuing 143(2),,,,Therefore, the idea of 143(2) is not good. If you have merit, fight it otherwise, ........
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Discussion / Re: Reopening on basis of post assessment information
« Last post by deepakgadgil on February 10, 2017, 10:09:04 AM »
sir
can u please provide me with full text of the case law
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Discussion / Reopening to invoke a provision
« Last post by rajul5234 on February 08, 2017, 01:45:39 PM »
Micro inks pvt. ltd. SCA 21687 / 2016. Dt. 31.1.17 Guj. H C

Held, If issue is processed under particular provision, reopening beyond a period of 4 yrs. from the end of the year cannot be permissible to invoke different provision to the detriment of assessee.

R K Patel, Advocate
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Discussion / Reopening on basis of post assessment information
« Last post by rajul5234 on February 08, 2017, 01:42:46 PM »
SCA 21452 / 2016. Manan exports. Gujarat high court.

Held, Even if assessing officer during scrutiny has not made addition properly on basis of information, subsequent to assessment same information by communication from a different source cannot grant jurisdiction to reopen a case beyond 4 years from the end of relevant year.

R K Patel
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