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24.11.2010 - Recent Updates as on 24.11.2010
Wednesday, November 24, 2010

1.    INCOME TAX OFFICER Vs. M/S DELHI IRON WORKS (P) LTD. & ORS. CRL. L.P. 85/2010 TO CRL. L.P. 93/2010, DATED 11/11/2010, DELHI HIGH COURT

The petitioner had filed complaints before the ACMM praying therein that the respondent be summoned, tried and punished under Section 276-B of the Act. It was alleged that the respondent no. 1 was a private limited company; while respondent No. 3 was its Director and “Principal Officer” and was responsible for managing the day-to-day affairs of the company. Respondents had failed to deduct the tax at source (TDS) from the interest paid to M/s Bhanamal & Co. (P) Ltd., M/s Banwari Lal & Sons (P) Ltd. and M/s Bhanamal Gulzari Mal (P) Ltd., and deposit the same with the Income Tax Department, within the prescribed period, thus, had committed offence punishable under Section 276-B of the Act. Respondent no. 3 was impleaded as an accused being “principal officer” of the company within the meaning of Section 2(35) of the Act. 

Legal preposition which emerges from the above is that before launching a prosecution under Section 276-B of the Act against the directors of a company, Assessing Officer has to issue notice under Section 2(35) of the Act expressing his intention to treat such directors of a company as “principal officers”. However, it may not be necessary to issue a separate notice or communication to all the directors that they are to be treated as “principal officers”. It would be sufficient compliance if in the show cause notice issued to the company it is mentioned that the directors are to be considered as principal officers of the company under the Act. In this case neither a notice was issued to respondent no. 3 under Section 2(35) of the Act the department intended to treat him “principal officer” nor in the show cause notice issued to the company it was mentioned that department is intended to treat the directors of the company as “principal officers”, for the purpose of launching prosecution under Section 276-B of the Act. 

(Please click here for judgment)

   

2.   THE COMMISSIONER OF INCOME TAX Vs. M/S SHAHABAD CO-OP SUGAR MILLS LTD., ITA No. 519 OF 2010, DATE OF DECISION: 9.11.2010, PUNJAB & HARYANA  HIGH  COURT

“Whether on the facts and in the circumstances of the case the Ld. ITAT is right in law in deleting the penalty imposed upon the assessee u/s 271(1)(c) of the Income Tax Act on account of admitted wrong claim of depreciation against the law laid down by the Hon'ble Apex Court in the case of Union of India and others vs. Dharmendra Textiles Processors and others 306 ITR 277 (SC)?” 

The respondent assessee is a Co-operative Sugar Mills which is manned by public officers, the bonafides of the same are prima-facie not in doubt.Further, the difference in the claim has arisen on account of a mere wrong application of depreciation rate. It is not a case where such mistake has been found after a long drawn investigation or enquiry so as to establish that any concealed income has been unearthed. The mistake was discovered during the assessment proceeding and the assessee filed acorrected claim in the assessment proceeding.Thus, there cannot be a scope for alleging any concealment or furnishing of inaccurate particulars of income against the assessee within the meaning of Section 271(1)(c) of the Act. 

(Please click here for judgment)

   

What's New 

a.   IT- (Eighth Amendment) Rules, 2010 - Amendment in Rule 2BB  (Click for detail)

b.   Tax Return Preparer (First Amendment) Scheme, 2010  (Click for detail)

c.   CO. Law-Cir. No. 4/2010 -  Change in additional fee to be levied for delays in filing Forms  (Click for detail)

d.   CO. Law-Cir. No. 5/2010 - Reopening/revision of annual accounts after their adoption in the annual general meeting  (Click for detail)

e.    Empanelment of Chartered Accountant firms for CAG Audit for the Year 2011-2012  (Click for detail)

           
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"Voice of CA"

CA. Sanjay Kumar Agarwal, Founder - Voice of CA
Member  Central Council - ICAI
Former Chairman - NIRC
Mob : 9811080342,
agarwal.s.ca@gmail.com 
   
   
CA. Kapil Goel, Moderator-Direct Taxes
Mob:9910272806,
kapilnkgoelandco@gmail.com

 
CA. Sidharth Jain, Co-Moderator
sidhjasso@yahoo.com 
  
CA. Mukesh K Bansal, Co-Moderator-FEMA
Mob:9540022533,
mukbansal80@gmail.com 

 

   

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