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II. Direct Taxes Case Laws:
1. Vipin Walia Vs. ITO, W.P.(C) 8273/2015 & CM No. 17434/2015 (for Stay), Date of Order: 15.02.2016, High Court of Delhi
Whether
it is illegal to issue a notice u/s 148 to the deceased assessee
whereas it should have been done so by issuing a notice to legal
representative of assessee within period of limitation for issuance of
notice?
Held-Yes
Brief Fact
A notice u/s 148 of the Income Tax Act, 1961, dated 27.03.2015 was
issued to Mr. Inder Pal Singh Walia seeking to reopen the assessment for
AY 2008-09 by the ITO which was returned unserved to the Department
with the remarks "Addressee expired". Infact Mr. Inder Pal Singh Walia
had expired on 14th March 2015. Hence, the notice dated 27th March 2015
had been addressed to a dead person. The ITO issued a letter dated 15th
June 2015 to the Petitioner with the notice u/s 148 of the Act and
requisitioning the details of legal heirs of the deceased Assessee to
complete the assessment proceedings. On 6th July 2015, the Petitioner
wrote to the ITO pointing out that he was unaware of the financial
affairs or transactions carried on by his late father and the Petitioner
approached the Court.
Held:
As far as Assessees who have expired, Section 159 of the Act sets out
how the Department should go about proceeding against the legal
representatives ('LRs') of such Assessee. Section 159(2) of the Act
makes a specific reference to a reassessment proceeding under Section
147 of the Act. While Section 159(2)(a) of the Act talks of a proceeding
already taken against an Assessee 'before his death'. Section 159(2)(b)
of the Act envisages any proceeding which could have been taken against
the deceased if he had survived. It permits such a proceeding to be
taken against the LRs of the deceased Assessee even if it had not taken
while the Assessee was alive. Section 159(2)(b) is relevant as far as
the present case is concerned. What was sought to be done by the ITO was
to initiate proceedings under Section 147 of the Act against the
deceased Assessee for AY 2008-09. The limitation for issuance of the
notice under Section 147/148 of the Act was 31st March 2015. On 27th
March 2015, when the notice was issued, the Assessee was already dead.
If the Department intended to proceed under Section 147 of the Act, it
could have done so prior to 31st March 2015 by issuing a notice to the
LRs of the deceased. Beyond that date it could not have proceeded in the
matter even by issuing notice to the LRs of the Assessee.
(Please click here for judgment)
2. M/s Virtusa (India) Pvt.Ltd. Vs. DCIT, I.T.A. No. 146/Hyd/2015, Date of order: 04.03.2016, ITAT - Hyderabad
Whether
where assessee relied on ITR – 6 format to arrive at total liability as
well as MAT credit calculations and paid tax accordingly, procedure
followed by assessee was proper, addition made is to be deleted?
Held-Yes
Brief Facts
The assessee filed its return of income on 30/11/2012 declaring total
income of Rs. 42,87,89,690 under the normal provisions of the
Income-tax Act,196. The return of income was processed by the Central
Processing Centre (CPC), Bangalore and assessed u/s 143(1) raising
demand of Rs. 32,06,700/-. The main difference in the computation of tax
by the assessee and the AO was that the Assessing officer has computed
the eligible MAT credit available of Rs.3,90,62,234 without including
surcharge and education cess while arriving at the amount of total tax
payable under the normal provisions of the Income Tax Act, 1961and under
sec. 115JB of the Act. In this case the assessing officer has
overlooked the format proceed to calculate the MAT credit to compute
assessment u/s 143(1) applying different methods when the proper and
correct method is proposed by CBDT in ITR-6. Therefore, the Assessing
Officer is expected to follow the ITR-6 format to complete the
assessment u/s 143(1) or 143(3) of the Act.
Held:
The tax liabilities for normal provisions as well as MAT are
calculated with surcharge and cess. The MAT credit in row “7” are
calculated automatically using the prescribed algorithm, this is nothing
but balancing figure i.e., the difference between tax liability as per
normal provisions and MAT provisions. Both the above tax liabilities are
calculated with surcharge and cess. These are the standard format,
which are expected to be followed by all the assessees and also
important to note that the above format of ITR 6 was amended w.e.f. AY
2012-13 by CBDT. Moreover, this is more relevant for the department
also. These formats are regulated by CBDT. Assessing Officer cannot
overlook these formats and (interpret it in his own method of
calculating tax credit while making assessment u/s 143(1) of the Act.)
proceed to calculate the MAT credit to compute assessment u/s 143(1)
applying different methods when the proper and correct method as
proposed by CBDT in ITR-6. The Assessing Officer is expected to follow
the ITR-6 format to complete the assessment u/s 143(1) or 143(3) of the
Act.
(Please click here for judgment)
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