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1. Circular No. 22: Amendment in Section 206C vide Finance Act 2016  (Click for detail)
   

2. Notification: Clarification on simplification of Procedure for Form No. 15G & 15H  (Click for detail)
   

3. Govt. issues consolidated FDI policy circular 2016  (Click for detail)
   

4. Sebi issues stricter KYC, disclosure regime for P-Notes  (Click for detail)
   

5. ICAI: Post Qualification Diploma in International Taxation  (Click for detail)

1.  Mahesh Kumar Gupta Vs. CIT (A), I.T.A .No. 1347/DEL/2014, Date of Judgment: 08 .06.2016, ITAT - New Delhi

Issue:
Whether the CIT can direct the examination of taxability of the deemed dividend u/s 2(22) (e) of the Act by passing order under Section 263 in the proceedings u/s 153A, when no such related material was found during search proceeding?

Held – No

Brief facts
Assessee was a director in the Company Jackson Generators (P) Ltd. holding substantial shareholding of more than 43.19%. The company is engaged in the manufacture and sale of Gen Sets. He is also a partner in the firm M/s. Jackson & Co. having 33% share of profit and this firm is also engaged in the manufacturing and sale of Gen Sets and trading in Motors, Engines etc.

In the above case, the CIT observed that M/s Jakson & Co. has taken loan of Rs.1,72,15,824/- from M/s Jakson Generators Pvt. Ltd. - which ought to be fixed as deemed dividend u/s 2(22) (e) of the Income Tax Act, 1961 in the hands of the assessee-as this transfer of loan attracts the provisions of Section 2(22)(e) of the Act. The above amount was not considered for taxation at the time of assessment proceedings u/s 143(3) r.w.s 153A of the Act, the assessment order for the A.Y 2004-05 is found to be erroneous in so far, as prejudicial to the interest of revenue, the Assessing Officer has made an omission of ignoring the provisions of deemed dividend. Hence, the CIT issued notice u/s 263 of the I.T. Act, 1961 to the assessee.

The CIT held that the order passed by the Ld. AO is erroneous in so far as it is prejudicial to the interest of the revenue. Thus, CIT directed the AO to examine the taxability of the amount of Rs. 1,72,15,824/- in the hands of the assessee u/s 2(22)(e) of the I. T. Act, 1961. Thereafter, the aggrieved assessee appealed before the Hon’ble ITAT.

Held
The Hon’ble ITAT held that the issue of deemed dividend does not arise from the provisions of Section 153A of the Act and there is no seized material unearthed at the relevant time. Thus it is beyond Assessing Officer’s power to address the said issue in proceedings initiated u/s 143(3) read with Section 153A of the Act. The CIT was wrong in directing the examination of taxability of deemed dividend under Section 2(22)(e) of the Act, in the proceedings u/s 153A of the Act while passing order under Section 263 of the Act when the proceedings under Section 153A itself has not unearthed the said issue. Thus, the CIT does not have power u/s 263 of the Act to give its own opinion when there is no new material unearthed. The issue taken up by the CIT was not within the purview of the Assessing Officer at the inception of assessment proceedings. Hence, Appeal of the Assessee is allowed.

(Please click here for judgment)

2.  Shri Shirdi Sai Darbar Charitable Trust (Dharamshala) Vs. CIT(Exemptions), I.T.A. No. 692/CHD/2015, Date of Pronouncement: 08.06.2016, ITAT - Chandigarh

Issue:
Whether CIT (Exemptions) can reject the application for registration u/s 12AA of the Income Tax Act,1961 on the grounds that the assessee has not filed any ITR and the clause of memorandum provide absolute powers to the trustees to manage the property of the trust which may attract the provision of Section 13(1)(c) of the Act?

HELD: No

Brief Facts:
The assessee is a charitable trust filed an application for registration u/s 12A before the CIT(exemption),Chandigarh. After providing the opportunity of being heard the CIT(exemptions) have denied the application on the ground that the assessee has not filed any ITR yet and the clause of memorandum provide absolute powers to the trustees to manage the property of the trust which may attract the provision of Section 13(1)(c) of the Act.

Held:
Hon’ble ITAT held that the condition which CIT(Exemptions) has to satisfy while granting the registration u/s 12A of the Income Tax Act,1961 are that the objects of the assessee are charitable in nature and the activities are genuine. There are no adverse remarks made by the CIT (Exemptions) with regard to objects of memorandum. Since the assessee has not filed its ITR it cannot be said the activities are not genuine. Moreover, section 13 comes into play at the time of granting exemption u/s 11 and not for granting exemption u/s 12A of the Act. Hence the appeal of the assessee is allowed.

(Please click here for judgment)   

III. Useful Articles:

1.  Krishi Kalyan Cess - FAQs

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2.  No Service Tax Audit by the Service Tax Department or CAG

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3.  No Service tax on sale of under construction flats if contract price includes value of land 

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4.  Services by Senior Advocates to Business Entities brought under Reverse Charge

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 Golden Rules:

  "Mistake is a single page in a part of life.
But, relation is a book of dictionary.
So, don't loose the full book for the single page"
                                        

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