CBDT criteria on selecting cases for scrutiny financial year 2015-16

CBDT criteria on selecting cases for scrutiny financial year 2015-16

Central board of direct taxes revealed criteria for selecting cases for scrutiny for the financial year 2015-16. CBDT issued an instruction no. 8/2015 dated 31 August 2015 regarding cases for scrutiny. Full instruction is as follows.

Subject: Compulsory manual selection of cases for scrutiny during the Financial Year 2015-2016-regd:-

1. In super session of earlier Instructions on the above subject, the Board hereby lays down the following procedure and criteria for manual selection of returns/cases for scrutiny during the financial-year 2015-2016:-

a) Cases involving addition in an earlier assessment year in excess of Rs. 10 lakhs on a substantial and recurring question of law or fact which is either confirmed in appeal or is pending before an appellate authority.

b) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess
of Rs. 10 crore or more on a substantial and recurring question of law or fact which is either
confirmed in appeal or is pending before an appellate authority.

c) All assessments pertaining to Survey under section 133A of the Income-tax Act, 1961 ('Act')
excluding those cases where books of accounts, documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey, such cases will not be covered by this exclusion.

d) Assessments in search and seizure cases to be made under section(s) 158B, 158BC, 158BD,
153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in which authorization for search and seizure was executed u/s 132 or 132A of the Act.

e) Returns filed in response to notice under section 148 of the Act.

f) Cases where registration u/s 12M of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.

g) Cases where the approval already granted u/s 1O(23C)/35(1)(ii)/35(1)(iii)/10(46) of the Act has been withdrawn by the Competent Authority, yet the assessee has been found claiming tax-exemption/benefit under the aforesaid provisions.

h) Cases in respect of which specific and verifiable information pointing out tax-evasion is given by Government Departments/Authorities. The Assessing Officer shall record reasons and take prior approval from jurisdictional Pro CCIT/CCIT/Pr. DGIT/DGIT concerned before selecting such a case for scrutiny.

2. Computer Aided Scrutiny Selection (CASS): Cases are also being selected under CASS on the basis of broad based selection filters. List of such cases shall be separately intimated in due course by the Pr.DGIT(Systems) to the jurisdictional authorities concerned.

3. It is reiterated that the targets for completion of scrutiny assessments and strategy of framing quality assessments as contained in Central Action Plan document for Financial-Year 2015-2016 have to be complied with and it must be ensured that all scrutiny assessment orders including the cases selected under the manual criterion are completed through the AST system software only. Further, in order to ensure the quality of assessments being framed, Pro CCsIT/CCsIT/Pr.
DsGIT/DsGIT should evolve a suitable monitoring mechanism and by 30th April, 2016, such authorities shall send a report to the respective Zonal Member with a copy to Member (IT) containing details of at least 50 quality assessment orders from their respective charges. In this regard, IT Authorities concerned must ensure that cases selected for publication in 'Let us Share' are picked up
only from the quality assessments as reported.

4. These instructions may be brought to the notice of all concerned.

5. Hindi version to follow. 

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CBDT clarification on approval and claim of exemption u/s 10(23C)(vi)

CBDT clarification on approval and claim of exemption u/s 10(23C)(vi)

CBDT issued a circular no. 14/2015 dated 17 August 2015 clarifying on certain issues related to grant of approval and claim of exemption u/s 10(23C)(vi) of the Income-tax Act, 1961.Full circular is as under.

Sub: Clarification on certain issues related to grant of approval and claim of exemption u/s 10(23C)(vi) of the Income-tax Act, 1961.

Sub-clause (vi) of clause (23C) of Sec 10 of the Income-tax Act, 1961 (`Act') prescribes that income of any university or other educational institutions, existing solely for educational purposes and not for purposes of profit, shall be exempt from tax if such entities are approved by the prescribed authorities. Such approval is not required in cases of university or educational institutions wholly or substantially financied by he Goverment [sub-clause (iiiab)] or if their aggregate annual receipts do not exceed Rs. 1 crore [sub-clause (iiiad) r.w. rule 2BC]. Thus, while granting approval to entities covered under sub-clause (vi), the prescribed authority has to ensure that the applicant institution must exist "solely for educational purposes and not for purposes of profit". There are several Provisos to clause (23C) of section 10 and prescribe, inter alia, various monitoring conditions subject to fulfillment of which only, the exemption can be availed.

These monitoring conditions include mode and manner of application of funds, maintenance and audit of books of accounts in certain situations etc. Some other Provisos prescribe the manner of making application u/s 10(23C)(vi) and the circumstances when an approval granted earlier can be withdrawn.

Representations have been received seeking clarification on certain issues related to operation of section 10(23C)(vi). These have been examined by the Board and following clarifications are made —
1. Scope of enquiry while granting apprital-
1.1 Clarification has been sought on the scope of enquiry that can be made by the prescribed authority while granting approval u, s 10(23C)(vi), i.e., whether it would be sufficient for the prescribed authority to consider the nature, existence for non-profit purposes and genuineness of the applicant institution or the conditions prescribed under various Provisos are also required to be considered at the stage of granting approval.

1.2 In this connection, attention is drawn to the decision of Hon'ble Supreme Court in case of American Hotel and Lodging Association Educational Institute vs. CBDT [301 ITR 86](2008) in which it has been held that at the time of granting approval u/s 10(23C)(vi), the prescribed authority is to be satisfied that the institution existed during the relevant year solely for educational purposes and not for profit. Once the prescribed authority is satisfied about fulfillment of this criteria i.e. the threshold pre-condition of actual existence of an educational institution under section 10(23C)(vi), it would not be justifiable, in denying approval on other grounds, especially where the compliance depends on events that have not taken place on the date on which the application for grant of approval has been made.

1.3 However, the prescribed authority is eligible to grant approval u/s 10(23C)(vi), subject to such terms and conditions as deemed necessary including those falling within the framework of various Provisos to the said clause of section 10. It has also been clarified in the said judgment that the compliance of prescribed conditions can be gauged while monitoring the case and in case of any breach thereof, the approval can be withdrawn. It is, therefore, clarified that the principle laid down by the Apex Court in American Hotels case (supra) must be followed while considering the applications filed seeking approval for exemption u/s 10(23 C)(vi).

2. Necessity for registration nits 12AA while seeking approval /claiming exemption u/s 10(23C)(vi)
2.1 Section 10(23C)(vi) does not prescribe any stipulation which makes registration u/s 12AA a mandatory pre or post condition. In fact, provisions of section 11 and 10(23C) are two parallel regimes and operate independently in their respective realms although some of the compliance criteria may be common to both. Hence obtaining prior registration before granting approval u/s 10(23 C) cannot be insisted upon.

2.2 However, in case of a trust or an institution having obtained registration u/s 12AA as well as approval u/s 10(23C)(vi), if registration is withdrawn at some point of time due to certain adverse findings, the withdrawal of approval u/s 10(23C)(vi) shall not be automatic but will depend upon whether these adverse findings also impact the conditions necessary to keep approval u/s 10(23C)(vi) alive.

3. Generation of surplus out of gross receipts 
A doubt has been raised whether generation of surplus out of gross receipts would necessarily 'breach' the threshold condition that the educational institution should exist `solely for educational purpose and not for the purpose of profit'. Perusal of prescribed provisions clearly reveal that mere generation of surplus cannot be a basis for rejection of application u/s 10(23C)(vi) on the ground that it amounts to an activity of the nature of profit making. In fact, the third Proviso to tile said clause clearly provides that accumulation of income is permissible subject to the manner prescribed therein provided such accumulation is to be applied "wholly and exclusively to the objects for which it is established". Hence, it is clarified that mere generation of surplus by educational institution from year to year cannot be a basis for rejection of application u/s 10(23 C)(vi) if it is used for educational purposes unless the accumulation is contrary to the manner prescribed under law.

4. Collection of amounts under different heads of fee from students-
It has been brought to the notice that collection of small amounts from students by way of application fee, examination fee, fee for issuing transfer certificate, subscription fee for library etc. is being treated by some Assessing Officers as profit making activity resulting in denial of exemption u/s 10(23C)(vi). Collection of small and reasonable amounts under different heads of fee, which are essentially in the nature of fee connected with imparting education and do not violate any Central or Stat-z,. regulation does not, in general, represent a profit making activity. Hence, there is no justification for treating the charging of small amounts under different heads of fee as Profit making activity unless the amount in the nature of 'capitation fee is charged directly or indirectly.

5. Impact of extraordinary powers of the Managing Trustees to appoint remove or nominate other trustees.

5.1 Doubt has been expressed whetaer pcwers to the Managing Trustees to appoint or remove other trustees and also to nominate their successor affect the nature of charitable activity of the trust and whether in such an eventually exemption can be denied.

5.2 There is no provision under the Act which calls for denial of exemption merely on account of appointment or removal of trustees. Although answer to such a situation would normally depend on the factual implication of such arrangement, the same should generally not be a ground for denying exemption unless the nature of activities of the trust or institution get changed or modified or no longer remain to exist 'solely for educational purpose and not for purposes of profit'. Hence denial of exemption would not be justifiable only on the ground of induction of new trustees or removal of existing ones.

6. Field authorities are advised to keep the above position in mind while dealing with the matters of approval /exemption u/s 10(23C)(vi). Similar principles would also apply to cases covered u/s 10(23C)(via) of the Act.


(Deepslikha Sharma) Director to the Government of India 
Income tax new rule 126 to determine stay of foreign ship crew members

Income tax new rule 126 to determine stay of foreign ship crew members

In exercise of the powers conferred by Explanation 2 to clause (1) of section 6 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Twelfth Amendment) Rules, 2015.
(2) They shall come into force with retrospective effect from the 1st day of April, 2015.

2. In the Income-tax Rules, 1962, in Part XV, after rule 125, the following rule shall be inserted, namely:—

'126. Computation of period of stay in India in certain cases.—(1) For the purposes of clause (1) of section 6, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, not include the period computed in accordance with sub-rule (2).

(2) The period referred to in sub-rule (1) shall be the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.

Explanation: For the purposes of this rule,—

(a) "Continuous Discharge Certificate" shall have the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum-Seafarer's Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958 (44 of 1958);

(b) "eligible voyage" shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where—

(i) for the voyage having originated from any port in India, has as its destination any port outside India; and
(ii) for the voyage having originated from any port outside India, has as its destination any port in India.'.
CBDT notification no. 71 about declaring some Bihar areas as backward

CBDT notification no. 71 about declaring some Bihar areas as backward

CBDT issued a notificationno.71/2015 dated 17 August 2015 on declaring some areas of Bihar as backward. Full notification is as under.

In exercise of the powers conferred by section 32 and section 32AD of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following districts of the State of Bihar as backward areas under the first proviso to clause (iia) of subsection (1) of section 32 and sub-section (1) of section 32AD, namely:— .
1. Patna 
2. Nalanda 
3. Bhojpur 
4. Rohtas 
5. Kaimur 
6. Gaya 
7. Jehanabad 
8. Aurangabad 
9. Nawada 
10. Vaishali 
11. Sheohar 
12. Samastipur 
13. Darbhanga 
14. Madhubani 
15. Purnea 
16. Katihar 
17. Araria 
18. Jamui 
19. Lakhisarai 
20. Supaul 
21. Muzaffarpur. 

2. This notification shall come into force on the date of its publication in the Official Gazette

Income tax 11 amendment rule and new form 61B

Income tax department made 11th amendment in the income tax rules with a notification no. 62/2015 dated 7 August 2015 and issued a new form 61B income tax form. Full notification and new form 61B are as under.

In exercise of the powers conferred by section 285BA read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government with respect to registration of persons, due diligence and maintenance of information, and the Board for matters relating to statement of reportable accounts, hereby make the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income–tax (11th Amendment) Rules, 2015.
 (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), after rule 114E, the following rules shall be inserted, namely:-

‘114F Definitions.- For the purpose of this rule and rules 114G and 114H,-
(1) “financial account” means an account (other than an excluded account) maintained by a financial institution, and includes-
(i) a depository account;
(ii) a custodial account;
(iii) in the case of an investment entity, any equity or debt interest in the financial institution.

Explanation.- For the purposes of this sub-clause “financial account” shall not include any equity interest or debt interest in an entity that is an investment entity solely because it,-

(a) renders investment advice to, and acts on behalf of; or
(b) manages portfolios for, and acts on behalf of,
a customer for the purpose of investing, managing, or administering financial assets deposited in the name of the customer with a financial institution that is not a non-participating financial institution other than such entity;

(iv) in the case of a financial institution not described in sub-clause (iii), any equity or debt interest in the financial institution, if the class of interests was established with a purpose of avoiding reporting in accordance with rule 114G and, in case of a U.S. reportable account, if the value of the debt or equity interest is determined, directly or indirectly, primarily by reference to assets that give rise to U.S. source withholdable payments; and

(v) any cash value insurance contract and any annuity contract issued or maintained by a financial institution, other than a non-investment-linked, non-transferable immediate life annuity that is issued to an individual and monetises a pension or disability benefit provided under an account that is an excluded account.

Explanation.- For the purposes of this clause,-
(a) “depository account” includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a financial institution in the ordinary course of a banking or similar business and also an amount held by an insurance company
pursuant to a guaranteed investment contract or similar agreement to pay or credit interest thereon;

(b) “custodial account” means an account (other than an insurance contract or annuity contract) for the benefit of another person that holds one or more financial assets;

(c) “equity interest” in a financial institution, being-
(i) a partnership firm, means either a capital or profits interest in the partnership firm;

(ii) a trust, means any interest held by any person treated as a settlor or beneficiary of all or a portion of the trust, or any other natural person exercising ultimate effective control over the trust;

Explanation.- A person will be treated as a beneficiary of a trust if he has the right to receive directly or indirectly a mandatory distribution or may receive, directly or indirectly, a discretionary distribution from the trust.

(d) “insurance contract” means a contract (other than an annuity contract) under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability, or property risk;

(e) “annuity contract” means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals;

(f) “cash value insurance contract” means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value and in case of a U.S. reportable account such value is greater than an amount equivalent to fifty thousand U.S. dollars.

Explanation.- For the purposes of this clause, a single premium life insurance contract which does not permit an amount to be paid on surrender or termination of the contract and which does not allow amounts to be borrowed under or with regard to the contract, shall not constitute a cash value insurance contract;
Download Full notification
Download New form 61B
Grant of minority sector by educational institute is valid

Grant of minority sector by educational institute is valid

Merely because minority status is accorded to educational institutions run by a society, it cannot be regarded as being established for benefit of a particular religious community; registration cannot be denied on this ground

• Sections 11 and 12 could be taken into consideration for purpose of grant or otherwise of registration under section 12AA inasmuch as it impinges on its public character. Notwithstanding registration granted under section 12AA, no benefit under sections 11 and 12 can be allowed in view of an abiding feature of a society's constitution or its inherent nature

HELD

• To be identified as an educational institution of the minorities, there should be a nexus between the institution and the particular minority to which it claims to be belonging. How could, otherwise, one may ask, it claim to be established for the benefit of the minority community, entitled to the protection guaranteed under article 30(1) of the Constitution, seeking to enshrine the right to serve and promote minority interest? A prescription of a standard or uniform percentage governing admissions may not, however, necessarily serve the purpose, which is to seek non-minority representation to a reasonable extent, while at the same time ensuring that the minority character of the institution is not annihilated, and the right engrafted under article 29(2) not subverted. What is, therefore, required is a balance between the two objectives – the preservation of the rights of the minority to admit the students of their community and that of admissions of 'outsiders' without disturbing the minority character. This balance, however, may not be specified in terms of a fixed percentage, which has to take into account the population as well as the educational needs of the area in which the educational institution is located, variables which are also subject to change with time(refer pgs. 8, 9 of the impugned order). The situation, as it appears, thus, is in a state of flux, though the position in law is clear, with the state governments empowered to prescribe the percentage, and which could be revised or changed from time to time.

• Clearly, thus, a right to regulate admission thereto is an important right of a minority institution. However, we do not find the same expressed in the charter of the assessee-society; there being no reference to any percentage or any restriction or mandate in respect thereof in its 'Aims and Objects'. Whatever implication this may have for its status as a minority institution, we can hardly countenance or subscribe to a proposition which, despite there being nothing either in its memorandum of association (object clause) or its conduct, sanctions a presumption that it is established for the benefit of the minority (Muslim) community, solely on the basis of it being granted the status of minority educational institution – the only restriction in its charter being toward its membership extending only to the members of the said community. If the institution has, by admitting 90 per cent non-minority (non-muslim) students, violated any specific provision or guideline in the matter and, accordingly, stands to lose its minority status, of which we have no clue, so be it. And which again does not help the revenue's case in any manner; rather, only goes against it. Though, therefore, appearing anomalous in-as-much as the minority status implies an inherent right to serve the minority interest, a finding to it being set up or established for the benefit of a particular (Muslim) community cannot be a matter of presumption and rendered de hors any material on record. The answer, as we understand, lies in the complete freedom allowed in the matter of admissions to unaided MEIs up to the undergraduate level as per the decisions by the Apex Court. Why, NCMEI, on similar facts, i.e., a low percentage of minority/s students in an educational institution established by the minorities, granted minority status to a school, holding that the criterion of fixation of a percentage governing admission of a minority community in a MEI cannot be included in the indicia for determining the minority status of such an Institution (Buckley Primary School vs. The Principal Secretary, Government of Orissa in Case No. 1320 of 2009 dated 06.07.2010/APB-I pgs. 103-129). Further, even where reserving such a right, the same may not necessarily translate into a high ratio of minority (muslim) students, for which other practical considerations may be responsible. That no such right stands reserved in the present case only fortifies the assessee's case. Why, yet, it stands granted a minority status, we wonder, which may or may not be the Revenue's concern. There is no claim by it of such status having been granted on account of any mis-representation, or as to the assessee having derived any benefit through misrepresentation. The same may be relevant inasmuch as the genuineness of the activities is a parameter which is to be examined by the competent authority while deciding on registration, even as the allegation cannot be lightly made, and would require being substantiated for it to be taken cognizance of. Notwithstanding, therefore, even if a minority status is accorded to educational institutions run by a society, it cannot be regarded as being established for benefit of a particular religious community. Even though the relevant provision (sec. 13(1)(b)) provides for exclusion of ss. 11 and 12 of the Act, the same could well be taken into consideration for the purpose of grant or otherwise of registration under section 12AA inasmuch as it impinges on its public character. What, we are unable to comprehend, effect or purpose the registration would have where, notwithstanding the same, no benefit under sections 11 and 12 can be allowed in view of an abiding feature of a society's constitution or its' inherent nature.
Relaxation in FDI sectoral cap

Relaxation in FDI sectoral cap

Ministry of Commerce and Industries issued a notification no. 8/12/2015 dated 12 August 2015 about relaxation in FDI Sectoral cap. Full notification is as under.

FDI policy is reviewed on an ongoing basis and significant changes are made in the FDI policy
regime, from time to time, to ensure that India remains increasingly attractive and investor-friendly investment destination. Changes are made in the Policy after having intensive consultation with stakeholders including concerned Ministries/ Departments, Apex Industries Chambers and other
organization.

FDI up to 100% is allowed on the automatic route in most sectors/activities subject to applicable laws/ regulations; security and other conditionalities.

During 2014-15 and 2015-16, the Government announced key FDI reforms in the defence and railways sectors. The entire range of rail infrastructure was opened to 100% FDI under the automatic route, and in defence, sectoral cap was raised to 49%. To boost infrastructure creation and to bring pragmatism in the policy, the Government reviewed the FDI policy in the construction development sector also by creating easy exit norms, rationalizing area restrictions and providing due emphasis to affordable housing. To give impetus to the medical devices sector, a carve out was created in FDI policy on the pharmaceutical sector and now 100% FDI under automatic route is permitted. The Government, in order to expand insurance cover to its large population and to provide required capital to insurance companies, raised the FDI limit in the sector to 49%. Pension sector has also been opened to foreign direct investment up to the same limit. The FDI policy provisions pertaining to NRI investment have also been clarified by providing that for the purposes of FDI policy, investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

To bring uniformity and simplicity in the FDI policy, the Government has introduced composite caps on foreign investments in the country. Composite cap is applicable across the sectors and is meant to attract foreign investment.

These measures are expected to increase FDI, which complements and supplements domestic investment. Domestic companies are benefited through FDI, by way of enhanced access to supplementary capital and state-of-art-technologies; exposure to global managerial practices and opportunities of integration into global markets resulting into accelerated domestic growth of the whole country including Karnataka.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Levy of VAT on Indian liquor on hotels is valid

Levy of VAT on Indian liquor on hotels is valid

CST & VAT: Tamil Nadu VAT: Levy of VAT on Indian-made liquor sold by hotels/clubs is constitutionally valid, irrespective of the fact that VAT was imposed without giving benefit to set-off of tax-suffered turnover at the time of purchase. This is so since liquor is non-vatable goods and provisions imposing non-vatable tax on goods had not been challenged.

Background of the case:

(1) Hotels and clubs were paying Tamil Nadu VAT on foreign liquor sold by them to their customers. However, no tax was payable on sale of Indian-made-liquor by them to their customers.

(2) A tax had been levied in 2012 on sale of Indian-made-liquor by hotels and clubs to their customers.

(3) This tax had to be paid upon total turnover arising on sale of such liquor without any set-off of tax-suffered turnover at the time of purchase.

(4) Hotels and clubs purchase Indian-made-liquor from Tamil Nadu State Marketing Corporation Limited ("TASMAC", a State's instrumentality) after payment of tax. TASMAC has the benefit of paying tax on turnover after setting off tax-suffered turnover at the time of purchase. However, hotels and clubs have no such benefit.

(5) It was argued by the hotels and clubs that there cannot be taxation of entire turnover. It places fetters on the right of the petitioners to carry on their own business. Therefore, there is violation of Article 19(1)(g).

The High Court held that:

(1) The rights protected by Article 19(1) are not absolute but qualified. The qualifications are stated in clauses (2) to (6) of Article 19. The fundamental rights guaranteed in Article 19(1)(a) to (g) are, therefore, to be read along with the said qualifications.

(2) Potable liquor as a beverage is an intoxicating and depressant drink which is dangerous and injurious to health and is, therefore, an article which is res extra commercium being inherently harmful. A citizen has, therefore, no fundamental right to do trade or business in liquor. Hence the trade or business in liquor can be completely prohibited.

(3) The State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6)or even otherwise.

(4) The petitioners made considerable profit by the escalation of sale price. The petitioners are making considerable value additions to their sales in favour of their customers. When the petitioners are selling liquor at a higher price than the TASMAC, they cannot seek parity.

(5) Liquor is specified as non-vatable item. Provisions as to tax certain goods treating them as non-vatable has not been challenged [Section 3(5) and Second Schedule].

(6) The petitioners, who are clubs and hotels, cannot be compared with the retail outlets of TASMAC. The customers of the TASMAC and the petitioners form two distinct and different categories based upon their respective socioe-conomic status. The petitioners are not prevented from doing their business. Thus, there is no violation of Article 19(1)(g).
E-filing of VAT return mandatory in Haryana

E-filing of VAT return mandatory in Haryana

HARYANA VALUE ADDED TAX (SECOND AMENDMENT) ORDINANCE, 2015 - AMENDMENT IN SECTIONS 2, 16, 34 & 60; SUBSTITUTION OF SECTIONS 8, 15A & 17 AND INSERTION OF SECTION 54A IN HARYANA VALUE ADDED TAX ACT, 2003

NOTIFICATION NO.LEG.9/2015, DATED 3-8-2015

An ORDINANCE further to amend the Haryana Value Added Tax Act, 2003.
Promulgated by the Governor of Haryana in the Sixty-sixth Year of the Republic of India.
Whereas the Legislature of the State of Haryana is not in session and the Governor is satisfied that the circumstances exist which render it necessary for him to take immediate action;
Now, therefore, in exercise of the powers conferred by clause (1) of article 213 of the Constitution of India, the Governor of Haryana hereby promulgates the following Ordinance:—
Short title
1. This Ordinance may be called the Haryana Value Added Tax (Second Amendment) Ordinance, 2015.

Amendment of section 2 of Haryana Act 6 of 2003

2. In sub-section (1) of section 2 of the Haryana Value Added Tax Act, 2003 (hereinafter called the principal Act),—
I. after clause (o), the following clause shall be inserted, namely:—
'(oo) "electronic governance" means the use of electronic medium for,—

(i) filing of any form, return, annexure, application, declaration, certificate, memorandum of appeal, communication, intimation or any other document;

(ii) creation, retention or preservation of records;

(iii) issue or grant of any form including statutory declaration form, order, notice, communication, intimation or certificate; and

(iv) receipt of tax, interest, penalty or any other payment or refund of the same through Government treasury or banks authorized by the Government treasury;';

II. for clause (w), the following clause shall be substituted, namely:—
'(w) "input tax" means the amount of tax actually paid to the State in respect of goods sold to a VAT dealer, which such dealer is allowed to take credit of as actual payment of tax by him, calculated in accordance with the provisions of section 8;'.

Amendment of section 8 of Haryana Act 6 of 2003
3. For section 8 of the principal Act, the following section shall be substituted, namely:—
"8. Determination of input tax.— (1) Input tax in respect of any goods purchased by a VAT dealer shall be the amount of tax actually paid to the State on the sale of such goods to him and shall, in case of a dealer who is liable to pay tax under sub-section (1) of section 3 or, as the case may be, makes an application for registration in time under sub-section (2) of section 11, include the tax paid under this Act and the Act of 1973 in respect of goods (except capital goods) held in stock by him on the day he becomes liable to pay tax but shall not include tax actually paid in respect of goods specified in Schedule E used or disposed of in the circumstances mentioned against such goods:

Provided that where the goods purchased in the State are used or disposed of partly in the circumstances mentioned in Schedule E and partly otherwise, the input tax in respect of such goods shall be computed pro rata:

Provided further that if input tax in respect of any goods purchased in the State has been availed of but such goods are subsequently used or disposed of in the circumstances mentioned in Schedule E, the input tax in respect of such goods shall be reversed.

(2) A tax invoice issued to a VAT dealer showing the tax charged to him on the sale of invoiced goods shall, subject to the provisions of sub-section (3), be a proof of the tax paid on such goods for the purpose of sub-section (1).

(3) Where any claim of input tax in respect of any goods sold to a dealer is called into question in any proceeding under this Act, the authority conducting such proceeding may require such dealer to produce before it in addition to the tax invoice issued to him by the selling dealer in respect of the sale of the goods, a certificate furnished to him in the prescribed form and manner by the selling dealer and such authority shall allow the claim only if it is satisfied after making such inquiry, as it may deem necessary that the particulars contained in the certificate produced before it are true and correct and in no case the amount of input tax on purchase of any goods in the State shall exceed the amount of tax in respect of the same goods, actually paid under this Act into the Government treasury.

(4) The State Government may, from time to time, frame rules consistent with the provisions of this Act for computation of input tax and when such rules are framed, no input tax shall be computed except in accordance with such rules.".

Substitution of section 15A of Haryana Act 6 of 2003
4. For section 15A of the principal Act, the following section shall be substituted, namely:—
"15A. Provisional assessment.— If an assessing authority has reason to believe on the basis of documentary evidence available with him that a dealer has evaded or avoided payment of tax under this Act, he may after giving the dealer a reasonable opportunity of being heard, determine for any period of the current financial year and any time within a period of six months from the date of detection, the taxable turnover of such a dealer on provisional basis to the best of his judgment and assess him to tax accordingly. The amount of tax so assessed shall be payable by the dealer in accordance with the provisions of section 22. Every deposit of tax under this section shall be adjustable against the liability of the dealer in assessment made under section 15.".

Amendment of section 16 of Haryana Act 6 of 2003
5. In section 16 of the principal Act,—
(i) for the words "three years", the words "six years" shall be substituted; and
(ii) in the explanation, for the word "is", the words "has been" shall be substituted.
Substitution of section 17 of Haryana Act 6 of 2003
6. For section 17 of the principal Act, the following section shall be substituted, namely:—
"17. If in consequence of definite information which has come into its possession, the assessing authority discovers that the turnover of the business of a dealer has been under assessed or has escaped assessment or input tax or refund has been allowed in excess in any year, it may, at any time before the expiry of eight years following the close of that year or within three years from the date of final assessment order, whichever is later, after giving the dealer a reasonable opportunity, in the prescribed manner, of being heard, reassess the tax liability of the dealer for the year for which the reassessment is proposed to be made and for the purpose of reassessment, the assessing authority shall, in case the dealer fails to comply with the terms of the notice issued to him for the purpose of reassessment, have power to reassess to the best of its judgment. ".

Amendment of section 34 of Haryana Act, 6 of 2003
7. In the second proviso to sub-section (1) of section 34 of the principal Act, for the words 'three years", the words "six years" shall be substituted.
Insertion of Chapter XA of in Haryana Act 6 of 2003
8. After Chapter X of the principal Act, the following Chapter shall be inserted, namely:—
"CHAPTER-XA
ELECTRONIC GOVERNANCE
"54A. Implementation of electronic governance.— (1) Notwithstanding anything contained in this Act or the rules framed thereunder, the Commissioner may, by an order, with the approval of State Government, implement electronic governance for carrying out the various provisions of this Act and the rules framed thereunder.

(2) Where an order has been passed under sub-section (1), the Commissioner may, by notification in the Official Gazette, amend or introduce forms for returns, applications, declarations, annexures, memorandum of appeal, report of audit or any other document which is required to be submitted electronically.

(3) The Commissioner may, for reasons to be recorded in writing, extend or reduce the period prescribed under the Act and the rules framed thereunder for electronic governance.

54B. Automation.— (1) The provisions contained in the Information Technology Act, 2000 (21 of 2000) and the rules framed and directions given thereunder, including the provisions relating to digital signatures, electronic governance, attribution, acknowledgement and dispatch of electronic records, secure electronic records and secure digital signatures and digital signature certificates, shall apply to the procedures under this Act and rules framed thereunder for electronic governance.

(2) Where any return, annexure, report of audit, document, application, form including statutory declaration form, certificate, communication or intimation is submitted by a dealer or his authorized signatory electronically through the official website, such return, annexure, report of audit, document, application, form including statutory declaration form, certificate, communication or intimation shall be deemed to have been submitted by him, if the dealer or his authorized signatory has given consent to use the official website:

Provided that the dealer or his authorized signatory who has consented to use the official website shall not retract from or repudiate such documents submitted by him through the official website.

(3) Where a certificate of registration, order, form including statutory declaration, certificate, notice or communication is prepared on any automated data processing system and is sent to any dealer, then the said certificate of registration, order, form including statutory declaration, certificate, notice or communication shall not be required to be personally signed by the Commissioner or any other officer subordinate to him and the certificate of registration, order, form including statutory declaration, certificate, notice or communication shall not be deemed to be invalid only on the ground that it has not been personally signed by the Commissioner or any other officer subordinate to him.

Explanation.— For the purposes of this section, "authorized signatory" means a person authorized by the dealer for electronic governance.".

Amendment of section 60 of Haryana Act 6 of 2003
9. In section 60 of the principal Act, for the words and signs "website www.haryanatax.com", the words "official website" shall be substituted.
No additional interest on deposit of armed forces group insurance

No additional interest on deposit of armed forces group insurance

Interest Rates on Deposits – Deposits of Army Group Insurance Directorate (AGID), Naval Group Insurance Fund (NGIF) and Air Force Group Insurance Society (AFGIS)

Please refer to our circulars DBOD.No.Dir.BC.121/C.347 (26)-86 dated October 29, 1986, DBOD. No. Dir. BC.26/C.347(26)-87 dated September 1, 1987 and DBOD. No. Dir. BC. 28/C.347(26)-87 dated September 11, 1987, in terms of which Public Sector Banks were permitted to pay additional interest of 1.28 per cent per annum over and above the normal rate of interest permissible in terms of directives on interest rates on deposits issued by Reserve Bank of India, from time to time, only on the term deposits for two years and above of Army Group Insurance Directorate (AGID), Naval Group Insurance Fund (NGIF) and AirForce Group Insurance Society (AFGIS), provided such deposits are not in any way linked with payment of insurance premia by the bank.
  
2. In line with complete deregulation of interest rates on deposits, it has been decided to withdraw the prescription of offering additional interest of 1.28 per cent per annum on the deposits of AGID, NGIF and AFGIS. Accordingly, interest rates on such deposits should be at par with other deposits of similar maturity and amount.

3. The above guidelines will be applicable at the time of accepting fresh deposits or renewal of the existing deposits. In other words, existing term deposits of AGID, NGIF and AFGIS may be
continued till maturity.

Income tax return form ITR for assessment year 2015-16

Income tax return form ITR for assessment year 2015-16

The income tax department issued income tax return form ITR for the assessment year 2015-16. However this time the department is late issuing income tax return form ITR. Download ITR for the assessment year 2015-16 from below .These income tax forms itr in both excel utility and java utility which can be used in both offline and online mode.

ITR
Description
Excel Utility
JavaUtility
ITR 1
(Sahaj)
For individual having income from salary & interest
ITR 2
For individual and HUF not having income from business and profession
ITR 2A
For individual and HUF not having income from business and profession and capital gains and who do not hold foreign assets
ITR-3
For individual and HUF being partners in firm and not carrying out business or profession under any proprietorship
ITR-4
For individual and HUF having income from proprietory business or profession
ITR 4S
(Sugam)
For individual and HUF having income from presumptive business
ITR-5
For person other than
(1)    Indivuidual
(2)    HUF
(3)    Company
(4)    Person filing form ITR 7

ITR-6
For companies other than companies claiming exemption u/s 11

ITR-7
For persons including companies required to furnish return u/s 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E)

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