Income tax - TDS - Does rejection of application u/s 197 amount to an 'Order' maintainable u/s 264? - YES, rejection does not lie in absolute discretion of AO - reasons must be indicated: Bombay HC THE issue before the High Court is that whether rejection of an application u/s 197 for lower TDS rate or no TDS certificate amounts to an 'order'. Whether such an 'order' as per Sec 264 is maintainable. And the answer to the first question is that the rejection of an application u/s 197 does amount to an 'Order' u/s 264, and the same is maintainable for revisionary proceedings. Facts of the case Petitioner is a consortium consisting of an Indian company and a Malaysian company - awarded a contract for the design, development, construction, commissioning, operation and maintenance of the Mumbai Monorail Project by MMRDA - petitioner is assessable as an AOP - files an application u/s 197, requesting the Revenue to deduct tax at the rate of 0.11% from the payments made to it under the contract - AO rejects the application on two grounds (i) The calculation mechanism provided in Rule 28AA fails as figures for three previous years are unavailable; and (ii) No eTDS returns were filed by the assessee The Petitioner moves the Commissioner of Income Tax (TDS), in revision under Section 264 - the Commissioner rejected the Revision Application holding that where the AO rejects an application under Section 197, no approval of the Commissioner is necessary. The Commissioner cites two reasons for the rejection. Firstly, if the benefit of a lower rate for withholding tax is not granted under Section 197 to the assessee, no hardship or prejudice would be caused to the assessee as a result of the rejection of the application because, the assessee would be entitled to get a refund of excess tax paid, if any, together with interest. The second reason is that when the Assessing Officer rejects an application under Section 197, he does not pass an ‘order’ as envisaged in Section 264 and consequently, a revision under Section 264 is not maintainable. Having heard the parties the High Court has held that, ++ it would be far fetched to accept the view that the rejection of an application must lie in the absolute discretion of the Assessing Officer or that the Assessing Officer is not bound to indicate reasons or a basis for the rejection of the application. The fact that Parliament has empowered the Board to frame Rules under subsection 2A, having due regard to the convenience of assessees and the interests of the Revenue specifying the cases and circumstances under which an application can be made and the conditions subject to which such a certificate may be granted is sufficient to indicate that the exercise of powers by the Assessing Officer is intended to be structured in accordance with the provisions of Section 197 and the Rules framed by the Board under subsection 2A. ++ The Assessing Officer cannot be heard to urge that though an assessee fulfills all the requirements which are stipulated in Rule 28AA or, as the case may be, in Rule 29B, he possesses an unguided discretion to reject the application; ++ the Assessing Officer when he rejects an application is bound to furnish reasons which would demonstrate an application of mind by him to the circumstances which are mandated both by the Statute and by the Rules to be taken into consideration; ++ the expression “order” for the purposes of Section 264 has a wide connotation. Subsection (1) of Section 264 provides that in the case of any order other than an order to which Section 263 applies, passed by an authority subordinate to him, the Commissioner may either of his own motion or on application by the assessee for revision, call for the record of any proceeding under the Act in which any such order has been passed and after making an enquiry, pass such order thereon not being an order prejudicial to the assessee as he thinks fit. Parliament has used the expression “any order”; ++ hence, any order passed by an authority subordinate to the Commissioner, other than an order to which Section 263 applies, is subject to the revisional jurisdiction under Section 264. A determination on an application under Section 197 requires an order to be passed by the Assessing Officer after application of mind. The Commissioner was, therefore, manifestly in error when he held that there was no order which would be subject to his revisional jurisdiction under Section 264; ++ The Assessing Officer in the present case, was in error in coming to the conclusion that the mechanism that is contemplated under Rule 28AA would break down in the case of the assessee on the ground that the financial statements of the assessee in the previous three years were not available. In this case, sub clause (ii) would not apply and the rate would be computed under subclause (i); ++ The failure of the assessee, if any, to file eTDS returns may result in independent consequences which are provided in law. That however, cannot justify the rejection of the application made by the assessee for the determination of withholding of tax at a lower rate on payments which are to be received by the assessee. ++ The Commissioner has rejected the application of the assessee on the ground that a revision was not maintainable under Section 264. The Commissioner also observed that in the event that the assessee has paid excess tax, it would be entitled to a refund of the tax paid together with interest and hence, no prejudice would be caused to the assessee. The entire approach of the Commissioner is, with respect, specious; ++ The Assessing Officer was required, in the first instance, to apply his mind to the fact that the conditions for the grant of a certificate under Section 197 are duly fulfilled. If those conditions are duly fulfilled, it would be impermissible for the Assessing Officer to reject the application merely on a whim and on caprice and for the Commissioner to hold that no prejudice would be caused to the assessee since tax would be refunded later together with interest. The application filed by the assessee has been rejected in a rather cavalier manner and without application of mind; ++ the Revision Application is restored to the CIT for a fresh determination.
Tuesday, May 18, 2010
Thursday, May 13, 2010
Is Caste Based Census 2011 acceptable?
With an uproar at the centre as to whether the demand for caste based census in 2011 is tenable, the recent judgement of Madrass HC came as relief.
IN A development that could provide legitimacy to the demand for caste-based census, the Madras High Court has issued a fresh direction to the Centre to conduct caste-wise enumeration in the country.
Allowing a PIL by lawyer R Krishnamoorthy, a division bench directed the Census Commissioner to take all steps to hold caste-wise enumeration. The bench comprising acting chief justice Elipe Dharma Rao and justice T S Sivagnanam said the relief sought by the petitioner had already been answered in the affirmative by the court in an earlier verdict on a writ petition.
In its October 2009 judgement, the court had noted that after 1931 there had never been any caste-wise enumeration or tabulation. “When there cannot be any dispute that there is an increase in the population of Scheduled Castes/Scheduled Tribes and Other Backward Classes manifold after 1931, the percentage of reservation fixed on the basis of population in 1931 has to be proportionately increased by conducting caste-wise census,” it had then held.
In the 2009 order, the court had asked the central government to conduct a fresh castewise census “at the earliest and in a time-bound manner” to help achieve “the goal of social justice in its true sense”. Justice Elipe Dharma Rao, who was part of the division bench that issued the order, had said that such an exercise would be in the interest of the weaker sections.
According to the bench, a caste-wise enumeration has become important as various state governments have introduced new categories — OBCs and MBCs — in the “reserved” category. “Given this backdrop, the percentage of reservation for various categories based on 1931 population figure is unfair. Quota should be proportionately increased by conducting a fresh caste-wise census,” the court said.
Incidentally, the Supreme Court had, in last April, rejected the Tamil Nadu-based PMK’s demand for castebased census. The court felt that such an exercise could “cause immense strife”.
Mr. Amitabh Bachhan has strongly opposed the caste based census and reiterated that if the officials asked him a question regarding his caste, he would reply saying as Indian. The veteran actor cited that all the spouses of his family members belongs to different caste and community.
Friday, May 7, 2010
Consensual sex sans adultery no offence
Consensual heterosexual relation between adults, including pre-marital sex, is no offence except in cases where the partners are liable to be charged for “adultery”, ruled the Supreme Court. It said the courts attach a lot of importance to personal autonomy and a person indulging in an immoral act need not necessarily be a culprit in the eyes of law. “Morality and criminality are non-co-extensive,” said a bench of CJI K G Balakrishnan and Justices Deepak Verma and B S Chauhan on Wednesday.
The SC said in the present social milieu, some view premarital sex as an attack on the centrality of marriage while a significant number see nothing wrong in it. This conflict of opinion on morality did not make pre-marital sex an offence, it ruled. “Notions of social morality are inherently subjective and criminal law cannot be used as a means to unduly interfere with the domain of personal autonomy,” it said. This clear finding and the judicial logic supporting it got substantial space in the SC’s judgment on Wednesday quashing 23 complaint cases against actress Khushboo, who was harassed through litigation for her remarks on prevalence of pre-marital sex in cities.
Justice Chauhan, writing the 41-page judgment for the bench, said, “While it is true that the mainstream view in our society is that sexual contact should take place only between marital partners, there is no statutory offence that takes place when adults willingly engage in sexual relations outside the marital setting, with the exception of ‘adultery’ as defined under Section 497 of the IPC.”
Section 497 provides, “Whoever has sexual intercourse with a person who is and whom he knows or has reason to believe to be the wife of another man, without the consent or connivance of that man, such sexual intercourse not amounting to the offence of rape, is guilty of the offence of adultery, and shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both. In such case, the wife shall be punishable as an abettor.
The SC said in the present social milieu, some view premarital sex as an attack on the centrality of marriage while a significant number see nothing wrong in it. This conflict of opinion on morality did not make pre-marital sex an offence, it ruled. “Notions of social morality are inherently subjective and criminal law cannot be used as a means to unduly interfere with the domain of personal autonomy,” it said. This clear finding and the judicial logic supporting it got substantial space in the SC’s judgment on Wednesday quashing 23 complaint cases against actress Khushboo, who was harassed through litigation for her remarks on prevalence of pre-marital sex in cities.
Justice Chauhan, writing the 41-page judgment for the bench, said, “While it is true that the mainstream view in our society is that sexual contact should take place only between marital partners, there is no statutory offence that takes place when adults willingly engage in sexual relations outside the marital setting, with the exception of ‘adultery’ as defined under Section 497 of the IPC.”
Section 497 provides, “Whoever has sexual intercourse with a person who is and whom he knows or has reason to believe to be the wife of another man, without the consent or connivance of that man, such sexual intercourse not amounting to the offence of rape, is guilty of the offence of adultery, and shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both. In such case, the wife shall be punishable as an abettor.
Wednesday, May 5, 2010
SC Bans Narco, Lie Detector tests in criminal offences
THE Supreme Court has held that narco-analysis, polygraph and brain mapping tests on an accused are illegal. The court, however, permitted use of such techniques in criminal cases on consent and with some safeguards.
“If we were to permit the forcible administration of these techniques, it could be the first step on a very slippery-slope as far as the standards of police behaviour is concerned,” the apex court said in a significant judgement on Wednesday.
“We hold that no individual should be forcibly subjected to any of the techniques in question, whether in the context of investigation in criminal cases or otherwise. Doing so would amount to an unwarranted intrusion into personal liberty,” said a bench comprising chief justice K G Balakrishnan, Justice R V Raveendran and Justice J M Panchal.
The bench said, “our conclusion is that the results obtained through the involuntary administration of either of the impugned tests (the narcoanalysis technique, polygraph examination and BEAP test) come within the scope of `testimonial compulsion,’ thereby attracting the protective shield of Article 20(3).”
The court rejected the plea of various state governments which had said that administering these techniques on the accused does not cause any bodily harm and that the extracted information will be used only for strengthening investigation.
It was pleaded before the court that such techniques were in alternative to third degree of torture and should be permitted.
“This is a circular line of reasoning since one form of improper behaviour is sought to be replaced by another. What this will result in is that investigators will increasingly seek reliance on the impugned techniques rather than engaging in a thorough investigation.
The widespread use of `third-degree’ interrogation methods so as to speak is a separate problem and needs to be tackled through long-term solutions such as more emphasis on the protection of human rights during police training, providing adequate resources for investigators and stronger accountability measures when such abuses do take place” remarked Justice Balakrishnan writing the verdict for the bench.
“Therefore, it is our considered opinion that subjecting a person to the impugned techniques in an involuntary manner violates the prescribed boundaries of privacy. Forcible interference with a person’s mental processes is not provided for under any statute and it most certainly comes into conflict with the right a gainst self-incrimination,“ the court said in its elaborate 251 page of judgement.
“However, we do leave room for the voluntary administration of the impugned techniques in the context of criminal justice, provided that certain safeguards are in place,” the court said.
It further said, “even when the subject has given consent to undergo any of these tests, the test results by themselves cannot be admitted as evidence because the subject does not exercise conscious control over the responses during the administration of the test. However, any information or material that is subsequently discovered with the help of voluntary administered test results can be admitted, in accordance with Section 27 of the Evidence Act, 1872.”
The issue of the legality of such techniques to extract information from the accused had received considerable attention since it involves tensions between the desirability of efficient investigation and the preservation of individual liberties.
Compulsory administration of these techniques violated the indivudual rights against self incrimination.
With this judgement, the high profile satyam scamster, B Ramalinga Raju will be amongst others who will escape the tests. The AP police was planing to conduct such tests on him as he was not revealing facts.
“If we were to permit the forcible administration of these techniques, it could be the first step on a very slippery-slope as far as the standards of police behaviour is concerned,” the apex court said in a significant judgement on Wednesday.
“We hold that no individual should be forcibly subjected to any of the techniques in question, whether in the context of investigation in criminal cases or otherwise. Doing so would amount to an unwarranted intrusion into personal liberty,” said a bench comprising chief justice K G Balakrishnan, Justice R V Raveendran and Justice J M Panchal.
The bench said, “our conclusion is that the results obtained through the involuntary administration of either of the impugned tests (the narcoanalysis technique, polygraph examination and BEAP test) come within the scope of `testimonial compulsion,’ thereby attracting the protective shield of Article 20(3).”
The court rejected the plea of various state governments which had said that administering these techniques on the accused does not cause any bodily harm and that the extracted information will be used only for strengthening investigation.
It was pleaded before the court that such techniques were in alternative to third degree of torture and should be permitted.
“This is a circular line of reasoning since one form of improper behaviour is sought to be replaced by another. What this will result in is that investigators will increasingly seek reliance on the impugned techniques rather than engaging in a thorough investigation.
The widespread use of `third-degree’ interrogation methods so as to speak is a separate problem and needs to be tackled through long-term solutions such as more emphasis on the protection of human rights during police training, providing adequate resources for investigators and stronger accountability measures when such abuses do take place” remarked Justice Balakrishnan writing the verdict for the bench.
“Therefore, it is our considered opinion that subjecting a person to the impugned techniques in an involuntary manner violates the prescribed boundaries of privacy. Forcible interference with a person’s mental processes is not provided for under any statute and it most certainly comes into conflict with the right a gainst self-incrimination,“ the court said in its elaborate 251 page of judgement.
“However, we do leave room for the voluntary administration of the impugned techniques in the context of criminal justice, provided that certain safeguards are in place,” the court said.
It further said, “even when the subject has given consent to undergo any of these tests, the test results by themselves cannot be admitted as evidence because the subject does not exercise conscious control over the responses during the administration of the test. However, any information or material that is subsequently discovered with the help of voluntary administered test results can be admitted, in accordance with Section 27 of the Evidence Act, 1872.”
The issue of the legality of such techniques to extract information from the accused had received considerable attention since it involves tensions between the desirability of efficient investigation and the preservation of individual liberties.
Compulsory administration of these techniques violated the indivudual rights against self incrimination.
With this judgement, the high profile satyam scamster, B Ramalinga Raju will be amongst others who will escape the tests. The AP police was planing to conduct such tests on him as he was not revealing facts.
Judges Cannot dictate judgements in Part
Judges cannot do with merely dictating a portion of the judgement as such a practice would render the entire judgement invalid, the Supreme Court has said.
A judgement has to be pronounced in an open court by the judge to the shorthand writer in the form of a dictation wherever it is permissible as stipulated under Order 20, Rule 1 of the CPC (Civil Procedure Code), a bench of Justices Arijit Pasayat and P Sathasivam observed.
"The mere fact that a major portion has been dictated by the learned judge in the judgment already dictated will not by itself lead to the conclusion that the judgement had been delivered," the Apex Court observed while dismissing an appeal.
The appeal was filed by K V Rami Reddy who challenged a Madras High Court judgment which had quashed a judgment in a civil dispute after noting that the Seventh Assistant Civil Judge, Chennai had passed the same without dictating the whole text in the open court as prescribed by the CPC.
The Assistant Civil Judge committed the said irregularity while dealing with suit for specific performance filed by a woman Prema who subsequently challenged his action before the Madras High Court.
A single judge of the Madras High Court upheld Prema's argument that when a judgement was not dictated in full in the open court it was "non-est in the eye of law" (an invalid judgment) and the remitted the matter back to the said judge to hear the arguments afresh upon which Reddy appealed in the Apex Court.
Source: Economic Times
A judgement has to be pronounced in an open court by the judge to the shorthand writer in the form of a dictation wherever it is permissible as stipulated under Order 20, Rule 1 of the CPC (Civil Procedure Code), a bench of Justices Arijit Pasayat and P Sathasivam observed.
"The mere fact that a major portion has been dictated by the learned judge in the judgment already dictated will not by itself lead to the conclusion that the judgement had been delivered," the Apex Court observed while dismissing an appeal.
The appeal was filed by K V Rami Reddy who challenged a Madras High Court judgment which had quashed a judgment in a civil dispute after noting that the Seventh Assistant Civil Judge, Chennai had passed the same without dictating the whole text in the open court as prescribed by the CPC.
The Assistant Civil Judge committed the said irregularity while dealing with suit for specific performance filed by a woman Prema who subsequently challenged his action before the Madras High Court.
A single judge of the Madras High Court upheld Prema's argument that when a judgement was not dictated in full in the open court it was "non-est in the eye of law" (an invalid judgment) and the remitted the matter back to the said judge to hear the arguments afresh upon which Reddy appealed in the Apex Court.
Source: Economic Times
Subscribe to:
Posts (Atom)