My beloved Members,
I. APEX COURT IMPOSES COSTS OF Rs. 10 lakhs ON MALLYA, BENEFITING SUPREME COURT LEGAL SERVICE AUTHORITY
The Apex Court vide its order dated 13-7-2015 castigated liquor baron Vijay Mallya for evading and abusing the legal process, as it rejected his plea seeking quashing of criminal proceedings in a case relating to violation of foreign exchange rules and imposed Rs. 10 lakhs as costs on him.
The Court also said Mallya’s
“enormous money power” made him believe that the State should “adjust” its affairs to suit his convenience.
“In our opinion, the appeal is required to be dismissed for more than one reason. The fact that the adjudicating officer chose to drop the proceedings against the appellant herein does not absolve the appellant (Mallya) of the criminal liability incurred by him by virtue of the operation of section 40 read with section 56 of the Foreign Exchange Regulations Act”.
The Court further said –
“Exonerating such an accused, who successfully evades process of law and thereby commits an independent offence on the ground that he is found to be not guilty of the substantive offence, would be destructive of law and order,” a bench headed by Justice J. Chelameswar said.
“The appeal is dismissed with exemplary costs quantified at Rs. 10 lakh to be paid to the Supreme Court Legal Service Authority,” the Bench directed (source: PTI).
The above Order of the Supreme Court will be a milestone in the history of Apex Court rulings! We must record our great appreciation for this Apex Court rulings!!
II. THE DILEMMA OF BLACK MONEY RULES A CATCH OF 22 CHOICE
The black money rules have seriously annoyed many who were looking for a chance to get taxmen and enforcement officials off their back. The law and rules so notified imposes tax on money that has been spent and sparks new fears. In the jungle of complex rules, there are many grey areas which include – complex valuation needs more time, foreign banks do not give requisite data older than 5/10 years, unlisted shares and its valuation can cause great pain so as the valuation of the property if sold later. Importantly, properties acquired abroad will be taxed on the basis of a valuation report of a valuer who is recognised by the Government of that country (where property is located).
The catch net as per rules is very wide in as much as, under the I-T Act the Tax Dept. can go back up to 16 years whereas under the Black Money law there is no time limit prescribed for the compliance.
In a nutshell, against the above black money scenario, if anyone even by mistake, makes an incorrect declaration, then the entire declaration will be treated as null and void. The tax and penalty paid will not be refunded and the information given in the form will be used against the person for initiating proceedings. Also, after filing up the form to spell out overseas bank accounts and assets, the taxman telts the person that the Government already knows about the undisclosed assets. So, if the state has information about someone’s bank account but not about the properties, the form has to be revised to avoid action under the Anti-Money Laundering Law.
The heat of the black money law is going to catch Information Technology (IT) professionals too. It appears that the taxman has turned his focus towards Indian Software professionals with retirement savings in the US. Stiff penalties under the
‘black money law’ are reportedly in the offing if investments are not disclosed. To our mind, that is grossly unfair. These professionals, admittedly, are not scheming cheats stashing their cash overseas. They pay taxes on their global income in India. So, why harass them? Should IT professional also use the compliance window, especially since information on undisclosed assets of Indian taxpayers will be available later this year under the ‘Foreign Account Tax Compliance Act’. The US had passed the law in 2010 that requires US taxpayers and foreign financial institutions to report information on foreign accounts of US taxpayers. With the Indo-US Accord, our tax authorities will secure details of financial accounts held by Indian Taxpayers in the US. So, this is a serious matter and accordingly needs serious consideration and a clarification from the Finance Ministry/CBDT themselves.
Soon, hundreds of firms came up in Erode, Tirupur, Coimbatore, Namakkal and Salem, with companies offering returns of Rs. 2 lakh a month for an initial investment of Rs. 10 lakh. An emu apparently fetched Rs. 20,000 with its eggs priced at Rs. 1,200 each. When it collapsed, more than 15,000 investors complained, with promoters of 21 companies arrested for swindling more than Rs. 500 crore. Over Rs. 80,000 crore belonging to 60 million people is locked up in such Ponzi schemes. However, in such circumstances, consumer protection remains weak.” Thereafter, he suggested that to protect such scams, India desperately needs to upgrade its Consumer Protection Law and suggested some measures towards that end.
III. Tax Administration Reform Commission (TARC)
I am pleased to inform you that ,AIFTP in association Gujarat Federation of Tax Practioners and other sister organisation has initiated a discussion on the TARC which will bring more transparency and accountability in tax administration. More than 550 delegates participated in the discussion.
Those who desire to read the report of TARC can visit itatonline.org and share your views on the report, which will enable the AIFTP to send the representation to the concerned authorities.
With best wishes and regards,