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President’s Message |
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UNION BUDGET, 2008 The new Union Budget was placed on 29-2-2008 by Hon’ble the Finance Minister, Hon’ble Mr. P. Chidambaram. The new Budget has given a thrust for improvement of agricultural economy and the rural sector. A scheme of waiver of loans and debt relief for small farmers has been announced, which may involve an outlay of Rs. 60,000 crores including for repayments under one time settlement. The Crops Rural Infrastructure Development Fund (CRIDF), has been enhanced to Rs. 14,000 crores. For development of rural roads an additional of Rs. 4,000 crores have been allocated. These are very important and appreciable steps taken for improvement in agricultural economy. The various amendments which have been proposed in direct and indirect tax laws shall have the far reaching effects. The relief given in ‘personal taxation’ by enhancing threshold limit of exemption of Individual to Rs. 1,50,000 and Rs. 1,80,000 in the case of women assessee and Rs. 2,25,000 for senior citizens of 65 years and above is a great relief to the general masses. Apart from the Securities Transaction Tax, the “Commodity Transaction Tax” has been introduced. This tax shall be allowed as deduction vide clause (xvi) in sub-section (1) of section 36 in computing the income, which is taxable under section 28 as ‘Income from Business or Profession’. Similarly, with the insertion of new clause [section 36(1)(xv)] the Security Transaction Tax shall also be allowed as expenses arising out of the income from such security transaction. Certain proposals have been made for amending the provisions with a view to overcome the various judgments of the Hon’ble Apex Court as well as all the various High Courts such as definition of the word “charitable purpose” has given under section 2(15) by adding a proviso which appears to have been made on account of the decision of the apex court in the case of CIT vs. Gujarat Maritime Board reported in (2007) 295 ITR 561. Different payments even if it is below Rs. 20,000 made repeatedly in a day were not within the purview of the tax net in view of the decision of the Orissa High Court in the case of CIT vs. Aloo Supply Co. reported in (1980) 121 ITR 680 but by substitution of sub-sections (3) and 3(A) in section 40-A the effect of the aforesaid decision has been taken away. Now aggregate of payments made in a day will be taken into consideration for the purposes of applying the provisions of section 40A(3). AIFTP has made representation to Hon’ble the Finance Minister and a delegation of AIFTP has also met the Chairman, CBDT suggesting various amendments in Income-tax Act which are necessary. Even though very patient and sympathetic consideration was given to the suggestion but they have not been included into the proposed amendment, and AIFTP proposes to proceed with its persuasion and follow-up. According to the Finance Act, 2007, applications which were pending before the Settlement Commission and which are not disposed of by 31-3-2008 such proceedings shall abate and the same will go back to the Assessing Officer for reassessment. The AIFTP has made suggestions for making suitable provisions so that the matter may not abate by extending the period of 31-3-2008. Since there was no extension proposed in the Finance Bill, various writ petitions have been filed in different High Courts directing Settlement Commission to decide the applications, in accordance with law, on or before 31-3-2008 so that the proceedings do not abate in terms of section 245-HA(1) of the Income Tax Act, 1961. Hon’ble Delhi High Court has passed an order in Writ Petition No. (C) 5535 of 2007 and Hon’ble Madras High Court has also passed similar order in Writ Petition Nos. 34719 to 34721 of 2007 directing the Settlement Commission to decide the application before 31-3-2008. In Allahabad High Court a large number of such petitions have been filed. Such litigations can be easily be avoided if the Settlement Commission decides the applications filed under section 245-C on or before 31-3-2008 or the date of 31-3-2008 is extended by making suitable amendments in section 245-HA of the Act. An amendment has been proposed under section 153 of the Income-tax Act that the assessing authority will get a period of not less than one year for completion of assessment after abatement of the proceedings before the Settlement Commission under section 245-HA of the Income-tax Act. Various appeals are pending before various Benches of Income Tax Appellate Tribunal and it takes its own time for deciding the appeals, according to its priority. The proposed amendment in section 254 making the stay order passed by Income Tax Appellate Tribunal lapse after the expiry of a period of 365 days from the date of stay order, irrespective of the fact whether the delay in disposal of the appeal is because of any reason not within the control of the parties. The incidental and ancillary powers of the Tribunal is sought to be curtailed. Various limits fixed before 30 years requires increase in the existing provision such as in section 40A(3) – The limit of Rs. 20,000 was fixed w.e.f. 1-4-1997, in section 44AB – The limit of sales at Rs. 40 lakhs was fixed w.e.f. 1-4-1985, in section 44AA – The limit for maintenance of accounts at Rs. 1,20,000 for certain persons was fixed w.e.f. 1-4-1976, in section 269SS – The limit for accepting loans or deposits in cash at Rs. 20,000 was fixed w.e.f. 1-4-1984 and in section 269T – Mode of payment of Loans or Deposit in Cash was originally fixed at Rs.10,000 which was revised to Rs. 20,000 w.e.f. 1-4-1989.Deliberations are required at all levels for removing the anomalies by making suggestions for necessary changes. Similarly, the decision of the
Empowered Committee with regard to the implementation of VAT have not been
properly followed by different States. Bharatji Agrawal |