Justice delayed is justice denied

The concept and implementation of e-appeal mechanism is a welcome move as it would not only curb corrupt practices as intended but also reduce the time and cost for getting justice.

The Faceless Appeal Scheme, 2020 provides discretionary video-call hearing in selected cases where the tax authority feels that issues are complex. Considering that the right to decide which case to be resolved over a video-call is available to the tax authority but not the taxpayers, a writ has been admitted in Delhi High Court challenging the legality of e-appeal scheme.

Considering that it is a burning issue, following aspects may be worth pondering upon –

• The element of human discretion can never be removed from any appeal system – physical or online.
• Opportunity of being heard can be oral and written and it is not necessarily a verbal opportunity.
• Any appellate order has to be given in writing only.

To ensure faster justice, it seems fair that no unnecessary pendency is created on account of time consumed for attending every case over video call. Every case would not involve same amount of time and complexity, hence, discretionary video-call hearing is in fact a boon, and otherwise the purpose of e-appeals would fail entirely.

Important Statutory developments

1. ITR due date for tax audit/TP cases extended to 31.1.21.
2. ITR due date for others extended to 31.12.20.
3. Tax Audit & transfer pricing report due date extended to 31.12.20.
4. Due date for filing declaration to opt for Vivad Se Vishwas Scheme extended to 31.12.20.
5. CBDT has released instructions for filing of ITR Forms 1 to 7 for AY 20-21.
6. CBDT notifies Equalisation levy (Amendment) Rules, 2020; revises Forms for filing statement & appeals.
7. CBDT issues guidelines on actions for recovery of taxes to be taken by AO/TRO.

Important Judicial Precedents

• No TDS u.s. 194C for purchase of advertisement space in newspaper, as advertisement space could be resold.
  Times VPL Ltd. (Kar HC)

• Back office work from legal dept of software companies classified as data processing for Sec10A exemption.
  Narendra R Thappetta(Kar HC)

• Where non-resident agents had rendered their services outside India & they were not having any permanent establishment in India, commission paid to them was not liable to tax in India.
  Jay Chemical Industries Ltd. (Guj HC)

• Provision of sec. 139(5) allowing revision of belated ITR not applicable with retrospective effect
  Avadhut Ban (HUF) (Pune ITAT)

• Exp. incurred on a project which was never put to use & subsequently abandoned to be treated as revenue in nature.
  Adadyn Technologies (P.) Ltd. (Bang ITAT)

• Stamp duty valuation or fair market value of immovable property to be considered on date of booking of flat for section 56 purpose.
  RadhaKishanKungwani (Jai ITAT)

• Depreciation granted towards admission fees and processing charges paid for membership in stock exchange (Intangible asset).
  BGSE Financials Ltd(Bang ITAT)

• AO cannot adopt NAV method to determine value of shares of a company if assessee used DCF method for the same.
  Valencia Nutrition Ltd. (Bang ITAT)

• Income brought to tax u.s 41(1) by reversal entry for ESOP to be treated as ‘export income’ for s.10A/10B exemption.
  California Software Co. Ltd (Mad HC)

• SC dismissed SLP against ruling that reassessment notice couldn’t be issued by AO who had no jurisdiction.
  PankajbhaiJaysukhlal Shah (SC)