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The principal notification was published in the Gazette of India, Extraordinary, vide number G.S.R.96(E), dated the 1st March, 2006, and was last amended by notification No.31/2007-Central Excise, dated the 19th July, 2007 and published vide number G.S.R. 494(E), dated the 19th July, 2007.
IT all started with search and seizure operation conducted at the premises of Friends Portfolio. In the course of the search, statements of Shri Manoj Agarwal and other persons were recorded and thereafter assessment was completed in their cases. It was found that all the transactions undertaken by Shri Manoj Agarwal through Friends Portfolio and his other concerns were bogus transactions, in the nature of merely providing entries without any real physical transactions relatable to those entries. Such entries were taken by a number of persons, namely, S/Shri C.P. Khanna, Puneet Khanna, Rajiv Aggarwal, Dhanraj Singh, Harjoot Singh, M/s Ramco Steel (P) Ltd. etc. The last named company filed petition to the Settlement Commission for settlement of its case in respect of entries taken from Shri Manoj Agarwal. In the statement Shri Manoj Agarwal admitted that all the entries given by him through Friends Portfolio and his other companies were in the nature of accommodation entries, which could be grouped into six categories as under:-
As no notice issued by the Assessing Officer u/s 143(2) in the present case as admitted by the AO himself in the remand report submitted to the learned CIT(A) as clearly mentioned by the learned CIT(A) in paragraph No. 17 on page 12 of his impugned order, the assessment order passed by him u/s 158BC suffered from a jurisdictional error and the same, therefore, was not valid in the eye of law.
If an order passed by the authority is not communicated to the assessee or the concerned person, it raises serious issues. These have been considered by Courts time and again. The principles of natural justice are, by now, fully evolved and expounded by a catena of decisions. The importance of the rule of natural justice is not only to secure justice but also to prevent the miscarriage of justice. Admittedly, they do not supplant the law of the land, but supplement it. These principles are enunciated in the case of A. K. Kraipak v. Union of India (AIR 1970 SC 150), and have been followed in a number of judgments.
How is the FBT to be valued? And when is the tax payable? The fringe benefit is to be valued at the fair market value (FMV) of the security or sweat equity share on the date of vesting of the option minus any amount paid by / recovered from the employee for such security or shares. The FMV is to be determined a s per the method to be prescribed by the Central Board of Direct Taxes (CBDT). The employer company is required to pay advance tax of estimated FBT progressively: 15 per cent by June 15, 45 per cent by September 15, 75 per cent by December 15 and 100 per cent by March 15 of the fiscal year.
Now , even individuals or HUF have been made responsible for deducting tax at source if their sales turnover exceeds Rs 40 lakhs or gross receipts from profession exceeds Rs 10 lacs. Not deducting tax at source from payments made will make them suffer very heavily. The punishment for not deducting tax at source, was enhanced by Finance Act 2004 by an amendment in section 40 of the I T Act. So , substituted section 40(ia) consists of following provision
In exercise of the powers conferred by sub-section (2) of Selection 4A of the Companies Act, 1956(1 to 1956), the Central Government here by to specifies the followings institutions to be public finance institutions and for that purpose makes the following further amendment in the Notification of the Government of India, published in the Gazette of India dated the 13th May, 1978 in Part II, Section 3, sub-section (ii), in the erstwhile Ministry of Law, Justice and Company Affairs (Department of Company Affairs) vide number S.O. 1329 dated the 8th May, 1978, Namely.
