Friday, April 21, 2017

Govt. extends due date for deposit under PMGKY to April 30, 2017

Government has extended date for making interest-free deposits for declarants who have paid tax and penalty under the Pradhan Mantri Garib Kalyan Yojna (PMGKY).

Under the PMGKY scheme, declarants had to deposit 25% of amount declared, in a bank for 4 years without interest. Due date for deposit such amount was March 31, 2017 which has now been extended till April 30, 2017.

Earlier, CBDT had also notified that if an assessee had made payment of tax, surcharge, penalty and deposit in the banks by the closing hours of 31st March, 2017, he shall be allowed to file declaration under the Scheme by the 10th of April, 2017.

Sec. 69A additions upheld as assessee failed to prove that bedroom from where cash was seized belonged to his sister


a) Search action was carried out at the residence of the assessee. During search, some unexplained cash was found and seized from bedroom of assessee's sister.

b) Assessee contended that cash received from the bedroom of sister belonged to his sister who came to stay with him few days back and, therefore, the same could not be included as unexplained cash in the hands of the assessee.

c) Assessing Officer (AO) did not accept the contention of the assessee and added entire amount of cash found as unexplained under section 69A.

d) CIT(A) and ITAT confirmed the order of AO. Aggrieved-assessee filed instant appeal before the High Court.

High Court held in favour of revenue as under:

1) Assessee failed to bring on any record that the bedroom was in exclusive possession of the sister. Even, there were contradiction in the statement of assessee recorded under section 132(4) and the affidavit of the sister.

2) Assessee had stated that out of amount found in cash, Rs. 2,50,000 lakh belonged to his sister whereas sister in her affidavit stated to had cash possession of Rs. 6,38,800 which was received by her from in-laws being Stridhan.

3) There were material contradiction in the statement of assessee and his sister with respect to ownership of actual amount in cash. Further no evidence was produced with respect to any share received from her in laws.

4) Therefore, seized cash was rightly included in income of assessee as unexplained money under section 69A. - [2017] 80 175 (Gujarat) 

AO's participation in raid doesn’t make reassessment void when he isn’t biased against assessee

The issue before the High Court was as under:

Whether ITAT fell into error in concluding that there was no infirmity in the framing of the assessment by an Officer who was involved in the search and seizure operations?

High Court held in favour of revenue as under:

1) Assessing Officer (AO) has been given the power under the Act to gather information for the purposes of assessment. The mode of gathering such information may vary from the mere issuance of a notice under Section 142 to the more intrusive method of entry and search/seizure envisaged under Section 133A, Section 133B and Section 132.

2) There is nothing inherently unconstitutional in permitting AOto gather the information and to assess the value of the information himself. It was not open to the High Court to have disabled AO from discharging his statutory functions.

3) If the assessee would establish that AO was in fact biased in the sense that he was involved in his personal capacity in the outcome of the assessment, it would be a good ground for setting aside the assessment order.

4) But to hold that bias was established only because the authorised officer under Section 132 and AO were the same person was an incorrect approach.

5) Assessee has, in addition to relying on the circumstance that the AO was a participant in the raiding party, not placed any other material to substantiate the allegation of bias.

6) No personal bias or malice or past history with the said official was alleged, much less proved. Thus, the argument that assessment was void on account of bias was unsustainable and had to be rejected. - [2017] 80 257 (Delhi)

Grant of scholarship to deserving students to pursue higher studies was charitable in nature: HC


a) The assessee was a society registered under Societies Registration Act, 1860 and was running several educational institutions in the State of U.P.

b) Assessing Officer (AO) disallowed payment of scholarship to the incumbent on the ground that it was not for charitable purpose and it would be considered as income of assessee.

c) On appeal, CIT (Appeals) deleted additions made by AO which was affirmed by the Tribunal on further appeal. Revenue filed instant appeal before the High Court

High Court held in favour of assessee as under:-

1) Scholarship to the incumbent was granted for pursuing Engineering course from University of California, Los Angeles, USA. The candidate was selected after a thorough process of selection and finding him most deserving candidate, scholarship was granted to the said incumbent.

2) This was in the process of charitable object of assessee Society for advancement of higher technical education to deserving students. It could not be doubted that advancement of education was a 'charitable purpose'.

3) The candidate, beneficiary, was directly or indirectly not related to Members of Society nor otherwise had any bearing or connection with the Society Members. Financial status of the said student or other things were immaterial so far as purpose for which scholarship to said incumbent was concerned.

4) Therefore, CIT (Appeals) was justified that grant of scholarship to deserving students to pursue higher studies was charitable in nature. [2017] 80 96 (Allahabad)