By C. N. Vaze, Chartered Accountant
Is It fair
1. Introduction :
Our legislative process involves various stages — viz.
introduction of the Bill, deliberations (if any) in the Parliament and then the
Bill with amendments, if any, which is passed is assented to by the Hon’ble
President. It is our experience that the Bill, on its introduction, is heatedly
debated upon among tax practitioners. How many of the suggestions resulting from
the debate reach the Finance Minister, and thereafter how much time the
Parliamentarians spend on it, are in the realm of conjecture. And finally, what
comes out as the ‘Act’ may be altogether at times contrary to what the FM states
on the floor of the House. Therefore, it is questionable as to what
extent the legislative intent really gets reflected in the provisions that
become law. In this article, I propose to draw the readers’ attention to some of
the provisions which become almost ineffective since they are worded in a vague
and un-assertive language.
2. Instances of vague wordings :
2.1 S. 50C Ss.(2) :
Without prejudice to the provisions of Ss.(1), where :
(a) the assessee claims before any AO that the value
adopted or assessed by the stamp valuation authority U/ss.(1) exceeds the fair
market value of the property as on the date of transfer;
(b) the value so adopted or assessed by the stamp valuation
authority U/ss.(1) has not been disputed in any appeal or revision or no
reference has been made before any other authority, Court or the High Court,
the Assessing Officer may refer the valuation of the
capital asset to a Valuation Officer and where any such reference is made, the
provisions of Ss.(2), (3), (4), (5) and (6) of S. 16A, clause (i) of Ss.(1)
and Ss.(6) and Ss.(7) of S. 23A, Ss.(5) of S. 24, S. 34AA, S. 35 and S. 37 of
the Wealth Tax Act, 1957 (27 of 1957), shall, with necessary modifications,
apply in relation to such reference as they apply in relation to a reference
made by the Assessing Officer under Ss.(1) of S. 16A of that Act.
Now, the ambiguities are :
- The word used is ‘may’. That means there is no obligation on the AO ?
- The apparent meaning is that AO can refer to DVO only at the instance of the
assessee. But it is not so stated categorically; and the I.T. Department is
referring the cases to DVO in an arbitrary manner.
2.2 S. 154(8) Rectification :
Ss.(8) of S. 154 provides that the authority shall pass an
order within a period of six months from the end of the month in which the
application is received by it :
(a) Making the amendment; or
(b) Refusing to allow the claim.
Now, it is not clear as to what happens if the authority does
not pass any order. And in almost all the cases this is the reality !
2.3 Ss.(2) of S. 12AA. It reads as follows :
Every order granting or refusing registration
under clause (b) of Ss.(1) shall be passed before the expiry of six months from
the end of the month in which the application was received under clause (a).
But it is silent as to the consequences of failure to pass
the order. However, the Bangalore Tribunal in Karnataka Golf Association v.
Deputy Director of Income Tax, (2004) 91 ITD 1 has held that if no order is
passed within the stipulated time, registration is deemed to have been granted.
2.4 Ss.(6A) of S. 250 :
It is reproduced below :
(6A) In every appeal, the Commissioner (Appeals), where it
is possible, may hear and decide such appeal within a period of one year from
the end of the financial year in which such appeal is filed before him under
Ss.(1) of S. 246A.
Conclusion :
It is not enough that an obligation is created on the
authorities. It should be coupled with a remedy in the hands of the assessee for
non-observance of the provisions on the part of the authorities.
