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Key takeaways from Budget-2020: Corporate Laws perspective

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1. Govt. proposes to exempt levy of stamp duty on transactions in stock exchanges established in IFSCs The Finance Bill, 2020 proposes to exempt levy of stamp duty in respect of instruments of transaction in stock exchanges and depositories established in IFSC set up under SEZ Act, 2005. In order to give effect to the proposed amendment, a new proviso has been proposed to be inserted to Section 9A (2) of the Indian Stamp Act, 1899. The exemption of the stamp duty on transactions carried out on stock exchanges and depositories established in IFSCs will lower the transactions cost and would encourage investments in IFSCs. Last year, in Finance Budget, 2019 the Govt. had inserted Section 9A to the Indian Stamp Act, 1899 whereby it was proposed to consolidate the stamp duty provisions relating to issue, sale or transfer of securities under the newly inserted section 9A and 9B of the Indian Stamp Act, 1899. The Amendment Act also proposed a uniform system for collection and payment ...
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BUDGET HIGHLIGHTS 2020

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1. New tax scheme for Individual and HUF A new Section 115BAC has been proposed to be inserted to provide an alternative to Individuals and HUFs to pay tax at lower rates. The income under this scheme shall be computed without claiming any deduction under Chapter VI-A (except Sections 80CCD or 80JJAA) or Section 24 or exemptions. 2. Abolition of Dividend Distribution Tax (DDT) Dividend from the domestic company or income from units of a mutual fund shall be taxable in the hands of shareholders or unit holders at the applicable rate and the domestic company or mutual funds shall not be required to pay any distribution tax. 3. Rationalization of taxation of start-ups Section 80-IAC has been proposed to be amended to provide that deduction to an eligible start-up shall be available for a period of 3 consecutive assessment years out of 10 years. Further, the turnover limit for claiming such exemption has been proposed to raised to Rs. 100 crore which was earlier Rs. 25 crore. 4. ...
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Territorial jurisdiction error couldn't be ignored merely because it wasn't raised at time of hearing of appeal

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CIT(Exemption) v. Baba Amarnath Educational Society -  [2019] 112 taxmann.com 221 (Punjab & Haryana) The assessee applied for registration under section 12AA. The CIT rejected the assessee’s application. Assessee challenged the rejection order before ITAT at Chandigarh. The ITAT directed the CIT to grant registration. In pursuance of the ITAT’s order registration was granted to the assessee. The revenue moved a miscellaneous application stating that the order passed by the Chandigarh ITAT was without jurisdiction as the case fell within the jurisdiction of Amritsar Bench. The revenue’s application was dismissed. On further appeal, the HC held that from the perusal of section 254(2), it was evident that there was an error apparent from record. The ITAT was empowered to amend the order passed under section 254. The undisputed fact that Chandigarh ITAT didn’t possess the jurisdiction to hear and decide the appeal is itself an error apparent from record. The same couldn’t ...
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Benami Transactions (Prohibition) Amendment Act, 2016 cannot have retrospective effect: Calcutta HC

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Ganpati Dealcom (P.) Ltd. v. Union of India -  [2019] 112 taxmann.com 367 (Calcutta) In 2011, appellant-writ petitioner purchased the property and sellers were diverse individuals. In 2017 after the Benami Transactions (Prohibition) Act, 1988 was amended by the Benami Transaction (Prohibition) Amendment Act, 2016 with effect from 25-10-2016, authority invoked section 24(1) and issued a notice to the appellant alleging that the said property was benami under section 2(8) of the said Act of 1988, as amended. It also alleged violation of section 2(9)(D) thereof and the consideration for this transaction was provided by "non-traceable fictitious/shell entities having no real business", rendering the transaction benami. The Calcutta High Court held that Benami Transactions (Prohibition) Amendment Act, 2016 was new legislation and in order to have retrospectivity, it should have been specifically provided therein that it was intended to cover contraventions at an earlier p...
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Regarding availment of benefits under Vera Samadhan Yojana - 2019 (Tax Settlement Scheme) for pending dues

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In order to recover pending dues and reduce litigations, the Govt.of Gujarat has announced Vera Samadhan Yojana - 2019 dated 06th December, 2019. The Scheme has been revised to make it more inclusive and liberal. The salient features of the scheme are as under - 1.              Inclusion of Sales Tax Act, Value Added Tax Act, Central Sales Tax Act, Motor Spirit Taxation Act,                           Entry Tax Act and Sugarcane Purchase Tax Act. 2.              Coverage of all transactions prior to 30/06/2017 regarding recovery of dues and litigations(appeals). 3.              Total set off of the amount paid before announcement of the scheme. 4.              Total remission of interest and penalty on payment of tax. 5.              Up to 5...
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Refund couldn't be withheld on ground that assessee declared income in prior AY and claimed loss in current AY

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www.taxmann.com Refund couldn't be withheld on ground that assessee declared income in prior AY and claimed loss in current AY Vodafone Idea Ltd. v. DCIT -  [2019] 111 taxmann.com 451 (Bombay) The assessee-Vodafone Idea Ltd. was engaged in the business of providing telecommunication services. It filed loss return and claimed refund of the entire amount deducted or collected at source. Assessing Officer (AO) withheld the refund determined under section 241A on the ground that the assessee had declared huge amount during AY 2016-17, whereas it had declared huge losses in the current Assessment Year. Thus, the issue of huge losses needed thorough investigation. On writ, the HC held that the auto-generated communication containing the note of withholding of refund in terms of section 241A didn’t satisfy any of legal tests, as the order was not passed by the AO who was competent to do so and secondly, it was not even an order. The communication didn’t contain any reasons recor...
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Disposing of appeal by merely holding that AO's order was self-speaking which required no interference was unjustified

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Disposing of appeal by merely holding that AO's order was self-speaking which required no interference was unjustified Ajji Basha v. CIT -  [2019] 111 taxmann.com 348 (Madras) Assessee filed an appeal to CIT(Appeals) against order of scrutiny assessment done by Assessing Officer. CIT(Appeals) disposed of appeal holding that Assessing Officer's order was a self-speaking order and did not require interference. The Madras High court held that the CIT(Appeals) is a fact finding authority and, therefore, has to consider the order of assessment on the grounds raised in the appeal and thereafter, pass a speaking order on merits and in accordance with law by giving his own reasons and findings as to whether the order of assessment could be sustained or not. In other words, the order should explicitly exhibit application of mind to the facts and circumstances and the objections raised in the grounds of appeal, also by expressing the reasons and findings in support of the conclu...
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