Manual scrutiny of Service Tax Returns

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4 Responses

  1. SAINATH says:

    In my view; Manual scrutiny of Service Tax returns by the Department is very good practice, becz i am from reputed public sector organisation.. we are taking lots of services from different people and we will pay fess immediately after completion of work services and we will reimburse the service tax portion after submission of actual tax paid challan.

    in this we are facing difficult that the service provider providing same amount of particular service to different branches of same organisation. and he is paying service tax to department for only one bill. and later on he submitting same challan to different branches of same organisation and taking reimbursement of service tax portion of his bill.

    we are facing problem here only becz of following reasons:
    1. The bill amount is same for different branches of same organisation (we can’t change this..)
    2. no where in challan we can find the details of payment amount.

    so in my view by this Manual scrutiny of returns, the service provider will caught by the department or he will get fear and do correct act in future days..

  2. IT : Amount received by assessee from accommodation entry providers in garb of share application money, was to be added to its taxable income under section 68
    [2012] 18 taxmann.com 217 (Delhi)
    HIGH COURT OF DELHI
    Commissioner of Income-tax
    v.
    Nova Promoters & Finlease (P) Ltd.*
    SANJIV KHANNA AND R.V. EASWAR, JJ.
    IT APPEAL NO. 342 OF 2011 †
    FEBRUARY 15, 2012

    Section 68 of the Income-tax Act, 1961 – Cash credits – Assessment year 2000-01 – For relevant assessment year, assessee filed its return declaring loss – Said return was processed under section 143(1) – Subsequently, Assessing Officer received information from Investigation Wing that assessee had obtained accommodation entries in garb of share application monies – In order to examine genuineness and creditworthiness of companies which gave entries to assessee, Assessing Officer issued summons to two persons namely, ‘M’ and ‘R’ who did not appear before him – Subsequently, assessee filed a letter with Assessing Officer along with affidavits of ‘R’ and ‘M’ in which both of them had stated that transactions with assessee were genuine and earlier statements recorded from them by investigation wing were given under pressure – Assessing Officer did not accept those affidavits and made certain addition to assessee’s income under section 68 – Tribunal, however, taking a view that there was no dispute about identity of shareholders namely ‘M’ and ‘R’, deleted addition made by Assessing Officer – On revenue’s appeal, it was noted that both ‘M’ and ‘R’ had admitted before Additional Commissioner (Investigation) that they were acting as accommodation entry providers – They had also given a list of 22 companies in which they were operating accounts – It was also apparent that out of 22 companies whose names figured in information given by them to investigation wing, 15 companies had provided so-called ‘share subscription monies’ to assessee – Whether on facts, there was specific involvement of assessee-company in modus operandi followed by ‘M’ and ‘R’ – Held, yes – Whether, therefore, impugned order passed by Tribunal deleting addition was to be set aside – Held, yes [In favour of revenue]
    Section 148 of the Income-tax Act, 1961 – Income escaping assessment – Issue of notice for – Assessment year 2000-01 – Whether at stage of issuing notice under section 148 merits of matter are not relevant and Assessing Officer at that stage is required to form only a prima facie belief or opinion that income chargeable to tax has escaped assessment – Held, yes – Whether however, once that stage is crossed and reassessment proceedings are set in motion, material on basis of which requisite belief was formed by Assessing Officer has to be appraised and examined – Held, yes [In favour of revenue]

  3. RAHUL CHILLAL says:

    Totally Agree with Sainath. But what about genuine assessee who pay & file in time, they feel harassed as they have to visit the service tax office.

  4. R.L. KIRUSHNAMOORTHY says:

    IN THE CASE OF GENUINE ASSESSEES THERE IS NO PROBLEM. WHEN THE BOOKS OF ACCOUNT MAINTAINED BY THE SERVICE PROVIDER TALLIES WITH THE BILLS AND COLLECCTION AMOUNT IN THE BANK THERE WILL NOT BE ANY PROBLEM. ONLY THING THE SERVICE TAX AUTHORITIES LOOKS AT ALL THE ASSESSEES WITH DOUBTS AND STARTS SCRUTINISING THE DOCUMENTS AS IF THEY HAVE DONE WRONG TRANSACTION.

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