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DIRECT TAXES CODE BILL, 2009

1) Document Identification Number, Sec 261 (4)

“Any document, letter or correspondence, received by the Department, any income tax authority or any other person acting on behalf of the Department or the income tax authority, shall be treated as invalid and shall be deemed never to have been received, if it does not bear a Document Identification Number referred to in subsection (3).  

This Provision certainly provided an opportunity to the department personnel to  through tantrums on whoever approached to submit any document / correspondence / replay sought by the department itself, in disguise enabling them to make  illegal / illegitimate money by not generating this DIN or not accepting any document from any person, on some or other obscure reasons.

It threatens that the document / correspondence / reply / communication ( to be submitted by any person to the department ) “shall be treated as invalid and shall be deemed never to have been received, if it does not bear a Document Identification Number referred to in subsection (3).”

It is clear that the   “Document Identification Number“ would by generated exclusively by the Revenue Department.    If the personnel at the job is not interested on one or other pretext  to accept inward correspondence and do not generate the  “Document Identification Number” , who would be forced to suffer?

Ground reality is different in the Revenue Department, why is it neglected in this draft code?    Does it  to want to umbrella the six decades old bureaucratic vested  interests?

It should enable any person to submit any document and same must be accepted by the department without any itch / objection, but it does not take place. In such helpless situations, there should be a mechanism wherein any document from any person must be received and be given DOCUMENT IDENTIFICAION NUMBER. As long as the documents are routed through the REVENUE DEPARTMENT, for every transaction, it encourages the personnel of revenue department to pocket some money from the persons, approaching with any document, highlighting / misleading with one or other reasons, and applying time consuming tactics, irritating the approaching persons.

Let the Revenue Department assess the contents / correctness of the document on acceptance, not on pre acceptance.

When e-returns are enabled, why not we adopt the very procedure on acceptance of any document, letter or correspondence from any other person?

We are also disabled by Sec 278(2) by “No prosecution, suit or other proceeding shall lie against the Government or any officer of the Government, under this Code”, whenever we come across the situations where our documents are not received by the personnel of revenue department on unsubstantial grounds.

2. “Direct Taxes Code 2009” . Section 23(1). Ambiguity regarding TDS on Rent.

 Sec.23 (1) of “Direct Taxes Code 2009” says “The income from any house property owned by the person shall be computed under the head “Income from House property”.

“Discussion Paper on Direct Taxes Code 2009” , Chapter – VIII, “Computation of Income from house property”, 8.2(g) says “The Income from  property shall include income from letting of any buildings along with any machinery, plant, furniture or any other facility if the letting of such building is inseparable from the letting of the machinery, plant, furniture or facility”.

 Now, confusion creeps in here about the rate for “Deduction of tax at Source”., The Third Schedule of “Direct Taxes Code 2009”.   Rule 11, says as follows:

Rent

(i)                 For the use of machinery or plant or equipment Rate of TDS is “ONE PER CENT”

(ii)               For use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings, Rate of TDS is “TEN PER CENT”.

 

 

Now question is in a situation where an assessee receives rent on “a building along with any machinery, plant, furniture or any other facility, where the letting of such building is inseparable from the letting of the machinery, plant, furniture or facility”, should the same be subjected to the rate of  TDS @ “One per cent ?

Or at “TEN PER CENT”? as per this new “Direct Taxes Code 2009”.

  

Is this ambiguity in this new “Direct Taxes Code 2009” not defeating the very purpose of “ Reducing the scope of litigation. Wherever Possible, an attempt has been made to avoid ambiguity in the provisions that invariably give rise to rival interpretations.”

 

From

Venkateswara Rao Sapare, Hyderabad – 500 008. Date 04.08.2010.

 

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Category Income Tax, Other Articles by - Venkateswara Rao Sapare 



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