ITO & Charging Section.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 July 2011
1) What do u mean by machinery provision? Any Example Or case law to understand the meaning of it.
2) What do u mean by charging section? Any Example Or case law to understand the meaning of it.
3) Sir is there any difference between A.O. & I.T.O?
Thanks
2) What do u mean by charging section? Any Example Or case law to understand the meaning of it.
3) Sir is there any difference between A.O. & I.T.O?
Thanks
10 July 2011
I have never com across any such provisions known as machinery provisions. You can treat depreciation as machinery previsions as is is an allowable expenses against your income by way of passing an entry.
Charging Sections are those sections which allows the expenses
There is no difference between A.O and I.T.O. Both are assessing Officer but if you mean i.T.O. then it indicates that he is not ACIT, DCIT or Add.CIT (They are also A.O.) and I.T.O. is always a promotee from inspector to I.T.O
Charging Sections are those sections which allows the expenses
There is no difference between A.O and I.T.O. Both are assessing Officer but if you mean i.T.O. then it indicates that he is not ACIT, DCIT or Add.CIT (They are also A.O.) and I.T.O. is always a promotee from inspector to I.T.O
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Querist : Anonymous
Querist :
Anonymous
(Querist)
10 July 2011
Thank You Sir
Thank You Very Much.
Sir 2 more question sir PLS
Section 14A of the Income Tax Act, 1961 was inserted in the year 2001 with the retrospective effect from April 1st , 1962 Right . But sir If my assessment are over for Eg: A.Y. 1998 – 1999 & I have received the assessment order than again the assessment will be done? Becasue it is has been said that it is a retrospective effect.
I was reading the case law CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC). But sir whom it is mentioned CIT v. They should mentioned HC v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC). Because after the HC judgment the aggrieved party can appeal to SC Right. If the party is aggrieved by the CIT order than he will appeal to ITAT not directed to the SC. So why the case law says CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC)
Thank You Very Much.
Sir 2 more question sir PLS
Section 14A of the Income Tax Act, 1961 was inserted in the year 2001 with the retrospective effect from April 1st , 1962 Right . But sir If my assessment are over for Eg: A.Y. 1998 – 1999 & I have received the assessment order than again the assessment will be done? Becasue it is has been said that it is a retrospective effect.
I was reading the case law CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC). But sir whom it is mentioned CIT v. They should mentioned HC v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC). Because after the HC judgment the aggrieved party can appeal to SC Right. If the party is aggrieved by the CIT order than he will appeal to ITAT not directed to the SC. So why the case law says CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC)
02 August 2024
### **1. Machinery Provision**
**Meaning:**
Machinery provision in tax law generally refers to the set of procedures, rules, and frameworks established to facilitate the implementation and enforcement of tax laws. It includes the administrative and procedural aspects necessary for the effective functioning of the tax system.
**Example:**
- **Section 142 of the Income Tax Act, 1961:** This section empowers the Assessing Officer (AO) to conduct inquiries and investigations to assess the taxpayer's income. It is part of the machinery provisions that allow the tax authorities to gather information and conduct assessments.
**Case Law:**
- **Case Law Example:** In the case of **CIT v. R. S. S. A. (P.) Ltd. [2009] 185 Taxman 131 (Mad.)**, the Madras High Court discussed the procedural aspects under the Income Tax Act, which are part of the machinery provisions. This case highlighted how the procedural provisions facilitate the assessment and enforcement of tax laws.
### **2. Charging Section**
**Meaning:**
The charging section in tax law is the specific provision that imposes a tax on income or other financial transactions. It defines the nature and scope of the tax liability and the taxable income.
**Example:**
- **Section 4 of the Income Tax Act, 1961:** This section is the charging section for income tax in India. It stipulates that income tax is charged for each financial year on the income of individuals, companies, and other entities according to the provisions of the Act.
**Case Law:**
- **Case Law Example:** In **CIT v. Amrit Foods [2007] 291 ITR 434 (SC)**, the Supreme Court discussed the scope and applicability of the charging section under the Income Tax Act. The case emphasized the interpretation of the charging provisions and their impact on tax liability.
### **3. Difference Between A.O. & I.T.O.**
- **Assessing Officer (A.O.):** The Assessing Officer is a general term used for any officer assigned the task of assessing tax returns and determining tax liabilities. This role can be performed by officers at various levels, including Income Tax Officers (ITO), Assistant Commissioners, or Deputy Commissioners.
- **Income Tax Officer (I.T.O.):** The ITO is a specific designation within the Income Tax Department. ITOs are responsible for assessing and processing tax returns, conducting audits, and enforcing tax laws at a regional or local level.
In essence, every ITO is an A.O., but not every A.O. is necessarily an ITO.
### **4. Section 14A and Retrospective Effect**
**Section 14A of the Income Tax Act, 1961** deals with the disallowance of expenses incurred in earning exempt income. It was introduced with retrospective effect from April 1, 1962.
**Impact on Previous Assessments:**
- **Retrospective Effect:** The retrospective effect means that the provisions of Section 14A apply to assessments made from the date of introduction of the section, even if the assessments were completed before the amendment.
- **Reassessment:** If your assessment for the Assessment Year (AY) 1998-1999 is already concluded, it typically won’t be reopened solely based on Section 14A unless it’s being reassessed or reviewed for specific reasons. The retrospective effect generally affects ongoing or future assessments rather than those already completed, unless there are specific provisions for reopening assessments.
### **5. Case Law and CIT vs. HC**
**Case Law Explanation:**
- **Case Name:** **CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC)**
- **"CIT v."**: In tax cases, the abbreviation "CIT" refers to the Commissioner of Income Tax, who is the respondent or appellant in the case. This means that the case is being heard by the Supreme Court on an appeal by the Commissioner of Income Tax (CIT), not the High Court (HC).
- **Hierarchy of Appeals:** The usual appellate hierarchy involves appeals from the Income Tax Appellate Tribunal (ITAT) to the High Court (HC) and then to the Supreme Court (SC). In this case, the Supreme Court is reviewing the matter on appeal from the CIT's decision, rather than directly from a High Court's decision.
**Case Law Summary:**
- **Why "CIT v.":** The case is titled **"CIT v. Walfort Share & Stock Brokers (P.) Ltd."** because it represents an appeal by the CIT to the Supreme Court. The CIT is challenging a previous ruling, and the case is thus named in accordance with the appellant (CIT).
Feel free to ask if you have more questions or need further clarification!
**Meaning:**
Machinery provision in tax law generally refers to the set of procedures, rules, and frameworks established to facilitate the implementation and enforcement of tax laws. It includes the administrative and procedural aspects necessary for the effective functioning of the tax system.
**Example:**
- **Section 142 of the Income Tax Act, 1961:** This section empowers the Assessing Officer (AO) to conduct inquiries and investigations to assess the taxpayer's income. It is part of the machinery provisions that allow the tax authorities to gather information and conduct assessments.
**Case Law:**
- **Case Law Example:** In the case of **CIT v. R. S. S. A. (P.) Ltd. [2009] 185 Taxman 131 (Mad.)**, the Madras High Court discussed the procedural aspects under the Income Tax Act, which are part of the machinery provisions. This case highlighted how the procedural provisions facilitate the assessment and enforcement of tax laws.
### **2. Charging Section**
**Meaning:**
The charging section in tax law is the specific provision that imposes a tax on income or other financial transactions. It defines the nature and scope of the tax liability and the taxable income.
**Example:**
- **Section 4 of the Income Tax Act, 1961:** This section is the charging section for income tax in India. It stipulates that income tax is charged for each financial year on the income of individuals, companies, and other entities according to the provisions of the Act.
**Case Law:**
- **Case Law Example:** In **CIT v. Amrit Foods [2007] 291 ITR 434 (SC)**, the Supreme Court discussed the scope and applicability of the charging section under the Income Tax Act. The case emphasized the interpretation of the charging provisions and their impact on tax liability.
### **3. Difference Between A.O. & I.T.O.**
- **Assessing Officer (A.O.):** The Assessing Officer is a general term used for any officer assigned the task of assessing tax returns and determining tax liabilities. This role can be performed by officers at various levels, including Income Tax Officers (ITO), Assistant Commissioners, or Deputy Commissioners.
- **Income Tax Officer (I.T.O.):** The ITO is a specific designation within the Income Tax Department. ITOs are responsible for assessing and processing tax returns, conducting audits, and enforcing tax laws at a regional or local level.
In essence, every ITO is an A.O., but not every A.O. is necessarily an ITO.
### **4. Section 14A and Retrospective Effect**
**Section 14A of the Income Tax Act, 1961** deals with the disallowance of expenses incurred in earning exempt income. It was introduced with retrospective effect from April 1, 1962.
**Impact on Previous Assessments:**
- **Retrospective Effect:** The retrospective effect means that the provisions of Section 14A apply to assessments made from the date of introduction of the section, even if the assessments were completed before the amendment.
- **Reassessment:** If your assessment for the Assessment Year (AY) 1998-1999 is already concluded, it typically won’t be reopened solely based on Section 14A unless it’s being reassessed or reviewed for specific reasons. The retrospective effect generally affects ongoing or future assessments rather than those already completed, unless there are specific provisions for reopening assessments.
### **5. Case Law and CIT vs. HC**
**Case Law Explanation:**
- **Case Name:** **CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 192 Taxman 211 (SC)**
- **"CIT v."**: In tax cases, the abbreviation "CIT" refers to the Commissioner of Income Tax, who is the respondent or appellant in the case. This means that the case is being heard by the Supreme Court on an appeal by the Commissioner of Income Tax (CIT), not the High Court (HC).
- **Hierarchy of Appeals:** The usual appellate hierarchy involves appeals from the Income Tax Appellate Tribunal (ITAT) to the High Court (HC) and then to the Supreme Court (SC). In this case, the Supreme Court is reviewing the matter on appeal from the CIT's decision, rather than directly from a High Court's decision.
**Case Law Summary:**
- **Why "CIT v.":** The case is titled **"CIT v. Walfort Share & Stock Brokers (P.) Ltd."** because it represents an appeal by the CIT to the Supreme Court. The CIT is challenging a previous ruling, and the case is thus named in accordance with the appellant (CIT).
Feel free to ask if you have more questions or need further clarification!
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