Tax Thoughts

Mr. Arvind Datar (Senior Advocate)
AAR Functioning Stalled

The Income-tax Act, 1961 provides for an Authority for Advance Rulings (AAR) under Chapter-XIX-B, which is to provide the facility of ascertaining the income-tax liability of a non-resident well in advance and thereby avoid long drawn and expensive litigation. The AAR has  been quite effective and  was looked up to  with  confidence and hope.In the recent past, the functioning of the AAR has been sought to be stymied by a completely erroneous interpretation of certain amendments made by the Finance Act, 2017........

Finance Act- Validity of Including Non-finance Subjects

In an unprecedented move, the Finance Act, 2017 amended 18 central legislations which had nothing to do with taxation or finance. The Finance Act is not an ordinary piece of legislation but a ‘Money Bill’ under Article 110 of the Constitution of India. A Money Bill, under Article 109, cannot be introduced in the Rajya Sabha and the Lok Sabha can pass it ignoring the recommendations, if any, suggested by the former House. This regrettable step   was indeed designed to bypass the Rajya Sabha which is nothing but a colourable exercise of power that is  not contemplated by the  Constitution........

Stay provisions under the Income-tax Act, 1961- legislative changes needed

After an assessment is complete, most taxing statutes provide for a right of appeal. This is often accompanied by a requirement of pre-deposit of some portion of the tax or duty.   In most indirect tax statutes, both at the State and Central levels, the appellate authority has the power to grant full or partial waiver of  the tax  or duty.........

Uncharitable Damage to Charitable Institutions

The most devastating blow to literally hundreds of charitable organizations has been the amendment to section 2(15) of the Income-tax Act, 1961 made by the Finance Act, 2008.   The mortal blow was dealt by the addition of the first proviso which reads as follows:- ........

The hidden dangers of GAAR

In a little over four weeks, the provisions of Chapter-XA incorporating the General Anti Avoidance Rules (GAAR) will come into force.   The sections are of particular concern as they are capable of extremely wide interpretations and confer almost unfettered power to determine what is as an “impermissible avoidance arrangement”.  Of particular are sections 96(2), and 102(10).  The former reads........

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