Legal Case Backlogs – Are we heading towards Justice? … An introspection

There is a report that there is a blow to the concept of Speedy Justice, wherein the pendency of the cases with the Supreme Court of India has gone over 50,000 in 2009.

 

The most dangerous revelation still awaits .…. A massive 2.64 crore cases were pending by the start of this year 2009 with the trial courts in India … forget about the other cases lying with Tribunals and other such authorities.

 

So how we need to summarise the above …

 

Simple!!! Justice delayed is JUSTICE DENIED. Whether the justice availed at the cost of mental stress, administrative harassment, time compulsion, loss of money and work, etc. shall ever be called a ‘Justice’ in the real sense?

 

With due respect to the law of our land, Hon’ble Courts, law enforcement agencies, etc., I wish to present the Probable reasons for the loads of cases, which are only illustrative and not exhaustive in nature (apart from the comments wherever appropriate):

 

1. There is no WILL for the disposal of cases. Delayed justice delivery system has made both the applicant and the defendants lethargic towards the proceedings of the court. It is not shocking that complainants themselves take a date to delay the proceedings in order to complete some other work which they feel are more important than the case filed in the court;

 

2. There is a continuous addition of cases before the court, whereas the disposal rates are too low in comparison. Add to this is the period for filing appeal and getting the order / justice from the appellate authorities, which are equally slow and discouraging;

 

3. In certain cases, law enforcement agencies play truant and files cases, which are purely based on manipulation by the Complainant. Despite knowing that the complaints are frivolous and baseless, the case is registered. Both the complainants (or the alleged ‘victim’) and law enforcement agencies are hand-in-gloves to harass an innocent person. Such additions further burden the courts, which are already over-burdened with loads of cases yet to be taken on the board for hearing;

 

4. There is no time limit for disposal of appeal cases by the appellate authorities. The process for filing appeal and setting up a time limit for disposal shall surely do wonders;

 

5. The Magistrates and Judges are transferred, leaving the parties in the lurch for want of justice. Though transfers may be routine and genuine, but the hardships faced by the parties must be considered before such transfers are made. The gap between the transfer of one judge and the reinstatement of another takes months to settle, which delays the justice further. A new judge takes its own time to study the cases before starting the proceedings once again;

 

6. Advocates have no less role to play for the delayed and infructuous justice. They want to prolong the case for their own selfish motives of generating more income from their clients, and secondly most of the time most of the advocates are not so willing and probably not capable to fight the case on the board which is taken up for hearing on day-to-day basis. They are believed to be happy with their regular income that they get from attending dates alone apart from the income earned through Notaries, affidavits, drafting of power of attorney and small-time bail cases;

 

7. Had there been a time constraint / limitation for filing a case and getting the justice within a specific time period, the Courts would never have felt the heat of such over-burdening of cases before them;

 

8. Sometimes I wonder how efficient and effective our administrative and other authorities are? They want the businessman to keep 8 years record, thereby forcing him to hire godowns to keep records. We can see cases of 1970s and 1980s being fought in the court. Given this system, can we expect a justice from the hands of those who are actually in a position to deliver the same, had they applied their WILL to get through the bottle-neck system;

 

9. Why cant we have a specific deadline for disposal of all cases by a certain period including those lying with appellate authorities? Are the efficiency and intelligence of the authorities not under the scanner of the normal public for not carrying out their work efficiently and effectively? Are there not any rules, procedures or set of norms for early disposal of all type of cases (except those which are in the larger interest or with larger gravity due to cumbersome investigation);

 

10. The businessmen are facing the heat due to delayed justice in cheque bounce cases. The Banks are feeling the heat due to issues not resolving despite the cases filed with Debt Recovery Tribunals. Such delayed system of justice also hampers the growth of the economy as loss of confidence plays a major role in bringing down the economy to a certain extent because of lack of justice at the appropriate time;

 

11. We dont need Judiciary to work on Saturdays OR to have their public holidays reduced OR to increase the courts and judges, UNLESS AND UNTIL there is a will to dispose off the cases in a shorter span of time. The will-power alongwith the right impetus from all relevant agencies shall ensure to get through the loads of cases in a span of couple of years. I hope the newly elected government looks at this problem with the positive frame of mind in order to resolve the long pending cases lying before the court. The respect for the judiciary shall be the highest if the justice delivery system falls in the right place!!! Its rightly said that a law is the king of KINGS.

New Income Tax Return Forms for Assessment Year 2009-2010 (Financial Year 2008-2009) – Part 3

 

After reading the provisions as contained in the Circular from the Ministry of Finance (Part 1) and after taking the impact (pros and cons) into account (Part 2), I wish to compile the other related information connected to the said efiling of returns.

 

1. The Forms are available FREE on the website of Income tax department of India www.incometaxindiaefiling.gov.in.

 

2. Even though the population having access to internet has risen, there are scores of people who are afraid to use the efiling portals to file their returns. Reason – Most of them do not want to risk playing with the financial and tax figures and secondly, most of them may need help on certain other specific issues, which are discussed elsewhere in this post.

 

3. Even though the Class 2 Digital Signature Certificates (DSC) are available now at a ridiculously low amount and within hours, it would still not be adopted by scores of people for couple of more years. Reason – Security; and the assessees wont be so comfortable loading the DSC in their Internet browser (especially for the Salaried class who may file their returns from the comfort of their office (?) …)

 

4. There are various efiling portals and related agenices, which promises to simplify the life of assessees by assisting them for efiling at a ridiculous amount of as low as Rs. 100/– per assessees. My questions to them are:

 

     (a)     Can they ever imagine to compete with the hardcore professionals (Chartered Accountants) who provide more personalised and reliable services, apart from providing post-filing related services like scrutiny assessments, advisory for the next year, etc.?

     (b)     Are such portals not providing ONLY ITR V to the assessees using their portals? Can an assessee from not related field will ever come to know about the break-ups of the income, deductions, exemptions, etc from the face of such ITR V per se?

     (c)     Can they provide a fool-proof assistance on their so-called Helpline numbers, coz such helpline numbers are not manned by accounting professionals (read Chartered Accountants)? Such call centre executives may hardly know the provisions related to Sec 24, Sec 80C, 80D, 80G, 80R, etc., forget about the right classification of income under appropriate heads?

     (d)     Are such portals not providing services ONLY to the Salaried class or those who are eligible for filing in ITR 1?

     (e)     Can these portals ever advise on Capital Gains and incase of multiple Form 16’s which has become a rule in the fast changing environment?

     (f)     And whether they can present the financial papers, including Balance Sheet for individuals who comes under the Business or Profession?

 

5. The aforesaid questions are only illustrative and not exhaustive. E-filing through portals shall never be able to replace the Chartered Accountants / Tax Consultants, coz the latters are providing personalised services (pre-filing and post-filing). Technology, however advance it shall be, may never be able to replace / isolate manual (personal) intervention beyond a certain point.

New Income Tax Return Forms for Assessment Year 2009-2010 (Financial Year 2008-2009) – Part 2

The Pros and Cons of the Circular dated 21.05.2009 introduced by the Central Board of Direct Taxes, Ministry of Finance: -

 

1. The Forms ITR 1 to ITR 8 have remained the same in nature, however the contents have been modified to capture new data’s for the purpose of speedier assessment and refunds related thereto;

 

2. The forms for the said assessment year can be downloaded from the Income Tax Department of India for the purpose of efiling of Income tax returns. It must be noted that separate such forms must be used for income tax filing related to respective assessment years, ie., the forms are assessment year specific. Before uploading the xml file, kindly ensure that your PAN and relevant forms for the right assessment year has been used for the purpose of electronic filing;

 

3. It is advisable to use a Digital Signature for efiling of returns, although the same has not been made mandatory. In this case, the tax payer is not required to furnish Form ITR-V with the Income Tax department;

 

4. If the assessee does not use a digital signature (which can be taken from TCS, emudra, MTNL, etc. by following Know Your Customer norms) for efiling of returns, it is mandatory to furnish the return in Form ITR V within 30 days from the date of transmitting the data electronically, failing which he shall be liable to re-transmit the data and re-generate ITR V for submission within the stipulated time of 30 days from the revised re-transmission of e-returns;

 

5. The Form ITR V which is generated after electronic filing of returns is bar-coded. The assessee from this assessment year onwards shall be required to send the same in A4 size envelope without folding it. The address of the Centralised Processing Centre (CPC) is “Income Tax Department – CPC, Post Box No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka”. Upon receipt of the Form ITR-V, the CPC shall send an e-mail acknowledging the receipt of Form ITR-V. In short, the current year acknowledgement shall not bear the age-old appearance of the Seal of Income Tax office and the assessees may take some time to adjust to this method of filing, although filing with digital signature shall become a habit in the years to come;

 

6. The refunds (despite issuance of Assessment Orders) were not released to the assessees pertaining to the financial year 2007–2008. The regulatory bodies have also raised their objection to the late refunds, which is still to be received by most of the assessees. To avoid this hardship, the Income tax department created a system of Unique Transaction Number (UTN) which were to be made applicable with effect from 01.04.2009 alongwith the provisions related to newly introduced Form 17. However, the provisions related to Form 17 were oflate, postponed to be effective from 01.07.2009. This would have meant that the refunds pertaining to financial year 2008–2009 would also have been released late since the UTN were to be introduced only from the financial year 2009–2010.

 

7. To ensure that this hardship is removed from the fin year 2008–2009 itself, the Income tax department introduced the concept of UTN with retrospective effect from 01.04.2008. Mentioning of UTN is mandatory for filing e-returns and for the purpose of proper claims. However, incorporation of UTN shall be routed through NSDL and the Deductors may be able to issue Form 16 / 16A incorporating such other datas by the end of June 2009 only (as against the date of 30 April of each year). I see no reason, why the income tax return filing deadline shall not be extended till 31^st August 2009 OR 30th September 2009 because of this newly introduced provision. Though it shall be beneficial for the assessees claiming refund, it has increased the workload of the Deductors in incorporating the UTN in Form 16 / 16A. Adequate provisions are being made by the Income tax department and NSDL to minimise the hardships to the assessees (deductees / deductors).

 

We hope that the assessees would get themselves accustomed themselves to changing times and comply with the provisions of the act in the best interest of all.

New Income Tax Return Forms for Assessment Year 2009-2010 (Financial Year 2008-2009) – Part 1

Before we proceed to state about the revised income tax return forms, let us see what the Circular (dated 21.05.2009) issued by Ministry of Finance has to say about the said filing.

(i) ITR-1 return of income for individuals having income from salary/ pension/ family pension and not having any other income except income by way of interest chargeable to income-tax under the head Income from other sources;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR1_2009_10_R1e.zip

(ii) ITR-2 return of income for Individuals and Hindu Undivided Families (HUFs) not having any income under the head Profits or gains of business or profession;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR2_2009_10_R1h.zip

(iii) ITR-3 return of income for Individuals and HUFs being partners in firms and not carrying out business or profession under any proprietorship;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR3_2009_10_R1g.zip

(iv) ITR-4 return of income for individual and HUFs having proprietory business or profession;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR4_2009_10_R1f.zip

(v) ITR-5 combined form for return of income and fringe benefits for Firms/ Association of Persons / Body of Individuals;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR5_2009_10_R1f.zip

(vi) ITR-6 combined form for return of income and fringe benefits for companies (other than companies claiming exemption under section 11;

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR6_2009_10_R1f.zip

(vii) ITR-7 combined form for return of income and fringe benefits for persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D);

(viii) ITR-8 stand alone form for return of fringe benefits for persons who are not required to furnish return of income but are required to furnish return of fringe benefits.

https://incometaxindiaefiling.gov.in/portal/downloads09-10/itr/ITR8_2009_10_R1a.zip

The above return forms are available on the website of Income Tax Department of India. It can also be sent to the person who shall place the request on our mail address or at the blog. Please specify your email address correctly. We shall also be glad to assist the people in filing their returns if they share their grievances on our email published elsewhere in this blog.

Now coming back to the process of filing returns, it is important to note that the return of income / fringe benefits can be furnished in any of the following manners:

(i) furnishing the return in a paper form;

(ii) furnishing the return electronically under digital signature;

(iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

(iv) furnishing a bar-coded return in a paper form.

The newly introduced forms are for the specific Assessment Year 2009–2010 (Financial Year 2008–2009) and appropriate forms of the respective assessment year should be used for the purpose of filing for any earlier assessment years.

It is mandatory for a company and a firm liable to audit under section 44AB (Turnover exceeding Rs. 40.00 lacs or Gross receipts in case of Professionals exceeding Rs. 10.00 lacs) of the Act to furnish the return electronically. However, electronic filing is optional for other categories of tax-payers. The e-Return has to be furnished at http://incometaxindiaefiling.gov.in. Further, it is advisable, though not mandatory, to use a digital signature for electronically furnishing the return. If the return is electronically furnished under a digital signature, the tax-payer is not required to furnish the Form ITR-V with the Income-tax Department as a follow up to the electronic transmitting of data in the return. Similarly, any return which is digitally signed by the assessee and filed with an E-Return Intermediary (ERI), who, in turn, submits the return to the Income Tax Department under his digital signature, will also be deemed to have been filed under a digital signature of the assessee and no Form ITR-V is required to be submitted. In such cases, the date of electronic transmission of the data in the return shall be the date of furnishing the return.

However, if the assessee does not use a digital signature for electronically transmitting the data, he is required to follow-up the electronic transmission of the data by submitting the Form ITR-V with the Income-tax Department as verification of the electronic filing of the return. In such a case, the date of transmitting the data electronically will be the date of furnishing the return if the Form ITR-V is furnished within thirty days after the date of transmitting the data electronically. In case, Form ITR-V, is furnished after the above mentioned period, it will be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the assessee to electronically re-transmit the data and follow it up by submitting the new Form ITR-V within thirty days.

Since the Form ITR-V is bar-coded, assessee is advised not to fold the same and post it in A4 size envelope. The assessee shall furnish the Form ITR-V to the Income-tax Department by mailing it to “Income Tax Department – CPC, Post Box No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka” within sixty days after the date of transmitting the data electronically or 30th Sept 2009, whichever is later. The Post Box shall deliver all the Form ITR-V to the Centralized Processing Centre (CPC) of the Income-tax Department in Bangalore. Upon receipt of the Form ITR-V, the CPC shall send an e-mail acknowledging the receipt of Form ITR-V. The e-mail shall be sent in due course to the e-mail address furnished by the tax-payers in his return. No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner.

All returns filed electronically shall be processed, on priority basis, only at the Centralized Processing Centre of the Income-tax Department in Bangalore. Since no documents are required to be furnished along with the return of income, the credit for Tax Deducted at Source (TDS), Tax Collected at Source (TCS), advance tax and self assessment tax (hereinafter collectively referred to as ‘pre-paid taxes’) shall be allowed on the basis of information relating to pre-paid taxes furnished in the relevant schedules of the return forms subject to matching with the information provided by the deductor, collector and the banks. Therefore, tax payers are advised to ensure that the information relating to pre-paid taxes is complete in all respect and correct.

With a view to enabling the matching of information relating to pre-paid taxes furnished by the tax payers, the Income-tax Department has created a system of Unique Transaction Number (UTN) and Challan Identification Number (CIN). Assessees must ensure that the deductor and the collector have provided them with separate UTNs in respect of each TDS and TCS transaction. Similarly, they must also ensure that the UTN for every TDS and TCS claim in the return is correctly filled in. Similarly, they must ensure that they correctly fill in the CIN in respect of payments of advance tax and self-assessment tax. Further, no disallowance of claim for pre-paid taxes shall be made by the Assessing Officer only on the ground that the TDS/TCS certificates and challans have not been furnished along with the return of income or Form ITR-V.

The return of income in Form No. ITR-1 to Form No.ITR-8 for Assessment Year 2009–2010 have been notified which require, amongst other, the quoting of the relevant UTN for every TDS or TCS claim made by the assessee. Therefore, the credit for any TDS or TCS claim will be allowed, amongst others, if the assessee quotes the relevant UTN for every TDS and TCS claim and the said UTN matches with the UTN in the database of the Income Tax Department. With a view to enabling the processing of returns relating to financial year 2007-08 (Assessment Year 2008-09) and enabling the assessee to receive the UTN for TDS and TCS transactions in the Financial Year 2008-09 (relevant for Assessment Year 2009-10), the following procedure shall be followed: -

(a) National Securities Depository Limited (NSDL) shall assign an UTN for every TDS and TCS transaction record in Financial Year 2007-08 and 2008-09 reported in the quarterly returns received by it.

(b) NSDL will create a facility to e-mail the UTN file to the deductor if the e-mail address of the deductor is available with them. In addition, they will also create a facility for the deductor to download the UTN file.

(c) Upon receipt of the UTN, the deductor will inform the UTN to the deductee. In cases where the UTNs are available to the deductor before the issue of the TDS/TCS certificate to the deductee, the deductor will indicate the UTNs on the certificate. However, if the UTNs are not available to the deductor before the issue of TDS/TCS certificate, the deductor shall, subsequently, send a consolidated statement of all TDS/TCS transactions indicating the UTNs.

(d) NSDL will also create a facility to allow independent viewing of the UTNs by the deductee. As a result, even if the UTNs are not received by the deductee from the deductor, they can be directly obtained from the NSDL database and quoted while making claims of TDS and TCS in the return of income. However, mentioning of the UTN is not mandatory atleast for filing pertaining to Fin Year 2008-2009 (Asst. Year 2009-2010)