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Designated courts at Ahmedabad and Madurai sentence five accused including then income tax officer to three years rigorous imprisonment with fine

February 28th, 2024

Posted By: Team-MMTaxClub

The Designated Courts at Ahmedabad and Madurai have today sentenced five accused including then Income Tax Officer (ITO), then Inspector of Income Tax and three private persons to three years’ Rigorous Imprisonment (RI) and combined fine of Rs. 1.70 lakh, in two separate CBI cases.

In the first case, the Special Judge for CBI cases, Ahmedabad sentenced Shri Mahesh Kantilal Sompura, then ITO, Ward-6(1), Ahmedabad and Shri Mukesh Ramniklal Raval, then Inspector of Income Tax, Ward-6(1), Ahmedabad, to 03 years’ Rigorous Imprisonment with a total fine of Rs. 50,000/- each for demanding and accepting bribe for settling the Income Tax Returns for Assessment year 2009-10 in favour of complainant.

Central Bureau of Investigation (CBI) had registered the instant case on 19.08.2011 against accused on a complaint. It was alleged that both accused demanded an illegal gratification of Rs 1,75,000/- from complainant for settling in his favour the scrutiny of his and his wife’s Income Tax Returns for Assessment year 2009-10. After negotiation, the accused persons were caught red handed while accepting bribe of Rs. 50,000/-.

CBI filed chargesheet on 26.09.2011 after investigation. The Trial Court found the accused guilty and sentenced them accordingly.

In the second case, the Court of Chief Judicial Magistrate, Madurai sentenced 3 private accused to three years’ Rigorous Imprisonment (RI) with a total fine of Rs. 70,000/- in a CBI case related to availing Bank loan in fraudulent manner and defaulting the repayment.

Central Bureau of Investigation (CBI) had registered the said case on 24.07.2014 against Sh. S.P.K. Selvam (Private Person) and others on the allegations of availing loan from Indian Overseas Bank (IOB), Meenakshi College Branch, Madurai under Swarna Jayanti Shahar Rozgar Yojana(SJSRY) scheme in fraudulent manner during the year 2009 to 2012. It was also alleged that the borrower defaulted repayment of loan and the account became NPA, which caused loss of Rs. 29.98 lakh (approx.) to the Bank.

After investigation, CBI filed a chargesheet against private persons including Sh. S.P.K. Selvam; Sh. C. Jagdeeswaran; Sh. S. Chinnaswamy and Smt. K. Sathiya for the offences of conspiracy, cheating and forgery of documents and using the forged documents as genuine.

The Chief Judicial Magistrate, Madurai convicted and sentenced Sh. S.P.K. Selvam to 3 years’ RI, with a fine of Rs. 50,000/- and Sh. C. Jagdeeswaran and Smt. K. Sathiya to three years RI with fine of Rs. 10,000/- each. Sh. S. Chinnasamy died during trial, hence charges against him were abated.

Designated courts at Ahmedabad and Madurai sentence five accused including then income tax officer to three years rigorous imprisonment with fine

February 28th, 2024

Posted By: Team-MMTaxClub

The Designated Courts at Ahmedabad and Madurai have today sentenced five accused including then Income Tax Officer (ITO), then Inspector of Income Tax and three private persons to three years’ Rigorous Imprisonment (RI) and combined fine of Rs. 1.70 lakh, in two separate CBI cases.

In the first case, the Special Judge for CBI cases, Ahmedabad sentenced Shri Mahesh Kantilal Sompura, then ITO, Ward-6(1), Ahmedabad and Shri Mukesh Ramniklal Raval, then Inspector of Income Tax, Ward-6(1), Ahmedabad, to 03 years’ Rigorous Imprisonment with a total fine of Rs. 50,000/- each for demanding and accepting bribe for settling the Income Tax Returns for Assessment year 2009-10 in favour of complainant.

Central Bureau of Investigation (CBI) had registered the instant case on 19.08.2011 against accused on a complaint. It was alleged that both accused demanded an illegal gratification of Rs 1,75,000/- from complainant for settling in his favour the scrutiny of his and his wife’s Income Tax Returns for Assessment year 2009-10. After negotiation, the accused persons were caught red handed while accepting bribe of Rs. 50,000/-.

CBI filed chargesheet on 26.09.2011 after investigation. The Trial Court found the accused guilty and sentenced them accordingly.

In the second case, the Court of Chief Judicial Magistrate, Madurai sentenced 3 private accused to three years’ Rigorous Imprisonment (RI) with a total fine of Rs. 70,000/- in a CBI case related to availing Bank loan in fraudulent manner and defaulting the repayment.

Central Bureau of Investigation (CBI) had registered the said case on 24.07.2014 against Sh. S.P.K. Selvam (Private Person) and others on the allegations of availing loan from Indian Overseas Bank (IOB), Meenakshi College Branch, Madurai under Swarna Jayanti Shahar Rozgar Yojana(SJSRY) scheme in fraudulent manner during the year 2009 to 2012. It was also alleged that the borrower defaulted repayment of loan and the account became NPA, which caused loss of Rs. 29.98 lakh (approx.) to the Bank.

After investigation, CBI filed a chargesheet against private persons including Sh. S.P.K. Selvam; Sh. C. Jagdeeswaran; Sh. S. Chinnaswamy and Smt. K. Sathiya for the offences of conspiracy, cheating and forgery of documents and using the forged documents as genuine.

The Chief Judicial Magistrate, Madurai convicted and sentenced Sh. S.P.K. Selvam to 3 years’ RI, with a fine of Rs. 50,000/- and Sh. C. Jagdeeswaran and Smt. K. Sathiya to three years RI with fine of Rs. 10,000/- each. Sh. S. Chinnasamy died during trial, hence charges against him were abated.

45-day payment rule to MSMEs may defer for one year Fin Min looking at a possible tweak

February 28th, 2024

Posted By: Team-MMTaxClub

The finance ministry is looking into a proposal to tweak the new income tax rule under which business enterprises will be required to make payments to micro, small and medium enterprises (MSMEs) within 45 days.

Some businesses have sought deferment of the provision by a full financial year while others have requested that the 45-day time limit be extended.

“The department of revenue is reviewing the proposal to assess if there is any change possible,” said two persons familiar with the development. The new rule, will come into effect from April 1, 2024 but many businesses have sought deferring it by one year to April 1, 2025.

The concern stems from multiple issues. A section of MSMEs, such as those in the textile industry, are worried that this new rule could impact their relations with suppliers and buyers, who often work with these small businesses on a credit system. Others are worried that their systems are not ready for this provision.

In order to promote timely payments to micro and small enterprises, the Finance Act 2023 inserted a new clause (h) in section 43B of the Income Tax Act to provide that any sum payable by the assessee to a micro or small enterprise beyond the specified time limit of 45 days in section 15 of the MSME Development Act 2006 will be allowed as deduction only on actual payment. The buyer will have to pay tax on the payment if it is not done in the specified time limit.

Recently, the Confederation of All India Traders had also written to finance minister Nirmala Sitharaman had called for suspension of the implementation of the provision until sufficient clarification and information dissemination are achieved nationwide. CAIT further appealed to the government to postpone the implementation of this law from April 1, 2024, to April 1, 2025, to provide traders with a one-year deferral period. “This will affect the business of micro and small enterprise adversely as the industry will prefer to work with medium enterprise,” it had said.

Fraudsters use handpumps to evade GST amounting to 15.27 crore

February 28th, 2024

Posted By: Team-MMTaxClub

A scam has been unearthed in Uttar Pradesh with fraudsters using hand pumps for claiming fake refunds using Inverted Duty Structure (IDS) under GST mechanism.

Taxes on inputs can be deducted from tax on final product and net is deposited with the government. However, this is not possible under IDS, where inputs attract tax at higher rates while it is lower for final product. So, under IDS, taxpayer gets refund. Very few goods under GST fall into IDS category and hand pump is one of them.

According to Sanjay Kumar Agarwal, Chairman of Central Board of Indirect Tyaxes & Custom (CBIC), Lucknow Zonal Unit of Directorate General of GST Intelligence (DGGI) booked a case after officers gathered that three Agra based taxpayers were availing fake Input Tax Credit (ITC) on the raw material allegedly for manufacturing hand pumps. “The fake ITC on raw materials (attracting GST at 18 per cent) was further used to issue fake invoices of hand pumps (attracting GST at five per cent) to non existent entities without any actual manufacturer and supply,” he said in a communication to all the officers and staff of CBIC.

Further, he said that adopting this modus, the taxpayers were obtaining fraudulent refunds under IDS with evasion amounting to ₹15.27 crore so far. “The mastermind of the whole operation, who has been placed under judicial custody, accepted the fraud committed and voluntary deposited ₹5.21 crore,” Agrawal said without disclosing the identity of accused.

This is just one example of using fake firms for evasion. Earlier, Finance Ministry reported that over 29,000 fake firms were identified and over 44000 crores of GST tax evasion detected in a nationwide drive between May and December of 2023. All Central and State tax administrations launched a special All-India Drive on May 16, 2023, to detect suspicious/fake GSTINs, conduct requisite verification, and take further remedial action to weed out fake billers from the GST ecosystem and safeguard government revenue. Based on detailed data analytics and risk parameters, GSTN identified fraudulent GSTINs for State and Central Tax authorities in the drive.

It was planned that details of such identified suspicious GSTINs, jurisdiction-wise, would be shared with the concerned State/Central Tax administration to initiate a verification drive and conduct necessary action. If, after detailed verification, it is found that the taxpayer is non-existent and fictitious, action will be initiated for suspension and cancellation of the taxpayer’s registration. Further, the matter may be examined for blocking the ITC in the Electronic Credit Ledger. Efforts will also be taken to identify the recipients to whom such non-existing taxpayers have passed the input tax credit and to identify the mastermind and act.

Fake invoice means no real supply of goods or services but simply invoice issuance, which is used fraudulently to avail input tax credit (ITC). Unscrupulous elements misuse the identity of other persons to obtain fake/ bogus registration under GST to defraud the Government. Such fake/non-genuine registrations are used to fraudulently pass on input tax credits to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both .Fake registrations and issuance of bogus invoices for passing off fake ITC have become a serious problem, as fraudulent people engage in dubious and complex transactions, causing revenue loss to the Government.

GSTN Advisory Delay in GSTN registration ensure with 30 days after aadhar authentication

February 28th, 2024

Posted By: Team-MMTaxClub

Instances of Delay in registration reported by some Taxpayers despite successful Aadhar Authentication in accordance with Rule 8 and 9 CGST, Rules, 2017-reg

In accordance with Rule 9 of the Central Goods and Services Tax (CGST) Rules, 2017, pertaining to the verification and approval of registration applications, following is informed:

Where a person has undergone Aadhaar authentication as per sub-rule (4A) of rule 8 but has been identified in terms of Rule 9(aa) by the common portal for detailed verification based on risk profile, your application for registration would be processed within thirty days of application submission.

Necessary changes would also be made to reflect the same in the online tracking module vis-à-vis processing of registration application.