Skill Development is akin to providing Education: ITAT holds Assessee eligible for Registration

The Income Tax Appellate Tribunal (ITAT), New Delhi hold that the assessee is eligible for registration under Section 12AA by ruling that skill development is akin to providing education.

C.R. Dadhich Memorial Society (assessee) established under the Haryana Registration and Regulation of Societies Act, 2012 with main object to render efficient services to nation, to take over, establish run and manage teacher training institutions and provide other facilities to the requiring of educational institutions in General and for handicapped and distress people in particular etc. the assessee runs skill Development training centre in affiliation with Pradhan Mantri Kaushal Vikas Yojana (PMKVY).

The assessee applied for registration u/s 12AA of the Income Tax Act, 1961 which was rejected by stating that imparting skill development does not tantamount to charity and does not cover under the charitable activities mentioned in section 2(15) of the Income Tax Act. After this rejection, the assessee applied again for registration u/s 12A of the Income Tax Act, 1961 and duly replied all the queries raised by the Commissioner of Income Tax (CIT), who again passed the order of rejection u/s 12AA. The CIT in the order stated that imparting skill development training doesn’t partake the meaning of public charity.

B. R. R. Kumar, Accountant Member and Yogesh Kumar U S, Judicial Member while deciding the case relied on the judgment in ESCORTS SKILL DEVELOPMENT v. CIT (EXEMPTIONS), wherein it was held that “”imparting skill development training by the applicant company which is also a flagship project of the Government of India for sustaining its growth rate and to create the pool of skill worker to further enhance its growth and development is a charitable activity following within the definition education u/s 2(15) entitling the applicant company for registration u/s 12AA of the Act and consequent approval u/s 80G of the Act, hence both the appeals filed by the applicant company are allowed directing the CIT (E) to provide registration u/s 12AA to the assessee and grant consequent approval u/s 80G of the Act.”

The Tribunal observed that “Since, imparting skill development is akin to providing education we hereby hold that the assessee is eligible for registration u/s 12AA of the Act”.

DGGI Officers have Jurisdiction to Issue Show-Cause Notice in Central Excise and Service Tax Matters

The Madras High Court, while upholding the validity of the show-cause notice issued by DGGI officers held that these officers are “Central Excise officers” for the purpose of exercising various functions under the Central Excise Act and Finance Act, 1994.

Justice C Saravanan was considering a bunch of writ petitions filed against the impugned Show Cause Notices (SCNs) issued by the Additional Director General, Directorate of GST Intelligence of the respective Zonal Units. Before the High Court, the petitioners including M/s Sun Tv Network and IL & FS Tamil Nadu Power Corporation Ltd, contended that the officer of Directorate of Central Excise Intelligence (DGCEI), presently The Directorate of GST Intelligence, are not “Central Excise Officer” and cannot exercise function Pan India.

Relying on the Office Order No.07/Ad(IV)2017 (F.No.A-11013/18/2017-Ad.IV), dated 12.06.2017, the Court observed that the officers of Directorate General of Central Excise Intelligence are “Central Excise Officers” for the purpose of Section 2(b) of the Central Excise Act, 1994. They are empowered to exercise power pan India under Notification No.38/2001-C.E. (N.T), dated 26.06.2001.

Citing a Notification No.22/2015-ST dated 16.9.2014, the Court observed that pan India powers have been vested with the officers from the ”Directorate of Central Excise Intelligence (DGCEI) [presently The Directorate of GST Intelligence]” and contrary to the restriction under Rule 3 of the Service Tax Rules, 1944 also fails.

“The power of the Board under Notification 22/2014-ST dated 6.09.2014 cannot be read in a restricted manner. There is no impediment in appointing the officers of Directorate General of Central Excise Intelligence as “Central Excise Officers” to exercise the power pan India,” the Court said.

The Court held that b virtue of the Notification No.7/2004-C.E. (N.T.), dated 11.03.2004, the officers specified in Column (2) of the Table to the said Notification were appointed as the “Central Excise Officers” and were invested with the powers to be exercised by them “throughout the territory of India” as are exercisable by the Central Excise Officer of the corresponding rank as specified in the Column (3) of the said Table, such powers being the powers of a Central Excise Officer conferred under Chapter V of the Finance Act, 1994.

“Therefore, without doubt, the officers from the Directorate are “Central Excise Officers” as they have been vested with the powers of central exercise officers. Thus, the definition of “Central Excise Officer” in Section 2(b) of the Central Excise Act, 1944 was made applicable for Section 73 of Chapter V of the Finance Act, 1994 which prescribes a machinery for recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded,” the Court said.

Upholding the show-cause proceedings, the Court concluded that “As mentioned above, under Rule 3 of the Service Tax Rules, 1994, the Board can appoint any other officer to exercise power within the “local limits”. However, that would not mean that the officers of ”Directorate of Central Excise Intelligence (DGCEI) [presently The Directorate of GST Intelligence]” who are already “Central Excise Officers” under Notification No.38/2001-C.E. (N.T), dated 26.06.2001 for whole of India cannot exercise power pan India. Notification No.22/2014-ST dated 6.09.2014 is to be read in conjunction with Notification No.38/2001- C.E. (N.T), dated 26.06.2001.”

Double Penalty for Non-Linking of PAN-Aadhaar, TDS on Cryptos: Three Major Income Tax Changes

1st July 2022 was a significant day for the taxpayers as some new important changes have been made in the Income Tax Act, 1961 which may affect the taxpayer’s life significantly.

Non-linking of PAN-Aadhaar

The taxpayers who did not link their PAN Card with the Aadhaar may face a penalty of Rs. 1000from 1st July. Earlier, till June 30, the charge was Rs. 500. So when an individual links their PAN and Aadhaar, they first have to pay the penalty and request to link PAN aadhaar once the payment reflects in the e-filing site.

TDS on Virtual Digital Assets

Earlier this year, Finance Minister Nirmala Sitharaman while presenting the Union Budget 2022, proposed a 1% tax deducted at source (TDS) on any payment made in exchange for the transfer of virtual digital assets (VDAs), mainly on cryptocurrency. For transactions totaling more than Rs 10,000, the TDS rule will go into effect on Friday, July 1. However, the Central Board of Direct Taxes (CBDT) has yesterday clarified that this provision shall not be applicable to non-fungible tokens (NFTs).

The tax at the time of transfer of VDA will be deducted at the rate of 20% if the deductee (buyer’s) PAN is not readily available. Additionally, if the payer is not one of the specified people, TDS will be withheld at a higher rate of 5% (as opposed to the usual rate of 1%) if the individual has not submitted his or her income tax return.

TDS on Perquisites TDS rule for doctors, social media influencers Doctors and social media influencers will be subject to 10 percent tax Deducted at Source (TDS) beginning July 1, 2022, on benefits received from companies for sales promotion. The provider of the benefit or perquisite may directly deduct the tax under Section 194R of the Income Tax Act, 1961, according to a notification from the Central Board of Direct Taxes (CBDT), although the taxpayer must verify the recipient’s possession of any taxable amounts.