Page 229 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes 13.5.4 Income Escaping Assessment U/S 147

If AO believes that the income of assessee of any PY has escaped assessment, he can reopen the
assessment and complete it as per new information about income or tax. Assessment up to last
6 years can be opened. In order to open an income escaping assessment AO has to issue notice
u/s 148 to the assessee.

Self Assessment

State whether True or False:
9. Belated return is the return filed by the assessee after the due date; it is covered u/s 139(4)
of the income tax Act.
10. Revised return is a new return filed by income tax assesses which corrects the information
filed earlier in the regular return is called Revised return.
11. Income tax department issues Permanent Account Number called PAN to all those persons
who apply for it.
12. TAN is actually used by income tax department as our account number on which all the
details relating to persons income are stored
13. Assessing Officer (AO) or does not file return of income or does not have complete accounts.
14. Assessee does not comply with instructions u/s 163(2), i.e., notice of scrutiny assessment.



Caselet CCEx., Panchkula v. Kulcip Medicines (P) Ltd.
2009 (14) S.T.R. 608 (P & H)

he assessee-respondent entered into an agreement with M/s. Cipla for handling
and distribution of their products and was entrusted with the job of receiving,
Tstoring and distributing Cipla products to their authorised stockists and distributing
centres. For the services so rendered, the assessee-respondent was entitled to commission
based on agreed percentage of sales figures and also to reimbursement of recurring
expenses. Revenue contended that the services provided by the assessee attracted service
tax under the category "clearing & forwarding agent's services". On the other hand, the
assessee pleaded that service tax could be levied under the said category only when
clearing and forwarding agent would have carried out both clearing and forwarding
operations.

The Tribunal held that as per the facts of the case, there was no clearing activity being
undertaken by the dealer. Therefore, the services rendered by him would not satisfy the
requirement of clearing and forwarding agent and consequently, no service tax liability
would arise. The High Court, affirming the decision taken by the Tribunal, held that since
no clearing activity was directly undertaken by the agent from the manufacturer's (Principal)
premises, he was not liable to pay the service tax under the category "clearing and
forwarding services". Service tax is leviable under the category "clearing and forwarding"
only if an agent renders both clearing and forwarding services.
The High Court further elaborated the question - whether word 'and' used after the word
'clearing' but before the word 'forwarding' in section 65(105)(j) can be considered in a
conjunctive (combined) sense or disjunctive (separating) sense. It elucidated that if one
Contd....

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