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Learning from case of Shri Vishwas Udaysingh Lad Return preparers must be more careful

Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 11-4-2016 - Vishwas Udaysingh Lad Versus The Income Tax Department By Its Assistant Commissioner of Income Tax 2016 (4) TMI 220 - KARNATAKA HIGH COURT About Shri Vishwas Udaysingh Lad: On search we find that Shri Vishwas Udaysingh Lad is a businessman / industrialist and director in many companies. For example, some information collected about him are as follows: https://www.zaubacorp.com/director/VISHWAS-UDAYSINGH-LAD/016 .....

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ITED Director 05 March 2010 ITONE CONSULTANCY AND TRAINING PRIVATE LIMITED Director 20 September 2011 Ashwini Capital Advisors Private Limited Director 25 September 2011 From the contents of facts as stated in the judgment also we find that he was a partner in many firms, shareholder and director in many companies, besides he also carried business in his personal account. The volumes of businesses, in which he was interested can thus be visualized as HUGE. Therefore, it is clear that he must hav .....

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ally and through various firms and companies, there is possibility that some transactions can be on behalf of firms and companies. The fact that he opened fixed deposits in three different names, case a doubt. However, once he has given his address correctly and the same address in different fixed deposits, such doubt has not much strength. Another reason to doubt is that when pointed out by the tax department, he disclosed fixed deposits and interest thereon as income. He has DIN, PAN, and othe .....

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t, without having KYC. It is not clear from details found in the reported judgment, how bank allowed fixed deposit in three names, and whether he has provided his PAN and other details. If he has not provided his PAN and established his credentials and KYC norms, then the conduct of concerned Bank must also be investigated and action must be taken against erring officers of bank. The manner of deposits made for obtaining fixed deposit receipts is also not found. Whether deposits for FDR were mad .....

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clear whether information was received from banks based on PAN or not. In case PAN was disclosed to bank, then it can be said that Mr. Lad had disclosed correct address and PAN therefore there was no intention to hide the FDR and interest. And it was due to mistake of concerned persons in preparation of ITR. A very big amount of deposits of about ₹ 10 crore was made with a single bank branch. Therefore, bona fide of Mr. Lad can be established if he had disclosed PAN correctly. Interest ear .....

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in some of accounts. However, it seems that without making a proper attempt, the amount of FDR was also included in income ( as appears from reading of judgment) The reason of doubt get some strength because when Income-tax Department pointed out about such income then he declared it as income. Gross negligence of concerned persons: It can only be a case of gross negligence of concerned persons because: income tax department must have got information based on PAN from banks / others with whom d .....

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ns, reconciliations etc. Reconciliation with Form 26AS which includes information about TDS, TCS, and also information received by tax department must have been made.If TDS was reconciled such mistake would not have taken place. Before finalising, filing/ submitting theROI, reconciliation of income with form 26AS, TDS, income received without TDS or lower TDS, etc. must have been made. It is also quite likely that Mr. Lad was wrongly advised to make FDR in different names. There can be many more .....

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6AA came into force w.e.f. 01.04.2010 that is assessment year 2010-11 (previous year ending on 31.03.2010). Therefore, provisions of S.206AA are applicable to the FDR made by Mr. Lad. Section 206AA reads as follows: 1[Requirement to furnish Permanent Account Number. 206AA. (1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall f .....

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ent Account Number in such declaration. (3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct the tax at source in accordance with the provisions of sub-section (1). (4) No certificate under section 197 shall be granted unless the application made under that section contains the Permanent Account Number of the applicant. (5) The deductee shall furnish his Permanent Account Number to the deductor and both shall indicate the same in all the correspondence, bi .....

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