Implementation of Supreme Court Decision-case of Fiat India Ltdby CBEC vide Circular No. 979/03/2014-CX dated 15-01-2014

Contents:

CBEC issued Circular No. 979/03/2014-CX dated 15-01-2014 clarifying implementation of Supreme Court Decision in the case of Fiat India Limited.

Through this Circular CBEC Clarifies as under on Implementation of FIAT Ruling:

Facts of each case to be considered

• Fiat Ruling was rendered in a unique set of facts where the cars were sold at prices substantially lower than manufacturing cost for a continuous period of five years. Further, lower prices were adopted with the objective of market penetration.The Supreme Court has cited two instances where a manufacturer may sell goods at lower prices and yet the declared value can be ac­cepted
  

(i)    company switching over business and

(ii)    where goods could not be sold within reasonable time]

S. 272B Penalty is Rs. 10000 per deductor and not per wrong PAN

The assessing officer had imposed penalty of Rs. 10,000/- in each case where PAN Number was not provided by the deductee. There were in all 30706 cases in which the PAN Number was missing or was incorrectly stated. The assessing officer, accordingly, imposed penalty of Rs. 10,000/- in each case. Thus, penalty of Rs.30,70,60,000/- was imposed. Board in the letter dated 5.8.2008 vide No.275/24/2007-IT(B) has clarified that penalty of Rs. 10,000/- under Section 272B is linked to the person, i.e., the deductor who is responsible to deduct TDS, and not to the number of defaults regarding the PAN quoted in the TDS return. Therefore, regardless of the number of defaults in each return, maximum penalty of Rs. 10,000/- can be imposed on the deductor. Penalty cannot be imposed by calculating the number of defective entries in each return and by multiplying them with Rs. 10,000/-. This also appears to be a legislative intent, as in many cases, the TDS amount may be small or insignificant fraction of Rs. 10,000/-.