The Hindu Editorial Analysis : 27th September 2023

The Hindu Editorial Analysis

The Importance of Reading The Hindu Editorial: Reading The Hindu newspaper has several benefits, including improving reading skills, facilitating comprehension, staying informed of current events, enhancing essay writing, and more. For individuals aiming for a career in banking, reading editorials is crucial for vocabulary building. In this article, we will examine today’s editorials, provide practice questions, and highlight important vocabulary words.

No relief.

• Income tax authorities are increasingly issuing show cause notices seeking explanations on foreign investments not disclosed in schedule-FA’ in tax returns.
• A recent order of the Mum bai bench of the ITAT, which upheld a penalty of Rs 10 lakh under the Black Money Act for each year of default, has created ripples.
• “The high penalty was aimed at those who hoard black money abroad in the form of undisclosed foreign assets.
• However, the lack of effective guidance in filling details in schedule-FA, and almost nil publicity in earlier years about this mandatory requirement, has led to many honest taxpayers making errors.
• It is a golden principle of jurisprudence, upheld by the SC, that the penalty should be commensurate with the offense committed.
• The flat penalty of Rs 10 lakh for each year should not be applied for infractions in schedule-FA where there is enough disclosure elsewhere in the tax return and annexed documents. Tax tribunals in some instances have deleted the penalties that were levied by the I-T officers,” Rutvik Sanghvi, a chartered accountant, said.
• In this case, the ITAT rejected the taxpayer’s argument that leniency should be shown because her foreign assets were not ‘undisclosed assets’ located outside India.
• She claimed that the source of funds for her investments was explained to the tax authorities (investments in global dynamic opportunity funds were made out of funds transferred under the LRS), and she had also declared the income arising from such investments in her tax returns.
• She argued that her failure to disclose these assets in the required schedule for three years was an unintentional mistake, and that she had rectified it in her return for FY18.
• Government officials said that information received from the US under its Foreign Account Tax Compliance Act (FATCA) and from other countries under exchange of information process, coupled with the use of advanced technology, enables them to zoom in on cases of non-disclosure.

Practice Questions:

• The ITAT rejected the taxpayer’s argument that leniency should be shown.Explain
• Why is the high penalty aimed at those who hoard black money abroad in the form of undisclosed foreign assets?

Important Vocabs:

• Outlay– money that is spent, especially in order to start a business or project
• Fiscal– connected with government or public money, especially taxes
• Deficit– the amount by which the money you receive is less than the money you have spent
• Bugle– brass instrument like a small trumpet
• Robust– strong and healthy

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