Wednesday, November 30, 2016

Demonetization: Detailed Drama of How Modi Checkmated Pakistan’s Devastating Assault


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Monday, November 28, 2016
Demonetization: Detailed Drama of How Modi Checkmated Pakistan’s Devastating Assault
All the chairpersons and MDs of India’s top banks were meeting at Reserve Bank of India’s headquarters on the 15th floor of the Mint Street office in a special session that started at 7 pm.  In Delhi, on the other hand, the top Cabinet ministers of the Modi government were meeting over an agenda regarding MoUs between India and Japan.
None of the top bank chiefs or the ministers of the government were aware of what was to happen.
The Cabinet meeting ended at 7.30 pm and the PM went to meet the President to inform him about the plan.  The ministers were instructed to remain in the meeting hall.  The bankers on the other hand, were discussing the situation from the Non-Performing Assets (NPAs) in the economy.
Just before 8 PM, the TV sets were switched on to listen to the PM, with the understanding that the meeting would continue after the PM address.  Of course, the announcement from the PM was going to be earth-shattering for most bankers who had to rush back to their offices to handle the situation arising from the ban of Rs 500 and Rs 1000!
The story of demonitization starts way back in at least 2010 with a company named De La Rue and its role in fake currency in India.  Sometime during 2009-10, the CBI had raided around 70-odd Indian bank branches along the India-Nepal border and found counterfeit currency with them.  That sent shock signals all over the intelligent community.  Upon investigation, however, the intelligence officials found something even more scary!  The branches had received the currency not from some smugglers, but RBI itself!  RBI was sending counterfeit notes to the bank branches around the country!
When the CBI raided the RBI, it found the same counterfeit currency in the RBI vaults in Rs 500 and Rs 1000 notes.  The Central Bank of the country had been compromised beyond anyone’s imagination!  The counterfeit and fake currency which Pakistan was pushing into India was being collected and distributed by none other than the Reserve Bank of India!
Almost like real…
In a little known case involving counterfeit currency caught in UP and Bihar, the defending lawyer rather nonchalantly argued that what was the proof that it was fake?  When the currency was sent to the Indian government labs, they indeed confirmed that the currency nabbed from the ISI agents was actually real!  When sent to foreign labs, it was found out that the currency was so close to real that it was extremely difficult to prove it being counterfeit.  In fact, the small difference that helped them prove it was not real was probably inserted on purpose!  Such was the confidence and arrogance of the counterfeiters!
It was found by the CBI on further investigation that the mischief was happening at the end of De La Rue, a company from whom RBI imports 95% of its currency paper.  In fact, RBI’s buy accounts for over 30% of De La Rue’s profits.  At that time, De La Rue was blacklisted by the government and the company came to the point of bankruptcy with 2000 metric tonnes of paper lying unused!  At that time, the De La Rue CEO James Hussey – godson of Queen Mother herself – resigned over what was called “paper quality issues”, which sounded fishy to begin with!
“We don’t know whether the paper disintegrates under a drop of rain or whether there is just a fly in a roll of paper somewhere,” said one source. “The statement is so full of holes that is has created further suspicion.”
De La Rue said the irregularities were of a “serious nature” but that it was “confident that neither the physical security nor the security features incorporated in the paper have been compromised for any customer and that the irregularities referred to relate only to testing of paper specifications at the relevant facility”.
================================================= 
Meanwhile, in 2010 another serious security lapse was exposed! : Outsourcing of Currency Printing by Government: Height of Betrayal
The government had, unbeknownst to anyone, had outsourced the printing of currency notes to US, UK and Germany – amounting to Rs 1 lakh crores!!  The entire economic sovereignty of India was at stake!
The RBI had in 1997-98 outsourced printing of 2,000 million pieces of Rs 100 notes and 1,600 million pieces of Rs 500 notes to US, UK and Germany amounting to Rs 1 lakh crore. The committee, after questioning central bank officials, said the reasons provided were far from convincing.
RBI had said the soilage factor and bad condition of notes resulted in the decision. The panel observed that RBI’s system of assessment with respect to demands and supply of bank notes in the country was off the mark resulting in a gap. (source)
The three companies to whom the Indian currency was outsourced were American Banknote Company (USA), Thomas De La Rue (UK) and Giesecke and Devrient Consortium (Germany).
On November 3, 2011 a complaint was received by the Central Vigilance Commission (CVC) signed by “unnamed officers of the Ministry of Finance” – who said that the security was compromised not just by De La Reu, but also other companies – French firm Arjo Wiggins, Crane AB of USA and Louisenthal, Germany!
What is most disturbing is that the information of compromise in security features of the paper for currency had at different times been withheld from the Home and Finance Ministry of India.
Following the quality breach by De La Rue, in September-October 2010, the government tested samples of currency paper supplied by other companies as well. On November 3, 2010, BRBNMPL ( Bharatiya Reserve Bank Note Mudran Private Ltd) — which signs currency note contracts on behalf of the RBI — wrote to the Directorate of Currency, Ministry of Finance, that currency paper supplied by Crane AB of USA and Louisenthal, Germany, had failed tests in Hoshangabad as well but cleared re-tests at the suppliers’ foreign laboratories.
The complaint notes, “BRBNMPL in their letter of 3rd November 2010, concealed the failure of paper supplied by Arjo Wiggins ( a French company) from the Ministry of Finance as detected in the tests conducted on Arjo Wiggins paper at Hoshangabad”.
In 2015, after Modi sought help in investigations in the fake currency notes from the US, it came out that the German company Louisenthal was also selling raw notes to Pakistan, resulting in a ban on the company.
The Home Ministry has barred a German company, Louisenthal, from selling bank note paper to the Reserve Bank of India (RBI) after it discovered that the firm was also selling raw notes to Pakistan, according to a senior official.
“We are only keeping our interests in mind,” the official told The Indian Express. “We have proof that high-quality fake Indian currency notes are being produced in Pakistan and pushed into India through Bangladesh, Nepal, Sri Lanka and Vietnam. The availability of a common supplier could be one of the reasons behind such high-quality fake notes.”
This is how the Indian currency was compromised at every point – RBI, Home Ministry, Finance ministry, and the Indian and Foreign printing presses.  Worse of all, our entire currency production was outsourced to unscrupulous forces who were merrily sharing the real stuff with Pakistan who was happily and arrogantly snubbing us and creating a havoc with our economy!
=================================================How Pakistan was Check-mated?
The free flow of Indian currency paper to Pakistan encouraged its government to set up 5 printing presses to print fake currency notes.these were smuggled to Nepal and Bangladesh (often on PIA flights).  The currency entered India via UP and Bihar (Nepal border), via Malda in West Bengal (from Bangladesh), via Rajasthan border, Punjab border and via Chennai and Mangalore through the Indian expats from Gulf.

Routes of Fake Currency to India (Courtesy IndiaToday)
Pakistan used to pump in money to fund student bodies (like in JNU and Jadhavpur), media and journalists and also political parties to completely influence the elections.
=================================================TThe “Imminent” Assault
Given the aggression with which the Modi government has acted against Pakistan and given its options against Indian – specifically the Surgical Strikes and the heavy bombardment such that Pakistan had to beg India to stop beating them up! – Pakistan wanted another front for a major strike!
As per General GD Bakshi, a prominent security and defense analyst, India has some Rs 16 trillion* of Rs 500 and Rs 1000 in circulation (which is 96% of the entire money supply).  Pakistan was already printing Rs 15 trillion (Rs 500 / Rs 1000) with a view to push them in India to completely “unhinge” the Indian economy in what Gen Bakshi calls an “Economic Pearl Harbour”!
This would have led to unprecedented terror strikes and runaway inflation and steep price rise, which would have spelt doom for India in many ways.
On the night of Nov 8th, when the Cabinet Ministers and the top bankers were caught unawares by the announcement of the Indian PM Modi on the ban on the notes – an act in extreme secrecy; all efforts to save Pakistan and its network were thwarted.
Pakistan was checkmated.
All those whom you see now coming together to fight demonetization know exactly what was being planned and what led to all this.  If they still choose to fight this act by the Modi government, you should know exactly from which team they are fighting this existential war of India’s future!  And, with the context of how RBI, Home and Finance Ministry, and banks were compromised over the years, one can very well understand the reason for extreme secrecy and quick action – which the critics ironically call “knee jerk” and “unprepared government plan”.
* Gen GD Bakshi mentions another figure of the number of notes.  The credible figure of currency in circulation is the one mentioned here with the link
==================================
Important information related to the FICN (Fake Indian Currency Notes) issue
Let us also look at other information which is important to fully understand the situation around the currency notes circulation by Pakistan.
Changes in De La Rue and Printing notes in India
There are only so many companies in the world with the expertise to produce the currency paper.  De La Rue, since its rather ignominious episode with the Indian currency and being close to bankruptcy has undertaken a complete rehaul of the company.  And with a new management, it has and is helping India to create production plants in India.
The printing facility in Mysuru (of Bhartiya Reserve Bank Note Mudran Private Ltd (BRBNMPL) was set up with De La Rue Giori (now KBA Giori, Switzerland).  Now another facility is coming up at Salboni with help from Komori Corporation, Japan.  It is important to know that indigenous note mills in India will be able to take care of 70% of the domestic currency needs.

This is where the Rs 2000 notes will also be printed.  In an attempt to participate in “Make in India”, the erstwhole De La Rue is working with the Indian government to establish the mills here in India.
So De La Rue is keen to contribute to the PM’s initiative, by bringing investment, expertise, knowledge and best practice to currency production in India. Given the opportunity to partner with India, we hope to create a regional hub for research and development, as well as local manufacturing facilities for the supply of security features for the next generation of India’s banknotes, passports and identity documents.
We need to make sure that ultimately India is able to work through the technology with more reliable partners and eventually on our own to have our important paper needs taken care of – currency, Aadhar and passport.
(Source-http://drishtikone.com/demonetization-detailed-drama-modi-checkmated-pakistans-devastating-assault/ )

A

Tuesday, November 29, 2016

Son, married or not, lives in house of parents at their mercy, says court

  • 30 Nov 2016
  • Delhi
  • HT Correspondent letters@hindustantimes.com


NEW DELHI: The Delhi high court ruled on Tuesday that a son, irrespective of his marital status, has no legal rights to live in his parents’ self-acquired house but can do so only at their “mercy”.
Justice Pratibha Rani said only because parents have allowed the son to live in their house as long as their relations are cordial does not mean they have to bear his “burden” throughout their life.
“He can live in that house only at the mercy of his parents up to the time the parents allow,” the court said.
The judgment is for a parent’s self-acquired house, not to be confused with a Hindu person’s birthright to ancestral property.
The high court upheld a trial court order, which has ordered a man and his wife to vacate a house after their parents sought their removal.
The son and daughter-in-law, who were living with them, claimed they were co-owners of the property, but couldn’t prove it in court.

implementation of govt decision on the recommendations of the seventh CPC


Minutes ofthe Meeting

Monitoring and disposal of Pensioners' Grievance through "Vrleb Responsive Pensionerc' Service"


precessing of pension cases mandatority through Bhavishya (Online Pension Sanction & Payment Tracking System) w.e.f. 01/01/2017-reg



Poor Functioning of CGHS



Press Information Bureau
Government of India
Ministry of Health and Family Welfare

25-November-2016 12:41 IST
Poor Functioning of CGHS

Some grievances have been received from CGHS beneficiaries through grievance portals and other channels regarding functioning of CGHS. These are mainly regarding non-issue of medicines, plastic cards, shortage of doctors/ specialists and long queue of patients in Wellness Centres.

Following action has been taken by the government in this regard:

(i) Appointment of retired doctors on contract basis as a stop gap arrangement to fill the vacant posts.

(ii) Medicines, which are not available at CGHS Wellness Centres are procured through Authorized Local Chemists.

(iii) A special drive was undertaken to clear the pendency of issue of CGHS Plastic cards

(iv) Option for self-printing of CGHS cards for existing CGHS beneficiaries.

(v) Introduction of on-line registration for consultation at selected Wellness Centres in Bengaluru and in one zone in Delhi.

(vi) Initiation of tele-consultation on trial basis in Delhi from two CGHS Wellness Centres with specialists of Dr. R.M.L Hospital.

Regular internal audits and also external audits/studies on the functioning of CGHS have been carried out. 

Outcome of some of the important studies are as under:

(i) Staff Inspection Unit (SIU) was carried out by Ministry of finance for Staff Pattern Norms based on patient attendance. Recommendations of the SIU have been implemented.

(ii) Based on the study carried out by Kaul Committee, computerization of all the CGHS Wellness Centres has been done

(iii) On the basis of recommendations of the CAG Audit on procurement of medicines, Medical Stores Organization (MSO) has initiated e-tender for procurement of Anti Cancer and other Lifesaving medicines. It has also been decided to procure only L1 Rate medicines under formulary for Branded Medicines.

(iv) Committee of Secretaries (COS) has also been monitoring the functioning of CGHS since 2008 and various steps have been implemented to make CGHS beneficiary friendly. As per the recommendations of COS, UTI-ITSL has been appointed as Bill Clearing Agency for settlement of credit bills of empanelled hospitals and diagnostic centres pertaining to the treatment of CGHS pensioner beneficiaries.

(v) The functioning of CGHS is also monitored by the Hon’ble Prime Minister and as per the directions under ‘PRAGATI’, the process of linking of Aadhar Number with CGHS beneficiary Numbers has been started.

A special drive was undertaken to clear the pendency of issue of CGHS Plastic cards. Provision has been made for self-printing of CGHS cards by existing CGHS beneficiaries.

(vi) DAR&PG conducted a study through Quality Council of India (QCI) to identify areas of Grievances in Different Ministries and organizations including CGHS and suggested possible solutions.

Based on the inputs so received:
  • Financial Powers of Additional Directors of CGHS have been enhanced for early settlement of medical claims of Pensioners.
  • Introduction of on-line registration for consultation at selected Wellness Centres in Bengaluru and in one zone in Delhi.
  • Aadhar-based Bio-metric attendance for the staff at CGHS Wellness Centres has been implemented in Delhi and NCR.
The following steps have been taken for improvement in the functioning of CGHS in the country:-

1. Regular Inspection of Wellness Centres is carried out.

2. Monthly advisory committee meetings are held for each Wellness Centres with CMO (Incharge)

3. Regular monitoring of empanelled hospitals by a team constituted by Additional Directors, CGHS of cities for this purpose.

4. Regular meeting of Additional Directors, CGHS with pensioner associations.

SMS alert facility to CGHS beneficiaries.

The Minister of State (Health and Family Welfare), Sh Faggan Singh Kulaste stated this in a written reply in the Lok Sabha here today.


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Review the Various Pension related issues requiring close monitoring: Minutes of the Meeting under the Chairmenship of CGA:-



No.CPAO/CO―ORD/(107)/2016-17/496
MINISTRY OF FINANCE, DEPARTMENT OF EXPENDITURE
CENTRAL PENSION ACCOUNTING OFFICE
TRIK00T -II, BHIKAJI CAMA PLACE, NEW DELHI-110066

Dated: 24.11.2016

Minutes of the Meeting

Please find enclosed herewith a copy of minutes of the Meeting held on 11th November, 2016 at ll.00 AM at O/o CGA under the chairmanship of controller General of Accounts to review the various pension ― related issues requiring close monitoring by Pr.CCAs/CCAs/CAs for further necessary action.

(Vijay Singh)
Sr. Accounts Officer

Minutes of the meeting held on 11.11.2016 under the chairmanship of Controller General of Accounts at Mahalekha Niyantrak Bhawan, INA, New Delhi.

A Meeting was held on 11.11.2016 at 11.00 AM under the Chairmanship of Controller General of Accounts in the Conference Hall ‘Swasti’ Mahalekha Niyantrak Bhawan, Office of CGA, Block-E, General Pool Office Complex, INA Colony, New Delhi to discuss pension related issues.

At the outset Chief Controller (Pension) welcomed all the participants. Controller General of Accounts in his opening remarks highlighted the need for quick processing of pension cases to avoid delays and prompt disposal of Pensioners’ grievances and advised all concerned CCAs/CAs that issues regarding pending grievances and delays in receipt of pension & revision cases from HOOs/DDOs should be raised in the Senior Officers’ Meetings chaired by respective Secretaries. He stressed that all Pr. CCAs/CCAs/CAs must use their dashboards provided by CPAO to monitor the disposal of grievances and uploading of lists of retiring employees and submission of pension cases.

List of participants is at Annexure-I.

Following agenda items were discussed and decisions taken:-

1. Agenda Item No. 1-A: Pending cases of revision under OM dated 6th April, 2016: Delinking of revised pension from qualifying service of 33 years:

It was observed that total 88,550 cases were due for revision. Out of that 61,778 cases were already revised. However, still 26772 cases (30%) were pending for revision. Out of these cases, 2551 2 cases (95%) were pending with 9 ministries/ departments i.e. Home Affairs (23,307), Atomic Energy, Prasar Bharti, CBEC, I&B, Agriculture, HIED, Civil Aviation and Supply. Vide various OMs issued by CPAO, concerned CCAs/CAs were requested to revise pending cases urgently. CGA directed to finalize all the pending cases within one month. PAO wise pendencies were reviewed specifically for MHA & Atomic Energy and they were advised to regularly review the status with their high pendency PAOs.

Action: All Concerned CCAs/ CAs

2. Agenda Item No. 1-B: Status of revision of pending Pre-2006 pension cases

It was observed that total 4617 cases of Pre-2006 (1,199 of Pre-2006 & 3,418 of Pre-90) were pending for revision in civil Ministries/Departments. Highest pendencies pertained to Home Affairs (963), Atomic Energy (442), CBEC, HRD, and Prasar Bharti. It was informed by the CCAs/CAs that these cases are pending due to non-availability of required information either with PAOs or with HOOs & Banks in spite of all out efforts made. Following points decisions were taken:

(i) CPAO to prepare fresh list of live pending cases on the basis of e-scrolls received which may reduce the number of pending cases. This list would be provided to the concerned Ministries/Departments to again review the pendency and check the availability of records. If records are not available even after this exercise, the certificate of non availability of records would be furnished by concerned CCAs/CAs to CPAO to enable it to take further necessary action. If any pensioner represents for revision of his/her pension in future the same would be revised on the basis of records provided by him/her subject to verification of the record.

(ii) The above list would also be provided to concerned pension disbursing banks to check the genuineness of these pensioners on the basis of KYC records available with them and get the relevant records required for revision for such pensioners. The banks will also be asked to furnish the copies of life certificates received from these pensioners to CPAO by 15th Feb, 2017.

Action: All Concerned CCAs/CAs, CPAO and Banks

3. Agenda Item Number-2: Delay in receipt of fresh PPOs

It was observed that only 29 percent of fresh PPOs were received in CPAO from PAOs before the date of retirement of government servants. All the CCAs/CAs present in the meeting informed that delay in finalizing fresh pension cases is because of late submission of pension papers by the HOOs to concerned PAOs. However, status of Atomic Energy was quite satisfactory where 85% fresh PPOs were received before the date of retirement. The Joint CA, Atomic Energy informed that they are regularly reviewing the status of receipt of fresh pension cases with the department and in case of any problem; they are holding the meetings with senior officers so that timely receipt of cases in PAOs may be ensured. CGA appreciated the efforts of Atomic Energy and advised other CCAs/CAs also to take up the matter regularly with concerned Administrative Authorities i.e. HODs/DOOs/DDOs for receiving the pension cases in PAOs as per prescribed time schedule and use the dashboards provided under WRPS to monitor the delays.

Action: All Concerned CCAs/ CAs

4. Agenda Item Number-3: Seeding of Aadhaar

Significant progress was observed in respect of Aadhaar Seeding in fresh PPOs by the Ministries/Departments as overall seeding percentage had reached 61%. Ministries/Departments where seeding percent was low were Home Affairs, PPG and Supply. In some Ministries/Departments, like Health & Family Welfare, HRD, Prasar Bharti and UD seeding was more than 90%, CCA, MHA was requested to ensure increasing the number of Aadhaar seeding in fresh PPOs as the low percentage of IVIHA had brought down overall percentage very significantly. Representative of PPG&P pointed out that low percentage of Aadhaar seeding in PPG&P was due to low Aadhaar seeding by Director of Accounts, Cabinet Secretariat (DACS) which uses PAO code of PPG&P but they are not in the administrative control of CA, PPG&P. On this issue, it was decided that while CPAO may take up the matter with DACS; PPG&P was also advised to coordinate with DACS to resolve this issue on regular basis. Most of the CCAs/CAs informed that PAOs are indicating Aadhaar numbers in fresh PPOs wherever the same is made available by the concerned HOOs and efforts are made to make it 100%.

Action: All Concerned CCAs/CAs

5. Agenda Item Number-4: Web Responsive Pensioners’ Service:

A. Grievances: Under WRPS, total 570 grievances were received, out of that 375 pertained to the concerned 15 ministries. Out of these 375 grievances, 70 grievances were replied back by PAOs to CPAO and 56 settled. 305 grievances were still pending with PAOs. CGA advised all concerned CCAs/CAs to review the status of pending grievances through WRPS on weekly basis and settle the grievances in time bound manner. CC (P) also requested CCAs/CAs to regularly review the pending grievances available under their dashboards under WRPS and ensure not to allow any pendency beyond 30 days. All the CCAs/CAs assured to regularly review the pending grievances and take necessary action to bring down the number of pending grievances.

Action: All Concerned CCAs/ CAs

B. Quarterly List of retiring Employees: Lists of only 1734 retiring employees were uploaded so far by the PAOs of concerned Ministries/Departments. Since annually about 35 thousand of fresh pension cases are received in CPAO, this small number of uploading of lists showed that still either many PAOs are not uploading complete lists of retiring employees or not uploading at all.

To ensure the timely submission of list of retirees by the HOOs to the concerned PAOs the CCAs/CAs present in the meeting were advised to take up the matter with their HODs on regular basis to get the complete list of retiring employees wherever the same is not being provided by the HOOs. CGA advised CCAs/CAs to pay special attention to those PAOs where details of not even single employee has been uploaded so far.

Action: All Concerned CCAs/ CAs

6. Agenda Item Number-5: Discrepancies in the bookie of Expenditure under Pension grant:

It was observed that there were many discrepancies in the booking of expenditure under pension grant No.35 in the year-2016-17 (up to 2nd quarter) by many Ministries/Departments i.e. expenditure in excess of budget, expenditure without budget, misclassification between charged and voted expenditure, expenditure booked in minus etc. An OM dated 11.11.2016 with details of discrepancies had already been issued to CCAs/CAs. All concerned CCAs/CAs were advised to regularly review the booking of expenditure under various heads of pension grant in their Ministries/Departments with the help of reports available under e-lekha/PFMS and ensure to avoid any discrepancies in booking under pension grant.

Action: All Concerned CCAs/ CAs

7. During the meeting, CCA, Home Affairs and CA, Agriculture requested CC (P) to organize workshop for their pension processing PAOs in CPAO on WRPS and various pension related issues. It was agreed that workshop for PAOs of Ministry of Agriculture would be organized on 18th November, 2016 and for MHA on 1st December, 2016 at CPAO. Other Ministries were also requested to work out schedule of workshop for their PAOs in consultation with CPAO.

Action: All Concerned CCAs/CA, CPAO, MHA, Agriculture

The meeting ended with vote of thanks to the chair.


Annexure-I 
List of Participants 
SI. No. Ministry/DepartmentName of Representative
1
CPAO
,
1. Sh. Sanjai Singh ,CC(P)
2. Sh. Subhash Chandra, CA
3. Sh. Davinder Kumar, TD, NIC
4. Sh. S. P. Sharma, Consultant
5. Mrs. Krishna Sharma, Sr. AO
6. Sh. Vijay Singh, Sr. AO
2
IndustrySh. Siya Sharan, CCA
3
CBEC1. Sh. Pradeep Kr. Berwah, CCA
2. Sh. Laxman Ram Kurnhar, Sr. AO
4
MHA1. Sh. Rajesh Kumar, CCA
2. Sh. Robin Jain, Sr. AO
5
Urban DevelopmentSh. Shyam S. Dubey, CCA
6
I&BSh. Jeetendra K. Jha, CA
7
HRDSh. B. K. Agrawal, CA
8
CBDTDr. Dilip Kumar, CA
9
AgricultureSh. Taranjit Singh, CA
10
PPG&P1. Mrs. Rita Barisal, Dy CA
2. Mrs. Saroj Grover, Sr. AO
11
Atomic Energy-Sh. Chetrarn. Singh, Joint CA
12
SupplySh. S.K. Arya, Sr. AO
13
Civil AviationSh. D.K Saini, Sr. AO



Monday, November 28, 2016

THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016

Click the link to read pdf 



1
AS INTRODUCED IN LOK SABHA
Bill No. 299 of 2016
THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016
A
BILL
further to amend the Income-tax Act, 1961 and the Finance Act, 2016.
Bit enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
51. (1) This Act may be called the Taxation Laws (Second Amendment) Act, 2016. (2) Save as otherwise provided in this Act, it shall come into force at once.
CHAPTER II
INCOME-TAX
43 of 1961. 2. In the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act), in
Short title and commencement.
Amendment of
10section 115BBE, for sub-section (1), the following sub-section shall be substituted with section 115BBE.effect from the 1st day of April, 2017, namely:—

“(1) Where the total income of an assessee,—

(a) includes any income referred to in section 68, section 69, section

69A, section 69B, section 69C or section 69D and reflected in the return of
15
income furnished under section 139; or

Amendment of section 271AAB.
Insertion of new section 271AAC.
Penalty in respect of certain income.
2

(b) determined by the Assessing Officer includes any income referred to

in section 68, section 69, section 69A, section 69B, section 69C or section

69D, if such income is not covered under clause (a),

the income-tax payable shall be the aggregate of—

(i) the amount of income-tax calculated on the income referred to
5
in clause (a) and clause (b), at the rate of sixty per cent.; and

(ii) the amount of income-tax with which the assessee would have

been chargeable had his total income been reduced by the amount of

income referred to in clause (i).”.

3. In the Income-tax Act, in section 271AAB,—
10
(I) in sub-section (1), after the words, figures and letters “the 1st day of July,

2012”, the words, brackets and figures “but before the date on which the Taxation

Laws (Second Amendment) Bill, 2016 receives the assent of the President” shall be

inserted;

(II) after sub-section (1), the following sub-section shall be inserted, namely:—
15
“(1A) The Assessing Officer may, notwithstanding anything contained in

any other provisions of this Act, direct that, in a case where search has been

initiated under section 132 on or after the date on which the Taxation Laws

(Second Amendment) Bill, 2016 receives the assent of the President, the assessee

shall pay by way of penalty, in addition to tax, if any, payable by him,—
20
(a) a sum computed at the rate of thirty per cent. of the undisclosed

income of the specified previous year, if the assessee—

(i) in the course of the search, in a statement under

sub-section (4) of section 132, admits the undisclosed income and

specifies the manner in which such income has been derived;
25
(ii) substantiates the manner in which the undisclosed income

was derived; and

(iii) on or before the specified date—

(A) pays the tax, together with interest, if any, in respect

of the undisclosed income; and
30
(B) furnishes the return of income for the specified

previous year declaring such undisclosed income therein;

(b) a sum computed at the rate of sixty per cent. of the undisclosed

income of the specified previous year, if it is not covered under the

provisions of clause (a).”;
35
(III) in sub-section (2), after the words brackets and figure “in sub-section (1)”,

the words, brackets, figure and letter “or sub-section (1A)” shall be inserted.

4. In the Income-tax Act, after section 271AAB, the following section shall be inserted

with effect from the 1st day of April, 2017, namely:—

“271AAC. (1) The Assessing Officer may, notwithstanding anything contained
40
in this Act other than the provisions of section 271AAB, direct that, in a case where

the income determined includes any income referred to in section 68, section 69,

section 69A, section 69B, section 69C or section 69D for any previous year, the

assessee shall pay by way of penalty, in addition to tax payable under section 115BBE,

a sum computed at the rate of ten per cent. of the tax payable under clause (i) of
45
sub-section (1) of section 115BBE:

Provided that no penalty shall be levied in respect of income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D to the extent such income has been included by the assessee in the return of income furnished

5
28 of 2016. 10
15
20
25
43 of 1961. 30
35
40
45
3
under section 139 and the tax in accordance with the provisions of clause (i) of sub-section (1) of section 115BBE has been paid on or before the end of the relevant previous year.
(2) No penalty under the provisions of section 270A shall be imposed upon the assessee in respect of the income referred to in sub-section (1).
(3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section.”.
CHAPTER III

FINANCE ACT

5. In the Finance Act, 2016,—
Amendment of
(a) in Chapter II, in section 2, in sub-section (9),—
section 2.

(i) in the third proviso, the figures and letters "115BBE" shall be omitted;

(ii) after the sixth proviso, the following proviso shall be inserted,

namely:—

‘Provided also that in respect of any income chargeable to tax under

clause (i) of sub-section (1) of section 115BBE of the Income-tax Act, the

“advance tax” computed under the first proviso shall be increased by a surcharge,

for the purposes of the Union, calculated at the rate of twenty-five per cent. of

such advance tax.’;

(b) after Chapter IX, the following Chapter shall be inserted, namely:—
‘CHAPTER IXA
TAXATION AND INVESTMENT REGIME FOR PRADHAN MANTRI GARIB KALYAN YOJANA, 2016
199A. (1) This Scheme may be called the Taxation and Investment Regime for
Pradhan Mantri Garib Kalyan Yojana, 2016.
(2) It shall come into force on such date as the Central Government may, by notification, in the Official Gazette, appoint.
199B. In this Scheme, unless the context otherwise requires,—
(a) "declarant" means a person making the declaration under sub-section (1) of section 199C;
(b"Income-tax Act" means the Income-tax Act, 1961;
Insertion of new Chapter IX A.
Short title and commencement.
Definitions.
(c) "Pradhan Mantri Garib Kalyan Deposit Scheme, 2016” (hereinafter in this Chapter referred to as “the Deposit Scheme”) means a scheme notified by the Central Government in consultation with the Reserve Bank of India in the Official Gazette; and
(d) all other words and expressions used in this Scheme but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act.
199C. (1) Subject to the provisions of this Scheme, any person may make, on or after the date of commencement of this Scheme but on or before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any income, in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017.
(2) No deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed against the income in respect of which a declaration under sub-section (1) is made.
Declaration of undisclosed income.

Charge of tax and surcharge.
Penalty.
Deposit of undisclosed income.
Manner of declaration.
Time for payment of tax, penalty, surcharge and deposit.
Undisclosed income declared not to be included in total income.
Undisclosed income declared not to affect finality of completed assessments.
4

Explanation.— For the purposes of this section, “specified entity” shall mean—

(i) the Reserve Bank of India;

(ii) any banking company or co-operative bank, to which the

Banking RegulationAct, 1949 applies (including any bank or banking institution
10 of 1949.
referred to in section 51 of that Act);
5
(iii) any Head Post Office or Sub-Post Office; and

(iv) any other entity as may be notified by the Central Government in the

Official Gazette in this behalf.

199D. (1) Notwithstanding anything contained in the Income-tax Act or in any

Finance Act, the undisclosed income declared under section 199C within the time
10
specified therein shall be chargeable to tax at the rate of thirty per cent. of the undisclosed

income.

(2) The amount of tax chargeable under sub-section (1) shall be increased by a

surcharge, for the purposes of the Union, to be called the Pradhan Mantri Garib

Kalyan Cess calculated at the rate of thrity-three per cent. of such tax so as to fulfil the
15
commitment of the Government for the welfare of the economically weaker sections

of the society.

199E. Notwithstanding anything contained in the Income-tax Act or in any

Finance Act, the person making a declaration under sub-section (1) of section 199C

shall, in addition to tax and surcharge charged under section 199D, be liable to pay
20
penalty at the rate of ten per cent. of the undisclosed income.

199F. (1) Notwithstanding anything contained in the Income-tax Act or in any

other law for the time being in force, the person making a declaration under

sub-section (1) of section 199C, shall deposit an amount which shall not be less than

twenty-five per cent. of the undisclosed income in the Pradhan Mantri Garib Kalyan
25
Deposit Scheme, 2016.

(2) The deposit shall bear no interest and the amount deposited shall be allowed

to be withdrawn after four years from the date of deposit and shall also fulfil such

other conditions as may be specified in the Pradhan Mantri Garib Kalyan Deposit

Scheme, 2016.
30
199G. A declaration under sub-section (1) of section 199C shall be made by a

person competent to verify the return of income under section 140 of the Income-tax

Act, to the Principal Commissioner or the Commissioner notified in the Official Gazette

for this purpose and shall be in such form and verified in such manner, as may be

prescribed.
35
199H. (1) The tax and surcharge payable under section 199D and penalty payable

under section 199E in respect of the undisclosed income, shall be paid before filing of

declaration under sub-section (1) of section 199C.

(2) The amount referred to in sub-section (1) of section 199F shall be deposited

before the filing of declaration under sub-section (1) of section 199C.

(3) The declaration under sub-section (1) of section 199C shall be accompanied
40
by the proof of deposit referred to in sub-section (1) of section 199F, payment of tax,

surcharge and penalty.

199-I. The amount of undisclosed income declared in accordance with section

199C shall not be included in the total income of the declarant for any assessment year

under the Income-tax Act.
45
199J.Adeclarant under this Scheme shall not be entitled, in respect of undisclosed

income referred to in section 199C or any amount of tax and surcharge paid thereon,

to re-open any assessment or reassessment made under the Income-tax Act or the

Wealth-tax Act, 1957, or to claim any set-off or relief in any appeal, reference or other
27 of 1957.
proceeding in relation to any such assessment or reassessment.
50
52 of 1974.
45 of 1860.
61 of 1985.
37 of 1967.
49 of 1988.
45 of 1988.
15 of 2003.
27 of 1992.
22 of 2015.
5
10
15
20
25
30
35
40
45
5
199K. Any amount of tax and surcharge paid under section 199D or penalty paid under section 199E shall not be refundable.
199L. Nothwithstanding anything contained in any other law for the time being in force, nothing contained in any declaration made under sub-section (1) of section 199C shall be admissible in evidence against the declarant for the purpose of any proceeding under any Act other than the Acts mentioned in section 199-O.
199M. Notwithstanding anything contained in this Scheme, where a declaration has been made by misrepresentation or suppression of facts or without payment of tax and surcharge under section 199D or penalty under section 199E or without depositing the amount in the Deposit Scheme as per the provisions of section 199F, such declaration shall be void and shall be deemed never to have been made under this Scheme.
Tax, etc., not refundable.
Declaration not admissible in evidence against declarant.
Declaration by misrepresentation of facts to be void.
199N. The provisions of Chapter XV of the Income-tax Act relating to liability in special cases and section 119, section 138 and section 189 of that Act shall, so far as may be, apply in relation to proceedings under this Scheme as they apply in relation to proceedings under the Income-tax Act.
199-O. The provisions of this Scheme shall not apply—
(a) in relation to any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974:
Provided that—
(i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board; or
(ii) such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9, of the said Act; or
(iii) such order of detention, being an order to which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of the said Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;
(b) in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Money-Laundering Act, 2002;
(c) to any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992;
(d) in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
199P. For the removal of doubts, it is hereby declared that save as otherwise expressely provided in sub-section (1) of section 199C, nothing contained in this
Applicability of certain provisions of Income-taxAct.
Scheme not to apply to certain persons.
Removal of doubts.
Power to remove difficulties.
Power to make rules.
6

Scheme shall be construed as conferring any benefit, concession or immunity on any

person other than the person making the declaration under this Scheme.

199Q. (1) If any difficulty arises in giving effect to the provisions of this Scheme,

the Central Government may, by order, not inconsistent with the provisions of this

Scheme, remove the difficulty:
5
Provided that no such order shall be made after the expiry of a period of two

years from the date on which the provisions of this Scheme come into force.

(2) Every order made under this section shall be laid before each House of

Parliament.

199R. (1) The Board may, subject to the control of the Central Government, by
10
notification in the Official Gazette, make rules for carrying out the provisions of this

Scheme.

(2) Without prejudice to the generality of the foregoing power, such rules may

provide for all or any of the following matters, namely:—

(a) the form and manner of declaration and verification to be made under
15
section 199G;

(b) any other matter which is to be, or may be, prescribed, or in respect of

which provision is to be made, by rules.

(3) Every rule made under this Scheme shall be laid, as soon as may be after it is

made before each House of Parliament while it is in session for a total period of thirty
20
days which may be comprised in one session or in two or more successive sessions

and if, before the expiry of the session immediately following the session or the

successive sessions aforesaid, both Houses agree in making any modification in the

rule or both Houses agree that the rule should not be made, the rule shall thereafter

have effect only in such modified form or be of no effect, as the case may be; so,
25
however, that any such modification or annulment shall be without prejudice to the

validity of anything previously done under that rule.'.


STATEMENT OF OBJECTS AND REASONS
Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes of existing series of denomination of the value of five hundred rupees and one thousand rupees (hereinafter referred to as specified bank notes) issued by the Reserve Bank of India have been ceased to be legal tender with effect from the 9th November, 2016.
2.Concerns have been raised that some of the existing provisions of theIncome-tax Act, 1961 could possibly be used for concealing black money. It is, therefore, important that the Government amends the Act to plug these loopholes as early as possible so as to prevent misuse of the provisions. The Taxation Laws (Second Amendment) Bill, 2016, proposes to make some changes in the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision.
3.In the wake of declaring specified bank notes as not legal tender, there have been representations and suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the Government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the Government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal economy. Thus, money coming from additional revenue as a result of the decision to ban Rs. 1000 and Rs. 500 notes can be utilised for welfare schemes for the poor.
4.Therefore, an alternative scheme namely, the ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) is proposed to be provided in the Bill. The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income and penalty @ 10% of the undisclosed income. Further, a surcharge to be called 'Pradhan Mantri Garib Kalyan Cess' @ 33% of tax is also proposed to be levied. In addition to tax surcharge and penalty, the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the Central Government in consultation with the Reserve Bank of India under the 'Pradhan Mantri Garib KalyanDeposit Scheme, 2016'. This amount is proposed to be utilised for the programmes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc.; so that there is justice and equality.
5.The Bill seeks to achieve the above objectives.
NEW DELHI;
ARUN JAITLEY.
The 26th November, 2016.

————
PRESIDENT’S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF
THE CONSTITUTION OF INDIA
[Copy of letter No. 142/33/2016-TPL, dated 26th November, 2016 from Shri Arun Jaitely, Minister of Finance and Corporate Affairs in the Ministry of Finance to Secretary-General, Lok Sabha.]
The President, have been informed of the subject-matter of the Taxation Laws (Second Amendment) BIll, 2016, recommends under clauses (1) and (3) of Article 117 read with clause (1) of Article 274 of the Constitution of India, introduction of the above Bill in Lok Sabha.
7

FINANCIAL MEMORANDUM
This Bill seeks to impose a higher rate of tax and levy of penalty in respect of certain incomes. It also provides for a scheme for payment of tax, penalty and surcharge on the undisclosed income and investment of certain amount of such income in the Pradhan Mantri Garib Kalyan Deposit Scheme. The Bill is proposed to be administered by the Central Board of Direct Taxes. Thus, no additional expenditure is contemplated on the enactment of the Bill.
8

MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 5 of the Bill seeks to insert a new section 199G, in respect of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016. The proposed section 199G provides that a declaration under section 199C shall be made by a person competent to verify the return of income under section 140 of the Income-tax Act, to the Principal Commissioner or the Commissioner notified in the Official Gazette for this purpose and shall be in such form and verified in such manner, as may be prescribed.
2.The matters in respect of which rules may be made or notifications may be issued in accordance with the provisions of the Bill are matters of procedure and detail and it is not practicable to provide for them in the Bill.
3.The delegation of legislative power is, therefore, of a normal character.
9

Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D.
Penalty where search has been initiated.
ANNEXURE
EXTRACTS FROM THE INCOME-TAX ACT, 1961
(43 OF 1961)
*
*
*
*
*
115BBE. (1) Where the total income of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income- tax payable shall be the aggregate of—
(a) the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent.; and
(b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).
*
*
*
*
*
271AAB. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,—
(a) a sum computed at the rate of ten per cent. of the undisclosed income of the specified previous year, if such assessee—
(i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived;
(ii) substantiates the manner in which the undisclosed income was derived;
and
(iii) on or before the specified date—
(A) pays the tax, together with interest, if any, in respect of the undisclosed income; and
(B) furnishes the return of income for the specified previous year declaring such undisclosed income therein;
(b) a sum computed at the rate of twenty per cent. of the undisclosed income of the specified previous year, if such assessee—
(i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and
(ii) on or before the specified date—
(A) declares such income in the return of income furnished for the specified previous year; and
(B) pays the tax, together with interest, if any, in respect of the undisclosed income;
(c) a sum which shall not be less than thirty per cent. but which shall not exceed ninety per cent. of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b).
*
*
*
*
*
10

(
9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) of section 176 of the Income-tax Act or deducted from, or paid on, income chargeable under the head “Salaries” under section 192 of the said Act or in which the “advance tax” payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, “advance tax” shall be charged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax shall be increased by a surcharge, for the purposes of the Union, calculated in such cases and in such manner as provided therein:
*
*
*
*
*
Provided also that in respect of any income chargeable to tax under section 115A, 115AB, 115AC, 115ACA, 115AD, 115B, 115BA, 115BB, 115BBA, 115BBC, 115BBD, 115BBDA, 115BBE, 115BBF, 115E, 115JB or 115JC of the Income-tax Act, “advance tax” computed under the first proviso shall be increased by a surcharge, for purposes of the Union, calculated,—
(a) in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, calculated at the rate of fifteen per cent. of such “advance tax”, where the total income exceeds one crore rupees;
(b) in the case of every co-operative society or firm or local authority, calculated at the rate of twelve per cent. of such “advance tax”, where the total income exceeds one crore rupees;
(c) in the case of every domestic company, calculated,—
(i) at the rate of seven per cent. of such “advance tax”, where the total income exceeds one crore rupees but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such “advance tax”, where the total income exceeds ten crore rupees;
(d) in the case of every company, other than a domestic company, calculated,—
(i) at the rate of two per cent. of such “advance tax”, where the total income exceeds one crore rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such “advance tax”, where the total income exceeds ten crore rupees;
*
*
*
*
*
Provided also that in the case of every company having total income chargeable to tax under section 115JB of the Income-tax Act, and such income exceeds ten crore rupees, the total amount payable as “advance tax” on such income and surcharge thereon, shall not exceed the total amount payable as “advance tax” and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
*
*
*
*
*
11

LOK SABHA
————
A
BILL
further to amend the Income-tax Act, 1961 and the Finance Act, 2016.
————
(Shri Arun Jaitley, Minister of Finance and Corporate Affairs)
GMGIPMRND—3435LS—26.11.2016.