This Issue - Icwai

INCOME INCOME TAX
TAX
skill. It was argued that the treatment had a dual
purpose, not only for saving his finger, but also for
retaining his professional income. But it was still
not found deductible, since a dual purpose by itself
cannot justify expenditure in an English decision in
Prince vs Mapp (Inspector of Taxes) (1971) 79 ITR 671
(ChD). A similar view was also taken in Bowden vs
Russell and Russell (1965) 42 TC 301.
The law, whether an illness, which affects a
professional, should not be deductible had arisen in
an interesting case of an eminent lawyer, who had to
undergo a coronary by-pass operation incurring a
cost of Rs.1.75 lakhs which he claimed as a deduction.
In an elaborate discussion, the High Court in Shanti
Bhushan vs CIT (2011) 336 ITR 26 (Del) found with
reference to the English decision in Norman vs Golder
(Inspector of Taxes) (1945) 13 ITR (EC) 21 (CA), that a
human body is not a plant and that any damage to
the body cannot be allowed like repairs for any plant
and machinery. He has, no doubt, used his body, but
it was not as a tool. Deduction was, therefore, found
inadmissible. On behalf of the assessee, the decision
in Mehboob Productions Pvt. Ltd. vs CIT (1977) 106
ITR 758 (Bom) was relied upon. But the High Court
distinguished this case as it related to a claim for
deduction of such expenses incurred by a firm on a
director, when he was on an assignment on firm’s
business to attend a prize giving ceremony on behalf
of the firm for a film produced by the firm, so as to be
deductible in the hands of employer.
NOTIFICATION
In fact, even where the body is used as a tool as in
the case of an athlete or a sports person, a model, a
dancer or a sex worker, such deduction could not be
admissible, though it would cause greater hardship
for those who suffer injury or loss of fitness and
health over years of exercise of their profession.
In fact, the High Court did refer to the case of a
cricketer, guitarist, jockey or a vocalist who used their
bodies as a tool. A lawyer cannot claim parity with
them.
It may be pointed out that the compensation
received for an injury in an accident, for example,
would not be taxable, so that revenue on parity of
reasoning would not allow the expenses on such
injuries or to the health except to the limited extent
provided in the statute. It is true that the assessee
would not have been put to this loss if his illness was
covered by an insurance or he had taken free treatment
from a Government hospital. The law probably can be
more humane, so as to bring the taxpayers—who
are unfortunate to meet with a serious illness like
heart attack or cancer—requiring expensive treatment
and those who do not have to face such health
hazards.
Words of wisdom
‘It is by the goodness of God that in our country
(U.S.) we have those three unspeakably precious
things : freedom of speech, freedom of conscience,
and the prudence never to practice either of them.’ ❐
DO No. HQ/ 60/ 2005-Computerisation
As you are aware companies are required to file their Balance Sheet and Annual Return to ROC within 30 and 60 days
respectively from the date of placing it in the Annual General Meeting. The companies that follow the standard FY
ending up to March each year are required to convene the AGM by September of that year. However, most of the
companies do not utilize the 30 and 60 days allowed for filing their documents but instead, keep waiting up to last date
to file their Balance Sheet and Annual Return. The avoidable delay in filing thus creates an artificial rush and results in
heavy filing on the last dates of October and November each year. Moreover, these documents being of large size take
a long time to upload. This makes it difficult for others to file their documents on-line.
In order to avoid heavy rush on the system due to filing of electronic forms and attachments which are of significantly
large size (2MB or more), it is proposed to educate corporate and professionals so that companies can spread out their
annual filings over a suitable period of time rather than rushing in on the last 2-3 days every month during peak filing
season. Ministry requires your active assistance/co-operation in propagating this educational campaign.
I, therefore, request you to kindly publish the enclosed notice from Ministry in your periodic publications immediately
and also put up a pop up message, ticker or similar prominent message on your websites for the next few months so that
a message can reach to companies to comfortably file their Balance Sheets and Annual Returns in time without having
to pay penal fees.
With best regards,
Yours sincerely,
(Avinash K Srivastava)
Jt. Secretary, Ministry of Corporate Affairs
776 The Management Accountant |September 2011