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D. Murali

E-mail is not admissible evidence, is the verdict. But to cheer IT enthusiasts is the proposal on electronic submission of IT returns.

ON one side we hear that Prime Minister Manmohan Singh has stressed the importance of a highway proposal linking countries and laying optical fibre telecom link alongside it. Elsewhere, there is a tax tribunal that decides e-mail correspondence to be inadmissible as evidence.

Apparently jarring, but it was in the Forbes Patvolk case that the Chennai tribunal had trashed e-mail. While the company was banking on the electronic confirmation received after rushing goods to a waiting ship, the Department was saying that the e-mail confirmation was "not signed by any authority".

The text of the case has interesting portions about how e-mail had figured in some earlier cases too. For instance, in the Rahul Associates case, the Mumbai tribunal had, in 2002, decided that e-mail message was "an unsubstantiated and clumsy evidence... worthy of no reliance" when it was "sent without disclosing its source". Again, in the Ridhi Sidhi Furniture case, e-mail evidence was rejected "on the ground that the name of the sender of the e-mail was blocked in the copies supplied to importer and the address of person sending the quotation was also not known."

Now, Forbes's counsel reasoned before the Chennai tribunal that his case was not one such because the e-mail had been sent by the manager of the vessel from the ship, over the Net, specifying the name of the sender and such particulars, and he had acknowledged the receipt of perishable cargo as ship stores. The Custom House Agent had paid the duty for the goods, and handed the same to the manager of the vessel which had been kept waiting for the purpose, argued the counsel, and pressed the company's claim for refund as per Rules; but the Department was insistent on some record "pertaining to the goods put on vessel to show that the goods received on board were supervised by the customs authorities."

The tribunal had this to say: "E-mail is between the supplier and the receiver of the goods and such correspondence, if allowed for the purpose of granting refund, will create lot of administrative inconvenience leading to frauds." So, the ultimate ruling was: "Refund claim on the basis of such clumsy evidence cannot be granted."

I can already see some IT enthusiasts livid at their favourite connectivity tool being called clumsy, but the tribunal has a point about potential misuse. It may, therefore, look as if Forbes's counsel was stretching e-mail's power beyond its practical limit.

To balance, there is some good news from Finance Minister P. Chidambaram. The latest Finance Bill can cheer the computer industry with amendments that recognise the importance of electronic submission of information. Already, the statute book has provisions that factor in IT; but the proposed amendments take IT to a higher plane. To know how, let us look at Sec 206C (5C) of the Income-tax Act that is about returns filed by those collecting tax at source. In its existing form it reads thus: "A return filed under sub-section (5B) shall fulfil the following conditions, namely - (a) while receiving returns on computer media, necessary checks by scanning the documents filed on computer media will be carried out and the media will be duly authenticated by the Assessing Officer; and (b) the Assessing Officer shall also take due care to preserve the computer media by duplicating, transferring, mastering or storage without loss of data."

Some job, isn't it, to be an AO with so many duties? So, perhaps to lighten the AO's tasks with the media, the amended 5C reads this way: "... a return filed on computer media shall be deemed to be a return for the purpose of sub-section (5A) and the rules made thereunder, without further proof of production of the original, as evidence of any contents of the original or of any facts stated therein." Well, now the responsibility to ensure that the media is error-free and readable falls on assessees.

On TDS again, law that required all along the submission of proof given by deductors is also undergoing a major change. As a result, outsourced facilities and back offices of Aaykar Bhavans are going to be busy matching PANs and tax deducted, so as to print out statements for despatching to taxpayers. For this there is a new Sec 203AA. Accordingly, the Department would "prepare and deliver to every person from whose income the tax has been deducted... a statement in the prescribed form specifying the amount of tax deducted or paid and such other particulars as may be prescribed." There's no mention of computer in Sec 203AA but it would be foolish to imagine anybody doing a tax-assessee matching manually.

These are only two instances to show that the taxman is shifting gears. So, the next time you go the ITO, try pressing your ears to the walls. It's quite likely that you may hear the humming of their servers.

ITworks@TheHindu.co.in

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