Passage Based Mock Questions for Legal Reasoning

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Passage Based Mock Questions for Legal Reasoning Read the passage given below and answer the questions that follow-  ​​ ​​ ​​ ​​ ​​​​ Passage ITax deduction at source (TDS) is only an alternative method of collection of taxes. The purpose of deduction of tax at source is not​​ to collect a sum which is not​​ taxable in law, it is to facilitate the collection of tax lawfully leviable. The law of TDS is merely a machinery and a collection provision and is not related to chargeability of income. In other words, it has nothing to do with determination of the tax liability of a person. The TDS provisions ensures collection of taxes payable by a payee (recipient of income) by directly imposing upon the payer an obligation to withhold the tax due from his income and deposit it with the Government at the time of making the payment to the payee/ recipient of the income.​​ Such tax is deposited to the credit of the payee and not the payer. Hence, TDS is only part of the existing tax liability arising from the income of a person and the burden of paying it is shifted onto the payer, who directly deducts a certain % from the payment made to the payee/ recipient of the income and directly deposits it to the Government.​​ To my mind, there are many benefits of the TDS provisions. It ensures transparency, reporting of all transactions by the payers, increases accountability, reduces distortions, increases collection of revenue at regular intervals rather than revenues flowing in only at the year end and the tax collection base is also widened. It enables authorities to bring within their fold all such persons who are liable to come within the network of tax payers. It is important to understand that by reducing the TDS/TCS rates​​ during spread of the Covid-19 pandemic, the Government has not reduced the tax rates. It has merely recasted an obligation​​ on the payer, to deduct a lower​​ % as TDS from the payments being made to the payee/recipient. As a​​ natural corollary, when a lower% as TDS is deducted, at the year-end a lower credit/benefit of the TDS deducted will be available to the taxpayer towards calculation of its final/net tax liability, and apart from those who would still be entitled to refunds on filing of Tax Returns, the taxpayer will now at the time of filing of its Tax Returns, be​​ liable to make good this lower​​ % of TDS deducted, by paying more tax from their own pockets at that point to eventually meet their yearly tax liabilities. Hence, ultimately the tax liability remains the same.​​ Accordingly, this TDS/TCS rate relaxation effective 14.05.2020 is a short-term cash flow measure which enables more liquidity in the hands of the payee/recipient. It is not a​​ reduction in the tax rates and there is no tax benefit granted, however, it temporarily increases liquidity and facilities to resolve the cash crunch problem in the midst of the COVID-19 crisis.Though cash fluidity measure may be a welcoming step, it is far from being the medicine one needs to resolve the issues of both the payer and the payee/recipient. The payer gets no relief and no benefit whatsoever since whatever is deductible under TDS gets deposited to the Government and the remaining goes to the payee/recipient. The payer’s liquidity/cash crunch issues remain unaddressed (specially in cases of employers, business houses, tenants, professionals etc.) and the payee/recipient only gets the benefit of holding ‘a rather small amount’ of ‘its own money’ in ‘its own hands’ for a longer duration. Does it really attempt to provide any relief? Perhaps not, because problems of the payers remain unaddressed. How will the payers meet the COVID-19 crisis and contribute towards kickstarting the economy again, remains unaddressed from a pure tax perspective.​​ While it understandable that the Government also its own limitations and fiscal debt, the point is the businessman/the employer/the employee/the payer/ the payee/the recipient, all are squeezed at the moment and some tax reforms, tax measures, tax concessions are required to allow normalcy.Extracted with edits from:​​ https://thedailyguardian.com/25-reduction-in-the-existing-tds-tcs-rate-slabs-a-taxing-contribution/​​  by​​ The Daily Guardian,​​ June​​ 2020​​ ​​ ​​  ​​​​  ​​​​ 1.​​ TDS​​ amount​​ is deducted by-​​ (a)​​ the employer paying salary to an employee​​ ​​ (b)​​ the employee receiving salary from an employer​​ (c)​​ the government​​ (d) None of the above​​  2.​​ Mr. Y, who is employee of Mr. X, requests​​ Mr. X to not deduct TDS from his​​ monthly salary​​ stating that Mr. Y shall, at the time of filing tax returns, pay the tax directly to the government.​​ Choose the correct options from below-​​ ​​  ​​​​ ​​ ​​ ​​ ​​ ​​ ​​ (a)​​ Mr. X can act on the request of Mr. Y(b)​​ Mr. X cannot act on the request of Mr. Y(c)​​ Mr. X can act on the request of Mr. Y only after taking prior approval from tax authorities(d)​​ Can’t say 3.​​ The​​ benefits of TDS​​ law​​ are-​​ ​​ ​​ (a) ensuring transparency​​ (b)​​ ensuring reporting of transactions​​ (c)​​ ensuring accountability​​ (d) All​​ of the above​​  4.​​ From the perspective of a salaried employee, the reduction of TDS rates carries​​ which of​​ the following benefits-​​ ​​ ​​ (a)​​ reducing amount of tax payable​​ (b)​​ making the tax liability nil​​ ​​ (c)​​ entitling the employee to a tax refund​​ (d)​​ None of the above​​  5.​​ The​​ reduction of TDS rates during spread of the Covid-19 pandemic-​​ ​​ ​​ (a)​​ does not affect the liquidity of the beneficiaries​​ (b)​​ substantially increases the liquidity of the beneficiaries by allowing them to hold a substantially large amount of money for a longer period of time​​ (c)​​ marginally increases the liquidity of the beneficiaries by ​​ allowing them to hold a very small amount of money for a longer period of time​​ (d)​​ None of the above​​  Passage II​​ As one of the measures to prevent the spread of the new deadly coronavirus, courts in major parts of the world are delaying trials and temporarily closing doors. While the move is rational in the face of the pandemic, the process could leave some cases in limbo for weeks, if not months. In the criminal context, this could be a huge barrier to access to justice for victims and in securing the rights of the accused. The Chief Justices of various judicial systems have issued guidance to trial courts seeking emergency orders to adjust or suspend court operations in light of the pandemic. In addition to these measures, new AI​​ based systems may prove helpful during these times and should, where available, be used to secure access to justice. An artificial intelligence (AI) driven judicial system would make sure that nothing stalls during the pandemic.​​  If we talk about India, a transformation has already begun in the Indian judicial system. From May 15, 2020 onwards, the Supreme Court of India has shifted to a new system of filing (“e-Filing – User Manual” for the Supreme Court) and “A Step by Step Guide for e-filing for High Courts and District Courts of India” that outline the details of what can be termed as process reforms in the judicial system. Justice Dhananjaya Y. Chandrachud, Chairman of the Supreme Court’s e Committee has ushered in these process reforms and Chief Justice of India Sharad A. Bobde under whose leadership they have been sealed. The system enables electronic filing of legal papers for both civil and criminal cases across courts.​​ Four key features define this system. First, the system enables 24/7 filing. Members of the bar do not have to file their cases during court hours; they can do so from home at any time, on any day. Second, it enables online communication of defects and scrutiny of matters that are filed. The system has time slots for raising the defects and seeking rectification. Third, e-payment of court fees and fourth, introducing the digital signature for all filing-related conversations. All four features required lawyers or their clerks to stand in lines, over several counters, often standing on the knife edge of case and process timeslots, causing delays through serial hearings in the dispensation of justice. With the help of technology-based new system all these are gone. Finally, for those who are not in tune with technology, the Registry Service will hand-hold them by engaging data entry operators in the Supreme Court, a system that could be used by High Courts and District Courts as and when they follow.​​ The artificial intelligence infrastructure will now play a big role in the organisation of courts, categorisation of matters, and process computerization. It will also allow extraction of information at the rate of 1 million words per minute and can be used for the purpose of deciding a case.​​  The havoc of COVID-19 can be seen as a practice session for the Indian Legal Fraternity to prepare themselves for a new working environment. Along with hearings through video-conferencing, this process reform will go a long way in sharpening the justice system, tightening costs and reducing the financial burden of justice on citizens. But it is not that all cases can or will be heard on video. Some will have to be heard in flock. However, with every new system, the e-filing infrastructure too will face some glitches. For instance, there will be the usual protests by the clerks who will now have to upgrade, adapt, add value to themselves and become executive assistants. The entire bulk photocopying infrastructure and filing of paper books in courts will need to find new sources of revenue. But if we trace the origin of technology back in the 1980s, when banking unions raised a big hue and cried saying computerization will replace their jobs. But finally they upgraded themselves and settled into related jobs.​​ Extracted with edits from:​​ https://thedailyguardian.com/indias-judiciary-is-now-plugged-into-the-future-amid-covid-19/​​  by​​ The Daily Guardian,​​ June​​ 2020​​ ​​ ​​  ​​​​  ​​​​ 1.​​ In the context of the theme of the given passage, the phrase “courts are temporarily closing doors” means-(a)​​ restricting the​​ number of entry gates meant for public use​​ (b)​​ unnecessarily closing all the entry gates meant for public use​​ (c)​​ shutting down temporarily or​​ handling lesser matters​​ than usual​​ to deal with the Covid-19 pandemic(d)​​ None​​ of the above​​ ​​ ​​ ​​  2.​​ The​​ new e-filing system introduced by the Supreme Court of India-​​ (a)​​ allows filing of cases only on weekdays​​ ​​ ​​ (b)​​ allows filing of only civil cases on all days​​ and filing of other cases only on weekdays​​ ​​ (c)​​ allows filing of criminal cases on all days and filing of other cases only on weekdays​​ ​​ ​​ (d) allows filing of all cases on all days​​  3.​​ Winston Churchill, the former Prime Minister of UK, once said “Never let a good crisis go to waste”. Whether this sentiment echoes in the views expressed by the author?​​ (a)​​ Yes(b)​​ No​​ (c)​​ Can’t say​​ ​​ (d)​​ Data insufficient​​ ​​  4.​​ In the context of the given passage, the phrase “standing on the knife edge of process timeslots” means-​​ (a)​​ while standing in lines,​​ clerks​​ and lawyers​​ always​​ get​​ sufficient time​​ to complete the process of filing a new case​​ ​​ ​​ ​​ (b)​​ while standing in lines, clerks and lawyers sometimes get sufficient time to complete the process of filing a new case  ​​ ​​​​ (c)​​ while standing in lines, clerks and lawyers sometimes​​ get very little time​​ to complete the process of filing a new case  ​​ ​​​​ (d)​​ None of the above​​ ​​  5.​​ The adaption of​​ e-filing system in courts​​ threatens the jobs of-​​ (a) lawyers​​ (b) judges(c) cleaners engaged in courts(d) photocopying personnel​​  Answer key with explanations  ​​ ​​ ​​ ​​ ​​ ​​​​ Passage IQuestion 1 - Option (a) is the correct answer.Explanation​​ –​​ The​​ first paragraph of the passage states that the obligation to deduct TDS is on the payer which in case of an employer and employee is the employer hence option (a) is correct.​​ ​​  Question 2 - Option (b) is the correct answer.​​ Explanation​​ –​​ The​​ first paragraph of the passage states that there is an obligation imposed by law on the payer to deduct the TDS amount hence an employer cannot not deduct TDS on the request of his employee.​​ ​​  Question 3 - Option​​ (d) is the correct answer.​​ Explanation​​ –​​ The benefits of TDS are listed in paragraph two of the passage according to which option (d) is correct.​​  Question 4 – Option (d) is the correct answer.​​ Explanation​​ –​​ The​​ passage states that reduction of TDS rates​​ does not give any real benefit to salaried persons hence option (d) is correct.​​ ​​ ​​  Question 5​​ –​​ Option (c) is the correct answer.​​ Explanation –​​ The line “the payee/recipient only gets the benefit of holding ‘a rather small amount’ of ‘its own money’ in ‘its own hands’ for a longer duration”​​ indicates that option (c) is correct.​​  Passage IIQuestion 1 - Option (c) is the correct answer.Explanation​​ –​​ The spread of Covid-19 affected the functioning of courts which were compelled to either shut down temporarily or hear lesser matters per day in order to avoid spread of the virus hence option (c) is correct.​​ ​​  Question 2 - Option​​ (d) is the correct answer.​​ Explanation​​ –​​ The​​ line “the system enables 24/7 filing. Members of the bar do not have to file their cases during court hours; they can do so from home at any time, on any day” indicates that option (d) is correct.​​ ​​ ​​ ​​ ​​  Question 3 - Option (a) is the correct answer.​​ Explanation​​ –​​ The​​ line “The havoc of COVID-19 can be seen as a practice session for the Indian Legal Fraternity to prepare themselves for a new working environment” indicates that option (a) is correct​​ as the author is essentially​​ echoing the intent underlying​​ the statement given by Winston Churchill.​​  Question 4 – Option (c) is the correct answer.​​ Explanation –​​ A plain reading of the third paragraph of the passage indicates that option (c) is correct. Question 5​​ –​​ Option (d) is the correct answer.​​ Explanation – The line “The entire bulk photocopying infrastructure and filing of paper books in courts will need to find new sources of revenue” indicates that​​ option (d) is correct.​​ (function( $ ) { //footnotes $('.defaultNote').children(":first").css('cursor', 'pointer'); $('.defaultNote').children(":first").click(function(){ var gotoID = '#' + $(this).parent().attr('id'); $('html, body').animate( { scrollTop: $('a[href="' + gotoID + '"]').offset().top - 60, }, 250, 'linear' ) }); }(jQuery)); var numFormat = ",."; (function( $ ) { "use strict"; //do some cleaning on load var sortCells = $('td[data-sorting], th[data-sorting]'); sortCells.each(function(){ var first = $(this).text().trim().charAt(0); if (first == '@'){ var oldHTML = $(this).html(); var newHTML = oldHTML.replace('@', ''); $(this).html(newHTML); } }); function sortingTable(node, pos, ordBy){ var rows = node.children('tbody').children('tr').get(); rows.sort(function(a, b) { var X = $(a).children('td').eq(pos).text().toUpperCase(); var Y = $(b).children('td').eq(pos).text().toUpperCase(); if (numFormat != '.,'){ //we are dealing with a different locale and we need to do some //transformation in numbers X = convert2number(X); Y = convert2number(Y); } else { X = X.replace(/,/g, '').replace(/ /g, ''); Y = Y.replace(/,/g, '').replace(/ /g, ''); } var currencies = ['$', '¥', '£', '€']; var arrayLength = currencies.length; var XX = X; var YY = Y; for (var i = 0; i < arrayLength; i++) { XX = XX.replace(currencies[i], ''); YY = YY.replace(currencies[i], ''); } if (!isNaN(XX) && !isNaN(YY)){ var floatXX = parseFloat(XX); var floatYY = parseFloat(YY); return -(floatYY-floatXX) * ordBy; } else if (!isNaN(XX) && isNaN(YY)){ return -1 * ordBy; } else if (isNaN(XX) && !isNaN(YY)){ return ordBy; } else { if(X < Y) { return -1 * ordBy; } if(X > Y) { return 1 * ordBy; } return 0; } }); $.each(rows, function(index, row) { node.children('tbody').append(row); }); } function removeTableCellDecoration() { $("td[data-sorting], th[data-sorting]").removeClass('sortDecorator'); } //unbind the click event just in case we are loading more than one document $("td[data-sorting], th[data-sorting]").off('click'); $("td[data-sorting], th[data-sorting]").click(function(){ removeTableCellDecoration(); $(this).addClass('sortDecorator'); //get desired ordering var ordering = $(this).attr('data-sortOrdering'); if (ordering == 'ASC'){ var ordBy = -1; $(this).attr('data-sortOrdering', 'DESC'); } else { var ordBy = 1; $(this).attr('data-sortOrdering', 'ASC'); } var cellPosition = $(this).prevAll().length; var table = $(this).parents('table:first'); sortingTable(table, cellPosition, ordBy); }); function convert2number(str) { str = str.trim(); if (str.match(/^\d+/)) { //we have to take special care when the thousand separators are '.' var result_0 = str.replace(/\./g, '_@_'); var result_1 = result_0.replace(window.numFormat[0], '.'); var result = result_1.replace(/_@_/g, ''); result .replace(/ /g, ''); return result; } else { return str; } } }(jQuery));