Thursday, January 28, 2010
Sunday, June 29, 2008
Research and Markets : Tesco Plc - SWOT Framework Analysis
Internal factors - The strengths and weaknesses internal to the organization.
External factors - The opportunities and threats presented by the external environment.
The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is really important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.
Content Outline:
A. Executive Summary
B. A Brief Profile of the Company
C. SWOT Framework Analysis
C.1 Strengths to Build Upon
C.2 Weaknesses to Overcome
C.3 Opportunities to Exploit
C.4 Threats to Overcome
D. Glossary of Terms
For more information visit http://www.researchandmarkets.com/reports/c67242
COPYRIGHT 2007 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning
Accounting (ACCT) 451
View previous syllabus.
Delivery mode: Individualized study online or
grouped study**
Credits: 3 - Applied Studies
Prerequisite: ACCT 351 and ACCT 352.
Centre: School of Business
ACCT 451 is not available for challenge.
**Note: Students registering in grouped study, or grouped studyOverview
ACCT 451 is designed to cover a selected group of advanced financial accounting topics. More than half of the course is devoted to the related topics of investments in equity securities, business combinations, and the preparation of consolidated financial statements. The remainder of the course covers the translation of foreign currency transactions, the translation of foreign currency financial statements, and accounting for not-for-profit organizations.
ACCT 451 is a three-credit option in Athabasca University's Bachelor of Commerce degree program, as well as in the University Certificate in Advanced Accounting. The course meets the requirements of all three professional accounting bodies in Canada (CA, CGA, CMA) with respect to a course in advanced financial accounting.
The minimum prerequisite for this course is a one-semester course in intermediate accounting (e.g., AU’s ACCT 351). However, it is strongly recommended that you complete a two-semester sequence in intermediate accounting prior to attempting this course (e.g., AU’s ACCT 351 and ACCT 352). While it would be possible to succeed in ACCT 451 without taking both of these courses (or their equivalents), the background they provide could make ACCT 451 much easier to work through.
Outline
Lesson 1: Introduction
Lesson 2: Investments in Equity Securities
Lesson 3: Business Combinations
Lesson 4: Consolidation at Acquisition
Lesson 5: Consolidation Subsequent to Acquisition (No Intercompany Profits)
Lesson 6: Consolidation Subsequent to Acquisition (Including Unrealized Intercompany Profits)
Lesson 7: Interests in Joint Ventures
Lesson 8: Translation of Foreign Currency Transactions
Lesson 9: Translation of Foreign Currency Financial Statements
Lesson 10: Accounting for Not-For-Profit Organizations
Evaluation
Your final grade in this course will be based on four written assignments, a Midterm Examination, and a Final Examination. If you fail to submit an assignment by the end of your contract period, you will receive a grade of zero for that assignment. You must write a midterm and a final examination. You must also achieve an overall course grade of at least a “D” (50 percent) and a grade of at least “D” (50 percent) on each examination. If either examination grade is below “D” (50 percent), you will not receive credit for the course, even in your overall course grade exceeds “D” (50 percent). The weighting of the composite mark is as follows:
| Assign 1 | Assign 2 | Midterm Exam | Assign 3 | Assign 4 | Final Exam | Total |
|---|---|---|---|---|---|---|
| 5% | 5% | 35% | 5% | 5% | 45% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Note: Students planning to transfer this course to a Professional Accounting designation (i.e., CMA, CGA, CA) are advised that they will be required to achieve a grade higher than the minimum passing grade. See http://business.athabascau.ca/profAcct/ for details.
Organizational Behaviour
View previous syllabus.
Delivery mode: Individualized study online or
grouped study.**
Credits: 3 - Applied Studies
Prerequisite: None.
Télé-université du Québec equivalency: ADM 1013
Centre: School of Business
Overview
This course was developed and written by Claude Dupuis. Organizational Behaviour 364 introduces the field of organizational behaviour (OB) and provides a foundation for other OB courses offered in the School of Business. It covers a wide breadth of theories and applications dealing with such topics as perception, motivation, decision-making, team dynamics, negotiation, conflict management, leadership, and organizational culture. Nine lessons, covering 14 chapters in the textbook Canadian Organizational Behaviour (6th ed.) by Steven L. McShane, are presented in a logical order to create a sense of progression for the learner. Each lesson builds upon previous lessons, starting at the individual level, then moving on to a team level, and finally adopting an organization-wide level of analysis.
The goal of this course is to help you develop a conceptual understanding of OB theories, while also providing you with skills to put those ideas and theories into practice. Key techniques and processes designed to improve organizational efficiency and effectiveness are fully examined from the perspective of management, workers, and society at large.
Outline
ORGB 364 consists of 9 lessons:
Lesson 1: Introduction to Organizational Behaviour
Lesson 2: Individual Behaviour and Learning
Lesson 3: Emotions and Attitudes
Lesson 4: Motivation and Performance
Lesson 5: Decision-Making
Lesson 6: Team Dynamics and Performance
Lesson 7: Communication and Power
Lesson 8: Negotiation and Leadership
Lesson 9: Organizational Culture
Evaluation
To receive credit for ORGB 364, you must achieve a composite course mark of at least a “D” (50 percent), and a mark of at least “D” (50 percent) on the final examination itself. The weighting of the composite mark is as follows:
| Assignment 1 | Midterm Exam | Assignment 2 | Final Exam | Total |
|---|---|---|---|---|
| 15% | 30% | 15% | 40% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Course Materials
Textbook
McShane, S. L. (2006). Canadian organizational behaviour (6th ed.). Toronto: McGraw-Hill Ryerson. ISBN-13: 9780070876941 (ISBN-10: 0070876940)
Marketing (MKTG) 396
View previous syllabus.
Delivery mode: Individualized study online or
grouped study.**
Credits: 3 - Applied Studies
Prerequisite: None.
Centre: School of Business
MKTG 396 has a Challenge for Credit option.
**Note: Students registering in grouped study, or grouped study international mode are advised that there may be some differences in the evaluation and course materials informationOverview
MKTG 396 introduces marketing concepts, functions, and institutions. It also examines the influence of marketing on the Canadian economy and on the management of individual organizations. The course includes case studies in marketing—real-life examples of marketing problems—to give students practice in decision making and to improve their communication skills.
Outline
Lesson 1: Marketing—Managing Profitable Customer Relationships
Lesson 2: Company and Marketing Strategy—Partnering to Build Customer Relationships
Lesson 3: Marketing in the Digital Age—Era of Social Responsibility and Ethics
Lesson 4: The Marketing Environment and Managing Marketing Information
Lesson 5: Consumer and Business Markets and Buyer Behaviour
Lesson 6: Market Segmentation, Targeting, and Positioning
Lesson 7: Product, Branding, and Life Cycle Strategies
Lesson 8: Pricing
Lesson 9: Distribution Channels and Supply Chain Management
Lesson 10: Retailing and Wholesaling
Lesson 11: Integrated Marketing Communication Strategy
Lesson 12: Advertising, Sales Promotion, and Public Relations
Lesson 13: Personal Selling and Direct Marketing
Lesson 14: The Global Marketplace
Evaluation
To receive credit for MKTG 396, students must achieve a course composite grade of at least a “D” (50 percent) and a grade of at least 50 percent on the final examination. The weighting of the composite grade is as follows:
| Assignment 1 | Assignment 2 | Assignment 3 | Final exam | Total |
|---|---|---|---|---|
| 15% | 15% | 30% | 40% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Note: The final examination for this course must be taken online at an invigilated location. It is your responsibility to ensure a computer with an Internet connection and Internet Explorer 5.0 or higher is available for your use at the invigilation centre.
Course Materials
Textbook
Kotler, P., Armstrong, G., & Cunningham, P. H. (2005). Principles of marketing. (Canadian 6th ed.). Toronto: Pearson Prentice Hall. ISBN 0-13-121619-8
Administration (ADMN) 404
View previous syllabus.
Delivery mode: Individualized study online or
grouped study.**
Credits: 3 - Reading course - Applied Studies.
Prerequisite: Professor approval and completion of all other courses in the respective program.
Centre: School of Business
ADMN 404 is not available for challenge.
Overview
ADMN 404 is a three-credit required course in all business degree programs offered at Athabasca University. It is equivalent to a one-semester course at a conventional university.
ADMN 404 is intended to help students integrate the functional expertise they have developed in areas such as accounting, finance, management, marketing, and production. Concepts and tools acquired from these functional areas provide the basis for approaching strategic problems from a holistic perspective.
General managers run businesses. They are responsible for the overall direction and success of their business units in a competitive environment. Therefore, the point of view taken in this course is that of a general manager.
Outline
Lesson 1: The Strategic Management Process
Lesson 2: External Analysis
Lesson 3: Internal Analysis: Competitive Advantage and Functional-Level Strategy
Lesson 4: Business-Level Strategy
Lesson 5: High Technology and Global Strategy
Lesson 6: Corporate-Level Strategy (Part One)
Lesson 7: Corporate Strategy; Diversification, Acquisitions, and Internal New Ventures
Lesson 8: Corporate Governance, Ethics, and Control Systems
Lesson 9: Implementing Strategy in a Single Industry
Lesson 10: Implementing Strategy across Industries and Countries
Evaluation
To receive credit for ADMN 404, you must achieve a grade of “C-” (60 percent) on each of the Midterm and Final Examinations. As well, your combined grade for all evaluation activities must be a “D” (50 percent) or better. The following chart summarizes the evaluation activities for this course.
| Assign 1 | Assign 2 | Assign 3 | Mid-term Exam | Final Exam | Total |
|---|---|---|---|---|---|
| 16% | 17% | 17% | 25% | 25% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
**Note: The final examination for this course must be taken online at an invigilated location. It is your responsibility to ensure a computer with an Internet connection and Internet Explorer 5.0 or higher is available for your use at the invigilation centre.
Course Materials
Textbook
Hill, C.W.L., and Jones, G.R. (2004). Strategic management: An integrated approach. (6th. ed.). Boston: Houghton Mifflin. ISBN 0-618-49771-4.
Reading File
The print Reading File contains assigned readings from various sources beyond the course textbook.
Accounting (ACCT) 454
View previous syllabus.
Delivery mode: Individualized study online or
grouped study**
Credits: 3 - Applied Studies
Prerequisites: ACCT 355 and MATH 215 or MGSC 301
and MGSC 312.
Centre: School of Business
ACCT 454 is not available for challenge.
Overview
This course provides advanced coverage of accounting concepts and the use of accounting information for managerial decision-making. Lesson 1 provides an overview of the purpose of management accounting as compared with financial accounting, and traces the history of management accounting. It also outlines some of the uses of cost information. Part II of Lesson 1 discusses cost behaviour. Lessons 2 and 3 cover data analysis techniqueslinear programming and regression analysisas well as activity-based cost systems.
Lesson 4 provides a wide-ranging examination of activitybased management, including pricing and profitability analysis and the strategic cost management technique of target costing. Lesson 5 covers decentralization, discussing levels of decentralization and some of the benefits and conflicts it causes. Lesson 6 introduces the balanced scorecard as a total business unit performance measurement platform.
Lesson 7 covers financial measures of performance, including sales, profitability, and productivity variances, and it deals with transfer pricing techniques and issues. Part II of Lesson 7 continues coverage of financial performance measurement, dealing with return on investment and economic value added. Lesson 8 completes the study of the balanced scorecard with a discussion of the customer, internal business processes, and employee perspectives. Lesson 9 considers the role of management accounting in performance evaluation and incentive and compensation, including a discussion of the principal-agent paradigm. Lesson 10 concludes the course with a look at the ethical considerations related to agency theory and control.
Outline
Lesson 1: Management Accounting and Decision Analysis
- Understanding Management Accounting
- Understanding Cost Behaviour
Lesson 2: Resource Allocation, Capacity Cost and Assigning Resource Costs
- Resource Allocation and Capacity Cost
- Assigning Resource Costs to Production Centers
Lesson 3: Activity-Based Cost Systems and Cost Estimation
- Activity-Based Costing
- Cost Estimation and Regression Analysis
Lesson 4: Activity-Based Management and Cost-Based Decision Making
- Activity-Based Management
- Cost-Based Decision Making
Lesson 5: Decentralization
Lesson 6: Balanced Scorecard: Measuring Total Business Unit Performance
- Measuring Total Business Unit Performance
Lesson 7: Financial Measures of Performance, Return On Investment (ROI) and Economic Value Added (EVA)
- Financial Measure of Performance
- ROI and EVA
Lesson 8: Nonfinancial Scorecard Perspective
- Measuring Customer Internal Business Process and Employee Performance
Lesson 9: The Agency Theory Perspective on Managerial Accounting
- Incentive and Compensation Systems
- Formal Models in Budgeting and Incentive Contracts
Lesson 10: Ethical Considerations Related to Agency Theory and Control
- Ethical Considerations
Evaluation
To receive credit for ACCT 454, you must successfully complete three written assignments and a final exam. The weighting of each assignment and the exam is indicated in the chart below. The passing grade for the final exam is “D” (50 percent) . To receive credit for the course, you must pass the final exam and achieve an overall course grade of at least a “D” (50 percent).
| Assignment 1 | Assignment 2 | Assignment 3 | Final Exam | Total |
|---|---|---|---|---|
| 15% | 15% | 20% | 50% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Note: Students planning to transfer this course to a Professional Accounting designation (i.e., CMA, CGA, CA) are advised that they will be required to achieve a grade higher than the minimum passing grade. See http://business.athabascau.ca/profAcct/ for details.
Course Materials
Textbook
Kaplan, R. S., & Atkinson, A. A. (1998). Advanced Management Accounting (3rd edition). Upper Saddle River, New Jersey: Prentice Hall, Inc.
ISBN 0-13-262288-2
Other Materials
Students will access all other course materials online.
Software Requirement
Microsoft Office (Excel).
Accounting (ACCT) 356
ACCT 356 introduces strategic concepts and tools that a manager in an organization is likely to find useful. This course focuses on helping students think strategically as they evaluate an organization’s potential and opportunities for change. Thinking strategically involves setting objectives and then aligning what the organization is, or can become in the short run, with the organization’s environment. The information organizations need to monitor, evaluate, and improve strategy is called strategic performance measures. Helping planners identify the nature and scope of strategic performance measures in an organization is a critical role for management accountants.
Outline
Lesson 1: Introduction to Strategy
Lesson 2: Strategy and Competitive Intelligence
Lesson 3: Competitive Analysis Tools—Part 1
Lesson 4: Competitive Analysis Tools—Part 2
Lesson 5: Customer Analysis
Lesson 6: Competitive and Resource Analysis
Lesson 7: Strategic Scans
Lesson 8: Evolutionary Analysis Tools
Lesson 9: Financial Analysis and Budgeting
Lesson 10: Accounting and Strategy
Evaluation
To receive credit for ACCT 356, you must achieve a composite course grade of at least a “D” (50 percent) and a grade of at least 50 percent on the final examination. The weighting of the composite grade is as follows:
| Assignment 1 | Assignment 2 | Final Exam | Total |
|---|---|---|---|
| 20% | 20% | 60% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Note: Students planning to transfer this course to a Professional Accounting designation (i.e., CMA, CGA, CA) are advised that they will be required to achieve a grade higher than the minimum passing grade. See the Professional Accounting Designation Web site for details.
Course Materials
Textbook
Fleisher, C. S., & Benoussan, B. E. (2003). Strategic and competitive analysis: Methods and techniques for analyzing business competition. Upper Saddle River, NJ: Pearson Education. ISBN 0130888524
Other Materials
The course materials also include a reading file. All other course materials will be accessed online.
Wednesday, June 25, 2008
Accounting and Financial Research and role of ICAP
Cricketer
Research.. a dirty word indeed!The general thinking among us goes something like this "Why should we waste time and effort on something when there are so many goras doing all the hard work for us??!!". Bas paisa banaao aur ghar jao... thats our motto. Who gives a damn about this thing called research.On a serious and sad note, the reason nobody is interested in research in this subject is because nearly all of us come in this profession to make big bucks, rather than for the love of the subject. In science, it is mostly the other way around.And why should ICAP pay attention to these things since it also is guilty of running a 'chappa khana' in its basement! The text books and syllabi of ICAP and ICMAP are virtual copies of other international qualifications like ACCA, CIMA etc.
Beyond Reasonable Excuse and Negligence
Your Ad Here
It is true not trite that ignorance of tax law is an excuse! Penalties and freezing injunction are the two most important aspects of Income Tax Ordinance, 2001. However, penal provisions contain a most commonly used word reasonable coupled with the phrase opportunity of being heard. Apart from this, reasonable is also supplemented by many other words like ground, accuracy, basis, cost, amount, cause, opportunity, facilities, compensation, excuse etc.
One can say that this word is a sort of an act of mercy in the self contained code – Income Tax Ordinance, 2001. Similarly, the recovery sections contain an important aspect which is normally referred to as freezing injunction and is of utmost importance for Banks. This article is an endeavor to analyze the impact of two most important recent judgments which is closely related to the concept of penal provisions, reasonable and negligence. After analyzing the impact, we will move beyond reasonable excuse and negligence.
BEYOND REASONABLE EXCUSEThe Income Tax Ordinance, 2001 contains a number of onerous obligations on taxpayers and a number of penal provisions where the obligations are not met. In many cases, however, the penalty can be averted if the taxpayer can show that he has a reasonable excuse for failing to comply with the initial obligation. The word reasonable is equally important for the tax collectors and taxpayers. Although the word reasonable appeared at various places in Income Tax Ordinance, 2001 but let’s have a bird’s eye view over the Penalty sections of Income Tax Ordinance, 2001 only. The example of penalty sections is given in following table.
As far as the period of default is concerned, it is worthwhile here to note that penalty can be avoided if, throughout the period of default, the taxpayer had a reasonable excuse for not paying tax due, for not submitting the return or any other reason mentioned above. In furtherance, it is always deemed to be understood that a person to have done something if the person has a reasonable excuse for not doing it initially.
In Pakistan, ever since the introduction of self assessment scheme and increased tax compliance work, the load over the tax practitioner is cumbersome. This has increased the mushroom growth of tax advisors, consultants and cowboy accountants. On the other side Central Board of Revenue is still the examiner of already examined members of professional accounting bodies through section 223.
On the other side, the taxpayer cannot escape penalties by hiding behind their tax advisor, consultants and cowboy accountants. However, there were several instances in the past where the taxpayers have suffered huge penalties just because of ill advice or consultancy on the part of their tax advisor, consultants and cowboy accountants. One wonder! Why this position was never challenged. It is this position which Mrs. Rowland challenged.
Mrs. Rowland argued that her reliance on her accountants constituted a reasonable excuse, however, HMRC took the view that an error by a taxpayer’s accountant cannot constitute a reasonable excuse – Rowland v HMRC (2006) SpC 548.
The case was heard by Adrian shipwright. He noted that it is not sufficient for a taxpayer to have a reasonable excuse at some point during a period default. The reasonable excuse must subsist for the entirety of the period. On this question, the special commissioner made it clear that whether or not the accountants had any reasonable excuse for their error was irrelevant. The legislation requires Mrs. Rowland’s position to be determined. In particular, the court is obliged to consider Mrs. Rowland’s own knowledge and the measures she took to comply with her obligations. While Mrs. Rowland had considerable experience as a company director and she understood the rules relating to companies’ filing obligations, it was held that she need not be aware of how film partnership schemes operated. It was therefore reasonable for her to engage a form of accountants that specialized in such matters and to trust them to matters right. It was only because of the wrong advice that Mrs. Rowland had received that the tax was not paid on time.
Furthermore, there is authority (Thorne v General Commissioners for Sevenoaks (1989) BTC 243) that reliance on third parties can constitute a reasonable excuse. The Special Commissioner therefore held that, subject to any special rules, Mrs. Rowland had a reasonable excuse for failing to pay the tax on time.
It is worthwhile here to note that reliance over third parties is now a reasonable excuse apart from shortage of funds; however, shortage of funds may not preclude the taxpayer from the application of section 205. This decision will be a relief to taxpayers and their advisers because it provides an opportunity for penalties to be waived in situations where, formerly, taxpayers had to make claims against their advisors.
On the other side, now it is reasonable for a taxpayer to turn to a particular firm of professional advisers to assist with a matter not with the range of the taxpayers’ personal expertise, then the Rowland Case is authority for the proposition that the taxpayer would have a reasonable excuse if the adviser made an inadvertent error.
NEGLIGENCE IS NOT ENOUGH!Tax advisers will have studied tort law and in particular the tort of negligence. This was the area of law whose modern incarnation was Donoghue v Stevenson [1932] AC 562 and is often referred to as the ginger beer case. In order for a claim of negligence to succeed, a claimant must generally satisfy five tests.
The alleged tortfeasor (wrongdoer) must owe a duty of care to the alleged victim;
The tortfeasor must have breached this duty of care;
The victim must suffer damage or loss;
That damage or loss must be caused by tortfeasor’s breach of the duty of care; and
The loss or damage must be a reasonably foreseeable consequence of the breach.
It was the first of these tests that gave rise to the neighborhood principle in Donoghue v Stevenson. That principle provides that one owes a duty of care to one’s neighbor – one’s neighbor being [those] persons who are so closely and directly affected by my act that [one] ought reasonably to have them in contemplation as being so affected.
In most cases of alleged negligence, the existence of a duty of care is obvious. For example, a driver of a vehicle owes a duty of care to his passengers, other road users and pedestrians etc; a tax advisor owes a duty of care to his clients and in some cases, to others whom the client wishes to benefit. However, there is a case in which the defendant argues as a preliminary point that the duty of care did not exist! Customs v Barclays was one such case (HM Customs & Excise v Barclays Bank plc [2006] UKHL 28).
Customs were concerned about outstanding VAT liabilities of two limited companies. As is common in such situations, customs applied to the courts to freeze the companies’ bank accounts, both held with Barclays Bank plc, so that any subsequent judgment customs might subsequently obtain would not be frustrated by the companies dissipating the funds in the meantime. The approach taken by customs is commonly known as freezing injunction.
Because of the need for secrecy, a party to a future action in the courts will make an application for a freezing injunction without notifying the other side. If the court grants the application, a temporary injunction is given until such time as the parties can come to Court to discuss its continued operation. Where a freezing injunction is in place, any person who disobeys it, that is dealing with funds in contravention of the terms of the injunction, may be held to be in contempt of Court with the risk of imprisonment or a fine. This threat is not directed only at the party against whom the injunction is obtained, the respondent, but also to third parties who know the injunctions and who do anything that helps or permits the respondent to breach its terms. Therefore, when freezing injunctions are granted, most applicants send a copy to the respondent’s bank.
This was precisely what happened in this particular case. However, shortly after the bank received details of the injunctions, it authorized substantial payments from the companies’ bank account. Subsequently, Customs obtained judgments against the two companies, but substantial sums were irrecoverable. Customs therefore sued Barclays for negligence.
The House of Lords considered as a preliminary point whether Barclays owed a duty of care to Customs instead of whether or not Barclays had actually been negligent, that is, whether there had been a breach of the duty of care were it to exist.
On reading the facts of the case, it might be easy to sympathize with Custom’s position. Due to the (assumed) negligence of the bank, substantial sums were lost to the Exchequer and the Bank could reasonably have been expected to foresee such a consequence. Indeed, the three judges in the Court of Appeal upheld Custom’s claim for damages.
TABLE OF SECTIONS RELATED TO PENALTY
SECTION 182 (1) – Penalty for failure to furnish a return or statementAny person who, without reasonable excuse, fails to furnish, within the time allowed under this Ordinance, return of income or a statement as required under sub-section (4) of section 115 or wealth statement for any tax year as required under this Ordinance shall be liable for a penalty equal to one-tenth of one per cent of the tax payable for each day of default subject to a minimum penalty of five hundred rupees and a maximum penalty of twenty-five per cent of the tax payable in respect of that tax year.
SECTION 182 (2) – Penalty for failure to furnish a return or statementAny person who, without reasonable excuse, fails to furnish, within the time allowed under this Ordinance, any statement required under section 165 shall be liable for a penalty of two thousand rupees.SECTION 185 – Penalty for failure to maintain recordsA person who, without reasonable excuse, fails to maintain records as required under this Ordinance shall be liable for a penalty equal to –
SECTION 186 (1) – Penalty for non-compliance with noticeA person who, without reasonable excuse, fails to comply with any notice served on the person under section 116 or 176 shall be liable for a penalty equal to –
SECTION 187 (3) (e) – Penalty for making false or misleading statementsTo another person with the knowledge or reasonable expectation that the statement would be conveyed to an income tax authority.
SECTION 190 (1) - Imposition of penaltyNo penalty may be imposed under this Part on any person unless the person is given a reasonable opportunity of being heard.
However, over the past 70 years, the law of negligence has been refined – particularly, in cases where the loss incurred to the claimant is purely financial loss. In particular, the Courts are wary of exposing potential defendants to claims for financial loss in novel situations. In Caparo Industries plc v Dickman [1990] 2 AC 605, Lord Bridge of Harwich held that the Courts should adopt an incremental approach to new categories of negligence – each new case being considered on its merits.
In the House of Lords, all five of their Lordships gave substantive speeches. They all held that, as a matter of policy, Barclays did not owe a duty of care to customs. Therefore, the claim failed at the first hurdle.
Lord Bingham cited six closely associated reasons for allowing the bank’s appeal. In particular, his Lordship highlighted the facts that:
while the terms of the injunction refer to the duties to the Court, it makes no reference to other duties that might be owed to other persons; and
Second, the bank, as an agent of its customer, is effectively acting as an opponent of Customs in their attempt to secure the missing VAT. And it is established authority that opposing parties in litigation do not owe each other a duty of care.
In respect of the second of these points, Lord Bingham said it would be strange anomalous - - if an action in negligence lay against the bank who allowed the horse to escape from the stable but not against the owner who rode it out.
In a similar vein, Lord Hoffmann held that a freezing injunction carries its won remedies, and the Courts cannot infer a wider consequence of a party failing to comply with it.
Lord Rodger was less convinced by the suggestion that the bank was effectively a party to the underlying impending litigation between Customs and the companies. In reality, he said, they were no more on the companies’ side in that dispute than the companies’ butchers, bakers or candlestick makers. He examined the recent cases that look at the duty of care where the loss suffered was purely financial, and concluded that to impose a duty on the bank would not be fair, just or reasonable.
Lord Walker, too, was disinclined to put much weight on the litigation context. He was attracted to the idea that banks ought to have the responsibility of dealing with freezing injunctions – especially when granted to the revenue authorities – in the same way as banks have other duties, example money laundering, imposed on them. However, his Lordship noted that other third parties, other than banks, might be served with a notice of freezing injunction, and to impose a duty of care on them would produce unfair, unjust and unreasonable results. Therefore, Lord Walker also allowed the bank’s appeal.
Lord Mance made a similar point and added that, while banks might be able to obtain insurance against such risks, other third parties are unlikely to be able to do so. His Lordship also provided a clear analysis of the various factors that give rise to a duty of care in cases of financial loss. He concluded by focusing on test of fairness, justice and reasonableness, and held that it would be inappropriate for the bank to be held to owe a duty of care in the circumstances.