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Showing posts from April, 2014

Sec 234E-Bombay HC Stay Order

S. 234E: High Court grants ad-interim stay against operation of notices levying fee for failure to file TDS statementS. 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). A Writ Petition to challenge the validity of s. 234E has been filed in the Bombay High Court. The Petition claims that assessees who are deducting tax at source are discharging an administrative function of the department and that they are a "honorary agent" of the department. It is stated that this obligation is onerous in nature and that there are already numerous penalties prescribed for a default. It is stated that the fee now levied by s. 234E is "exponentially harsh and burdensome" and also "deceitful, atrocious and obnoxious". It is also claimed that Parliament does not have the jurisdiction or compe…

FATCA

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 by US Government, aims to check and impose withholding tax on illicit activities of US taxpayers who use offshore accounts to evade taxes. The final FATCA regulations, issued in January 2013, are set to come into effect from July 1, 2014 after signing of Intergovernmental Agreements (IGA) with different countries. On April 11, 2014, India reached an agreement 'in substance' with USA on FATCA.

Resolutions to be proposed at the ensuing AGM

Friends pl add on to do list immediately after 28th AprilResolutions to be proposed at the ensuing AGM1)      Increase in borrowing limit and creation of charge - S/180 (I) (c) & 180 (I) (a)2)      Accepting Public Deposits - S/73 & 763)      Change/ Alteration in AOA –Adopt Table F4)      Invt. in other body Corporates - S/1865)      Appointment of Branch Auditors (Dubai Branch)6)      Related Party transactions, if any - S/1887)      Appointment of Auditors – Within 3yrs of notification S/139 (2)8)      Issue of Securities (CPs etc) on Pvt. Placement - S/429)      Appt of CFO & other KMPs - Board approval as 20310)   Fixing Remuneration of KMPS - Board approval as 20311)   Appt. of independent directors - S/149(10) to (12)

Actions immediately to be taken on  notification of the Act1)      Identify related parties – To be notified to a/cs and SAP team2)      Print new Business letters, bills etc with CIN no. – s/12(3) (c)3)      Devise CSR policy & spending – s/1354)  …

SEBI INTRODUCED amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance)

SEBI has pursuant to a master circular issued today, introduced amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement. The master circular will supersede all other earlier circulars issued by SEBI on Clauses 35B and 49 of the Equity Listing Agreement. The revised Clause 35B would be applicable to all listed companies and the modalities would be governed by the provisions of Companies (Management and Administration) Rules, 2014.Following are some of the highlights of the revised Clause 49:1.       Applicability a)      To all listed companies with effect from 1 October 2014.b)      The provisions of Clause 49(VI)(C) [constitution of risk management committee] will be applicable to top 100 listed companies by market capitalisation as at the end of the immediate previous financial year. 2.       Related Party Transactions i.e. a transfer of resources, services or obligations between a company and a related party, regardless of w…

CBDT on Roads-BOT

Important CBDT Circular On Depreciation/ Amortisation Of Intangible AssetsThe CBDT has issuedCircular No. 09/2014 dated 23.04.2014in which it has dealt with the important issue of treatment of expenditure incurred for development of roads & highways in Build-Own-Transfer (BOT) agreements. The CBDT has expressed the view that as the assessee does not hold any rights in the project except recovery of toll fee to recoup the expenditure incurred, the assessee cannot be treated as the "owner" of the property and cannot be allowed depreciation u/s 32(1)(ii) of the Act. However, the CBDT has also held, following the law laid down inMadras Industrial Investment Corp225 ITR 802 (SC), that the entire cost of construction and development of the infrastructure facility has to be amortized evenly over the period of the concessionaire agreement and allowed as business expenditure u/s 37(1) of the Act. The CBDT's view with regard to the assessee not being the "owner&quo…

SEBI's New Corporate Governance Norms

SEBI's New Corporate Governance Norms: A more transparent roadmap for Listed EntitiesIn a step towards ensuring lucidity in the regime, the Capital Market Regulator, SEBI, has floated new Corporate Governance Norms and revised Clause 35B with the basic premise of promoting interest of varied stakeholders on one hand and aligning the provisions of extant Clause 49 of the Listing Agreement with the Companies Act, 2013 on the other.

The new norms aim to intensify the corporate governance framework for listed companies in India and are considered as a step forward to increment harmonisation in SEBI & MCA laws. 
The main highlights are outlined as follows:Amendment in Clause 35B in line with the Section 108 of the Act read with Rule 20 of Companies (Management and Administration) Rules, 2014, thereby casting a mandate on all the listed Companies for the mandatory electronic voting facility to all the members of the Company to exercise their right to vo…

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)As the members are aware, the Direct Taxes Code, 2013 has proposed to widen the scope of the definition “Accountant” to include other professionals as well. It is a fact that various provisions in the Income-tax Act, 1961 under which chartered accountants have been given the responsibilities to undertake audit and certification of accounts of various entities have the emphasis on “audit” of the relevant accounts which is the exclusive domain of Chartered Accountants. The Council of ICAI is aware that the proposed change is a cause of major concern to the entire profession. In this regard, ICAI has through a representation to Ministry of Finance, placed on record its concern not only for the profession, but for the country as a whole since issuance of audit certificates by persons having limited knowledge of audit of accounts will not only be professionally incorrect and but will raise many…

Standard Operating Procedure instructions for IT

FYI- Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The SOP also makes special provisions for dealing with the tax demand upto Rs. 1,00,000/- in the case of Individuals and HUFs in order to accommodate certain extra ordinary situations. The SOP is expected to mitigate the long standing grievances of taxpayers by way of reduction/deletion of tax demands. The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income. Such mistakes include quoting of invalid/incorrect TAN; quoting of only one TAN against more than one TAN tax credit; furnishing information in wrong TDS Schedules in the Return For…

Amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement.

SEBI has pursuant to a master circular issued today, introduced amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement. The master circular will supersede all other earlier circulars issued by SEBI on Clauses 35B and 49 of the Equity Listing Agreement. The revised Clause 35B would be applicable to all listed companies and the modalities would be governed by the provisions of Companies (Management and Administration) Rules, 2014.Following are some of the highlights of the revised Clause 49:1.       Applicability a)      To all listed companies with effect from 1 October 2014.b)      The provisions of Clause 49(VI)(C) [constitution of risk management committee] will be applicable to top 100 listed companies by market capitalisation as at the end of the immediate previous financial year. 2.       Related Party Transactions i.e. a transfer of resources, services or obligations between a company and a related party, regardless of w…

Press Note on Tax Credit

CBDT optimist on Standard Operating Procedure; Urges taxpayers to file rectification request for TDS mismatchesApril 18, 2014 SECTION 139D OF THE INCOME-TAX ACT, 1961 - FILING OF RETURN IN ELECTRONIC FORM - EXTENSION OF FACILITY TO TAXPAYERS TO VERIFY IF DEMAND IN THEIR CASE IS DUE TO TAX CREDIT MISMATCH ON ACCOUNT OF INCORRECT FURNISHING OF SPECIFIED PARTICULARS AND SUBMIT RECTIFICATION REQUESTS WITH CORRECT PARTICULARS OF TDS/TAX CLAIMS FOR CORRECTION OF THESE DEMANDS PRESS NOTE NO.402/92/2006-MC, DATED 17-4-2014Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The SOP also makes special provisions for dealing with the tax demand upto Rs. 1,00,000/- in th…

Parliament competent to impose Service Tax on Restaurants and hotels: Bombay HC

Bombay HC upholds service tax levy on AC restaurants; Differs from Kerala HC ratioBombay HC dismisses writ filed by Indian Hotels and Restaurant Association, upholds validity of service tax levy on air-conditioned restaurants serving liquor u/s 65(105)(zzzzv) of Finance Act; Rejects assessee's challenge to Parliament's competence to tax sale / purchase of goods by way of / as part of any service, covered under "State List" read with Article 366(29A)(f) of Indian Constitution; Tax on sale / purchase of goods and tax on services two distinct concepts; To say that Parliament is denuded of its competence to tax restaurant services entails violence to plain language of Constitutional provisions; Service tax does not tax sale of goods, but services provided in such sale; Entry 54 in List II does not envisage service tax on services rendered by restaurant to any person, as referred u/s 65(105)(zzzzv); Rejects Kerala HC's single Judge ruling in Kerala Classi…

Section 40(a)(ia),

IT: In view of retrospective amendment in section 40(a)(ia), deduction made in last month of financial year would be allowable, if same was deposited before filing of return under section 139(1)[2014] 42 taxmann.com 547 (Rajasthan)HIGH COURT OF RAJASTHANCommissioner of Income-tax, Udaipur
v.
Choudhary Construction Company

New e forms

FYI - The ministry of Corporate Affairs vide public notice dated 11th April 2014 stated  that all the new e forms   under the Companies Act 2013 would be available for  uploading from the 28th day of April 2014 (instead of staggered roll out of new e forms from the 14th of April, 2014)

CIN Mandatory

Corporate Identification Number (CIN) to be mandatorily mentioned on letterheads etc. from 1st April, 2014
In the latest from the Ministry of Corporate Affairs, 183 new Sections of the Companies Act 2013 have been notified to take effect from April 1, 2014.
As per Section 12 of the Act notified from 1st April, 2014, every company is mandatorily required to mention its Corporate Identification Number (CIN) along with the name and address of registered office on letterheads, invoices, notices and on all official correspondence and publications. Additionally, contact details, email and website address, if any, must be incorporated in such documents mentioned from April 1, 2014.
In case of any failure to quote the CIN number, penalty of Rs 1,000 per day shall be imposed on the defaulting company and on every officer in default for every day during which the default continues. However, maximum penalty imposable shall not exceed Rs 100,000.

Direct Taxes Code

The Finance Ministry has released a revised and comprehensive "Direct Taxes Code 2013″. The said Code contains several significant changes with far-reaching implications to the law and practice of income-tax. The Code also seeks to make the law more simplified and comprehensible. There is specific emphasis in the Code on measures to tax tax evasion. The Finance Ministry has also issued a paper highlighting the salient features of the Direct Taxes Code 2013
Source: ITAT Online


"accountant" means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub section (1) of section 6 of that Act, and shall include - (i) a company secretary within the meaning of the Company Secretaries Act, 1980
(ii)a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 ; or
(iii) any person having such qualifications as the Board may prescribe, for the purposes specified in this beh…

ITR- AY 2014-15

INCOME-TAX (FOURTH AMENDMENT) RULES, 2014 - AMENDMENT IN RULE 12 & SUBSTITUTION OF FORMS SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) AND ITR-V NOTIFICATION NO.24/2014 [F.NO.142/2/2014-TPL]/SO 997(E), DATED 1-4-2014 In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax rules, 1962, namely:— 1. (1) These rules may be called the Income-tax (4th Amendment) Rules, 2014. (2) They shall come into force with effect from the 1st day of April, 2014. 2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 12,— (a)in sub-rule (1), for the figures "2013", the figures "2014" shall be substituted;(b)in sub-rule(2), in the proviso after the words and figures "section 115JB" the words "or to give a notice under clause (a) of sub-section (2) of section 11" shall be i…

Bank Audit: Minimise bank audit risk by maintaining documentation

Bank Audit: Minimise bank audit risk by maintaining documentation: Train ur staffs to Identify NPAs: By CA Nitesh More
1) Our audit risk is minimized If: a)We are able to identify & recognize the NPAs properly, b)We maintain proper documentation of our audit. Otherwise if subsequently, RBI inspector detect additional NPAs & on that basis , if RBI complain to ICAI, one may be in trouble. 2) TRAIN YOUR STAFFS TO IDENTIFY NPAs: Identification of the NPAs is one of the major Task in Bank Branch audit. If your article clerks &other staffs are able to identify the NPAs than you will be able to implement proper incomerecognition & provisioning norms as per RBI guidelines. So train your article clerk to indentifythe NPAs.   3) Non performing Assets : An asset, including a leased asset, becomes non performing when it ceases to generate income for the bank. A non performing asset (NPA) is a loan or an advance where; i. Interest and/ or instalment of principal remain overdue for a perio…