MCA UPDATE
!! Good Morning !!
MCA has notified the amended
Section 42 of the CA 2013 and its corresponding Rule 14 of the Companies
(Prospectus and Allotment of Securities) Rules w.e.f. 7th August, 2018.
Key changes made in the revised
section 42 and corresponding rule 14 are enumerated below :
(a) Deletion of requirement
w.r.t. value of offer or invitation per person:
The requirement of the value of offer or invitation per person of INR 20,000/- of face value of the securities has been done away with.
The requirement of the value of offer or invitation per person of INR 20,000/- of face value of the securities has been done away with.
(b) Usage of Share Application
Money:
Now a company is not permitted to utilize the share application money received by it unless (i) allotment is made; and (ii) the return of allotment, in e-form PAS – 3, is filed with the Registrar of Companies.
Now a company is not permitted to utilize the share application money received by it unless (i) allotment is made; and (ii) the return of allotment, in e-form PAS – 3, is filed with the Registrar of Companies.
(c) Reduction in time period
for filing e-form PAS – 3:
Now, a company is required to file the return of allotment within 15 days of allotment instead of 30 days.
Now, a company is required to file the return of allotment within 15 days of allotment instead of 30 days.
(d) Separate penal provisions
for non-filing of e-form PAS – 3:
Where a company defaults in filing e-form PAS – 3 within 15 days of allotment, the company, its promoters and directors shall be liable with a penalty INR 1,000/- per day but not exceeding INR 25,00,000/-.
Where a company defaults in filing e-form PAS – 3 within 15 days of allotment, the company, its promoters and directors shall be liable with a penalty INR 1,000/- per day but not exceeding INR 25,00,000/-.
(e) Common private placement
offer cum application form:
The form PAS-4 has been revised and has a small section of application letter that needs to be filled in by the applicant. This application needs to be submitted by the applicant along with subscription money.
The form PAS-4 has been revised and has a small section of application letter that needs to be filled in by the applicant. This application needs to be submitted by the applicant along with subscription money.
(f) Mode of Payment:
The subscription money is required to be paid either by cheque, demand draft or other banking channel and not by cash.
The subscription money is required to be paid either by cheque, demand draft or other banking channel and not by cash.
(g) Fresh offer prior to
allotment:
Earlier there was a restriction that no fresh offer or invitation can be made unless the allotment w.r.t. any earlier offer has been completed or the offer has been withdrawn or abandoned. Now a carve out has been provided that where the number of persons to whom the offer is made does not exceed 200, the company may, at any time, make more than one issue of securities to such class of identified persons.
Earlier there was a restriction that no fresh offer or invitation can be made unless the allotment w.r.t. any earlier offer has been completed or the offer has been withdrawn or abandoned. Now a carve out has been provided that where the number of persons to whom the offer is made does not exceed 200, the company may, at any time, make more than one issue of securities to such class of identified persons.
(h) Restriction on rights of
renunciation:
The revised section specifically restricts any right of renunciation of the private placement offer that is been made by the issuer company. The earlier section and rules did not have the said restriction.
The revised section specifically restricts any right of renunciation of the private placement offer that is been made by the issuer company. The earlier section and rules did not have the said restriction.
(i) Record:
A complete record of Private Placement offers is required to be made in Form PAS-5.
A complete record of Private Placement offers is required to be made in Form PAS-5.
(j) Revision of penalty amount:
The penal provision has been revised from ‘the amount involved in the offer or invitation or Rs. 2Cr, whichever is higher” to ‘the amount involved in the offer or invitation or Rs. 2Cr, whichever is lower”.
The penal provision has been revised from ‘the amount involved in the offer or invitation or Rs. 2Cr, whichever is higher” to ‘the amount involved in the offer or invitation or Rs. 2Cr, whichever is lower”.
For ease of reference, provided
below the links to the commencement notification and the revised rules:
http://www.mca.gov.in/Ministry/pdf/CommencementNoti07_08082018.pdf
http://www.mca.gov.in/Ministry/pdf/RuleProspectusSecurities07_08082018.pdf
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NCLAT : In Shah Brothers Ispat Pvt. Ltd. vs. P. Mohanraj and Ors.
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NCLAT : In Shah Brothers Ispat Pvt. Ltd. vs. P. Mohanraj and Ors.
Whether the order of
moratorium will cover a criminal proceeding under Section 138 of NI Act, which
provides punishment of imprisonment for a term which may extend to three years
or with fine which may extend to twice the amount of cheque or with both? It
was held that the court of competent jurisdiction may proceed with the
proceeding under Section 138 of NI Act, even during the period of moratorium._
Read full case law at :_
https://dasgovernance.com/2018/08/09/nclat-in-shah-brothers-ispat-pvt-ltd-vs-p-mohanraj-and-ors/.
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A ‘Technical Error’ on the part of Chartered
Accountant can’t be treated as Professional Misconduct:
AA The Appellate Authority has
recently quashed an order of the disciplinary committee and held that a mere
technical error on the part of a Chartered Accountant is not sufficient to
treat him guilty of professional misconduct. Satish K. Arora, President &
COO of M/s International Asset Reconstruction Company Private Limited, Mumbai
lodged a complaint against the appellant, Chartered Accountant. In the
complaint, it was alleged that in spite of clearly being in knowledge of facts
of an assignment, the appellant has chosen to allow to misrepresent facts and
has not disclosed the correct liability of the Borrower Company with respect to
IARC. It was said that the said act would amount to professional misconduct.
vinay The disciplinary committee of the ICAI found the above allegation
admissible and awarded punishment of removal of name of the Appellant from the
Register of Members for a period of one year and also imposed a fine of
Rs.50,000/. Before the appellate authority, the appellant contended that the
loan towards Axis Bank and IARC were shown as ‘secured loans’ only and their
character was not altered and therefore, the true and fair view was not impaired
at all and at the worst, it can only be described as a technical error which
does not constitute professional misconduct. The appellate authority noted that
even the counsel for the ICAI fairly admitted that there is no charge of
impairment of true and fair view of financial statements. “We have also
observed that the issue of compliance of SA 505 raised by Director (Discipline)
in his Prima Facie Opinion has also not been raised by the Disciplinary
Committee and appears to have been dropped. Thus no violation of the law has
been pointed out in the impugned Order passed by the Disciplinary Committee nor
has any charge of impairment of true and fair view been levied. The fact of
account of AVFL becoming NPA in Axis Bank is also of no relevance for the
purpose of audit either for true and fair view or disclosure. Even there is no
charge framed on this account.” Diving deeply into the facts of the case, the
appellate authority allowed the contentions of the appellant and held that “it
may at worst be a technical error and therefore, it cannot be said that the due
diligence was not exercised or there was any negligence, much less gross
negligence. Accordingly, we find the appellant ‘Not Guilty’ under clause (7) of
Part-I of the Second Schedule to the Chartered Accountants Act, 1949,” the AA
said.
Good news after a long period
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10.08.2018(Friday) is Last Day to
file GSTR-1 for monthly return outward suppliers for July, 2018.
Migration cases where
Provisional ID received can follow specified process till 31.8.18 to complete
registration. Notification 31/2018 of 6-8-18.
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Luxury Tax leviable on Rent charged on
Furniture and Utensils in Marriage Hall: Kerala HC [Read Judgment]
Read more at:
http://www.taxscan.in/luxury-tax-leviable-rent-charged-furniture-utensils-marriage-hall-kerala-hc/27028/.
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Income Tax Returns filed by As
many as 209,000 'non-filers' filed in last fiscal and paid taxes worth Rs 64.16
billion, Minister of State for Finance Shiv Pratap Shukla said.
Govt introduced four bills to
amend the Goods and Services Tax (GST) laws which among other things seek to
simplify the return forms and raise the turnover threshold for availing
composition scheme to Rs 1.5 crore.
10.08.2018 (Friday) is Last Day
to file GSTR-1 for monthly return outward suppliers for July, 2018.
Migration cases where
Provisional ID received can follow specified process till 31.8.18 to complete
registration. Notification 31/2018 of 6-8-18.
MCA Form DIR-3 KYC is has been revised on MCA21 portal w.e.f. 9th AUG 2018. As per the revised form,
stakeholders may kindly note that ‘Aadhaar’ shall now be mandatory only for
applicants who are ‘Residents of India’.
The Negotiable
Instruments(Amendment) Act, 2018 has been notified to primarily address issues
of dishonour of cheques and to deal with unnecessary delay in disposal of such
cases.
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Companies to provide GST Details: MCA Amends
Cost Record and Audit Rules [Read Draft Rules]
Read more at:
http://www.taxscan.in/companies-to-provide-gst-details-mca-amends-the-cost-record-and-audit-rules/27059/.
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Supplying Food to Poor by Trust under
Sub-Contracts received from State Govt or Intermediaries not ‘Charitable’ in
Nature: Kerala HC [Read Judgment]
Read more at:
http://www.taxscan.in/supplying-food-poor-trust-sub-contracts-received-state-govt-charitable-nature-kerala-hc/27064/.
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Legal updates
Service Tax:
1. High Court- Taking a
photograph of a person in the process of preparation of Electoral Photo
Identity Card (EPIC) would be self-service and would not attract Service Tax in
terms of Section 65(105)(zzzh) of the Finance Act, 1994, as in such a
situation, there is no service provider and service receiver.
2018-TIOL-1553-HC-KOL-ST
2018-TIOL-1553-HC-KOL-ST
2. Tax Liability- Since
respondent discharged service tax liability in capacity of recipient of
service, Rule 5B of the CCR, 2004 seeking refund of service tax paid on the
taxable
services should be equated with Rule 5 of CCR for grant of refund of
service tax paid.
2018-TIOL-2457-CESTAT-MUM
2018-TIOL-2457-CESTAT-MUM
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Chartered Accountant held guilty for
Misconduct for arranging Bogus Bills through Dummy Concerns and Charged
Commission [Read Order]
Read more at: http://www.taxscan.in/chartered-accountant-guilty-misconduct-arranging-bogus-bills-dummy-charged-commission/27071/.
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Loading or Unloading of Goods in Trailer /
Truck in Godown amount to Cargo Handling Service: CESTAT [Read Order]
Read more at:
http://www.taxscan.in/loading-unloading-goods-trailer-truck-godown-amount-cargo-handling-service-cestat/27076/.
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A Notice for Attachment of Property cannot be
challenged before High Court: Madras High Court [Read Judgment]
Read more at:
http://www.taxscan.in/notice-attachment-property-challenged-high-court-madras-high-court/27088/.
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CBI Arrests 6 Customs Officials and Private
Persons for Bribery and Smuggling
Read more at: http://www.taxscan.in/cbi-arrests-6-customs-officials-private-persons-bribery-smuggling/27085/.
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Lok Sabha passes bills to amend GST laws
Move aims at plugging loopholes
in existing laws and reducing the compliance burden for taxpayers
New Delhi: The Lok Sabha
on Thursday passed four bills amending laws relating to the Goods and Services
Tax (GST). The move aims at plugging loopholes in existing laws and reducing
the compliance burden for taxpayers. The Central GST (Amendment) Bill, 2018,
Integrated GST (Amendment) Bill, 2018, The Union Territory GST (Amendment)
Bill, 2018 and the GST (Compensation to States) Amendment Bill, 2018 got the
Lower House’s nod
Aug 09, 2018.
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Lok Sabha passes bills to amend GST laws
Taxpayers to amend their tax
returns
The provisions will allow
taxpayers to amend their tax returns in order to rectify errors. They also
widen the scope for availing input tax credit.
However, in a move that will
have a retrospective impact, transitional credit cannot be claimed for taxes
levied in a pre-GST era.
Aug 09, 2018.
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Cabinet approves signing of MoU between India
and Canada on collaboration among Chartered Accountant Institutions
Read more at:
http://www.taxscan.in/cabinet-mou-ndia-canada-chartered-accountant-institutions/27099/.
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NCLT (Mumbai Bench) : In Vijay Kumar Jain vs.
Resolution Professional and Committee of Creditors
Whether suspended director is entitled
to get the confidential information as stated in
Reg. 35 of the CIRP Reg. or
not? It was held that the suspended director be a part of the CoC meetings, but
they are not entitled or grant him access to any Confidential Documents._
Read full case law at :_
https://dasgovernance.com/2018/08/10/nclt-mumbai-bench-in-vijay-kumar-jain-vs-resolution-professional-and-committee-of-creditors/
