CA Rohit Jaiswal

Wednesday, 8 September 2021

8 September 3021 Updates

🪙 Addition made under section 68 on account of sundry creditor was deleted – ITAT Bench of Delhi held in the case of Mega international (P.) Ltd. v. DCIT [7525/Del/2017]

🪔 Facts and Findings: The AO noted that out of three sundry creditors shown by the Assessee-company in its Income Tax Return, notice served to one creditor was returned unserved. Thus, the AO has made addition to assessee's income on account of said creditor.

🌴 ITAT bench of Delhi noted that the AO proceeded to make said addition without providing sufficient opportunity to the Assessee to clarify issue or to file confirmation in respect of said creditor. Further, when confirmation in respect of such creditor was produced by the Assessee before the CIT-A, he erroneously rejected the same. Thus, considering facts, it was held that impugned addition made on account of a sundry creditor was unjustified and same was to be deleted.

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⚫The Govt is looking at easing coal stock rules to allow diversion of fuel to stations having critical level of stocks. It is looking at the possibility of reducing the benchmark of 14 days of coal stocks to 10 days for identifying and diverting coal to plants with extremely depleted stocks.

⚫The Ministry of Road Transport and Highways said, construction of 3,385.02 km of national highways so far in the current financial year 2021-22.

⚫The CBDT has issued refunds of over Rs 67,401 crore to more than 2.4 million taxpayers between April 1 and August 16.

⚫The Centre has asked all its departments to promote five-minute yoga break or 'Y-break' among employees working under them, with a view to refresh, distress and refocuses them with enhanced efficiency at workplaces.

⚫India administered over 68 crore COVID-19 vaccine doses so far.

⚫India reported 42,618 fresh COVID-19 cases in the last 24 hours wherein Kerala contributed 29,322 positive cases.

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🔮 Ethics of the Day🕵🏻

🏵️ FAQ : Whether a Chartered Accountant in practice can use expression like Income Tax Consultant, Cost Accountant, Company Secretary, Cost Consultant or a Management Consultant?

👉 Ans :No, Council direction under Paragraph 2.14.1.7(ii) of Clause (7) of Part I of the First Schedule to the Act, appearing in Volume II of the Code of Ethics prescribes that it is improper for a Chartered Accountant to state on his professional documents that he is an Income-tax Consultant, Cost Accountant, Company Secretary, Cost Consultant or a Management Consultant

🏵️ FAQ: Can a Chartered Accountant in practice give the date of setting up the practice or date of establishment on the letterheads and other professional documents, etc.?

👉 Ans : No,Council direction under Paragraph 2.14.1.7(iv) of Clause (7) of Part I of the First Schedule to the Act, appearing in Volume-II of Code of Ethics prescribes that the date of setting up of the firm on the letterheads and the professional documents, etc. should not be mentioned. However, in the Website, the year of establishment can be given.

🏵️ FAQ: Can a Chartered Accountant in practice also practice as an Advocate*?

👉 Ans :Yes, Council direction under Paragraph 2.14.1.7(v) under Clause (7) of Part I of the First Schedule to the Act , appearing in Volume-II of Code of Ethics prescribes that a Chartered Accountant in practice who is otherwise eligible may practice as an Advocate subject to the permission of the Bar Council but in such cases, he should not use designation 'Chartered Accountant' in respect of the matters involving the practice as an Advocate. In respect of other matters he should use the designation 'Chartered Accountant' but he should not use the designation 'Chartered Accountant' and 'Advocate' simultaneously.

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⚫FPIs were net buyers to the tune of Rs 16,459 crore in Indian markets in August, with majority of investment coming in the debt segment.

⚫E-commerce firms such as Amazon and Flipkart are strengthening their supply chain networks with the addition of new facilities ahead of the festive season. They are also scaling up their hiring initiatives to meet consumer demand.

⚫Saudi Arabia cut oil prices for sales to Asia next month by more than twice the expected amount in a sign the world’s largest crude exporter wants to entice buyers to take more of its barrels. Saudi Aramco is rolling back pricing on all of its grades to its biggest market in Asia.

⚫Atal Pension Yojana has emerged as the most popular social security scheme under the NPS with over 2.8 crore subscribers, mainly from the non-metro centres.

⚫Morning Consult, which regularly tracks popularity ratings of a host of global leaders, has put PM Modi with 70% approval on the top of a list which included US President and UK PM.

"The highest ranking for the country's top leader in the global approval rating is a matter of pride and honour for the country.

⚫Aviation watchdog DGCA directive to DDA to reduce the height of buildings and structures in four apartments- Ganga, Yamuna, Narmada and Saraswati in D-6 society of Vasant Kunj has left the residents worried.

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MCA proposed to do away with Statutory Audit as per the Companies Act 2013 for small companies.

MCA proposed to do away with Statutory Audit as per the Companies Act 2013 for small companies

As per news updates, the Ministry of Corporate Affairs (MCA) might do away with Statutory Audit as per the Companies Act 2013 for small companies. This decision has been taken in line with the ease of doing business.

In order to promote, ease of doing business, first Turnover limit of Tax Audit was increased, then GST Audit was abolished, and now the government is planning to do away with Statutory Audit for certain classes of companies.

Once Statutory Audit for companies is done away with, companies will no more need CA Certification on their Financials and the Director of the company can self certify the documents and upload it on ROC website.

As per sources, companies with paid-up capital of up to Rs. 2 Cr and Turnover of up to Rs. 20 Cr are small companies and this benefit may be provided to them from next Financial year.

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🪙 Keyman Insurance Policy premium paid by firm for its partners is an allowable business expenditure – ITAT Bench of Lucknow held in the case of Ibrahim International Ltd Vs ACIT [ITA No. 340/Lkw/2018]

🌴 Facts and findings: The Assessee-Company, formerly a Partnership Firm paid premium on a Keyman Insurance Policy taken for its partners for AY 2007-08 which was disallowed by the Revenue holding it to be in the nature of investment. The ITAT bench of Lucknow noted that the Assessee amended its Form 36 on conversion from partnership firm into Company which was not objected to by the Revenue. The ITAT referred to CBDT Circular No. 38/2016 (accepting the ruling of the High Court of Punjab & Haryana in the case of Ramesh Steels) wherein it was clarified that the premium on Keyman Insurance Policy is admissible expenditure under section 37 and thus, allowed Assessee’s claim.

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⚫Sales of 1647 listed mfg co's recorded "extraordinarily high" growth of 75% in the first quarter of FY'22 mainly due to a very low base in the pandemic hit year ago period.

⚫Indian exporters allege global shipping co's are forming cartels. Ask govt to regulate them, bat for a larger Indian shipping company.

⚫Tesla plans fully owned retail outlets in India. It has been sourcing auto components from the country after signing up non disclosure agreements.

🌑India's sugar production is likely to decline marginally to 30.5 million tonne in the next 2021-22 season as more sugarcane will be diverted for ethanol making.

⚫Nearly 47% cases closed under the insolvency law ended up in liquidation till the end of June this year but economic value in majority of the cases had eroded even before commencement of the CIRP.

⚫ED files 15 cases for medical malpractice amid threat of third Covid wave. Probe agency identifies a trail of close to Rs 50 cr.

⚫SC gives Govt a week to fill vacancies in tribunals.

🌑The Kerala high court asked the Govt to allow the administration of the second dose of the Covishield vaccine after a gap of four weeks for those wishing to take the jab early, and willing to pay for it.

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🔮 Ethics of the Day🕵🏻

🏵️ FAQ : Whether a Chartered Accountant in practice can use the designation 'Corporate Lawyer'?

👉 Ans No,a Chartered Accountant in practice is not permitted to use the designation 'Corporate Lawyer'.

🏵️ FAQ: Can a Chartered Accountant in practice/firm give advertisement in press?

👉 Ans : No,however, the members in practice may advertise the services setting out the services provided by him or his firm, and particulars of his firm, through a `Write-Up’, subject to Advertisement Guidelines issued by the Council.

🏵️ FAQ: If a member is a partner in more than one firm, is it permissible to print the names of all the firms on visiting cards, letter-heads, stationery etc?

👉 Ans :Yes,there is no violation under Clause (7) of Part I of the First Schedule to the Act.

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🇮🇳 GST Updates 07.09.2021

1️⃣ Govt. must constitute GST tribunal: SC.

2️⃣ RSS weekly Panchajanya attacks Infosys over glitches in I-T, GST portals.

3️⃣ Roti vs Malabar parotta, papad vs fryum – bizarre GST slabs for similar goods spark 4,600 cases.

4️⃣ GST authorities send out more notices, industries claim harassment. A

detailed representation to GST authorities and the CBIC to avoid hardships.

5️⃣ Punjab records 20.41% rise in GST collection in August.

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👉🏻Govt. must constitute GST tribunal - Supreme Court

( The Supreme Court on Monday said the government had no option but to constitute the Goods and Services Tax (GST) Appellate Tribunal.)

👇🏻 👇🏻 👇🏻

https://bit.ly/3yP5uly

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CBDT opens window for filing of Settelment Application to all those assessees who were eligible to file application on 31st January,2021, a day before Settelment Commission was wound up with a further condition that assessment proceedings are pending on the date of filing such application. The last date for filing application is 30th September, 2021. Settelment of application shall be done by Interim Board of Commissioners constituted by CBDT.

The time period is short. Only 24 days.

Regards

Ved Jain

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Rules on taxable PF Interest notified:

1. CBDT has come up with the Notification no. 95/2021 dated 31st August, 2021 and inserted a new Rule 9D under the income tax Rules, which shall be applicable for the FY 2021-22 and onwards.

2. As per this new Rule 9D, two Provident Fund accounts shall be maintained from the FY 2021-22 and onwards to calculate the portion of interest that is to be taxed for a contribution made above threshold limit which is Rs. 2.5 lacs for other than government employees and Rs. 5 lacs for government employees.

3. The Rule also specifies the method to calculate the closing balance in both the PF accounts.

4. Non Taxable contribution account balance as on 31/3/22 shall be the aggregate of:

Non Taxable PF account opening bal+ contribution during the year+ interest- withdrawal

5. Taxable contribution account balance as on 31/3/22 shall be the aggregate of:

Contribution during the year+ interest- withdrawal

6. So the interest earned on the excess contributions of PF above Rs 2.5 L or Rs 5 L as the case may be, would be taxable.

CA Aniket Kulkarni

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Regarding Exempt LT Capital Gain of Rs. 1 lac u/s 112A

I had received many queries that ITD portal is not showing exempt LTCG of upto Rs. 1 lac and showing the same as part of Total Income.

I would like to bring to your kind notice that this is not a flaw but is exactly as per law.

Language of 112(2) does not exempt such income, but on the other hand, while computing tax, first 1 lac shall be excluded.

Thus it will become part of Total Income per se, but while computing tax, it will be excluded.

So pls stop worrying about it.

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CBDT amends Income-tax Rules, 1962 to ease authentication of electronic records submitted in faceless assessment proceedings

👉For easing the process of authentication of electronic records in faceless assessment proceedings, the Government has amended Income-tax Rules, 1962 (‘the Rules’) vide notification no G.S.R. 616(E) dated 6th September, 2021. The amended Rules provides that electronic records submitted through registered account of the taxpayers in the Income-tax Department’s portal shall be deemed to have been authenticated by the taxpayer by electronic verification code (EVC). Therefore, where a person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated by EVC for the purposes of section 144B(7)(i)(b) of the Income-tax Act, 1961 (‘the Act’).

👉However, under the existing provisions of section 144B(7)(i)(b) of the Act, this simplified process of authentication by EVC is not available to certain persons (such as companies, tax audit cases, etc.) and they are mandatorily required to authenticate the electronic records by digital signature. In order to provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also. Hence, the persons who are mandatorily required to authenticate electronic records by digital signature shall be deemed to have authenticated the electronic records when they submit the record through their registered account in the Income-tax Department’s portal. Legislative amendments in this regard shall be proposed in due course.

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⚫The Union Cabinet is likely to discuss a relief package for the financially stressed telecom sector. As part of the package, there could be some relaxation on payment of levies to the govt including a one year moratorium on spectrum installment due in April 2022.

⚫Govt likely to give more sops to units in SEZ's. With this incentive, manufacturers will be able to boost production.

⚫Drone use, satellite imagery for agriculture insurance may be a must. Govt, Irdai considering using AI to control fraud claims, cut delays in settlement

⚫The I-Tax dept extended the deadline for filing settlement applications for eligible taxpayers till Sept 30, as settlement commission ceased to exist from February 1.

⚫Tax portal 2.0 to integrate with bourses to track trade transactions. Will take stock of discrepancies in assessee disclosures in ITR.

⚫India crossed the 700 million mark for total doses administered in the country. More than 76% of the doses given so far were first shots, while the remaining 24% were second doses.

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Ethics of the Day*🕵🏻

🏵️ FAQ : Can a Chartered Accountant in practice use/fix a monogram of the Institute on any column/wall located inside the office or on professional documents.?

👉 Ans :No,in view of the Council directions under Clause (7) of Part I of the First Schedule to the Act, a Chartered Accountant in practice is not permitted to use/fix a monogram of the Institute on any column/wall located inside the office or on any professional documents.

🏵️ FAQ: Whether the office of a Chartered Accountant is permitted to go in for ISO certification or other similar certifications?

👉 Ans :Yes, there is no bar for a member to go in for ISO certification or other similar certifications. However, the member cannot use the expression like “ISO Certified” on his professional documents, visiting cards, letterheads or sign boards etc.

🏵️ FAQ: If a member has passed any additional course of the ICAI, is he permitted to print such qualification on visiting cards, letter heads and other stationery?

👉 Ans :It is not permissible for a member to mention the name of certificate course of the ICAI cleared by him. However, wherever diploma is awarded by the ICAI, the same can be mentioned on the visiting cards, letterheads, and other stationery. E.g. DISA (ICAI).

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CBDT inserted a new Rule 14C to ease authentication of electronic records submitted in faceless assessment proceedings. If electronic records are submitted through registered account of taxpayer on the income tax portal,separate authentication thru EVC is not required to be done.

*http://gstupdategstforcecom.blogspot.com/2021/09/cbdt-inserted-new-rule-14c-to-ease.html*

CBDT provides relief to taxpayers who were eligible to file application for settlement as on 31.01.2021 before ITSC, but could not, due to cessation of ITSC vide Finance Act,2021. Such applications can be filed by 30.09.2021 before the Interim Board,subject to certain conditions.

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Thanks for reading

Saturday, 4 September 2021

4 September 2021 Updates

👉Date for filing application for revocation of cancellation of registration extended

https://www.gst.gov.in/newsandupdates/read/503

👉Exposure Draft of Revised AS 36, Impairment of Assets - (31-08-2021)

https://www.icai.org/post/ed-of-revised-as-36-impairment-of-assets

👉Interview with CNBC Asia, Singapore on August 26, 2021 - Shri Shaktikanta Das, Governor, Reserve Bank of India

https://www.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1119

👉Keynote Address at the 21st FIMMDA-PDAI Annual Conference on August 31, 2021 - Shri Shaktikanta Das, Governor, Reserve Bank of India

https://www.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1122

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🔮 Ethics of the Day🕵🏻

🏵️ FAQ : Can a Chartered Accountant in practice/Firm of Chartered Accountants post the particulars of himself/ itself on a website*

👉 Ans :Yes, the Council has approved the detailed guidelines for posting the particulars on Website by Chartered Accountants in practice and firm(s) of Chartered Accountants in practice.

🏵️ FAQ: Whether website of any Chartered Accountant can provide a link to the website of ICAI, its Regional Councils and Branches and also to the websites of Govt./Govt. Departments/Regulatory authorities and other professional bodies?

👉 Ans : Yes, it is permitted that website may provide link to the website of ICAI, its Regional Councils and Branches and also to the websites of Govt./Govt. Departments/Regulatory authorities and other professional bodies.

🏵️ FAQ: Whether the information contained in the website of the Chartered Ac countants and/or Chartered Accountants' firms can be circulated on their own or through e-mail or by any other mode or technique?

👉 Ans :Paragraphs 3.3.3 and 3.3.4 of Council Guidelines for Advertisement, 2008, appearing in Volume-II of Code of Ethics, prescribe that the Chartered Accountants and/or Chartered Accountants' firms should ensure that none of the information contained in the website be circulated on their own or through e-mail or by any other mode or technique except on a specific “pull” request. The Chartered Accountants and/or Chartered Accountants' Firms would ensure that their Websites are run *on a “pull” model and not a “push” model* of the technology to ensure that any person who wishes to locate the Chartered Accountants or Chartered Accountants' firms would only have access to the information and the information should be provided only on the basis of specific “pull” request.

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JB Mohapatra has been appointed as the chairman of the Central Board of Direct Taxes, the finance ministry said in a notification Wednesday. Mohapatra had been officiating as the chairman of the Board since June this year. Mohapatra will succeed Prakash Chandra Mody, a 1982-batch Indian revenue services officer, who retired in May.

CBDT has, on August 31, 2021, notified the rules regarding the taxation of the interest on the excess EPF contributions. According to the notification, for the purpose of calculation of taxable interest, separate accounts within the provident fund account shall be maintained during and from the financial year 2021-22. Any contributions made by an individual till March 31, 2021, will be considered non-taxable contributions. Further, from FY 2020-21, interest will be separately calculated on both these EPF accounts.

GST collections dipped around 4% to Rs 1.12 lakh crore in August, compared to Rs 1.16 lakh crore in the previous month, but policymakers and experts remained upbeat about revenues remaining strong in the coming months on account of improved economic activity.

Upcoming GST Council meeting on September 17 will focus on the extension of compensation cess as the Council may also look into duty inversion in specific sectors. States are demanding the extension of compensation cess for another five years.

RBI will conduct fine-tuning operations to manage unanticipated and one-off liquidity flows, Governor Shaktikanta Das said. As the market settles down to regular operations, the RBI will conduct fine-tuning operations from time to time, as needed, to manage unanticipated and one-off liquidity flows so that liquid conditions in the system evolves in a balanced and evenly distributed manner.

CAG Empanelment status of CA Firms For PSU Audit FY 2021-22 from below link: https://lnkd.in/gwR9HMRT.

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Notice issued under section 148 till 30th June 2021 is completely legal and valid – High Court of Chhattisgarh held in the case of Palak Khatuja vs Union of India [W.P.(T) No. 147/148/149 of 2021]

🌴 Facts and findings: Assessees-individuals preferred writ petitions challenging the notices issued under section 148 for AY 2015-16 on June 30, 2021 issued without adhering to the procedure under section 148A. The Assessees also submitted that the extension notifications would not over ride even to extend the period of operation of provisions of the old regime. The Revenue submitted that because of pandemic and lock down, lot of people could not file their return and submit the necessary papers, thus, the CBDT issued the notification for extending the application of old reassessment provisions initially up to Apr 30, 2021 which was further extended up to June 30, 2021 and therefore, the impugned notice was within the ambit of Revenue’s power and thus, completely valid and legal.

The High Court has referred to the Taxation & Others Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 and observed that “the delegation to the executive with conferment of the power to the Central Government to specify the date by way of relaxation of time limit, the main purpose of the Finance Act is not defeated. The legislature has resorted to conditional legislation to give the power to executive, in what circumstances the law should become operative or when the operation should be extended would be covered by doctrine of the conditional legislation. Thus, the *High Court noted that it was for the benefit of the Assessees and to facilitate the individual to come out of woods, the time limit was extended and certain right was reserved in favour of the Revenue to maintain parity and consequently, Section 148 under the old regime was also extended and rejects to interfere in the issuance of notice under section 148.*

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🔮 Ethics of the Day🕵🏻

🏵️ FAQ : Whether a Firm of Chartered Accountants can provide facility to the client to access its documents through logging in on the Firm’s website?

👉 Ans :Paragraph 3.3.9 of the Council Guidelines for Advertisement, 2008, appearing in Volume-II of Code of Ethics permit chat rooms amongst members of the ICAI and between Firms and its clients, provided the confidentiality protocol is observed. Accordingly, *it is permissible* for the Firm of Chartered Accountants to provide document management facility to the client to get access copies of their documents on the Firm’s website vide distinct log in and password.

🏵️ FAQ: *Can a member/ Firm of Chartered Accountants print his/its vision and values behind the visiting cards*?

👉 Ans : *No*, since such printing of vision and values behind the visiting cards may result in solicitation and violation of the provisions of Clause (6) of Part-I of First Schedule to the Act.

🏵️ FAQ: Can a Chartered Accountant in practice advertise his professional attainments or services, or can he use any designation or expression other than Chartered Accountants on professional documents, visiting cards, letter heads or sign boards, etc.?

👉 Ans :No, as per Clause (7) of Part I of the First Schedule to the Act, a Chartered Accountant shall be deemed to be guilty of professional misconduct, if he advertises his professional attainments or services, or uses any designation or expressions other than chartered accountant on professional documents, visiting cards, letter heads or sign boards, unless it be a degree of a University established by law in India or recognized by the Central Government or a title indicating membership of the Institute of Chartered Accountants or of any other institution that has been recognized by the Central Government or may be recognized by the Council. However, the member in practice may advertise through a write-up setting out the services provided by him or his firm and particulars of his firm subject to such guidelines as may be issued by the Council.

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Union Budget 2021 has provided relief for Senior Citizen from filing Income Tax Return

👉The Central Board of Direct Taxes (CBDT) notified the provision regarding Furnishing of declaration and evidence of claims by senior citizens for Exemption from Income Tax Return Filing under section 194P of the Income Tax Act.

👉The CBDT inserted Rule 26D through the Income-tax (26th Amendment) Rules, 2021.

👉The declaration required to be furnished by the specified senior citizen to the specified bank under sub-clause (iii) of clause (b) of Explanation to section 194P shall be in Form No. 12BBA to be furnished in paper form duly verified.

👉On furnishing of the declaration in Form No. 12BBA, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis of the rates in force.

👉The effect of the deduction allowable under Chapter VI-A shall be given based on the evidence furnished by the specified senior citizen during the previous year.

👉The declaration referred to in sub-rule (1) and evidence for claiming deduction under Chapter VI-A referred to in sub-rule (3) shall be properly maintained by the Specified Bank and shall be made available to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required.

👉The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems), as the case may be, shall specify the procedure for furnishing of particulars of Form No. 12BBA referred to in sub-rule (1) and evidence referred to in sub-rule (3) by the specified banks to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax, as and when required.”.

👉In the principal rules, in rule 31, in sub-rule (1), in clause (a), after the word and figures “section 192”, the words, figures and letter “and section 194P” shall be inserted.

👉In the principal rules, in rule 31A,- (i) in sub-rule (1), in clause (a), after the word and figures “section 192”, the words, figures and letter “and section 194P” shall be inserted; in clause (b), after the words, figures and letter “section 193 to 196D”, the brackets, words, figures and letter “(other than section 194P)” shall be inserted; after sub-rule (3A), the following sub-rule shall be inserted, namely:-

👉“Specified bank responsible for deduction of tax under section 194P shall furnish evidence produced by the specified senior citizen for claiming deduction under chapter VI-A to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or to any other person authorized by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as and when required,” the notification said.

👉The Board notified Form no. 12BBA which pertains to a declaration to be furnished by Specified Senior Citizen under sub-clause (iii) of clause (b) of Explanation to section 194P.

*YouTube channel* Northern Region (Jammu & Kashmir, Himachal Pradesh, Haryana, Punjab, Delhi and Chandigarh) but also outside Northern Region.

Thursday, 2 September 2021

2 September 2021 Updates

Income Tax Department has urged taxpayers to "quickly" send an online response so that their pending refunds for assessment year 2020-21 can be processed expeditiously., it said that till date, 93 per cent of the refund claims in ITRs (Income Tax Returns) filed for assessment year (AY) 20-21 have "already" been processed.

Income Tax Department released draft of rules to drop retro Tax demands provided companies concerned give an “irrevocable” undertaking to withdraw all legal cases against the government as well as undertake not to pursue any in future. Earlier this month, the government enacted the Taxation Laws (Amendment) Act 2021 to scrap a tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India.

Goods and service tax network had issued News and Update dated August 26, 2021 regarding Implementation of Rule-59(6) on GST Portal. Rule-59(6) will be implemented on GST Portal from 1 September, 2021. GSTN system will now check before the filing of GSTR-1 whether the following conditions have been met or not:

GSTN has asked taxpayers who have not filed their pending GSTR-3B, especially from period November 2020 and afterwards, to do so at the earliest Taxpayers who have not filed GSTR-3B return for the past two months will not be allowed to file GSTR-1 return from next month,

Definition of PMLA is given under section 3 of the PMLA, 2002 where any activity of Money Laundering is involved for the purpose of converting ‘Non legitimise’ money into ‘legitimise’ money which is earned through committing a ‘schedule offence’ by a person.Read more:- http://femainindia.com/Image/PMLA_28.8.pdf

RBI announced the launch of the next round of households surveys to capture inflation expectations and consumer confidence, which provide useful inputs for its monetary policy.

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🌺 In case there is a misuse of the status conferred upon it by Section 12AA of the Act, registration under sections 12AA and 80G to be cancelled: Hon’ble Supreme Court held in the case of CIT (Exemptions), Kolkata vs. Batanagar Education Research Trust [Civil Appeal No. 4451 of 2021]

🌴 Observation of the Supreme Court: Where answers given to questionnaire by Managing Trustee of the Assessee- Trust showed that donations were received by way of cheques out of which substantial money was ploughed back or returned to donors in cash and thus registration conferred upon it under sections 12AA and 80G was completely being misused by Trust. In such a case, Income-tax authorities were right and justified in cancelling registration under sections 12AA and 80G to Trust.

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HC: Invoking doctrine of conditional legislation, upholds reassessment notices issued under old regime

[TS-816-HC-2021(CHAT)]

Chhattisgarh HC dismisses writ petitions against reassessment notices issued under the old regime and holds that by extension notification issued by CBDT, “the individual identity of Section 148, which was prevailing prior to amendment and insertion of section 148A was insulated and saved uptill 30.06.2021.”; Assessees-Individuals preferred writ petitions challenging the notices issued u/s 148 for AY 2015-16 on Jun 30, 2021 issued without adhering to the procedure u/s 148A; Assessees also submitted that the extension notifications would not over ride even to extend the period of operation of provisions of the old regime; Revenue submitted that because of pandemic and lock down lot of people could not file their return and submit the necessary papers, thus, the CBDT issued the notification for extending the application of old reassessment provisions initially upto Apr 30, 2021 which was further extended upto Jun 30, 2021 and therefore, the impugned notice was within the ambit of Revenue’s power and thus, completely valid and legal;

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🏵️ FAQ : Can a member put up his photograph on the website?

👉 Ans :Yes, Paragraph 3.3.7 of Council Guidelines for Advertisement, 2008, appearing in Volume-II of Code of Ethics provides that display of passport style photograph is permitted.

🏵️ FAQ: Whether the names of clients or fees charged be mentioned on the website of a Chartered Accountant or Chartered Accountants Firm*?

👉 Ans : Names of clients and fee charged cannot be given. However, disclosure of names of clients and/or fees charged may be made on the website where it is required by a regulator, whether or not constituted under a statute, in India or outside India, provided that such disclosure is only to the extent of requirement of the regulator and is made only till such period that the member works under the purview of such regulator/ such requirements of the regulator are in force. The fact that the disclosure is being made due to requirement of regulator has to be made below the disclosure itself.

🏵️ FAQ: Whether a Firm of Chartered Accountants can use catchwords / catchphrases on its website, Letter heads and visiting cards?

👉 Ans :The mention of catchwords / catchphrases (for e.g., excellence in a particular area, Firm having professionals of integrity etc.) on Firm’s website, Letter heads and visiting cards is not permissible in view of the provisions of Clauses (6) and (7) of Part-I of the First Schedule to Act. It may be noted that the above catch words are only indicative and not exhaustive.

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: HC: Invoking doctrine of conditional legislation, upholds reassessment notices issued under old regime

[TS-816-HC-2021(CHAT)]

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GST UPDATE NO. 57th ON LIABILITY ON SUPPLY OF NON-AC BUSES TO COMPANY FOR TRANSPORTATION OF STAFF

The tax liability on renting/hiring of motor vehicles has been point of dispute since Service Tax Laws and the legacy is continued in the GST regime also. Recently, the issue regarding leviability of GST on supply of non AC buses for transportation of staff under contract carriage was raised before the Maharashtra Authority for Advance Ruling in the case of M/s SHAILESH RAMSUNDER PANDE. The outcome of this decision is the subject matter of discussion of our present update.

The AAR held that the applicant has agreement with RIPL for supplying non-AC buses to transport staff of RIPL and the buses are owned by the applicant. Further, the applicant also incurs expenses on fuel and maintenance of the buses and for all these services provided by the applicant, they are paid fixed hire cost plus fixed fuel cost at predetermined rates of fuel plus mileage. Moreover, it is RIPL which controls the deployment of the buses. Thus, the applicant cannot run the buses on their own because the overall control of the buses is with the RIPL. Further, as per the agreement, insurance charges etc. will be paid by the applicant whereas the toll tax etc. will be paid by RIPL. Thus, while the ownership of buses lies with the applicant, the buses shall be strictly operated as per the instructions of the RIPL. Hence, there is clear transfer of right to use the buses by way of effective control as is seen from the fact that the buses are plying strictly as per RIPL’s instructions.

The serial no. 15 of the exemption notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 reads as follows:-

S. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of services Rate (%) Condition

15 Heading 9964 Transport of passengers, with or without accompanied belongings, by-

(b) non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or Nil Nil

The AAR held that in the case of transportation of passengers, the recipient of service would be the passenger whereas in the case of renting of any motor vehicle, like buses in the subject case, the recipient would not be a passenger. In the present case, the consideration for supply of service is charged from RIPL and not the passenger. Therefore, in the subject case, recipient is RIPL. Consequently, it was held that the subject activity is “renting of motor vehicle” and shall qualify as a taxable activity under the provisions of GST law. As the activity is not transportation of passengers, the provision of above referred notification are not appliable in the present case.

The AAR placed reliance on the definition of ‘contract carriage’ as given under section 2(7) of the Motor Vehicles Act, 1988 which reads as follows:-

“contract carriage” means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum-

(a) on a time basis, whether or not with reference to any route or distance; or

(b) from one point to another, and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey , and includes-

(i) a maxicab; and

(ii) a motorcab notwithstanding the separate fares are charged for its passengers’

Thus, the essential ingredient of contract carriage is that it plies under a contract for a fixed set of passengers, and does not allow any other passenger to board or alight from the carriage at will. A ‘contract carriage’ carries passengers as a group and cannot pick up passengers en-route. The AAR also ruled that even if it is assumed that contract is of “non air-conditioned contract carriage”, serial no. 15 excludes hiring of such carriages. Hence, AAR rules that the service provided by the applicant falls under renting of motor vehicles under serial no. 10 of the notification no. 11/2017-CT (Rate) dated 28.06.2017 attracting 5% GST without ITC under reverse charge mechanism or 12% GST with ITC facility under forward charge mechanism.

In our opinion, the contention of the learned AAR that the terms of the contract do not indicate that the transaction is of “non air conditioned contract carriage” appears to be misplaced on two points. If the definition of contract carriage is studied, it is found that the only requirement is that the use of carriage is for carriage of passengers either on time basis without reference to any route or it is for carriage of passengers from one point to another, without stopping to pick up or set down passengers not included in the contract anywhere during the journey. It nowhere states that contract carriage carries passengers as group and cannot pick up passengers en-route but the same contention is taken by AAR. This example will further elaborate it. Suppose, a company employs a bus for picking up of their employees by contact carriage starting from point A and ending at point C. As per definition of contact carriage, it can stop at point B and pick up employees of company mentioned in the contract. But it cannot pick up any other person not mentioned in contract. Moreover, as per definition of contact carriage, it cannot stop at point E which is not mentioned in the contract. But the interpretation taken by AAR is that it cannot stop at any point and cannot pick up anyone including employees mentioned in contract. This analogy is wrong. As such, they said restriction has been added by Authority of Advance Rulings by themselves. Hence, in our view, the transaction can be very well considered as that of “non air conditioner contract carriage”.

Now, the next important question is who is the recipient of service? It is contended by AAR that since consideration is paid by the company, the company is the receiver and as it is not passenger, the benefit of exemption is not available. In this regard, it is submitted that although consideration is paid by the company but practically, at times, the person paying the consideration is different than the actual beneficiary of the service received. In such a situation, merely because the recipient does not actually get benefit of the service cannot be reason to deny the provision of service in that category. To illustrate- if consideration of a flight ticket for director is paid by a company to the airlines, in such a case, it cannot be denied that the director is the passenger and the services are correctly classifiable under transportation of passengers by air by the airlines company. Accordingly, the justification for non-applicability of exemption notification does not appear to be convincing.

This is solely for educational purpose.

You can reach us at new.capradeepjain.com , at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on twitter at https://www.twitter.com/@capradeepjain21 and follow us on linkedin at https://www.linkedin.com/in/ca-pradeep-jain-b6a31a16/

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📍FinMin prescribes rules for calculation of taxable interest on contribution to EPF/GPF

New norms to come into effect prospectively

The Finance Ministry said that tax on interest pertaining to contribution towards Employees’ Provident Fund (EPF) or General Provident Fund (GPF) exceeding ₹2.5 lakh will not be retrospective.

The rules released by the Ministry prescribes calculation of taxable interest relating to contribution towards EPF or GPF with prospective effect and that the threshold for contribution to avail non-taxable interest could go to ₹5 lakh, in case of government employee.

The rules further say that the income earned through interest on contribution of over and above ₹2.5 lakh (₹5 lakh in case of no contribution from the employer) will be taxable. For the purpose of calculation of taxable interest, separate accounts within the provident fund account will be maintained during the current fiscal year (2021-22) and onwards for taxable contribution and non-taxable contribution made by a person.

Read full at https://www.thehindubusinessline.com/economy/policy/finmin-prescribes-rules-for-calculation-of-taxable-interest-on-contribution-to-epfgpf/article36225537.ece

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📌📍No GST On Papad, Whatever Its Shape": Tax Body Corrects Harsh Goenka

The Central Board of Indirect Taxes and Customs said the exemption of papad is not affected by its shape or name.

Papad, whatever its shape or name, is exempted from GST, the government's indirect taxation agency clarified today after a social media post claimed that a round papad is exempted from the tax while a square variant attracts it.

The social media post had pictures of round and flat papads placed next to each other. Sharing the post, Harsh Goenka, chairman of RPG Enterprises, tweeted, "Did you know that a round papad is exempt from GST and a square papad attracts GST ? Can anyone suggest a good chartered accountant who can make me understand the logic?"

Responding to the post, the Central Board of Indirect Taxes and Customs, which is responsible for indirect taxation in the country, clarified through its official handle, "Papad, by whatever name known, is exempt from GST vide Entry No. 96 of GST notification No.2/2017-CT(R). This entry does not distinguish based on the shape of papad. This notification is available at http ://cbic.gov.in"

https://www.ndtv.com/india-news/no-gst-on-papad-whatever-its-shape-tax-body-corrects-harsh-goenka-2525483

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🏵️ FAQ : Whether a Chartered Accountant in practice can give public interviews and also whether he can furnish details about himself or his firm in such interviews?

👉 Ans :As per paragraph 2.14.1.6(iv)O under Clause (6) of Part I of the First Schedule to the Act, appearing in Volume-II of Code of Ethics, a Chartered Accountant in practice can give public interviews. While doing so, due care should be taken to ensure that such interviews or details about the members or their firms are not given in a manner highlighting their professional attainments, Any detail which is given must, in addition to meeting above requirements, be given only as a response to specific question , and of factual nature only.

🏵️ FAQ: Whether a member can appear on television, films, internet and broadcast in the Radio or give lectures at forums?

👉 Ans : Yes, Council direction under Paragraph 2.14.1.7(x) under Clause (7) of Part I of the First Schedule to the Act, as appearing in Volume-II of Code of Ethics prescribes that a member may appear on television, films and internet and agree to broadcast in the Radio or give lectures at forums and may give his name and describe himself as chartered accountant. Special qualifications or specialized knowledge directly relevant to the subject matter of the programme may also be given. Firm name may also be mentioned, however, any exaggerated claim or any kind of comparison is not permissible.. What he may say or write must not be promotional of him or his firm but must be an objective professional view of the topic under consideration.

🏵️ FAQ: A Chartered Accountant in practice during a TV interview, handed over a bio-data of his firm to the Chairperson. Such bio-data detailed the standing of the international firm with which the firm was associated. It also detailed the achievements of the concerned partner and his recognition as an expert in the field of taxation in the country. The chairperson read out the said bio-data during the interview. Is it a professional misconduct?

👉 Ans: Yes, Clause (6) of Part I of the First Schedule to the Act prohibits solicitation of client or professional work either directly or indirectly by circular, advertisement, personal communication or interview or by any other means since it shall constitute professional misconduct. The member would be held guilty of professional misconduct under Clause (6) of Part I of the First Schedule to the Act under the given circumstances.

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👉🏻Canada's PNP issued over 3400 invitation for PR in the month of August

(Canada’s Provincial Nominee Programs (PNP) issued over 3,400 invitations to apply for provincial nomination during the month of August 2021. Major Provinces are..)

👇🏻 👇🏻 👇🏻

https://bit.ly/3gULyaY

👉🏻Govt appoints J B Mohapatra as CBDT Chairman

(Appointments Committee of the Cabinet has confirmed the appointment of IRS officer Jagannath Bidyadhar Mohapatra as the Chairman of the Central Board of Direct Taxes (CBDT)

👇🏻 👇🏻 👇🏻

https://bit.ly/3jCNsyx

👉🏻Master Direction on Financial Statements - Presentation and Disclosures - RBI

(Reserve Bank of India (Financial Statements - Presentation and Disclosures) Directions, 2021 (Like Format of the Balance Sheet and Profit and Loss Account, Notes and instructions for compilation, Disclosure in financial statements – notes to accounts, Consolidated Financial Statements, Other instructions etc)

👇🏻 👇🏻 👇🏻

https://bit.ly/38FyLV3

👉🏻ICAI Election 2021 - Know Your Pooling Booth Details

(Know your polling booth details for ICAI Elections to be held on 3rd and 4th December 2021)

👇🏻 👇🏻 👇🏻

https://bit.ly/3zFhyHt

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📲 Download my official Android app "Updates by CARJ" 📚 to stay connected with latest news and updates 📝

https://carohitjaiswal.blogspot.com/p/update-android-app.html?m=0

Thanks for reading

Wednesday, 1 September 2021

1 September 2021 News and Updates

Ø Maruti Suzuki to raise prices in September

Ø Maruti Suzuki output may fall further due to Malaysia lockdown

Ø Bharat Forge may sustain premium valuation amid higher revenue visibility

Ø Anmi expresses concern over T+1 settlement proposal

Ø Motilal Oswal sees 18% upside in freshly-debuted Clean Science

Ø Go Airlines gets Sebi nod for Rs 3,600 crore IPO

Ø Ola picks banks for $1 billion IPO, may file papers in October

Ø Telecom tariff hikes are imminent: Nitin Soni, Fitch Ratings

Ø SBI to raise up to Rs 4,000 crore via AT1 bonds

Ø Unitholders of Franklin’s six shut debt schemes to get Rs 2,918 crore

Ø SSWL inks pact with Tata Steel Long Products to supply round bars

Ø Rakesh Jhunjhunwala-backed Rare Enterprises to invest in Syska LED

Ø NSE co-location case: Sebi slaps Rs 6 lakh fine on Parwati Capital Market

Ø Carlyle preferred bidder for Baring PE's Hexaware in $3 bn deal: Report

Ø NTPC ups coal output, seeks to boost stocks to meet electricity demand

Ø Aluminium industry staring at 3-5 day coal inventory amid CIL's supply cut

Ø Airtel's fundraise to provide ammo for 5G, fortify position: Analysts

Ø India power-sector financier REC plans first loan using Libor heir

Ø Exports from SEZs up 41.5% to Rs 2.15 trillion during Apr-June 2021

Ø L&T wins significant contracts for various businesses

Ø Moody's assigns B1(hyb) rating to Axis Bank's proposed AT-I capital bonds

Ø Depositors of stressed banks to get up to Rs 5 lakh back from Nov 30

Ø MapMyIndia plans Rs 1,200 crore IPO

Ø Jindal Steel and Power seek shareholder nod to divest power biz

Ø FinMin extends deadline for making payments under Vivad se Vishwas scheme till September 30

Ø Economic resurgence: FDI equity inflows jump 168% in Q1

Ø Coal shortage drives spot power prices to record high of Rs 20 per unit

Ø Tracking investments: Ministries asked to move faster on PLI schemes

Ø Zomato invests over $100 million in Grofers

Ø Gujarat Gas rating – Buy: Sharp price hike to aid profitability

Ø Sebi cuts lock-in period for promoters to 18 months post-IPO

Ø ICICI bank files cheating case against Karvy Stock Broking Ltd

Ø New drone regulations wind in the sails for racers, hobbyists

Ø Amazon asks Sebi to order withdrawal of Future-RIL deal approval

Ø Shriram City looks to disburse up to ₹23,000 cr in FY22

Ø RBI imposes monetary penalty on 2 co-op banks, 1 NBFC

Ø NHPC signs MoU with PFC to fund hydro projects, acquisition of stressed projects

Ø Domestic air travel bookings pick up pace amid festive season

Ø FMCG earnings don’t paint a pretty picture of the economy

Ø Mumbai court allows restoration of Nirav Modi's confiscated properties to PNB

Ø Ixigo takes aim at MakeMyTrip with ₹1,600-crore IPO

Ø Jeh Wadia steps down from roles at more Wadia firms

Ø India's space-tech startups steering a rough ride

Ø China’s biggest solar giant is extending its global reach

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⚫Demand for work under the MGNREGA continues to be robust in the first five months of the FY22. 77% of budget used up in five months.

⚫India’s digital loan market is becoming a battleground for co's as they seek a foothold in what’s set to be a $1 trillion industry. Facebook said India would be the first country where it rolls out its small business loan program offering loans via a partner to firms that advertise on its platform. The loans will range from rs.500,000 to 5 million with interest rates of 17%-20%, potentially without collateral.

⚫General and health insurers have received almost 1.4 times the number of Covid-related health claims so far in FY22 than what they had received in entire FY21.

⚫America's 20-year-old military presence in Afghanistan has ended. The USA withdrew all of its soldiers from the war-ravaged country.

⚫Sivakasi, home of fireworks, is losing its spark. The pandemic, muted festivals and pollution concerns may slash sales by half.

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Multipurpose Empanelment Form (MEF) - 2021-22 - (20-08-2021)

Professional Development Committee

The Institute of Chartered Accountants of India

20th August, 2021Multipurpose Empanelment Form (MEF) – 2021-22

You may be aware that the Professional Development Committee of the ICAI hosts the Multipurpose Empanelment Form every year to be filled by the CA Firms and Members applying for the Bank Audits and other assignments. The form is generally hosted on MEF site in the month of August/ September. For the year 2021-22, we wish to inform that we are in the process of upgrading the said form so as to make it comprehensive and more user friendly.

In view of the above, members may kindly note that the Revised MEF Form for the year 2021-22 is expected to be made live (at meficai.org) in the month of October 2021.

Upon hosting, we will be also sending an email in your mail ID registered with us.

This is for your kind information.

Professional Development Committee

The Institute of Chartered Accountants of India

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📱 iPads not substitute for computers, ineligible for depreciation at 60% - ITAT Bench of Amritsar held in the case of Kohinoor Indian Pvt. Ltd. vs ACIT [ITA Nos. 234 & 316/Asr/2017]

🌴 Facts and findings: The Assessee Company claimed depreciation on iPads at 60% (rate applicable on computers), for AYs 2012-13 & 2013-14, whereas Revenue distinguished iPads from MacBooks and found it similar to iPhones to hold that the iPads were eligible for depreciation at 15%. The ITAT observed that in the absence of definition of computer in the Income-tax Act, definition of "computer" under Information Technology Act, 2000 can be taken as an aid of interpretation and also applies the common parlance test. The ITAT remarked that in the age of technology, most gadgets are working with the aid of computer but the predominant purpose of iPad is communication as its *main features are email, whatsapp, call, facetime, music, films etc. and thought it discharges some of the functions of the computers, but it cannot be used as a computer.

👉 ITAT bench held that iPads to be a communicating device, not a substitute for computers, thus, ineligible for higher rate of depreciation of 60%.

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⚫Foreign direct investment into the country rose by more than twofold to USD 17.57 billion during April-June this fiscal on account of measures such as policy reforms and ease of doing business.

⚫A strong economic growth rebound is expected on the back of rapid vaccinations, a recovering monsoon boosting agricultural output, thrust on infrastructure investments by the Govt, and growth in export.

⚫UIDAI said that there have been no outages in its Aadhaar EPFO linking facility.

⚫CBDT releases draft regulations for withdrawal of retro tax demands.

⚫The Centre asked all states and UT's to ensure there is no large gathering during the upcoming festival season and, if necessary, impose local restrictions to check the spread of coronavirus.

⚫US Embassy urges Americans to leave vicinity of Kabul airport due to threat.

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🌺 Where there is no principal agent relationship, the expense is not considered as commission for TDS under section 194H of the Act – High Court of Gujarat held in the case of CIT (TDS) vs Intas Pharmaceuticals Ltd. - [2021] 129 taxmann.com 347

🌴 Facts and Findings: The assessee, a pharmaceuticals company has incurred expenses for providing services such as taxi services, booking of air-tickets, cost of souvenir, etc. for conferences of doctors. As a fact, such doctors were not bound to prescribe medicines as suggested by the assessee. The High Court of Gujarat held that since no agency relationship between assessee and doctors existed, thus said expenses incurred by assessee for doctors could not be treated as "commission" and accordingly not liable for deducting tax at source under section 194H of the Act.

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Implementation of the Rule-59(6) on GST Portal

You will not be able to file GSTR-1 if GSTR-3B has not been filed for previous 2 months effective Sep 1, 2021.

Read the new rules below:

1. Rule-59(6) of CGST Rules, 2017; inserted vide Notification No. 1/2021 dated 1st January 2021, provides for restriction in filing of GSTR-1 in certain cases :

a) a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for preceding two months;

b) a registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3Bfor preceding tax period;

2. This Rule will be implemented on GST Portal from 1st September, 2021. On implementation of the said Rule, the system will check that whether before the filing of GSTR-1/IFF of a tax-period, the following has been filed or not:

a) GSTR-3B for the previous two monthly tax-periods (for monthly filers),

b) GSTR-3B for the previous quarterly tax period (for quarterly filers), as the case may be. The system will restrict filing of GSTR-1/IFF till Rule-59(6) is complied with.

3. This check will operate on clicking the SUBMIT button of GSTR-1 and the system will give an error message if the condition of Rule-59(6) is not met. It may be noted that records which have been saved in GSTR-1 will remain saved and filing of such records will be permitted after Rule-59(6) is complied with.

4. Implementation of Rule-59(6) on the GST Portal will be completely automated, similar to the blocking & un-blocking of e-way bill as per Rule-138E and facility for filing of GSTR-1 will be restored immediately after filing of relevant GSTR-3B. No separate approval would be needed from the tax-officer to restore the facility for filing of GSTR-1.

5. To ensure no disruption in filing GSTR-1/IFF, taxpayers who have not filed their pending GSTR-3B, especially from period November 2020 and afterwards may do so at the earliest.

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Fair & Independent allotment of Audits

Dear Seniors & Professional Colleagues,

During felicitation programs of President & VP by EIRC, I had given the following suggestions for betterment of CA fraternity:

1) Allotment of Bank Branch Audit by Software:

a) ICAI allotment of bank branch audit software , should be programmed in such a way that those who have longest gestation period, should be allotted first i.e. those who have not allotted for last , say 10 years be allotted first, than 9 years, 8 years........

b) All banks should allot bank branch audit by using this software only.

2) Allotment of Tax Audit: We should impress PMO & finance minister to use this software for transparent & independent system of allotment, pointing out deficiency of existing system of allotment by assessee himself.

3) Allotment of Company audit: This software should be used.

4) Allotment of other audits:

This software should be used.

5) Mapping concept & use of AI: Above software should use address mapping concept & artificial intelligence to reduce time & cost of both auditors & auditees .

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CBDT extends due dates for electronic filing of various Forms under the Income-tax Act, 1961

On consideration of difficulties reported by the taxpayers and other stakeholders in electronic filing of certain Forms under the provisions of the Income-tax Act,1961 read with Income-tax Rules,1962 (Rules), Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for electronic filing of such Forms. The further details are as under:

The application for registration or intimation or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A required to be filed on or before 30th June, 2021, as extended to 31st August, 2021 vide Circular No.12 of 2021 dated 25.06.2021, may be filed on or before 31st March, 2022.

The application for registration or approval under Section 10(23C), 12A or 80G of the Act in Form No.10AB, for which the last date for filing falls on or before 28th February, 2022 may be filed on or before 31st March, 2022.

The Equalization Levy Statement in Form No.1 for the Financial Year 2020- 21, which was required to be filed on or before 30th June, 2021, as extended to 31st August, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be filed on or before 31st December, 2021.

The Quarterly statement in Form No. 15CC to be furnished by authorized dealer in respect of remittances made for the quarter ending on 30th June, 2021, required to be furnished on or before 15th July, 2021 under Rule 37BB of the Rules, as extended to 31st August, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be furnished on or before 30th November, 2021.

The Quarterly statement in Form No. 15CC to be furnished by authorized dealer in respect of remittances made for the quarter ending on 30th September, 2021, required to be furnished on or before 15th October, 2021 under Rule 37BB of the Rules, may be furnished on or before 31st December, 2021.

Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30th June, 2021, which was originally required to be uploaded on or before 15th July, 2021, and subsequently by 31st August, 2021, as per Circular No.12 of 2021 dated 25.06.2021, may be uploaded on or before 30th November, 2021.

Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30th September, 2021, which is required to be uploaded on or before 15th October, 2021, may be uploaded on or before 31st December, 2021.

Intimation to be made by Sovereign Wealth Fund in respect of investments made by it in India in Form II SWF for the quarter ending on 30th June, 2021, required to be made on or before 31st July, 2021 as per Circular No.15 of 2020 dated 22.07.2020, as extended to 30th September, 2021 vide Circular No.15 of 2021 dated 03.08.2021, may be made on or before 30th November, 2021.

Intimation to be made by Sovereign Wealth Fund in respect of investments made by it in India in Form II SWF for the quarter ending on 30th September, 2021, required to be made on or before 31st October, 2021 as per Circular No.15 of 2020 dated 22.07.2020, may be made on or before 31st December, 2021.

Intimation to be made by a Pension Fund in respect of each investment made by it in India in Form No. 10BBB for the quarter ending on 30th June, 2021, required to be made on or before 31st July, 2021 under Rule 2DB of the Rules, as extended to 30th September, 2021 vide Circular No. 15 of 2021 dated 03.08.2021, may be made on or before 30th November, 2021.

Intimation to be made by a Pension Fund in respect of each investment made by it in India in Form No. 10BBB for the quarter ending on 30th September, 2021, required to be made on or before 31st October, 2021 under Rule 2DB of the Rules, may be made on or before 31st December, 2021.

Intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India, for the purposes of sub-section (1) of section 286 of the Act, in Form No.3CEAC, required to be made on or before 30th November, 2021 under Rule 10DB of the Rules, may be made on or before 31st December, 2021.

Report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India, for the purposes of sub-section (2) or sub-section (4) of section 286 of the Act, in Form No. 3CEAD, required to be furnished on or before 30th November, 2021 under Rule 10DB of the Rules, may be furnished on or before 31st December, 2021.

Intimation on behalf of an international group for the purposes of the proviso to sub-section (4) of section 286 of the Act in Form No. 3CEAE, required to be made on or before 30th November, 2021 under Rule 10DB of the Rules, may be made on or before 31st December, 2021. CBDT Circular No. 16/2021 in F.No.225/49/2021/ITA-II dated 29.08.2021 issued.

CDBT Extends the last date of payment to be made under VsV (without any additional amount) from 31.08.2021

to 30.09.2021 as per PIB press release dated 29-08-2021. The official circular will follow.

GST Amnesty Scheme Extended:

CBIC has issued a Press Release in order to extend the following due dates:

GST Amnesty Scheme for GSTR-3B (July, 17 to April, 21) has been extended from 31.08.2021 to 30.11.2021.

The last date of Option of filing GSTR-3B/1/IFF by EVC for Companies (instead DSC) extended from 31.08.2021 to 31.10.2021.

The due date of filing REVOCATION application in relation to cancellations between 01.03.2020 to 31.08.2021 has been extended to 30.09.2021.

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⚫Air travel sees recovery, hotels and travel firms see brisk weekend demand. During the first ten days of August, some 90,000 passengers travelled via Delhi airport daily, which is five times higher than in mid-May.

⚫Rs 1-trillion m-cap club nears half-century; 19 companies join in 2021.

⚫Sebi bars Kotak AMC from launching FMPs for 6 months, imposes fine.

⚫MCA is working to issue code of conduct for creditors under IBC.

⚫Govt set to extend key ITR filing dates amid portal tech glitches. The total numbers of returns filed for FY21 are just 14% of returns filed for FY20.

⚫India recorded the highest single-day vaccine coverage with over 10 million doses of vaccines administered across the country.

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✅ITAT, Bangalore bench in its recent ruling in the case of Jindal Aluminium Limited has inter alia held that the *payment of interest on late payment of TDS under Section 201(1A) of the Income Tax Act cannot be treated as a deductible expenditure* under the Income Tax Act, 1961.

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📲 Download my official Android app "Updates by CARJ" 📚 to stay connected with latest news and updates 📝

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Thanks for reading

Friday, 27 August 2021

27 August 2021 Updates

👉Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) -reg.

https://www.mca.gov.in/bin/dms/getdocument?mds=uCTTViAfc1KSszKI91LQvA%253D%253D&type=open

👉Announcement by CL&CGC ICAI regarding amendment in Companies (Appointment and Qualification of Directors) Rules, 2014- A Chartered Accountant in practice for atleast 10 years is not required to clear online proficiency test to become Independent Director

https://resource.cdn.icai.org/66192clcgc53434.pdf

👉Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) as issued by Ministry of Corporate Affairs on 25th August, 2021

https://resource.cdn.icai.org/66218clcgc53480.pdf

👉Tokenisation – Card Transactions : Extending the Scope of Permitted Devices

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12152&Mode=0

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⚫I-tax notices give FPIs the jitters; experts suspect tech glitches and called the development unprecedented.

⚫About 165,000 workers in the unorganised sector registered themselves on the e-Shram portal on the first day of its launch.

⚫Expense on R&D for Covid-19 drugs, vax, devices will count as CSR. The CSR FAQs provide details of what would qualify as overheads.

⚫SAIL is looking at bringing down its borrowings to Rs 20,000 crore by the end of the current financial year.

⚫India recorded 44558 new Covid-19 cases in the past 24 hours out of which, over 31,000 were from Kerala. The fear of third wave looms large as Kerala reported over 30,000 fresh cases for the second consecutive day on Thursday and even Delhi and Mumbai saw slight surge in daily cases.

⚫SC may resume physical hearing from September 1 in limited manner.

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Importance of SFT Code in Form No. 26AS

👉SFT refers to the Specified Financial Transaction. It is designed pursuant to rule 114E of the Income Tax act wherein certain specified transactions have been enumerated which is required to be reported by specified entities/ authorities to the Income Tax Department.

👉Form NO. 26AS mentioned the section quote of the specified transactions carried out by the taxpayers. Let us know about the SFT Code and its details.

👉SFT number Particulars Amount (in aggregation of) Person liable to report

👉SFT- 001: Purchase of bank drafts or pay orders in cash Rs. 10 lakh Banking company , co-operative bank

👉SFT- 002: Purchase of pre-paid instruments in cash Rs. 10 lakh Banking company, co-operative bank

👉SFT- 003: Cash deposit in current account Rs. 50 lakh Banking company, co-operative bank

👉SFT- 004: Cash deposit in account other than current account Rs. 10 lakh Banking company, co-operative bank or post master office

👉SFT- 005: Time deposit Rs. 10 lakh Banking company, co-operative bank or post master office or Nidhi or NBFC

👉SFT- 006: Payment for credit card Rs. 1 lakh in cash or Rs. 10 lakh in any other mode Banking company, co-operative bank or post master office

👉SFT- 007: Purchase of bonds or debentures Rs. 10 lakh Company or institution issuing debentures or bonds

👉SFT- 008: Purchase of shares Rs. 10 lakh Company issuing shares

👉SFT- 009: Buy back of shares Rs. 10 lakh Company listed in recognized stock exchange

👉SFT- 010: Purchase of mutual fund units Rs. 10 lakh · A trustee of mutual fund or any authorized person

👉SFT- 011: Purchase of foreign currency Rs. 10 lakh Authorised person under FEMA act

👉SFT- 012: Purchase or sale of immovable property Rs. 30 lakh (individual transaction) Inspector general or registrar or sub registrar

👉SFT- 013: Cash payment for goods and services Rs. 2 lakh (individual transaction) Any person liable to audit u/s 44AB

👉SFT- 014: Cash deposits during specified period (9th Nov to 30th Dec, 2016) Rs. 2.5 lakh Banking company, co-operative bank or post master office

Above chart makes it crystal clear that the SFT return has to be filed by the person with whom transactions have been done and not the person who has done the transaction. While filing income tax returns, taxpayers must just check whether the transaction as reflected In 26AS

👉Is correctIt belong to him And the same is very well explainable to the tax authorities if the information is called for.

👉Nothing more is required to be done by the taxpayers for SFT transactions reflected in 26AS of the assessee,

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🌺 Letter of allotment is relevant over date of possession for construing holding period for the term of Capital Assets – ITAT Bench of Surat in the case of Jethanand T. Datwani vs ITO [ITA No. 264/SRT/2017]

🌴 Facts and Findings: The NRI-Assessee was reassessed for AY 2008-09 and an addition was made on account of long term capital gains for property sold, holding period for which was computed by the AO with reference to date of possession of the property. The Assessee contended that he had acquired the property in 1997 and made payments of substantial amount of consideration, however being non-resident he could not travel for registration of conveyance deed, which was done in the year 2000, and therefore holding period for the property be considered from the year 1997 instead of the year 2000. The CIT - A disagreed with the Assessee’s contention.

☘️ The ITAT found that the Assessee was allotted the property by allotment letter dated Feb 25, 1997 and before occupation he had paid substantial amount as consideration. The ITAT bench relied on the ruling of the High Court of Punjab & Haryana in the case of Madhu Kaul vs CIT [(2014) 363 ITR 54] and the ruling of High Court of Madras in the case of CIT vs S.R. Jayshankar [(2015] 373 ITR 120] wherein it was held that that the date of allotment letter is to be considered to determine the holding period to ascertain the entitlement of section 54 of the Act. Accordingly, the ITAT bench *held that the holding period to be considered from date of allotment letter to determine the long term capital gains for ascertaining the entitlement of section 54 of the Act.

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Thursday, 26 August 2021

26 August 2021 Updates

🔰 Lassi is Exempted under GST

✅ In M/s. Sampoorna Dairy and Agrotech LLP. [Advance Ruling No. GUJ/GAAR/R/30/2021 dated July 19, 2021], M/s. Sampoorna Dairy and Agrotech LLP. ( “the Applicant”) has sought an Advance Ruling on whether the product “Lassi” but named as “Laban” is to be classified as Lassi itself and whether the same is exempted under the Central Goods and Services Act, 2017 ( “CGST Act” ).

Read More at: http://www.a2ztaxcorp.com/lassi-is-exempted-under-gst/

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📚 Incentive paid to Director in recognition of his services is allowable under section 36(1)(ii) of the Income-tax Act: ITAT Bench of Mumbai in the case of DCIT vs. VVF Limited [ITA/6908/2019].

🌴 Facts and finding: The Assessee Company paid an incentive of Rs.2.50 Crores to a Director who was holding 68% shareholding and claimed it as deduction under section 36(1)(ii). Assessee submitted that the Director played a significant role in exceling the Assessee's business and growth without drawing any remuneration for 3 years, therefore, in recognition of his contribution, such amount was paid which was approved by a board resolution and a special resolution in the EGM. The Revenue contended that transaction is done to be a device to extend benefits to the Director and avoid dividend distribution tax.

🫐 The ITAT bench of Mumbai deleted the disallowance appreciating the Assessee’s contention and observed that the Revenue’s allegation of violation of corporate law provisions not supported by concrete material on record; and accordingly given the remarks that if it was a dividend which was paid in the name of incentive, similar payments would have been made to the other shareholders of the company.

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⚫The Govt is considering allowing FDI in LIC of India.

⚫Infosys becomes 4th Indian company to touch $100 bn market capitalisation.

⚫Real estate investment trusts and infrastructure investment trusts will now be included in the Nifty indices after the NSE revised the criteria for their inclusion.

⚫Indian co's have likely spent over Rs 1 trillion on CSR projects since a mandatory law came into effect.The amount for the FY21 is likely to cross Rs 22,000 crore.

⚫India recorded a massive spike of 51,016 new Covid-19 cases. Coronavirus in India may be entering some kind of stage of endemicity where there is low or moderate level of transmission going on.

⚫IPO bets of wealthy investors turn sour in August. Overall, HNIs have profited in 16 out of 27 IPOs in 2021.

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🏵️ ICAI Election Update

Voting is now easier for a member who is not residing at his registered professional address. Now, if you are residing in the *same Region* where your professional address is registered, you can exercise your voting rights at the polling station of your place of availability on the day of voting by giving information to ICAI 14 days in advance.

👉 If you reside in any other Region, you can exercise your right to vote at the polling station of your place of availability on the polling day by giving information to ICAI 21 days in advance.

👉 Form/link for change in polling booth will be published soon

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Income tax return filing for FY 2020-21 for individuals has already been extended to September 30, 2021, from the usual deadline of July 31, 2021. However, the new income tax e-filing portal has been marred by glitches and other problems from inception. The finance minister has given Infosys time till September 15 to fix all the problems. Chartered accountant society representatives are also saying that the deadline should be extended in view of the state of the e-filing portal.

Finance Minister in a meeting with Infosys CEO Salil Parekh expressed "deep disappointment" plaguing the new income tax portal for more than two months after launch and gave him till September 15 to resolve all issues. In response, Parekh said over 750 people are working on the project and Infosys COO Pravin Rao is personally overseeing this project.

MCA in its revised norm has exempted practising #Chartered accountant with 10+ years’ experience from taking the online proficiency test conducted by the IICA, which was previously mandatory for independent directors getting into or retaining their board positions.

Supreme Court on Monday refused to stay the National Company Law Appellate Tribunal’s (NCLAT’s) decision that ruled that power distribution companies cannot terminate their power purchase agreement (PPA) with insolvent generating companies during the corporate insolvency resolution process (CIRP).

Large urban cooperative banks (UCBs) should be allowed to function along the lines of small finance banks (SFBs) and universal banks, a Reserve Bank of India (RBI)-appointed expert panel said in a report. The committee under the chairmanship of former RBI deputy governor N.S. Vishwanathan proposed a four-tier structure for urban cooperative banks or UCBs based on the size of deposits and capital availability,

The recent banking regulation amendment has empowered RBI to declare certain securities issued by urban cooperative banks under the Securities Contract Regulation Act to facilitate listing and trading in recognised stock exchanges. The committee has recommended that until such time, RBI may consider allowing banks in tier-3 and tier-4 cities with the necessary technology and wherewithal to issue shares at a premium to people residing in their areas of operation, subject to certain conditions.

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ICAI Election Update

👉 If you reside in any other Region, you can exercise your right to vote at the polling station of your place of availability on the polling day by giving information to ICAI 21 days in advance.

👉 Form/link for change in polling booth will be published soon

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🏵️ Amendment in relation to disallowance on late deposit of PF/ESI is prospective in nature, hence not applicable to the assessment years prior to the assessment year 2021-22: ITAT Bench of Delhi in the case of Insta Exhibitions Pvt. Ltd Vs ACIT [ITA No. 6941/Del/2017]

🌴 Facts and Findings: During the course of the assessment proceeding, the AO noted that Assessee deposited employees’ contribution towards ESI of Rs.2.31 lacs and PF of Rs.9.84 lacs beyond the due date under respective statutes and accordingly, disallowed the amounts under section 36(1)(va). The ITAT bench referred its co-ordinate bench ruling in the case of Dee Development Engineers [ITA No. 4959/Del/2016] wherein it was held that legislative intent and objective was not to treat belated payments under ESI & PF as deemed income under section 2(24). ITAT refers to ‘Notes on Clauses’ introducing Finance Bill 2021, and holds that amendment is *effective from AY 2021-22, and thus not applicable to the year under consideration i.e. the assessment year 2014-15. Accordingly, the ITAT bench of Delhi has deleted the addition.

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✅ MCA Update on CSR - FAQs dated 25th August 2021 vide General Circular no. 14/2021. - MCA issued a set of FAQs along with response of the Ministry is provided herewith for better understanding and facilitating effective implementation of CSR.

https://www.mca.gov.in/bin/dms/getdocument?mds=uCTTViAfc1KSszKI91LQvA%253D%253D&type=open

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Where assessee entered into an agreement for sale of flats with customer prior to 1-4-2013, however, sale deeds were executed after 1-4-2013*, then the provisions of section 43CA will be applicable – ITAT Banch of Jaipur in the case of Spytech Buildcon v. ACIT [2021] 129 taxmann.com 175

🌴 Facts and Findings: The case is related to the Assessment year 2014-15. The assessee-firm was engaged in business of real estate development and during relevant previous years sold three flats at value less than Fair Market Value as on date of registration of sale deed*. The Assessing Officer proposed to make addition under section 43CA on differential amount of consideration shown in document and Stamp Duty Valuation. The Assessee contended before Assessing Officer that at point of time agreement for sale of flats in question were entered into with customer, section 43CA was not in Statute Book and, thus, provisions of section 43CA were not applicable.

🫐 However, the Assessing Officer did not accept this contention of assessee and made addition of differential amount under section 43CA. The question under consideration of ITAT bench was whether transfer under provisions of section 43CA is recognized only when a registered document is executed and since in instant case, booking was claimed to have been made prior to 1-4-2013 whereas sale deeds were executed after 1-4-2013 which fell in previous year relevant to assessment year under consideration, provisions of section 43CA would be applicable for assessment year under consideration. The ITAT Bench decided the matter in the favour of the revenue and *held that merely because an agreement had taken place prior to 1-4-2013 would not take away transaction from ambit of provisions of section 43CA.

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