MCA imposes fees on fling of Form 1,23B, 24A, 36, 61, 62, 65,

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Imposing fees on certain e-forms filed with ROC, RD or MCA (HQ) under MCA-21 where at present no fee is prescribed

General Circular No. 14/2012, dated 21-6-2012

The Ministry of Corporate Affairs has decided that fees shall be applicable on the following forms at the rates indicated in the table below:-

-

S. No.	Form No.	Particulars of the Form	Applicable fee
1.	Form 1 of Investor Education protection Fund Rule	Statement of amounts credited to Investor Education and Protection Fund.	As per Schedule X to the Act.
2.	Form 23B	Information by statutory auditor to the Registrar of companies Act, 1956 pursuant to section 224(1)(a) of the Companies Act, 1956.	As per Schedule X to the Act.
3.	Form 24A	Application to RD(a) For Appointment of Auditors under section 224(3)(b) Others	As per Companies (Fee on Application) Rules, 1999
4.	Form 36	Receiver’s or manager’s abstract of receipts and payments (charge related form)	As per Schedule X to the Act.
5.	Form 61	Application to RoC-(a) Compounding of Offences u/s 621A(b) Application for extension of Annual General Meeting upto 3 months u/s 166 of the Act (c) Application for extension of time for preparation of Annual Accounts upto 18 months u/s 220 of the Act. (d) Others	(a) As per Companies (Fee on Application) Rules, 1999(b) -Do-(c) -Do- (d) -Do-
6.	Form 62	Form for submission of misc. documents under the below mentioned rules:(a) Form 154 of the companies (Court) Rules, 1959(b) Form 157 of the companies (Court) Rules, 1959 (c) Form 158 of the Companies (Court) Rules, 1959	As per Schedule X to the Act.
7.	Form 65	Application to the Central Govt. (HQ)-(a) Application pursuant to rule 2 of the Companies (Application for Extension of Time or Exemption under sub-section (8) of section 58A) Rules, 1979.(b) Information and explanation on reservations and qualification contained in the cost audit report by a company (c) Others	(a) as per Companies (Fee on Application) Rules, 1999(b) Nil(c) as per Companies (Fee on Application) Rules, 1999

3. This circular will come into effect from 22nd July, 2012.

Exemption from filing of Income-tax Return for Salaried

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FAQ ON EXEMPTION FROM FILING OF INCOME-TAX RETURN (A.Y. 2012-13)

What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

1. The primary objective of this notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs. 5,00,000, and (ii) the total income consists only of income chargeable to income-tax under the head ‘Salaries’ and interest income from savings bank account if such interest income does not exceed Rs. 10,000.

Board Meetings without quorum & irregularities in filing Form 32 is Oppression & Mismanagement

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COMPANY LAW BOARD, NEW DELHI BENCH

Naresh Mohan Mittal v. Sangeeta Construction (P.) Ltd.

CP NOS. 151 TO 153 OF 2007

SEPTEMBER 5, 2011

 

In the facts and circumstances of this case, it is noted that the respondents have not been able to refute the allegations made by the petitioners regarding the irregularities and illegalities in filing of Forms 32 and DIN-3. The reason given for cessation of directorship of petitioner No. 2 was that he was appointed as an additional director with effect from 25-10-2004 to hold office up to the date of next AGM which was held on 24-9-2005, and in the AGM he was not appointed as director, petitioner No. 2 had accordingly ceased to be director with effect from 24-9-2005. It is not understood as to how petitioner no. 2 could be invited to the meeting allegedly held properly by the respondents on 31-8-2007, if he had ceased to be director with effect from 24-9-2005. It was also noted that ‘G’ was, in fact, removed by the Institute of Chartered Accountants of India from his membership during the period when the company had re-appointed him as a statutory auditor, he, in fact, was ineligible to be re-appointed as statutory auditor. Further, it was noted that the replies of the company secretaries was also very evasive and not up to the standards of statutory compliances which they are required to practice and uphold. It is very obvious that the filing of the documents with the RoC has been managed and is not in accordance with the procedure prescribed. Form 32 has been filed after a delay of 9 months. Signatures on the documents are alleged to be forged. The facts and circumstances of this case give credence to the narration of events as given by the petitioners. The exoneration of the company secretary by the ICSI and restoration of membership of the statutory auditor does not validate the irregularities and the illegalities committed in the present case. Meetings without adequate quorum and without proper notice, onus of proving which is on the sender, are held to be ab initio void and so are the resolutions passed therein.

In view of the facts and circumstances of this case, these being family companies being managed by the brothers in accordance with the family settlement, adherence to which has not been disputed, it is noted that by levelling allegations and counter-allegations by manipulating records by holding meetings without quorum both parties have endeavoured to gain control of the management of the companies and have acted in breach of fiduciary duties. [Para 23]

The fiduciary capacity within which directors have to act enjoins duty upon them to act on behalf of the company with utmost care and skill and due diligence and in the interest of the company. More so, in a family company where even directorial complaints can be looked into. Directors have a duty to make full and honest disclosures to shareholders regarding all important matters relating to the company. In the present case a clear case of oppression has been made out, even a single act can cause continuous oppression. The conduct of the respondents have been harsh, burdensome, against probity and good conduct. Once conduct is found to be oppressive under sections 397 and 398, the discretionary power given to the CLB under section 402 to set right, remedy or put to an end to such oppression is very wide. The respondents have been involved in continuous acts of oppression against the petitioners and the present petitions deserve to be allowed in favour of the petitioners. Status quo ante is hereby restored setting aside the appointments of respondent Nos. 3 and 5 as directors. Petitioner no. 2 continues to be a director on the Board. All statements/statutory forms filed in this regard with the RoC are held to be invalid, all resolutions passed in Board meetings/AGM/EGM are hereby cancelled.

The company petition stand disposed of in the above terms. All company applications stand disposed off. All interim injunctions given stand vacated.

S. 80-IB – Deduction allowed for manufacturing not for processing

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ITAT HYDERABAD

Venkateswara Feeds & Feeds v. ACIT

IT Appeal NoS. 493 (Hyd.) of 2005

1013 & 1014 (Hyd.) of 2006 and

869 & 870 (Hyd.) of 2008

[Assessment Years 2001-02 to 2005-06]

APRIL 26, 2012

One has to examine the stages through which the mash feed is converted into pellet feed. In deciding the issue whether there had been any manufacture of pellet feed. It was to be held that there had been only processing while the production of pellet feed was done by following various stages, namely, (i) batch weighing, (ii) grinding, (iii) mixing, (iv) conditioning with steam, (v) pelleting, (vi) cooling, (vii) crumbling and, finally (viii) packing.

The difference between the pellet feed and mash feed, is difference in the quality of the feed and did not throw any light on the manufacture and is of no significance while discussing whether there is manufacture for the purpose of claiming deduction under section 80-IB.

The question is whether ‘Mash Feed’ undergoes any process of manufacture to produce an article or thing called ‘Pellet’, which is different and distinct from the input material. In instant case though the original commodity has undergone certain degree of change still it has not lost its original identity and hence, it cannot be said that it amounts to manufacture. The words ‘manufacture’ and ‘produce’ applied to bringing into existence something which is different from its components.

In the conversion, whether the identity of the commodity before and after it undergoes various processes/changes remains the same, in manufacturing a new and different article must emerge from the original substance and new substance does not mean that merely a change in the substance is effected. Manufacture and production implies that something is brought into existence which is different from its components. Moreover, the ‘term’ processing is distinguishable from the term ‘manufacture’ and mere processing does not amount to change loosing its original identity whereas in manufacturing, the original articles loose their identity. In the case under consideration, doing something to substance to change or alter their form can be termed as processing and does not amount to manufacture as a production of a new substance does not mean merely to produce some change in the substance. There is no change in the basic component except a physical change in the structure and shape in the form of pellet as no new substance comes into existence.

In view of the above discussion, it can be concluded that the activity followed by the assessee-firm is a processing activity and it is not entitled for the deduction under section 80-IB and assessee’s claim under section 80-IB is to be dismissed.

Commission to working director-shareholder cannot be disallowed merely because assessee-company did not declare dividend

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ITAT DELHI

Coil Company (P.) Ltd. v. ACIT

IT Appeal Nos. 1389 (Delhi) of 2009

2648 (Delhi) of 2010 and 425 (Delhi) of 2011

[Assessment Years 2005-06 to 2007-08]

MAY 25, 2012

The plain reading of sec. 36(1)(ii) contemplates two situations. According to the first situation, any sum paid to an employee as a bonus or commission for services rendered would be allowed to the assessee. The second part exhibits the other condition that the deduction mentioned in the first situation could be allowed, if such sum would have not been payable to an employee as a profit or dividend meaning thereby if the amount of commission or bonus is receivable by an employee in the shape of profit/dividend then such commission paid to such employee would not be allowed as a deduction.

We have already noticed the shareholding pattern of the assessee. It is pertinent to observe that in the relevant year Sardar Sucha Singh was holding just 39.9% of the total shareholding and rest of the shares are being held by other individuals or by the company. Being a private limited company, controlled by the family members, a resolution approving the payment of commission to the working directors may not be very difficult task but whether this arrangement indicates that if this commission was not paid to the working director then it would be received in the shape of profit/dividend. If we look towards the shareholding pattern then only 39.9% of this commission paid would be paid to Shri Sucha Singh on the basis of the shares held by him. The other shareholders, namely, Harjinder Kaur, Paramjeet Singh who are holding 25% and 16% of the shares would get commission though the Board has not resolved for payment of any extra remuneration to these persons. It only suggests that commission was not paid to Shri Sucha Singh on the basis of the shares held by him, rather it is paid by keeping in view his services towards the company. Distribution of dividends is one component. It does not give the meaning that if an assessee failed to distribute the dividend, then payment of any commission would take the colour of dividend. The commission paid to Shri Sucha Singh is linked with the sales turnover of the assessee and to the performance of the directors. It has nothing to do with the shareholding pattern. Considering the authoritative pronouncement of the Hon’ble Delhi High Court in the cases referred by the learned counsel for the assessee, we allow the grounds of appeal raised by the assessee in assessment years 2005-06 and 2007-08. Consequently, we reject the ground No.1 raised by the revenue in assessment year 2006-07. The disallowance made by the Assessing Officer in respect of commission paid to Shri Sucha Singh in all the three years is held not to be justified. Such disallowance is deleted

If DTAA is silent on a particular type of income, it will not automatically become business Income

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ITAT CHENNAI

DCIT v. TVS Electronics Ltd.

IT Appeal NO. 811 (MDS.) of 2010

[ASSESSMENT YEAR 2005-06]

MAY 25, 2012

There is no dispute that money paid to the non-resident by the assessee was for a market survey, qualitative consumer measurement, retail store site information and compiling data for identifying opportunities for consumer electronics in the overseas market. Such a “market survey” definitely involved exercise of technical knowledge and skill by the persons doing the survey. We cannot say that the work done by the Mauritius company for the assessee was not a technical service. What assessee paid to Mauritius company was fees for technical services. Explanation 2 to Section 9(1)(vii) of the Act states that “fees for technical services” meant any consideration for rendering any managerial, technical or consultancy services. There is no case for the assessee that payments were made for any construction, assembly, mining or a project undertaken by the recipient which would fall under the head “salaries”. Therefore, by virtue of Explanation 2 to Section 9(1)(vii) of the Act, the type of service received by the assessee M/s Rosewell Group Services Ltd., Mauritius was nothing but fees for technical services. A.O. was justified in taking this view. But, nevertheless, argument of the assessee before the CIT (Appeals) was that it had a bonafide belief that DTAA between India and Mauritius saved it from liability to deduct tax at source. According to assessee, the said Mauritius company was not having a permanent establishment in India and technical services not being specifically provided under DTAA, the receipts in the hand of Mauritius company could only be considered as part of its business earnings. This argument was accepted by the CIT (Appeals). However, we find that this line of reasoning was never mentioned by the assessee before the A.O. and the Assessing Officer had no opportunity to express his opinion. When technical service is not mentioned in DTAA between India and Mauritius, whether fee received for such services could be considered as business earning in the hands of recipient has not been analysed by any of the authorities below. Admittedly, Chapter III of DTAA between India and Mauritius did not provide for taxing any fees paid for technical services. Only for a reason that DTAA is silent on a particular type of income, we cannot say that such income will automatically become business income of the recipient. In our opinion, when DTAA is silent on an aspect, the provisions of the Act has to be considered and applied. This aspect has not been dealt with by the authorities below. We are, therefore, of the opinion that this issue requires a fresh look by the A.O. Orders of lower authorities on payments made for market survey, are set aside and remitted back to A.O. for consideration afresh in accordance with law.

ICAI requests CBDT to review the ITR forms vis-à-vis Revised Schedule VI

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The Ministry of Corporate Affairs (MCA) has notified the Schedule VI (Revised) which is applicable in respect of Balance Sheet and Profit and Loss Account prepared for the financial year commencing on or after 1.4.2011. The Revised Schedule VI had changed the nomenclature of certain items, modified the present classification of accounts, removed / added certain disclosure requirements etc which in turn has impacted the financial reporting requirement for the Companies.
Considering, the changes in the financial reporting requirements for the Companies, the Direct Taxes Committee of ICAI has suggested CBDT to consider streamlining of the income tax return forms to incorporate the changes made in the Revised Schedule VI. It has also been mentioned that in case the same is not done the Indian companies will be required to prepare another set of financial statements for satisfying the requirement of the Income-tax Act, which not only will result in higher costs, but also consume considerable time and effort.

Source- ICAI

Deduction u/s 80IB allowable even if not claimed in ITR

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ITAT DELHI

DCIT v. Raj Laxmi Stone Crusher

IT APPEAL NO. 253 (DELHI) OF 2009

[Assessment year 2005-06]

MAY 25, 2012

The facts of the present case are similar only in the case in I.T.A. No.350/Del/.2009 wherein the Hon’ble Delhi Bench ‘D’ has dealt with the similar issue which was at ground No.3 of the appeal. The Tribunal has held in favour of the assessee and had remitted back file to the office of Assessing Officer for consideration of claim of assessee u/s 80IB. While deciding the matter, the Hon’ble Tribunal had considered various judicial pronouncements in which it was held that the authorities under the Act are under an obligation to act in accordance with law. If an assessee under a mistake, misconception or not being properly instructed is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes are collected.

S. 194J Maintenance of hospital equipments is ‘professional service’

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ITAT AMRITSAR BENCH

Income-tax Officer (TDS), Jammu

v.

Accounts Officer, Govt. Medical College, Jammu

IT Appeal NoS. 112 and 113 (Asr.) OF 2011

[Assessment years 2008-09 and 2009-10]

May 7, 2012

As per Explanation 2 to section 9(1)(vii) the fees for technical services means any consideration for the rendering of any managerial, technical or consultancy services including the provision of services of technical or other personnel, and fees paid for that shall be considered for the purpose of section 194J. As per conditions mentioned in the agreement with regard to theatre and surgical operation, the services of a technical qualified person are to be made available to the assessee to maintain equipments. Therefore, the said technical services as per CBDT Circular No. 715, dated 8-8-1995 cannot be services of routine and normal maintenance. The operation theatre and surgical are highly technical equipments for the operation of the persons. Therefore, they cannot be maintained in a routine or normal manner, but a technical person is required for maintenance of such equipments. Similar is the case with RO system, CT scan machine, MRI machine, lift and sterlisation and medical equipments. Therefore, these contracts cannot be the contracts in a routine or normal manner but for which technical service has been rendered and provisions of section 194J, read with Explanation 2 to section 9(1)(vii) are attracted. [Para 6.4]

The anti-termite treatment though does not require technical expertise, but it requires professional skill for the reason that the spray of the anti-termite chemicals in the premises or the machine requires a highly and professionalized skill. In the absence of which there can be a loss to the life of the human being living therein, especially in the Medical College. If spray is made by a person who is not professional or without any professional skill then consequences can be otherwise. Therefore, this service has to be treated as professional service to be included for the purpose of section 194J, read with Explanation 2 to section 9(1)(vii). In the facts and circumstances of the case, except for the supply of bread and butter and supply of security and personnel, the findings of the Assessing Officer deserved to be upheld. [Para 6.5]

Amendments to section 44BB & 44DA are prospective and applies from A.Y. 2011-12

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IN THE ITAT DELHI

Schlumberger Asia Services Ltd.

v.

Additional Director of Income-tax, (International Tax)

IT Appeal No. 6063 (Delhi) of 2010 – Assessment Year 2007-08

Date of pronouncement – 18.05.2012

It has further been the contention of the revenue that the amendments vide Finance Act 2010, inserting mutually exclusionary clauses in s. 44BB and s.44DA are clarificatory, and hence are retrospective in operation, w.e.f. AY 2004-05. We find that this contention is not at all correct as the said provision of the Act cannot be said to be clarificatory and hence retrospective in operation. In this regard in the case of CGG Veritas Services SA (supra) comes to the rescue of the assessee. Furthermore, the Jurisdictional High Court in the case of the assessee itself in Schlumberger Asia Services Ltd. (supra) wherein it has been held that the amendment by Finance Act, 2010, excluding the application of Section 44BB in cases where Section 44DA applies, is prospective and applies from assessment year 2011-12.

Trust running classes for and under authority of University is not a coaching centre

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ITAT CHENNAI

Soorya Educational Trust

v.

Income-tax Officer

IT APPEAL NO. 579 (MDS.) OF 2012- ASSESSMENT YEAR 2008-09

Trust running classes for and under authority of University is not a coaching centre & cannot be denied exemption u/s. 11 & 12

When assessee was employing teachers and teaching the students for getting a formal degree or diploma of a recognized University and when attendance to such classes was compulsory for being eligible to write the examinations, we cannot place the assessee at par with a coaching centre. Coaching centre only trains the students to face competitive, professional, entrance examinations or similar examinations. Here, the training given by the assessee was for award of formal degrees or diploma courses and scheme of the examination was jointly decided by assessee and Annamalai University. Assessee had a say in charting out the scheme of examination and assessee was solely responsible for conducting classes. As already mentioned, assessee was only getting a share of the fees from Annamalai University. In our opinion, as long as Annamalai University was not considered a commercial institution, assessee also could not be considered a commercial institution. If Annamalai University was an educational institution, then assessee, which was conducting classes for the said University under its authority, was also an educational institution.

Though, in the context of the provision of section 10(22), the concept of education need not be given any wide or extended meaning, it surely would encompass systematic dissemination of knowledge and training in specialised subjects as is done by the assessee. The changing times and the ever widening horizons of knowledge may bring in changes in the methodology of teaching and a shift for the better in the institutional set-up. Advancement of knowledge brings within its fold suitable methods of its dissemination and though the primary method of sitting in a classroom may remain ideal for most of the initial education, it may become necessary to have a different outlook for further education. It is not necessary to nail down the concept of education to a particular formula or to flow it only through a defined channel. Its progress lies in the acceptance of new ideas and development of appropriate means to reach them to the recipients.”

Assessee here, in our opinion, did fall within the concept of rendering a formal education and could not be equated with a coaching institute. We are, therefore, of the opinion that assessee could not have been denied the eligible exemption under Sections 11 and 12 of the Act for a reason that it was not doing charitable activity as defined under Section 2(15) of the Act

No deduction u/s 54B if Assessee purchases agricultural land in his son & daughter-in-laws name

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HIGH COURT OF RAJASTHAN

Kalya v. Commissioner of Income-tax

D.B. IT APPEAL NO. 112 OF 2012

D.B. civil misc. stay application no. 1180 of 2012

Date of Pronouncement – 19.05.2012

It is noticed that the appellant-assess sold the agricultural land, which was mutated in his name, for a sale consideration of Rs. 1,61,09,100/-. Thereafter out of the selling price, the appellant-assessee purchased land in the name of his son and daughter-in-law for a total consideration of Rs. 1,22,71,440/-. It is relevant to note that the land sold was in the name of appellant-assessee, while the land purchased was in the name of his son and daughter-in-law.7. A bare reading of Section 54B of the Income Tax Act does not suggest that assessee would be entitled to get exemption for the land purchased by him in the name of his son and daughter-in-law.

Secondly, the word “assessee” used in the Income Tax Act needs to be given a ‘legal interpretation’ and not a ‘liberal interpretation’, as contended by the learned counsel for the appellant. If the word ‘assessee’ is given a liberal interpretation, it would be tantamount to giving a free hand to the assessee and his legal heirs and it shall curtail the revenue of the Government, which the law does not permit.

The Income Tax Appellate Tribunal, having considered all the facts and circumstances of the case, is found to have rightly disallowed the exemption under Section 54B of the Act.

Due date for filing Form 49C extended till 30-9-2012

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Due date for filing of Form 49C by an NR, having liaison office in India, extended till 30-9-2012

Section 119 of the Income-tax Act, 1961 – Income-tax authorities – Instructions to subordinate authorities – Order extending due date for filing Form 49C for F.Y. 2011-12

Order [F. No. 225/124/2012/ITA.II], dated 20-6-2012

Section 285 of Income-tax Act and Rule 114DA of Income-tax Rules read with Circular No. 5 of 2012, dated 6-2-2012, prescribes that a specified categories of assessees having a (Liaison Office in India shall electronically file Form 49C, within 60 days from the end of financial year. The due date for filing Form 49C for the financial year 2011-12 was prescribed as 30th May, 2012.

2. It has been brought to the notice of the Board that the appropriate facility for allowing the electronic filing of this form has not yet been operationalised due to technical difficulties and therefore the concerned assessees have not been able to make compliance within the prescribed date. In consideration of the same, the Board in exercise of powers conferred under section 119 of the Income-tax Act, 1961, has decided to extend the due date of filing Form 49C for the financial year 2011-12, up to 30th September, 2012.

3. The Board has further decided that for the financial year 2011-12, Form 49C can be filed in ‘paper mode’ instead of filing it electronically with digital signatures. Such Form 49C (in Paper mode) should be sent at the following address by ‘Registered Post’ or ‘Speed Post’:

The Director General of Income Tax (International Taxation),

4th Floor, Drum Shaped Building,

I.P. Estate, New Delhi-11002

The above may be immediately brought to the notice of the all concerned

ITAT has no power to condone delay in filing rectification petition u/s. 254(2)

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IN THE ITAT AHMEDABAD BENCH ‘A’

Agni Briquette (P.) Ltd.

v.

Assistant Commissioner of Income-tax, Circle-2

MA NOS. 72 AND 73 (AHD.) OF 2012

IT APPEAL NOS. 497 AND 498 (AHD.) OF 2003

[ASSESSMENT YEAR 1997-98]

JUNE 15, 2012

Statute has either mentioned that the date on which the order sought to be appealed should be the date of communication, or the date when the order is served or the date of service of the notice of demand. However, the Statute has not given any such indication while drafting the language of section 254(2) of the I.T.Act rather it has plainly mentioned, without any ambiguity, that the Appellate Tribunal may at any time within four years from the date of the order shall make such amendment if the mistake is brought to its notice by the assessee. The purpose of usage of such language appears to be that vide section 254(2A) an appeal is otherwise to be decided by the Tribunal within a period of four years by the end of the Financial Year in which such appeal is filed u/s.253(1) of the I.T.Act. Thereafter, another four years has further been granted for filing a petition u/s.254(2) by the Statute. If within the said long period of “eight years” an appellant is not vigilant about the fate of its appeal, then such an appellant cannot be termed as a serious litigant interested in getting an appeal finalized within a reasonable period. In the present case, the appeal in respect of the ITA No.497/Ahd/2003 was filed on 6/2/2003. Likewise, the appeal in respect of ITA No.498/Ahd/2003 was filed on 6/2/2003. Both these appeals remained pending uptill February-2007 and then on 23/02/2007 these appeals were decided ex-parte by the impugned orders by the Respected Co-ordinate Bench. Meaning thereby the appellant has never enquired in the said four years between 2003 to 2007 about the fate of his appeals although those were filed in the year 2003. After the lapse of 8 years, undisputedly a long gap, now this assessee is seeking a favourable decision which may tantamount to re-writing the Statute.

CBDT directs AOs to reconcile pending demands already paid

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Section 119 of the Income-tax Act, 1961 – Income-tax authorities – Instructions to subordinate authorities – Authorization of AOs in certain cases to rectify/reconcile disputed arrear demand

Circular No. 4 of 2012, dated 20-6-2012

The Board has been apprised that in certain cases the assessees have disputed the figures of arrear demands shown as outstanding against them in the records of the Assessing Officer. The Assessing Officers have expressed their inability to correct/reconcile such disputed arrear demand on the ground that the period of limitation of four years as provided under sub-section (7) of section 154 of the Act has expired.

Further, in some cases, the Assessing Officers have uploaded such disputed arrear demand on the Financial Accounting System (FAS) portal of Centralized Processing Center (CPC), Bengaluru which has resulted in adjustment of refund arising out of processing of Returns against such arrear demand which has been disputed by such assessees on the grounds that either such demand has already been paid or has been reduced/ eliminated in the appeals, etc. The arrear demands, in these cases also were not corrected / reconciled for the reason that the period of limitation of four years has elapsed.

2. The Board, in consideration of genuine hardship faced by the abovementioned class of cases, in exercise of powers vested under section 119(2)(b) of the Act, hereby authorize the Assessing Officers to make appropriate corrections in the figures of such disputed arrear demands after due verification/reconciliation and after examining the same on merits, whether by way of rectification or otherwise, irrespective of the fact that the period of limitation of four years as provided under section 154(7) of the Act has elapsed.

3. In view of the above the following has been decided:—

(a) In the category of cases where based on the figure of arrear demand uploaded by the Assessing Officer but disputed by the assessee, the Centralized Processing Center (CPC), Bengaluru has already adjusted any refund arising out of processing of return, the jurisdictional Assessing Officer shall verify the claim of the assessee on merits. After due verification of any such claim on merits, the Assessing Officer shall issue refund of the excess amount, if any, so adjusted by CPC due to inaccurate figures of arrear demand uploaded by the Assessing Officer. The Assessing Officer, in appropriate cases, will also upload amended figure of arrear demand on the Financial Accounting System (FAS) portal of Centralized Processing Center (CPC), Bengaluru wherever there is balance outstanding arrear demand still remaining after aforesaid correction/ reconciliation.

(b) In other cases, where the assessee disputes and requests for correction of the figures of arrear demand, whether uploaded on CPC or not uploaded and still lying in the records of the Assessing Officer, the jurisdictional Assessing Officer shall verify the claim of the assessee on merits and after due verification of such claim, will make suitable correction in the figure of arrear demand in his records and upload the correct figure of arrear demand on CPC portal.

4. It is specifically clarified that these instructions would apply only to the cases where the figures of arrear demand is to be reconciled/ corrected – whether such arrear demand has been uploaded by the Assessing Officer on to Financial Accounting System (FAS) of CPC or it is still in the records of the Assessing Officer.

This may be brought to the notice of all the officers of your CCA region.

Annual return on Foreign Liabilities & Assets Reporting by Indian Companies – Revised format

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June 20, 2012

To
All Category – I Authorised Dealer Banks
Madam / Sir,

Annual return on Foreign Liabilities and Assets
Reporting by Indian Companies – Revised format

Attention of the Authorised Dealer (AD) Category – I banks is invited to A. P. (DIR Series) Circular No.45 dated March 15, 2011 wherein, it was, inter-alia, stipulated that the annual return on Foreign Liabilities and Assets (FLA) is required to be submitted directly by all the Indian companies which have received FDI and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year, to the Director, External Liabilities and Assets Statistics Division, Department of Statistics and Information Management (DSIM), Reserve Bank of India, C-8, 3rd floor, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051, by July 15 of every year.

2. The Annual Return on FLA is now modified as attached. An easy-to-fill soft form of the return with guidance to users and in-built validations is now being made available on the RBI website (www.rbi.org.in → Forms category → FEMA Forms) which can be duly filled-in, validated and sent by e-mail, by July 15 every year. Any queries related to filling of annual return should be e-mailed. These directions will come into force with immediate effect. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

3. Necessary amendments to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 and the Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Amendment) Regulations, 2004 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 and Notification No. FEMA 120 dated July 07, 2004, respectively will be issued separately.

4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Place of Provision of Services Rules,2012 wef 01.07.2012

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Notification No. 28/2012 – Service Tax

New Delhi, the 20^th June, 2012

G.S.R…..(E).- In exercise of the powers conferred by sub-section (1) of section 66C and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 9/2005-ST, dated the 3^rd March, 2005 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 151 (E) dated the 3^rd March, 2005 and the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 11/2006-ST dated the 19^th May, 2006 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 227 (E) dated the 19^th May, 2006, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules for the purpose of determination of the place of provision of services, namely:-

1. Short title, extent and commencement. - (1) These rules may be called the Place of Provision of Services Rules, 2012.

(2) They shall come into force on 1^st day of July, 2012.

2. Definitions.- In these rules, unless the context otherwise requires,-

(a) “Act” means the Finance Act, 1994 (32 of 1994);

(b) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account;

(c) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934);

(d) “continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by one service provider or through one agent acting on behalf of more than one service provider, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued;

(e) “financial institution” has the meaning assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act,1934 (2 of 1934);

(f) “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account.;

(g) “leg of journey” means a part of the journey that begins where passengers embark or disembark the conveyance, or where it is stopped to allow for its servicing or refueling, and ends where it is next stopped for any of those purposes;

(h) “location of the service provider” means-

(a). where the service provider has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained;

(b). where the service provider is not covered under sub-clause (a):

(i) the location of his business establishment; or

(ii) where the services are provided from a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or

(iii) where services are provided from more than one establishment, whether business or fixed, the establishment most directly concerned with the provision of the service; and

(iv) in the absence of such places, the usual place of residence of the service provider.

(i) “location of the service receiver” means:-

(a). where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained;

(b). where the recipient of service is not covered under sub-clause (a):

(i) the location of his business establishment; or

(ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or

(iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and

(iv) in the absence of such places, the usual place of residence of the recipient of service.

Explanation:-. For the purposes of clauses (h) and (i), “usual place of residence” in case of a body corporate means the place where it is incorporated or otherwise legally constituted.

Explanation 2:-. For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address.

(j) “means of transport” means any conveyance designed to transport goods or persons from one place to another;

(k) “non-banking financial company” means-

(i) a financial institution which is a company; or

(ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or

(iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette specify;

(l) “online information and database access or retrieval services” means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network;

(m) “person liable to pay tax” shall mean the person liable to pay service tax under section 68 of the Act or under sub-clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994;

(n) “provided” includes the expression “to be provided”;

(o) “received” includes the expression “to be received”;

(p) “registration” means the registration under rule 4 of the Service Tax Rules, 1994;

(q) “telecommunication service” means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting services.

(r) words and expressions used in these rules and not defined, but defined in the Act, shall have the meanings respectively assigned to them in the Act.

3. Place of provision generally.- The place of provision of a service shall be the location of the recipient of service:

Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service.

4. Place of provision of performance based services.- The place of provision of following services shall be the location where the services are actually performed, namely:-

(a) services provided in respect of goods that are required to be made physically available by the recipient of service to the provider of service, or to a person acting on behalf of the provider of service, in order to provide the service:

Provided that when such services are provided from a remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of service:

Provided further that this sub-rule shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs, reconditioning or reengineering for re-export, subject to conditions as may be specified in this regard.

(b) services provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service.

5. Place of provision of services relating to immovable property.- The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located.

6. Place of provision of services relating to events.- The place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held.

7. Place of provision of services provided at more than one location.-Where any service referred to in rules 4, 5, or 6 is provided at more than one location, including a location in the taxable territory, its place of provision shall be the location in the taxable territory where the greatest proportion of the service is provided.

8. Place of provision of services where provider and recipient are located in taxable territory.- Place of provision of a service, where the location of the provider of service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service.

9. Place of provision of specified services.- The place of provision of following services shall be the location of the service provider:-

(a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b) Online information and database access or retrieval services;

(c) Intermediary services;

(d) Service consisting of hiring of means of transport, upto a period of one month.

10. Place of provision of goods transportation services.- The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods:

Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay tax.

11. Place of provision of passenger transportation service.- The place of provision in respect of a passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey.

12. Place of provision of services provided on board a conveyance.- Place of provision of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.

13. Powers to notify description of services or circumstances for certain purposes.- In order to prevent double taxation or non-taxation of the provision of a service, or for the uniform application of rules, the Central Government shall have the power to notify any description of service or circumstances in which the place of provision shall be the place of effective use and enjoyment of a service.

14. Order of application of rules.- Notwithstanding anything stated in any rule, where the provision of a service is, prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration.

[F.No. 334 /1/ 2012-TRU]

Service tax Exemption on property tax paid on immovable property

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Notification No. 29/2012- Service Tax, Dated – 20^th June, 2012

G.S.R……(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), and in supersession of the Government of India in the Ministry of Finance (Department of Revenue) notification No. 24/2007-Service Tax, dated the 22^nd May, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 370 (E), dated the 22^nd May, 2007, except as respects things done or omitted to be done before such supersession, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of renting of an immovable property, from so much of the service tax leviable thereon under section 66B of the said Finance Act, as is in excess of the service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property less taxes on such property, namely property tax levied and collected by local bodies:

Provided that any amount such as interest, penalty paid to the local authority by the service provider on account of delayed payment of property tax or any other reasons shall not be treated as property tax for the purposes of deduction from the gross amount charged:

Provided further that wherever the period for which property tax paid is different from the period for which service tax is paid or payable, property tax proportionate to the period for which service tax is paid or payable shall be calculated and the amount so calculated shall be excluded from the gross amount charged for renting of the immovable property for the said period, for the purposes of levy of service tax.

Example:

Property tax paid for April to September = Rs. 12,000/-

Rent received for April = Rs. 1, 00,000/-

Service tax payable for April = Rs. 98,000/- (1, 00,000 -12,000/6) * applicable rate of service tax

2. This notification shall come into force on the 1^st day of July, 2012.

Exemption to specified services received by exporter of goods

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Notification No. 31/2012 – Service Tax

New Delhi, the 20th June, 2012

G.S.R…. (E). -In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 18/2009-Service Tax, dated the 7^th July, 2009, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.490 (E), dated the 7^th July, 2009, except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service received by an exporter of goods (hereinafter referred to as the exporter) and used for export of goods (hereinafter referred to as the said goods), of the description specified in column (2) of the Table below (hereinafter referred to as the specified service), from the whole of the service tax leviable thereon under section 66B of the said Act, subject to the conditions specified in column (3) of the said Table, namely:-

Table

Sr. No.	Description of the taxable service	Conditions
(1)	(2)	(3)
1.	Service provided to an exporter for transport of the said goods by goods transport agency in a goods carriage from any container freight station or inland container depot to the port or airport, as the case may be, from where the goods are exported; or Service provided to an exporter in relation to transport of the said goods by goods transport agency in a goods carriage directly from their place of removal, to an inland container depot, a container freight station, a port or airport, as the case may be, from where the goods are exported.	The exporter shall have to produce the consignment note, by whatever name called, issued in his name.

Provided that-

(a) the exemption shall be available to an exporter who,-

(i) informs the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory or the regional office or the head office, as the case may be, in Form EXP1 appended to this notification, before availing the said exemption;

(ii) is registered with an export promotion council sponsored by the Ministry of Commerce or the Ministry of Textiles, as the case may be;

(iii) is a holder of Import-Export Code Number;

(iv) is registered under section 69 of the said Act;

(v) is liable to pay service tax under sub-section (2) of section 68 of said Act, read with item (B) of sub-clause (i) of clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules,1994, for the specified service;

(b) the invoice, bill or challan, or any other document by whatever name called issued by the service provider to the exporter, on which the exporter intends to avail exemption, shall be issued in the name of the exporter, showing that the exporter is liable to pay the service tax in terms of item (v) of clause (a);

(c) the exporter availing the exemption shall file the return in Form EXP2, every six months of the financial year, within fifteen days of the completion of the said six months;

(d) the exporter shall submit with the half yearly return, after certification, the documents in original specified in clause (b) and the certified copies of the documents specified in column (4) of the said Table;

(e) the documents enclosed with the return shall contain a certification from the exporter or the authorised person, to the effect that taxable service to which the document pertains, has been received and used for export of goods by mentioning the specific shipping bill number on the said document.

(f) where the exporter is a proprietorship concern or partnership firm, the documents enclosed with the return shall be certified by the exporter himself and where the exporter is a limited company, the documents enclosed with the return shall be certified by the person authorised by the Board of Directors;

2. This notification shall come into force on the 1^st day of July, 2012.

Form EXP1
[See item (i) of clause (a) of proviso ]

S.No———————-

(to be filled in by the office of jurisdictional Assistant / Deputy Commissioner)

To,
The Deputy Commissioner /Assistant Commissioner of Central Excise

Sir,

I/We intend to avail of the exemption from service tax under Notification No. 31/2012-ST, dated 20^th June, 2012 in respect of service for transport of the said goods by road, which has been used for export of goods and the relevant particulars are as follows.

1. Name of the exporter………

2. Service Tax Registration No……….

3. Division ……… Commissionerate ……………

4 Membership No. the Export Council………….

5 Name of the Export Council…………

6. Address of the registered / head office of exporter:……..

7. Tel. No. and e-mail ID of the exporter……..:

8. Import -Export Code No…………..

9. Details of Bank Account (Name of Bank, branch address and account number)……..

I/we undertake that I/we shall comply with the conditions laid down in the said notification and in case of any change in aforementioned particulars; I/We shall intimate the same.

Date:…..

Place:……..

Signature and full address of Exporter
(Affix stamp)

Receipt (to be given by office of Assistant Commissioner/ Deputy Commissioner having jurisdiction) Received Form EXP1 dated –/–/– submitted by __________( name of the exporter). The said intimation is accepted and given acknowledgment No. _____( S. No. Above)

For Assistant, / Deputy Commissioner
(Stamp)

Form EXP2
[See clause (c) of proviso]

To,
The Deputy Commissioner /Assistant Commissioner of Central Excise

Sir,

I/We have availed of exemption of service tax under Notification No. 31/2012-ST, dated 20^th June, 2012 in respect of services, namely, the services provided for transport of said goods in a goods carriage by goods transport agency, and has used the same for export of goods during the period from …… to….. .. and the relevant particulars are as follows:-

1. Name of the exporter………..
2. Address of the registered / head office of exporter…………
3. Tel. No. and e-mail ID of the exporter……..:
4. Service Tax Registration No…….
5. Division ……… Commissionerate ……………
6. Membership No. Of the Export Council………
7. Import Export Code No…………..
8. Name of the Export Council………..
9. Details of Bank Account (Name of Bank, branch address and account number)……..

Table-A

Sr. No.	Details of goods exported (on which exemption of service tax availed) during the six months ending on…………………………..
	Details of Shipping Bill/ Bill of export (Please enclose self attested copy of Shipping Bill or Bill of Export) and Details of goods exported (in case of exports of more than one commodity, please fill in the proforma, commodity-wise)
	No.	Date	Date of Let export order	Export invoice no	Date	Description of goods exported	Quantity (please mention the unit)	FOB value (in rupees in lakh)

Table- B

Details of specified service used for export of goods, covered under the Shipping Bill or Bill of Export mentioned in Table A in respect of which the exemption has been availed during the six months ending on…………………………..				Details of documents attached showing the use of such service for export, the details of which are mentioned in Table A (self attested)	Total amount of service tax claimed as exemption (rupees in lakhs)
Name of service provider	Address of service provider	Invoice No.	Date

9. Declaration:-

I / We hereby declare that-

(i) I have complied with all the conditions mentioned in Notification No. 31/2012-ST, dated 20^th June, 2012;

(ii) the information given in this application form is true, correct and complete in every respect and that I am authorised to sign on behalf of the exporter;

(iii) no CENVAT credit of service tax paid on the specified service used for export of said goods taken under the CENVAT Credit Rules, 2004;

(iv) I / we, am/ are enclosing all the required documents. Further, I understand that failure to file the return within stipulated time or non-enclosure of the required document, duly certified, would debar me/us for the refund claimed aforesaid.

Date:……..

Place:………

Signature and full address of Exporter
(Affix stamp)

Enclosures: as above

[F.No. 334 /1/ 2012-TRU]