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Thursday, January 15, 2015

Date for Calculation of Interest U/s 234- Date of Cheque presentation or Clearing?

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MADRAS HIGH COURT

Commissioner of Income Tax Chennai.
Vs.
REPCO Home Finance Ltd.

T.C.(A).No.601 of 2014
DATED: 11.11.2014


Issue- Whether interest under Section 234C of the Act is to be calculated based on date of clearing of the cheque or date of presentation of the cheque.

Held- It is not the case of the department that the cheque issued by the assessee was dishonourned. Once the cheque issued by the assessee is encashed, in the light of the decisions referred supra, the payment relates back to the date of receipt of the cheque.

No processing of returns for I-T refund if selected for Scrutiny

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Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi,
 Instruction No.1/2015
Dated -13th January, 2015
Subject: – Clarification regarding applicability of section 143(1D) of the Income-tax Act, 1961 -reg.
Sub-section (ID) of section 143 of the Income-tax Act, 1961 (‘Act’) provides that where a notice has been issued to a taxpayer under sub-section (2) of section 143 of the Act, it shall not be necessary to process the return in such a case.
 2.      Some doubts have been expressed, in view of the words “shall not be necessary”  used in the said sub-section, as to whether this provision permits processing of returns having a  refund claim, where notice under section 143(2) of the Act has been issued.
 3.        The matter has been examined by the Board.  Sub-section (1D) of section 143 of the Act was introduced by the Finance Act, 2012 with effect from 01.07.2012. The purpose of introduction of this sub-section has been stated in the Explantory Note to the Finance Act as under: “Under the existing provisions, every return of income is to be processed under sub-section (1) of section 143 and refund, if any, due is to be issued to the taxpayer. Some returns of income are also  selected for scrutiny which may lead to raising a demand for taxes although refunds may have been    issued earlier at the time of processing. It is therefore proposed to amend the provisions of the Income-tax Act to provide that processing of return will not be necessary in a case where notice under sub-section (2) of section 143 has been issued for scrutiny of the return.” Thus, in cases where an unprocessed return is selected for scrutiny, the legislative intent is to prevent the issue of refund after processing as scrutiny proceedings may result in demand for taxes on finalisation of the assessment subsequently.
4. Considering the unambiguous language of the relevant provision and the intention of law as discussed above, the Central Board of Direct Taxes, in exercise of the powers conferred on it under section 119 of the Act hereby clarifies that the processing of a return cannot be undertaken after notice has been issued under sub-section (2 ) of section 143 of the Act. It shall however, be desirable that scrutiny assessments in such cases are completed expeditiously.
5.     This may be brought to the notice of all concerned for strict Compliance.
6.     Hindi version to follow.

Tuesday, January 13, 2015

REVISED PATH OF IMPLEMENTATION FOR IFRS CONVERGENCE

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MINISTRY OF CORPORATE AFFAIRS

PRESS RELEASE

In pursuance of the Budget statement the Ministry of Corporate Affairs, after wide consultations with various stakeholders and regulators, has drawn up a revised Road Map for companies other than Banking Companies, Insurance Companies and Non- Banking Finance Companies ( NBFC’s) for implementation of Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS).

The Ind AS shall be applicable to the companies as follows:

(i)               On voluntary basis for financial statements for accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31st March, 2015 or thereafter;

(ii)              On mandatory basis for the accounting periods beginning on or after April 1, 2016, with comparatives for the periods ending 31st March, 2016, or thereafter, for the companies
                    specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of 
 listing on any stock exchange in India or outside India and having net worth of Rs.
                          500 Crore or more.

(b)   Companies other than those covered in (ii) (a) above, having net worth of Rs. 500     
Crore or more.

(c)    Holding, subsidiary, joint venture or associate companies of companies covered 
under (ii) (a) and (ii) (b) above.

(iii)            On mandatory basis for the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter, for the companies specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of being
listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred Crore.

(b)   Companies other than those covered in paragraph (ii) and paragraph (iii)(a) above that 
is unlisted companies having net worth of two hundred and fifty crore or more but less than rupees five hundred Crore.

(c)     Holding, subsidiary, joint venture or associate companies of companies covered under paragraph (iii) (a) and (iii) (b) above.

However, Companies whose securities are listed or in the process of listing on SME exchanges shall not be required to apply Ind AS. Such companies shall continue to comply with the existing  Accounting Standards unless they choose otherwise.
 
(iv)              Once a company opts to follow the Indian Accounting Standards (Ind AS), it shall be required   to follow the Ind AS for all the subsequent financial statements.

(v)                Companies not covered by the above roadmap shall continue to apply existing Accounting Standards prescribed in Annexure to the Companies (Accounting Standards) Rules, 2006.

A notification on the above lines shall be issued shortly.