Allowability of Interest U/s. 244A on MAT credit

PrintPDF ACIT Vs Bank Of India (ITAT Mumbai) As per the provisions of section 115JAA(2), the amount of tax credit of MAT to be carried forward is determined and it is not provided therein that first the taxes paid are to be adjusted and then credit of MAT is to be given. In the case of Chemplast Sanmar, cited supra, the Chennai Bench of the Tribunal has held while deciding he issue u/s.234B and 234C that the tax credit u/s.115JA(2) is advance tax retained by the Department for being set off against the tax liability of future years. We are in agreement with the ld. CIT that the assessee is entitled for interest u/s.244A on the refund given to it. We are also of the view that it was a mistake which could be rectified u/s. 154. So from this is is clear that MAT credit has to be given right at the beginning and if ultimately the calculation leads to a refund, then such interest has to be paid u/s.244A.

Depreciation can be allowed even if the machinery is not put to use

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ITO V/s. Tropicana Beverages Company(ITAT Delhi)- when it is established that the machinery on which depreciation has been claimed by the assessee, had been provided by the assessee to Dynamix for the purpose of manufacturing the product of the assessee, necessarily the machinery was used for the purpose of the business of the assessee. That being so, “used for the purposes of the business” in section 32 of the Act is applicable to the assessee.

The words “used for the purposes of the business” in section 10(2)(iv) of the Indian Income Tax Act, 1922, which expression is the same as that employed in section 32 of the I.T. Act, 1961, under which the assessee has made the claim of depreciation in the present case, meant that the machinery and plant is used for the purpose of enabling the owner to carry on the business and earn profits in the business; and that therefore, the assessee was entitled for claiming depreciation.

Repayment of capital to the partners in the form of uncrossed cheque would not be liable to penalty u/s 269T

PrintPDF ITO Vs M/s Universal Associates (ITAT Ahemedabad) - Considering the facts of the case in the light of the above decisions, we are of the view that the at least the assessee has been able to explain reasonable cause for failure to comply with the provisions of law. The ex-partners have introduced their capital in the assessee firm and on retirement they were given their amount back through bearer cheques and, therefore, the assessee is able to prove that it had reasonable cause for failure to comply with the provisions of law.The finding of fact given by the learned CIT(A) show that the assessee made payments bona fide and the default was highly technical in nature, therefore, the learned CIT(A) was justified in canceling the penalty. Consequently, penalty imposed by the AO merely on technical mistake if any committed by the assessee which has not resulted in any loss of revenue, the levy of penalty was harsh and could not have been sustained in law.

MCA – Revised Form 23AC and Form 23ACA applicable from 12th August 2011

PrintPDF Revised Form 23AC and Form 23ACA will be available on the MCA Portal, effective 12th August, 2011. All Stakeholders are requested to use new version w.e.f. 12th August, 2011 (6.00 AM) as the current version of these forms will be discontinued on MCA Portal.

Government considering proposal to extend EPF to all companies with over 10 employees

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The government is considering a proposal to extend Employees Provident Fund Scheme to all companies with over 10 employees, the Parliament was informed today. “The proposal is under examination and consideration of the government,” Labour and Employment Minister Mallikarjun Kharge said in a written reply.

At present the EPF Act has provisions that any factories or establishments having 20 or more employees have to contribute to the EPF.

To a different question about existing pension scheme and whether it has become non-sustainable, the minister said they are considering a report of an expert committee constituted by the Ministry to review the scheme.

Depreciation on the capital assets was allowable even when capital expenditure on the acquisition of the corresponding assets had already been allowed

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CIT v Market Committee, Tohona (Punjab and Haryana HC) – Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in allowing depreciation on the capital assets even when capital expenditure on acquisition of thecorresponding assets had already been allowed as ‘application of income’ for the purpose of allowing exemption under section 11 of the income-tax Act and as such further allowing of depreciation of these capital assets will amount to double deduction for the same expenditure?

Whether allowing of depreciation on the capital assets by Hon’ble ITAT is justified in the light of the Hon’ble Apex Court decision in Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure?

CIT v Market Committee, Tohona

High Court of Punjab and Haryana

I.T.A. No. 186 of 2011

Decided on: 12 July 2011

Judgment

This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench “E”, New Delhi dated 25.6.2010 in I.T.A. No.1335/DEL/2010 for the assessment year 2007-08 proposing following questions of law:-

1. “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in allowing depreciation on the capital assets even when capital expenditure on acquisition of thecorresponding assets had already been allowed as ‘application of income’ for the purpose of allowing exemption under section 11 of the income-tax Act and as such further allowing of depreciation of these capital assets will amount to double deduction for the same expenditure?

2. Whether allowing of depreciation on the capital assets by Hon’ble ITAT is justified in the light of the Hon’ble Apex Court decision in Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure?”

2. Learned counsel for the appellant fairly states that the matter is covered against the revenue byjudgment of this Court dated 5.7.2010 in I.T.A. No.535 of 2009 in CIT v. Market Committee, Pipli.

3. Accordingly, this appeal is dismissed.

MCA introduces Company Law Settlement Scheme, 2011 for default in filing of Annual Return, balance Sheet, P/L a/c, Compliance Certificate

PrintPDF General Circular No.59 /2011, Dated the 05th Aug, 2011
Subject: Company Law Settlement Scheme, 2011
It has been observed that a large number of companies are not filing their due statutory documents (i.e. Balance Sheets and Annual Returns) timely with the Registrar of Companies. Due to this, the records available in the electronic registry are not updated and thereby are not available to the stakeholders for inspection. Further, due to not filing the documents on time, companies are burdened with additional fee, facing the prosecutions and being debarred from filing other documents electronically as provided in Circular No. 33/2011 dated 01.06.2011 also.
2. In order to give an opportunity to the defaulting companies to enable them to make their default good by filing such belated documents and to become a regular compliant in future, the Ministry, in exercise of the powers under Section 611(2) and 637B (b) of the Companies Act, 1956 has decided to introduce a Scheme namely, “Company Law Settlement Scheme, 2011,” condoning the delay in filing documents with the Registrar, granting immunity from prosecution and charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act, 1956 and the rules made there under. The details of the Scheme are as under:-
(i) The scheme shall come into force on the 12th Aug, 2011 and shall remain in force up to 31st Oct, 2011.
(ii) Definitions – In this Scheme, unless the context otherwise requires, -
(a) “Act” means the Companies Act, 1956 (1 of 1956);
(b) “company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act;
(c) “defaulting company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act, which has made a default in filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under;
(d) “designated authority” means the Registrar of Companies having jurisdiction over the registered office of the company.
(iii) Applicability: – Any “defaulting company” is permitted to file belated documents, which were due for filing till 30.06.2011, in accordance with the provisions of this Scheme:
(iv) Manner of payment of fees and additional fee on filing belated document for seeking immunity under the Scheme – The defaulting company shall pay statutory filing fees as prescribed under the Companies Act and rules made there under along with an additional fee of 25 percent of the actual additional fee standardised under sub­section (2) of Section 611 of the Companies Act, 1956, payable on the date of filing of each belated document;
(v) Withdrawal of appeal against prosecution launched for the offences- If the defaulting company has filed any appeal against any notice issued or complaint filed before the competent court for violation of the provisions under the Act in respect of which application is made under this Scheme, the applicant shall before filing an application for issue of immunity certificate, withdraw the appeal and furnish the proof of such withdrawal along with the application;
(vi) Application for issue of immunity in respect of document(s) filed under the scheme - The application for seeking immunity in respect of belated documents filed under the Scheme may be made electronically in the Form annexed, after closure of Scheme and after the document(s) are taken on file, or on record or approved by the Registrar of Companies as the case may be, but not after the expiry of six months from the date of closure of the Scheme. There shall not be any fee payable on this Form;
(vii) Order by designated authority granting immunity from the penalty and prosecution - The designated authority shall consider the application and upon being satisfied shall grant the immunity certificate in respect of documents filed in the Scheme;
(viii) Scheme not to apply to certain documents –
(a) This Scheme shall not apply to the filing of documents other that following documents:-
Form 20 B - Form of filing annual return by a company having a share capital
Form 21 A – Particulars of annual return for the company not having share capital
Form 23AC & 23ACA – Form for filing Balance Sheet and Profit & Loss account
Form 66 - Form for submission of Compliance Certificate with the Registrar
(b) This Scheme shall not apply to companies against which action under sub-section (5) of section 560 of the Act has been initiated by the Registrar of Companies;
(ix) After granting the immunity, the Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s);
3. At the conclusion of the Scheme, the Registrar shall take necessary action under the Companies Act, 1956 against the companies who have not availed this Scheme and are in default in filing of documents in a timely manner.

Online incorporation of companies within 24 hours

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General Circular No. 49 /2011, Dated – Dated the 23^rd July, 2011

Sub: Online incorporation of companieswithin 24 hours

In order to give ease to the corporate world to carry business in India, the Ministry of Corporate Affairs has been simplifying the procedures under the Companies Act, 1956. As another step in this direction, the Ministry is modifying the incorporation procedures to enable promoters to get their companiesincorporated online within 24 hours.

2. Ministry has already implemented online approval of Director’s Identification Number (DIN) with effect from 12.06.2011 and names of the proposed company will also be made available online with effect from 24.07.2011. The digital certificate of incorporation is already being issued online by the Registrar of Companies.

3. Now, the Ministry is also simplifying the procedures to approve incorporation applications forms online.

In case the e-forms 1, 18, 32 and e-form for Memorandum of Association(MOA) and Articles ofAssociation (AOA) have been certified by the practicing professional regarding the correctness of the information and declarations given by the subscribers, the application shall be processed electronically and the digital certificate of incorporation shall be issued immediately online by the Registrar ofCompanies.

4. The above facility is optional to the existing process of backend processing of applications by the Registrar of Companies where no such certifications have been done by the practicing professional.

5. If any of the information or declaration given by the company or certificate given by the professional in the e-forms and attachment(s) thereto is/are, found to be wrong, false or illegal then the subscribers, declarant(s) and professional(s) shall be liable for penal action under section 628 and 629 of theCompanies Act, 1956 in addition to penal action prescribed in regulations of the respective professional institutes.

6. Where a company has been registered online on the basis of declarations made by the subscribers, declarant(s) and certifications by the professional(s) given in the e-form, if it is found later on that the company ought not to have been registered under provisions of the Companies Act, 1956 read with Rules and Regulations made therein, the Registrar of Companies shall take necessary action to put the company in state of suspended animation and initiate the process of revocation of the registration of the company after giving an opportunity of being heard.

7. It is expected that the above immediate online approvals of DIN, availability of name and registration of e-forms-1, 18, 32 and MOA and AOA, the complete process of incorporation of a company can be completed within 24 hours.

8. The above simplified process of online incorporation of companies is likely to be implemented with effect from 11^th August, 2011.

MCA simplifies procedure for obtaining confirmation of shifting of registered office from one state to another state u/s. 17 of the Companies Act, 195

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General Circular No. 50 /2011 , Dated 25^thJuly, 2011

Sub: Simplified procedure for obtainingconfirmation of shifting of registered office from one state to another state under section 17 of the Companies Act, 1956.

In order to simplify the procedures and cut timelines, the Ministry has decided to notify section 8 of the Companies (Second Amendment) Act, 2002 (1) of 2003 thereby the work relating to confirmation of shifting ofregistered office from one state to another state and consequent alteration to Memorandum of Association of the company under section 17 of the Companies Act, 1956 shall be shifted from the jurisdiction of Company Law Board to the Central Government.

2. It has further been decided to delegate this work to the respective Registrar of Companies under whose jurisdiction the registered office of the company is situated. The petitions filed with the Company LawBoard and pending as on the effective date of notification shall be transferred to respective Registrar ofCompanies.

3. The revised e-forms and business re-engineering process under MCA-21 system is being developed and the simplified procedures to be followed by the companies and Registrar of Companies shall be given in the modified e-forms and instruction kit thereto shortly.

4. It is expected that on discharging of these functions by the respective Registrar of Companies on implementation of simplified procedures, the cost and the time to get such confirmation and alteration to Memorandum of Association under section 17 of the Companies Act, 1956 shall be reduced.

5. The above simplified process is likely to be implemented with effect from 24^th September, 2011.

Excise Duty – Provisions of Finance Act, 2011 (8 of 2011) will come in force from 1st day of August, 2011

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Notification No. 18 /2011 –Central Excise (N.T), Dated the 28^thJuly, 2011

G.S.R. 580(E). – In exercise of the powers conferred by section 62 of the FinanceAct, 2011 ( 8 of 2011), the Central Government hereby appoints the 1^st day of August, 2011, as the date on which, theprovisions of the said section shall come in to force.

XBRL statement can be filed up to 30.11.2011 without any additional fee and can be certified by CA, CS, CWA

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Circular No: 57/2011, Dated: 28.07.2011

No. HQ/MCA/DigitisedBS/AR/2009

Sub: Filing of Balance Sheet and Profit and Loss Account in eXtensible Business Reporting Language (XBRL) mode.

The Para 3 of the Circular no. 37/2011 dated 07.06.2011 may be read as under: ‑

“All companies falling in Phase-I class ofcompanies (excluding exempted class) are permitted to file their financial statementswithout any additional fee up to 30.11.2011 or within 60 days of their due date, whichever is later.”

2. Further, in supersession of Para 2 (i) of Ministry’s Circular No. 43/2011 dated 07.07.2011, it is informed that the verification and certification of the XBRL document of financial statements on the e-forms would continue to be done by authorized signatory of the company as well as professional like Chartered Accountant or Company Secretary or Cost Accountant in whole time practice.

HDFC Bank starts income tax payment facility through ATMs

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Private sector lender HDFC Bank on Wednesday launched a service whereby its 115 lakh debit card holders can pay income tax through the bank’s ATMs. “With this facility, the bank has given its vast customer base the freedom from waiting in long queues at counters or logging into the internet to pay their taxes,” the bank said in a statement.
The service was flagged off by Controller General of Accounts C R Sundaramurti at the bank’s Deer Park branch here.

The service can now be accessed by the bank’s 115 lakh debit card holders at 5,998 HDFC Bank ATMs in 1,111 cities across the country.

For availing the service, customers will have to register themselves and the ATM payment option will be activated immediately, it said.

For the quarter ended June 30, the bank’s total income was Rs 7,098 crore as against Rs 5,411.0 crore in the year-ago period. Net revenues Rs 3,968 crore in the first quarter of the fiscal as against Rs 3,392 crore in April-June, 2010.

Sebi clears single-window clearance for prior approvals

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Market regulator the Securities and Exchange Board of India (Sebi) today approved a single-window clearance system for market entities, including stock brokers, merchant bankers and credit ratings agencies, for grant of prior approval for change in control of their management structures.

REVISED PROCEDURE FOR SEEKING PRIOR APPROVAL FOR CHANGE IN CONTROL THROUGH SINGLE WINDOW

CIRCULAR NO. MIRSD/14/2011, DATED 2-8-2011

1. SEBI vide Circular No. MIRSD/MSS/Cir-30/13289/03, dated July 9, 2003 addressed to all the Stock exchanges specified, inter alia, the procedure for seeking prior approval from SEBI by stock brokers for change in status and constitution.

2. SEBI has recently amended the regulations for certain intermediaries, viz., Stock Brokers and Sub-brokers, Merchant Bankers, Debenture Trustees, Registrar to an Issue and Share Transfer Agents, Underwriters, Depository Participants, Bankers to an Issue and Credit Rating Agencies, videNotification No. LAD-NRO/GN/2011-12/03/12650, dated April 19, 2011. This has already been communicated to you and a copy of the notification is also available on SEBI website www.sebi.gov.in . As per the amendments, the requirement of obtaining prior approval for change in status or constitution has been dispensed with. However, in case of change in control of the above intermediaries except for Sub-brokers, prior approval of SEBI is required.

3. With a view to expedite the process of granting prior approval, it has been decided to adopt a ‘single window clearance at SEBI’, for the above intermediaries in case of their having multiple registrations with SEBI. Accordingly, in consultation with the major stock exchanges and market participants, it has been decided to adopt the following procedure;

(i) In case an applicant holds multiple registrations with SEBI, it shall make only one application to SEBI accompanied by the following information about itself, the acquirer and the directors/partners of the acquirer;

l Whether any application was made in the past to SEBI seeking registration in any capacity but it was not granted? If yes, details thereof.

l Whether any action has been initiated/taken under SCRA/SEBI Act or rules and regulationsmade thereunder? If yes, status thereof along with corrective action taken to avoid such violations in the future. The acquirer shall also confirm that it shall honour all past liabilities/obligations of the applicant, if any.

l Whether any investor complaint is pending? If yes, steps taken and confirmation that the acquirer shall resolve the same.

l Details of litigation, if any.

l That all the fees due to SEBI have been paid.

l That there will not be any change in the Board of Directors of incumbent, till the time prior approval is granted.

l That the incumbent shall inform all its existing investors/clients in order to enable them to take informed decision regarding their continuance or otherwise with the entity with new management.

(ii) Further, in case the incumbent is a registered stock broker and/or depository participant, in addition to the above, it shall obtain approval/NOC from all the Stock Exchanges/Depositories, where the incumbent is a member/Depository Participant and forward a self attested copy of the same to SEBI.

(iii) The application shall be addressed to “Chief General Manager, MIRSD, SEBI”.

(iv) The prior approval granted by SEBI shall be valid for a period of 180 days from the date of communication.

4. While the above mentioned intermediaries are advised to ensure compliance with the provisions of this circular, the stock exchanges and depositories are advised to:

(i) bring the provisions of this circular to the notice of the Stock Brokers/ Depository Participants and also disseminate the same on their websites.

(ii) make amendments to the relevant bye-laws, rules and regulations as deemed necessary for the implementation of the above decision in coordination with one another to achieve uniformity in approach.

(iii) communicate to SEBI, the status of the implementation of the provisions of this circular in their Monthly Development Reports.

5. This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.

6. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Circulars”.