UPDATES:

1. If assessee admits undisclosed income, substantiate manner and paid taxes on undisclosed income no penalty u/s 271AAA of the Income Tax Act can be levied – [SPS Steel and Power Ltd. v/s. ACIT, ITAT KOLKATA].
2. Genuine expenditure paid in cash cannot be disallowed u/s 40A (3) of the Income Tax Act –[DCIT vs. KolliGopal Krishna, ITAT Hyderabad].
3. RBI has notified two new forms NBS 8 and NBS 9 to be filed annually within 30 days of closing of financial year. NBS 8 is for NBFC-ND with assets size between 100-500 crore. NBS 9 is for NBFC-ND with assets size below 100 crore.
4. DGFT launches online payment facility for application fees through Credit/ Debit Cards.
5. India and USA have signed an Inter Governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency between the two nations on tax matters.
6. ICAI on 06.07.2015 announced the new scheme of education and training for CA course. Now, Commerce Graduates / Post-Graduates (with minimum 55% marks) or Other Graduates / Post-Graduates (with minimum 60% marks) and Intermediate level passed students of ICSI and ICWAI to enter directly to its Intermediate course.

FLA Return by 15th July,2015

ANNUAL RETURN ON FOREIGN LIABILITIES AND ASSETS

• Act: Annual return on Foreign Liabilities and Assets has been notified under FEMA 1999. Return to be filed under A.P. (DIR Series) Circular No.145 dated June 18, 2014 and submitted to the Department of Statistics and Information Management, RBI, Mumbai

• Applicability: It is required to be submitted directly by all the Indian companies which have received FDI (foreign direct investment) and/or made FDI abroad (i.e. overseas investment) in the previous year(s) including the current year i.e. who hold foreign Assets or Liabilities in their balance sheets

• Due Date: FLA Return is mandatory under FEMA 1999 and companies are required to submit the same based on audited/ unaudited account by July 15 every year through official email id of any authorized person of company like CFO, Director, Company Secretary at fla@rbi.org.in

• Format: The FLA Return has to be submitted in excel based format, which has inbuilt checks and validations. The latest format of FLA Return is available on RBI’s web site at the following link:

https://www.rbi.org.in/Scripts/BS_ViewFemaForms.aspx

For detailed FAQs on FLA Return you may please read more on the following link:

https://rbi.org.in/Scripts/FAQView.aspx?Id=95

• Non-compliance: Non-filing of FLA Return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

UPDATES:

1. Rent received from a property belonging to assessee’s husband is taxable under the head “House Property” and not under “Other Sources. [CIT v/s. Mina Deogun, High Court of Calcutta].

2. Penalty u/s 272B of the Income Tax Act cannot be imposed if there was reasonable cause of failure to quote valid PANs.

3. The CBEC vide Notification No. 18/2015-CE (NT) dt July 6, 2015 has specified the conditions, safeguards and procedures for issue of invoices, preserving records in electronic form, authentication of records and invoices by digital sign.

4. Construction of metro rail cannot be charged to service tax under Commercial or Industrial Construction Services. Mumbai - CESTAT.

5.The Supreme Court said on monday that capital market regulator Securities and Exchange Board of India (SEBI) has the power to probe Global Depository Receipts (GDRs).

6. MCA has notified new versions of e-Form's DPT-3, Form 4 LLP, CRA - 2, MSC – 3 and FC 1 with effect from 07.07.2015.

7. National Floor Level minimum wage enhanced from Rs.137 to Rs.160 per Day with effect from. 01.07.2015.

8. Competition Commission of India (CCI) has amended its regulations related to mergers and made them more forward looking.

NEW BATCH FOR CS FOUNDATION/EXECUTIVE/ PROFESSIONAL STARTING SOON

13 Exemptions to Private Companies

Ministry of Corporate Affairs has issued Notification dated June 5, 2015 by which it has provided various much awaited Exemptions to Private Companies other than the subsidiary of a public company  a summary of such exemptions is as follows :-

S.No.	Exemption Given	Section	Major Impact
1.	DEFINITION OF RELATED PARTY RELAXED WITH RESPECT TO SECTION 188 Does not include Holding, Subsidiary, Associate Company and sister concern(subsidiary of holding)	2(76)	Transactions entered with them and falling under section 188 does not require compliance of section 188. Note:- Although Holding company is excluded but Director(other than independent Director), KMP of holding company or their relative are still included in definition of Related Party. (Section 2(76)(ix))
2.	TIME LIMITS IN RIGHT ISSUE CAN BE REDUCED Sending of offer letter min 3 days period before opening of offer AND Minimum & maximum offer period of 15 & 30 days respectively Can be reduced, if 90% member give their consent in writing/electronic mode	62(1)(a)&62(2)	In case of emergency, the mentioned time limits an be reduced with consent of shareholders. Note:- The time limits cannot be increased, they can only be reduced.
3.	ACCEPTANCE OF DEPOSITS FROM MEMBERS MADE EASIER FOR CERTAIN PRIVATE COMPANIES Private Companies borrowing monies from members upto aggregate limit of paid-up share capital & free-reserves need not require to comply with conditions mentioned in section 73(2)(a) to (e). However details of money so borrowed shall be filed with ROC in manner as may be specified	73(2)(a) to (e)	If Such Company borrows money from member then no need to:– Issue Circular -File circular with ROC -Maintain Deposit repayment reserve -Provide deposit insurance
4.	NO NEED TO FILE MGT-14 FOR BOARD RESOLUTIONS. Any Board resolution mentioned in section 179 read with rule 8 ofCompanies (Meeting of Board & its power) Rules, 2014 is now not required to be filed with ROC.	117(3)(g)	Saving in ROC filing costs
5.	ARTICLES OF A PRIVATE COMPANY MAY OVERRIDE PROVISIONS PERTAINING TO 1.  Content & length of notice 2.  Explanatory Statement 3. Quorum 4. Chairman 5. Proxies 6. Restriction on voting rights 7. Show of hands & Poll (Position brought at par with Companies Act, 1956)	101 to 107 &109	Private Company may override by its articles mentioned provisions. However, a Private Company Cannot:- 1. Reduce quorum below 2 (In re- Ram Villas Press Publication Pvt. Ltd- Kerela HC) 2. Increase time limit of 48 hours for depositing proxy form (Section 105(4)) 3. Reject a proxy form if it fails to comply with specific requirement of AOA (Section 105(7)) 4. Restrict voting right of a member other than restrictions in section 106 (section 106(2))
6.	MAXIMUM NO. OF AUDIT IN CASE OF PRIVATE COMPANY RELAXED Text of notification:- “Other than OPC, Dormant, Small Companies and Private Companies having paid up capital of less than Rs. 100 Crores shall be inserted after 20 Companies.”	141(3)(g)	Limit of 20 Companies only includes:- 1. Public Companies 2. Private Companies having paid up capital of Rs. 100 crore or more
7.	CANDIDATURE NOT REQUIRED FOR APPOINTMENT OF DIRECTOR AT GENERAL MEETING	160	Amount of Rs. 1 lakh not required to be deposited at least 14 days before GM
8.	APPOINTMENT OF DIRECTORS NEED NOT TO BE VOTED INDIVIDUALLY	162	More than 1 director can be appointed via single resolution
9.	RESTRICTIONS ON POWERS OF BOARD NOT TO APPLY	180	Private Company can now without shareholder’s approval:- 1. Borrow exceeding paid up capital & free reserves. 2. Sell/lease/dispose off undertaking
10.	INTERESTED DIRECTOR CAN PARTICIPATE IN BOARD MEETING AFTER DISCLOSURE OF INTEREST	184	Interested Director can now participate in agenda in which he is interested. Note:- He Cannot be counted in Quorum (Section 174(3) explanation)
11.	LOANS/GUARANTEE/SECURITY CAN BE GIVEN TO DIRECTOR AND PERSON IN WHOM HE IS INTERESTED BY CERTAIN PRIVATE COMPANIES A private Company which has:- 1. Body Corporate should not be Shareholder 2. Not borrowed money from Bank/ Financial Institution/ Body Corporate exceeding lower of the following:- i.  Twice its Paid up capital ii. Rs. 50 crore 3.      No repayment default subsisting of such borrowings at time of giving loan	185	Giving of loans/ guarantee/security to Group Companies now possible
12.	RESTRICTION ON VOTING RIGHT IN GENERAL MEETING IN CASE OF RELATED PARTY TRANSACTION NOT APPLICABLE	188(1) 2nd proviso	Member although being related party to the concerned resolution can still cast his vote at GM.
13.	SHAREHOLDER’S RATIFICATION NOT REQUIRED FOR APPOINTMENT OF MD/WTD	196(4) &(5)	1. Shareholder’s Ratification in not required. 2. Schedule V not applicable. 3. MR-1 not required to be filed 4. T&C of appointment, remuneration not mandatory to be mentioned in resolution

 THESE EXEMPTIONS ARE NOT AVAILABLE TO A PRIVATE COMPANY WHICH IS A subsidiary of a public company. (section 2(71) proviso)

UPDATES:

1. CBDT Notification No. 50/2015 dated 24th June 2015 regarding permitted business relationship a Chartered Accountant can have with his client to maintain independency.
2. Loans advanced by partner to firm does not fall in the purview of Sec. 269SS.[ M/s Muthoot Financiers group firms vs. CIT (Delhi High Court)].
3. RBI Circular No. 12 dated June 25, 2015, RBI clarifies that now authorized dealer banks need not require case-by-case approval of RBI for borrowing overseas funds.
4. RBI clears 2nd and 4th saturday off for banks. w.e.f. 15.07.2015. First Saturday off will be on 25th July.
5. Online Payment of EPF mandatory with effect from 5th May, 2015.
6. The service tax applicable w.e.f. 1st June, 2015 is as follows:
1. Restaurant – 5.6%
2. Hotel lodging – 8.4%
3. Vehicle rent – 5.6%
4. Hall with catering – 9.8%
5. Catering – 8.4%
6. Building repairing – 9.8%
7. Civil contract with material – 5.6%
8. Building residential – 3.5%
9. Building commercial – 4.2%
10. GTA transports – 4.2%
11. All other Services – 14%

UPDATES

1.  CBDT allowing revision of Wealth Tax Return u/s 25 beyond specified date. [Notification Dated-11th June 2015].

2.  ITAT Amritsar Bench issued order u/s 234E of the Income Tax Act in favour of assessee. [Sibia Healthcare Pvt Ltd vs DCIT].'

3.  Service Tax Department issued clarification that 14% tax will not apply to non-AC restaurants. Even AC restaurants will charge Tax @ 14% only on 40% of bill amount. The effective tax will be 5.6% on full bill.

4.   Supreme Court upholds plea of revenue neutrality in case of captive consumption to set aside invocation of extended period. [Nirlon Ltd. vs. Commissioner of Central Excise, Mumbai].

5.  Private and Public companies are no longer required to have minimum paid up share capital of 1 Lakh and 5 Lakh Rupees. respectively. The Companies (Amendment) Act, 2015.

6.  The revised form CRA-2 and CRA-4 have now been notified by MCA on 12th June, 2015 and is available for filing. The additional fee on delay is waived till 30th June, 2015.

7.  RBI issued Master Circular for “Non-Banking Financial Companies – Corporate Governance (Reserve Bank) Directions, 2015” vide Notification No. RBI/2014-15/632DNBR (PD) CC No.040/03.01.001/2014-15.