News of Professional Interest

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5 Feb 2016

VAT dept seals L&T properties: Files related to action ‘untraceable’, Delhi HC told

Informed that files related to a survey and sealing of properties in 2013 had “gone missing”, Delhi High Court has ordered Commissioner, Department of Trade and Taxes of the Delhi government, to “personally inquire” into the matter. In its order Wednesday, a bench of Justice S Muralidhar and Justice Vibhu Bakhru also questioned the “management” and functioning of Value Added Tax (VAT) department. The bench noted the files maintained by the VAT department did not indicate whether any formal authorisation to conduct the survey and sealing of properties had “ever been issued.” The bench directed the commissioner to give an explanation for the “missing” files and also “explain” the system followed in the trade and taxes department for maintaining files. Contd… http://goo.gl/PA865D

4 Feb 2016

CBDT notifies procedure for email communication between taxman and taxpayer

The CBDT has notified the format and procedure for the taxman and taxpayers to usher in an ambitious pilot project of using emails as the new mode of communication between the two sides, as part of the government’s bid to reduce grievances of the tax-paying public. An official notification has been issued which spells out the procedure, formats and standards for ensuring “secured transmission” of emails between the Assessing Officer (AO) of the IT department and the assessee stating all communication between the two sides will be done through PDF file format and over bonafide email ids. The new notification is a follow up of an amendment made by the Central Board of Direct Taxes (CBDT) in the Income Tax Act in December last year, which allowed emails to become the new mode of interaction tool between the AO and the tax-paying individual. Contd… http://goo.gl/YypsRU

4 Feb 2016

21 YRS AFTER MAJOR TAX FRAUD, INSTITUTE DEBARS ACCOUNTANT

Back in 1995, a chartered accountant created an elaborate scheme involving fake companies, fake income tax returns and fake certificates. But the refund the Income Tax department gave him was real. In just one year, he managed to get over Rs 20 lakh in refund. But his luck ran out the same year with the IT department calling his bluff. However, it has taken Institute of Chartered Accountants of India (ICAI) 21 years to suspend him for five years, that too only with the help of a High Court order that came a few days ago. The ICAI, based in New Delhi, approached the Karnataka HC against G Girish, a chartered accountant based in Jayanagar. It was found that Girish had created false Tax Deducted at Source (TDS) certificates using fake credentials of companies and individuals. When the refund came in the name of the fictitious companies and persons he had created, he managed to get them to his address by bribing the postman. The number of fictitious assessees he created was 96. Girish did not respond to numerous notices slapped on him by the ICAI; the association then issued a prima facie opinion that the “respondent is guilty of misconduct” and referred the issue to its disciplinary committee. With no response still from Girish, the disciplinary committee decided to proceed against him ex parte. Finding him guilty, the committee referred the matter to the HC so that his name was removed from ICAI ‘Register of Members’ for a period of five years. http://goo.gl/EueDze

3 Feb 2016

Don’t pay taxes if government fails to curb corruption: Nagpur Bench of Bombay HC

Expressing serious concern over the ever-growing number of corruption cases, the Nagpur bench of Bombay High Court on Tuesday called on citizens to raise voice against “this menace” and “refuse to pay taxes by launching a non-cooperation movement” if the government fails to control it. Justice Arun Chaudhari passed several strictures on the Maharashtra government and Bank of Maharashtra (BOM) for overlooking embezzlement of funds worth Rs385 crore in Lokshahir Annabhau Sathe Vikas Mahamandal (LASVM), an organization which was set up for the uplift of Mathang community. He asked director general of police (DGP) to find out veracity of such cases reported in newspapers and act immediately. Terming corruption as a “hydra-headed monster”, the judge said it is high time citizens came together to tell their governments that they have had enough. “The miasma (unholy atmosphere) of corruption can be beaten if all work together. If it continues, taxpayers’ should refuse to pay taxes through a non-cooperation movement,” said Chaudhari. Contd… http://goo.gl/LpBGHB

2 Feb 2016

ICAI Awards for Excellence in Financial Reporting

With the objective to recognise and encourage excellence in preparation and presentation of financial information, the Institute of Chartered Accountants of India (ICAI) through its Research Committee, organizes the annual competition ‘ICAI Awards for Excellence in Financial Reporting’. This year, the function shall be organized on Feb 6, 2016 at Kolkata. Shri Tshering Kezang, Auditor General of Bhutan shall grace the occasion as Chief Guest and CA. K. Rahman Khan, Member of Parliament shall be the Guest of Honor. For the competition this year i.e. 2014-15, a total number of 175 entries were received across the 13 categories in which the competition was held. A meticulous evaluation process is followed and unless the stringent criteria/minimum threshold norms are met, no entity is recommended for an award. The emphasis is on going beyond the normal reporting requirements. Thus, the awards are bestowed only upon those select few who have gone the extra mile in their financial reporting requirements. Contd… http://goo.gl/OAWJ8I

2 Feb 2016

Report of the Companies Law Committee submitted to FM / CAM

The Companies Law Committee was constituted in June 2015 for examining and making recommendations on the issues arising out of implementation of the Companies Act, 2013. The Committee submitted its report to the Government, as appended below. After exhaustive deliberations, the Committee has proposed changes in 78 sections of the Companies Act, 2013, which along with consequential changes, would result in about 100 amendments to the Act.  Approximately fifty amendments to the Rules have also been proposed. The recommendations cover significant areas of the Act, including definitions, raising of capital, accounts and audit, corporate governance, managerial remuneration, companies incorporated outside India and offences/ penalties.

Report of Companies Law Committee submitted to FM & CAM

2 Feb 2016

One million file tax returns under special drive by I-T dept

Around one million taxpayers have filed their I-T returns for Assessment Year 2014-15 after the department tracked them under a special drive to identify those who have not filed their returns despite having an obligation to do so, according to official data. While the amount of revenue received by the tax department under this drive has not been quantified, the data said the Income Tax department identified a total of 5.89 million such taxpayers out of which 1.12 million filed their returns for the said time period. Contd… http://goo.gl/9fYwdY

2 Feb 2016

US ready for bilateral advance pricing pacts

US tax authorities will begin accepting bilateral advance pricing agreement (APA) requests from February 16, strengthening ties between the two governments in the taxation of multinational firms. Companies operating in both India and the US will benefit from this effort, as a bilateral APA will provide greater predictability in taxation, easing the uncertainty of doing business in both countries. India currently has bilateral APAs with Japan and the United Kingdom. APAs are mainly unilateral and bilateral, with the latter involving the tax administrations of both countries. A bilateral APA is preferred by multinational companies. Contd… http://goo.gl/HMX0I0

2 Feb 2016

Govt to push ahead with NFRA despite stiff resistance from ICAI

Discounting the stiff opposition of The Institute of Chartered Accountants of India (ICAI), a government panel has recommended the formation of a new regulatory authority, National Financial Reporting Authority (NFRA), as early as possible. “Major economies of the world have already established such regulatory bodies. The committee by a majority view recommended that NFRA should be established early. Consultation may, however, be carried out with ICAI with regard to the jurisdiction of NFRA and the ICAI representation on NFRA,” said the panel, which recommended changes in 78 Sections of the Companies Act, 2013. ICAI said it had submitted a letter, dated August 18, 2015, to the panel raising concerns with respect to the constitution of an NFRA.  It further said the committee by a majority view has not accepted the recommendations of the ICAI.  However, the committee was pleased to state that consultation might be carried out with ICAI with regard to jurisdiction of NFRA and the ICAI representative of NFRA. Contd.. http://goo.gl/pr9upU

1 Feb 2016

CBDT lists norms for faster refund in pending tax demand cases

he CBDT has issued guidelines for expeditious tax refund of up to Rs 5,000 in cases where the department wants to adjust the refund with a pending demand, which has been contested by the assessee. The guidelines would help further streamline the process of refunds. Between mid-April and January, the Income Tax department has issued a record Rs 65,000 crore worth refunds. “Where the tax payer has contested the demand, Central Processing Centre (CPC) would issue a reminder to the Assessing Officers about the contention of the tax payer, asking them to either confirm or make appropriate changes, to the demand within 30 days,” the Central Board of Direct Taxes (CBDT) said in an office memorandum. Contd…. http://goo.gl/FW3Mx1

31 Jan 2016

ICAI revamping chartered accountants course curriculum: PTI

Chartered accountants’ body ICAI is awaiting in-principle approval from the government for its “completely revamped” course curriculum that is in tune with current economic landscape. The curriculum for the chartered accountants programme is revised every 10 years and the latest one has been prepared after long drawn consultations with stakeholders. “Our (revised) course curriculum is in advanced stage of getting approval from the central government. It is a completely revamped course curriculum… It has gone to the Corporate Affairs Ministry (for approval),” ICAI President Manoj Fadnis told PTI. Contd.. http://goo.gl/RREAAr

31 Jan 2016

Atulesh Jindal to take over as new CBDT chairman

Senior Indian Revenue Service officer Atulesh Jindal will tomorrow take charge as the new chairman of the CBDT, the controlling body of the Income Tax department. He will succeed incumbent AK Jain who completes his term today. The appointments committee of the cabinet headed by Prime Minister Narendra Modi had approved the appointment of Jindal as the next Chairman of the Central Board of Direct Taxes on January 22. Contd… http://goo.gl/GvPnSG

31 Jan 2016

Making the Budget GST-ready

Some changes have to be brought in the Budget 2016-17 so as to prepare for the impending goods and services tax (GST). The GST may come after the Budget but we have to prepare for it. The first general change that has to be thought of is the law of unjust enrichment. Under this law, the tax payer is not entitled to refund unless he proves he has not passed the burden of higher tax on to the buyers. If this law continues, the GST will be bogged down to litigations, and the smooth flow of goods and the availing of tax credit will be hindered. This law has to go for Customs also if it goes for excise and service tax. Contd…. http://goo.gl/9jSMNd

30 Jan 2016

Congress should see reason, help GST pass: Arun Jaitley

inance minister Arun Jaitley on Saturday hoped the Congress will “see reason” and help in passage of GST legislation, stuck in Rajya Sabha, in the Budget session of Parliament beginning next month. “It (GST) is the important reform of UPA. If I had to credit the authorship of it, I have to give credit to them. Now, If the author turns against his own script, what do I make… I have reached out (and) I have spoken to them. I have explained to them and I hope they will see reason… (and) see the rationale behind passing GST,” he said. Contd… http://goo.gl/ZqAfYK

30 Jan 2016

Government working on approving companies’ names in 24 hours: MCA

The government is working on ensuring that the name of a new company is approved within 24 hours, a step towards improving ease of doing business and reducing overall transaction costs. Corporate Affairs Secretary Tapan Ray said his Ministry is focused on reducing the problems faced by the industry and ensuring that ease of doing business becomes the “order of the day”. “Incorporating a company is now much easier and will be made further easier as we go along the road. We are aiming to get a name (of a new company) approved within 24 hours,” Ray said. Contd… http://goo.gl/A6KoBG

30 Jan 2016

Budget 2016: Income Tax Expectations From Arun Jaitley

Finance Minister Arun Jaitley will present the Budget for 2016-17 on February 29. The salaried class has a lot of expectations from the Budget. Increase in the personal income tax exemption limit and a higher deduction limit on home loan interest are among the common ones, say analysts.”Considering the increase in cost of living, the current basic exemption limit of 2.5 lakh should be raised to Rs. 3 lakh. Also going forward increase in basic exemption limit could be linked to the rate of inflation and be raised every year automatically,” says Neha Malhotra, executive director of taxation at Nangia & Co, a tax advisory firm. Contd…. http://goo.gl/ulsSvZ

21 Jan 2016

Pay 12% interest on Income Tax refund delay: Panel

Tax refunds made more than six months after the returns are filed will come with an annual interest of 12% and those with delay by over a year will be paid interest up to 18%, if the government accepts the recommendations of a high-level committee. Currently, the interest on refunds can’t exceed 6%, a “low rate” which, according to the committee, doesn’t fully offset the opportunity cost of money to the taxpayer, while serving as a “perverse incentive” for the taxman to delay refunds. Contd…. http://goo.gl/Uy3GnY