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    • FEMA
    • Audit
    • Income Tax
    • Companies Act, 2013
    • Indirect Tax

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    • Income Tax
    • FEMA
    • Companies Act, 2013
    • Indirect Tax
    Tags: ,

    Introduction:

     

    The Constitution (One Hundred and First Amendment) Act, 2016 (hereinafter referred to as ‘GST Constitutional Amendment Act) is been recently passed by Parliament, ratified by majority of the States and received President’s assent on 08.09.2016. Subsequently, Central Government has notified various provisions of the GST Constitutional Amendment Act through notifications issued on 10.09.2016 and 16.09.2016. The President has constituted the GST Council with effect from 15.09.2016. The passage of the said Act is considered to be a major breakthrough in implementation of GST in India. In fact several legal issues are instigated during the phase of its enactment only. Let us now discuss some of the key legal issues that emanate from this GST Constitutional Amendment Act.

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    THE COMPANIES AMENDMENT BILL, 2016 [BILL 73 of 2016] – A REVIEW- PART-5 (continued from September-2016 wiki)

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

    No.

    2013, amended

     

     

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

    74

    S e c t i o n

    -

    3 8 4

    75

    Amendment to Section (2) of Section 384 of the Act, to

    Amendment to remove ambiguity.

     

    Debentures,

    Annual

     

    include Section 135 of Act, thereby making the provisions of

     

     

    Return, Registration of

     

     

     

     

    Corporate Social responsibility CSR applicable to a Foreign

     

     

    charges,

    books

    of

     

     

     

     

    Company, in addition to the applicability of the provisions of

     

     

    account

    and  their

     

     

     

     

    Section 71, 92, 128, Chapter-VI &Chapter-XIV of the Act.

     

     

    inspection.

     

     

     

     

     

     

     

     

     

     

    75

    Section - 403 – Fee for

    76

    Amendment to replace the existing 1st proviso to Sub-Section

    Welcome Amendment, to remove

     

    filing, etc.

     

     

     

     

    (1) of Section 403 of the Act, with new a proviso, so as to

    ambiguity

     

     

     

     

     

     

    include the details of the relevant sections [i.e., 89, 92, 117,

     

     

     

     

     

     

     

    121, 137 or 157] under which filings can be done within a

     

     

     

     

     

     

     

    period of 270 days from the expiry of the period so provided in

     

     

     

     

     

     

     

    those sections, on payment of such additional fee.

     

     

     

     

     

     

     

    Amendment to replace the existing 2nd proviso to Sub-Section

    Welcome Amendment, to remove

     

     

     

     

     

     

    (1) of Section 403 of the Act, with new a proviso, so as to

     

     

     

     

     

     

    ambiguity and ease of operations.

     

     

     

     

     

     

    enable filing of returns relating to the sections referred in the

     

     

     

     

     

     

     

    1st proviso, beyond the time frame as given in the 1st proviso

     

     

     

     

     

     

     

    and with regard to the other sections, beyond the time frame

     

     

     

     

     

     

     

    given in the respective section, on payment of such higher

     

     

     

     

     

     

     

    additional or additional fee.

     

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

     

    Proposed amendment relating to

    Remarks/Comments/Penalty

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Insertion of a 3rd proviso to provide that in case of default on two

     

     

     

     

    or more occasions in filing of returns under section 89, 92, 117,

     

     

     

     

    121, 137 or 157, the provisions of the first and second provisos

     

     

     

     

    shall not apply, until the return is submitted, filed, registered or

     

     

     

     

    recorded, as the case may be, with additional fee, without

     

     

     

     

    prejudice to any legal action or liability under this Act.

     

     

     

     

    Amendment to Sub-Section (2) of Section 403 of the Act, to

    Amendment to remove ambiguity.

     

     

     

    substitute the words "first proviso to that sub-section" with

     

     

     

     

    words "relevant section”.

     

     

     

     

     

     

     

     

    76

    Section - 406 -

    77

    Amendment to substitute the existing section 406 of the Act

    Amendment to give more clarity.

    with a new section 406 with 5 sub-sections..  The new section

     

     

    Power to modify Act in

     

     

     

     

    is titled: “Provision relating to Nidhis and its application, etc.”.

     

     

    its  application  to

     

     

     

     

     

     

     

     

     

     

    The gist of the sub-sections is as below:

     

     

    Nidhis.

     

     

     

     

     

     

     

     

     

     

     

    (1)  A word “Mutual Benefit Society” has been added, and

     

     

     

     

    accordingly a Nidhi or a Mutual Benefit Society shall be a

     

     

     

     

    company  which  the  Central  Government  may  by

     

     

     

     

    notification in the Gazette, declare to be so.

     

     

     

     

    (2)  The Central Government may by notification in the

     

     

     

     

    Gazette, direct the applicability or non-applicability of the

     

     

     

     

    provisions of the Act to a Nidhi or Mutual Benefit Society.

     

     

     

     

    (3)  Placing of the draft of the proposed notification before

     

     

     

     

    each House of Parliament, while it is in session, for a total

     

     

     

     

    period  of  30  days,  and  if,  both  Houses  agree  in

     

     

     

     

    disapproving the issue of notification or both Houses

     

     

     

     

    agree in making any modification in the notification, the

     

     

     

     

    notification shall not be issued or, as the case may be, shall

     

     

     

     

    be issued only in such modified form as may be agreed

     

     

     

     

    upon by both the Houses.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

     

    Proposed amendment relating to

     

     

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (4)  For the purpose of reckoning the period of 30 days, referred

     

     

     

     

     

    to in sub-section (3), any period during which the House

     

     

     

     

     

    referred to in sub-section (3), is prorogued or adjourned for

     

     

     

     

     

    more than four consecutive days, shall not be counted.

     

     

     

     

     

    (5)  Laying of Copies of every notification, before each House of

     

     

     

     

     

    Parliament, as soon as may be after it has been issued.

     

     

     

     

     

     

     

     

    77

    Section – 409 –

    78

    Amendment to Sub-Section (3) of Section 409 of the Act, in

     

     

    Qualification of

    connection with the eligibility of the Technical members of the

     

     

     

     

     

     

     

    President and

     

    National Company Law Tribunal.

     

     

     

     

     

     

    Members of Tribunal.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    78

    Section 411–

    79

    Amendment to Sub-Section (3) of Section 411 of the Act, in

     

     

    Qualifications of

    connection with the eligibility of the Technical members of the

     

     

     

     

     

     

     

    chairperson And

     

    National Company Law Appellate Tribunal.

     

     

     

     

     

    Members of Appellate

     

     

     

     

     

     

     

     

     

    Tribunal.

     

     

     

     

     

     

     

     

    79

    Section – 412 -

    80

    Amendment to Sub-Section (2) of Section 412 of the Act, in

     

     

    Selection of

    connection with the constitution of the Selection Committee,

     

     

     

     

     

     

     

    Members of Tribunal

     

    to recommend the appointment of Members to the National

     

     

     

    and Appellate

     

    Company Law Tribunal and the National Company Law

     

     

     

    Tribunal.

     

    Appellate Tribunal.

     

     

     

     

     

    80

    Section - 435 –

    81

    Substitution of the existing Section 435 of the Act, with a new

    Welcome Amendment to remove

     

    section,  to

    amend  provide  for

    appointment

    by

    Central

    ambiguity.

     

    Establishment of

     

     

    Government

    of  Metropolitan

    Magistrate  or

    a

    Judicial

     

     

     

    Special Courts.

     

     

     

     

     

    Magistrate of the First Class in Special Court in case of offences

     

     

     

     

     

     

     

     

     

     

    punishable under the Act with imprisonment less than 2 years.

     

     

     

     

     

    The appointment by the Central Government shall be with the

     

     

     

     

     

    concurrence of the Chief Justice of the High Court within whose

     

     

     

     

     

    jurisdiction the judge to be appointed is working.

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

     

     

    Proposed amendment relating to

    Remarks/Comments/Penalty

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

    81

    Section – 438 –

    82

     

    Amendment of Section 438 of the Act, consequent upon the

     

     

    proposed amendment to Section 435 of the Act, thereby to

     

     

    Application of Code to

     

     

     

     

     

     

    replace the words "deemed to be a Court of Session", with the

     

     

    Proceedings  before

     

     

     

     

     

     

    words "deemed to be a Court of Session or the court of

     

     

    Special Court.

     

     

     

     

     

     

    Metropolitan Magistrate or a Judicial Magistrate of the First

     

     

     

     

     

     

     

     

     

    Class, as the case may be".

     

     

     

     

     

     

     

     

    82

    Section – 439 -

    83

     

    Amendment to Sub-section (2) of Section 439 of the Act to

    Welcome Amendment to remove

     

    include ”Member” in addition to the shareholders, for

    ambiguity.

     

    Offences to be non-

     

     

     

     

     

    making a complaint with respect to taking cognizance of

     

     

    cognizable.

     

     

     

     

     

     

    offences under the Act by the Court.

     

     

     

     

     

     

     

     

     

     

     

     

     

    83

    Section – 440–

    84

     

    Amendment to Section 440 of the Act to provide that till

     

     

    Special Courts are established, the trial of offences shall be

     

     

    Transitional provisions.

     

     

     

     

     

     

    continued with Court of Sessionor Court of Metropolitan

     

     

     

     

     

     

     

     

     

     

    Magistrate or a Judicial Magistrate of the First Class, thereby

     

     

     

     

     

    to replace the words  " Court of Session", appearing in the

     

     

     

     

    section with the words " Court of Session or the court of

     

     

     

     

    Metropolitan Magistrate or a Judicial Magistrate of the First

     

     

     

     

    Class, as the case may be.

     

     

     

     

     

     

     

     

    84

    Section –441 –

    85

     

    Amendment to Sub-Section (1) of Section 441 of the Act to

    Welcome  Amendment,  giving

     

    replace the words "with fine only", appearing in the Sub-

    further  scope  to  compound

     

    Compounding of

     

     

     

     

     

    Section, with the words "not being an offence punishable with

    o f f e n c e s  p u n i s h a b l e  w i t h

     

    certain offences

     

     

     

     

     

    imprisonment only, or punishable with imprisonment and also

    imprisonment or with Fine, with

     

     

     

     

     

     

     

     

    with fine".

    imprisonment or with Fine or both

     

     

     

     

     

     

    with out the special permission of

     

     

     

     

    NOTE: Consequent upon amendment to Sub-Section (1) of

    the Special Court.

     

     

     

     

     

     

     

     

     

     

     

    Section 441, the clause (a) of Sub-Section (6) of Section 441,

     

     

     

     

     

    also needs amendment, but seems to have been missed out

     

     

     

     

     

    in the proposed amendment bill.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

    85

    New Section

    86

    Insertion of 2 new sections 446A & 446B, after the existing

     

     

    Section 446.

     

     

     

     

     

     

     

     

     

     

    Section 446A : Factors for determining level of punishment.

    Welcome inclusion

     

     

     

     

    The new Section provides that the court or the Special Court,

     

     

     

     

     

    shall consider the following factors, to decide the amount of

     

     

     

     

     

    fine or imprisonment under this Act.

     

     

     

     

     

    (a) size of the company; (b) nature of business carried on by

     

     

     

     

     

    the company;(c) injury to public interest;(d) nature of the

     

     

     

     

     

    default; and(e) repetition of the default.

     

     

     

     

     

    Section 446B: Lesser penalties for One Person Companies or

     

     

     

     

     

    small companies

     

     

     

     

     

    If a One Person Company or a small company fails to comply

    Welcome inclusion in favour of One

     

     

     

     

    with the provisions of Section 92(5), Section 117(2)(c),Section

    Person  Companies  and  Small

     

     

     

     

    137(3), such company and officer in default of such company

    Companies  and  the  officers,

     

     

     

     

    shall be punishable with fine or imprisonment or fine and

    reducing fine and imprisonment.

     

     

     

     

    imprisonment, as the case may be, which shall not be more

     

     

     

     

     

    than one-half of the fine or imprisonment or fine and

     

     

     

     

     

    imprisonment, as the case may be, of the minimum or

     

     

     

     

     

    maximum fine or imprisonment or fine and imprisonment, as

     

     

     

     

     

    the case may be, specified in such sections.

     

     

     

     

     

    Note: It is noticed that in the amendment bill they have

     

     

     

     

     

    referred Section 117 (2)(c), but the said sub-section does not

     

     

     

     

     

    contain any clauses, and it is assumed probably it is relating to

     

     

     

     

     

    Section 117 (3)(c) and not Section 117 (2)©.

     

     

     

     

     

     

     

     

     

    Tags:

    Flash News!!!

     

    The Central Government in exercise of the Powers conferred in 145(2) of the Income tax Act, 1961 notifies1 Income Computation and Disclosure Standards (‘ICDS’) to be followed by all assessees (other than exempted2 ) following mercantile system of accounting for the purpose of computing income under the head ‘Profits and Gains of Business or Profession’ or ‘Income from Other Sources’.

     

    This Notification will apply from Assessment Year 2017-18 and subsequent assessment years.

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    The audit committee is a cornerstone of good corporate governance. Its mandate now extends well beyond oversight of financial reporting to include an array of key areas that support an organization’s performance, such as risk management, compliance, reliability and integrity of internal data, cyber risk, and the effectiveness of internal control over operations.

     

    Yet even as the list of oversight responsibilities gets longer and more complex, the amount of time that most audit committee members can reasonably commit to the part has not. The role of internal audit has traveled a parallel course with that of the audit committee, with internal auditors expanding their scope of responsibilities to meet organizational needs. Organizations are increasingly turning to the internal audit function to provide assurance and/or consulting services to better address their own needs. When a strong working relationship is in place with the audit committee, internal audit can enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight. With its broad view of the organization and its familiarity with operations across all business units, the internal audit department is uniquely positioned to help the audit committee understand and evaluate risks that may affect the enterprise.

    Tags:

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