o o o Audit Direct Taxes Indirect Taxes

o o o Audit Direct Taxes Indirect Taxes Company Law Management Consultancy SEPTEMBER 2016 EDITORIAL DUE DATE CHART INCOME TAX UPDATES MVAT UPDATES S P C M & ASSOCIATES Chartered Accountants MONTHLY NEWSLETTER Sincerity Professionalism & Commitment is our Motto MVAT ARTICLE - PENALTY CLASS SUITS UNDER THE COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE C. A. Suhas P. Bora C. A. Pradip M. Katariya C. T. S. No. 6616, Plot No 491, 5 th Floor, Centre Point, Mitra Mandal Chowk, Next to Balasaheb Thackrey Hospital, Parvati Pune 411009 Landline No 020 6744 7171 Email : abhay@spcm. in DISCLAIMER : Every effort has been made to ensure accuracy in the information. The publishers do not hold themselves responsible for errors that may have arisen. Please take professional advice for further implementation. All rights reserved. STRICTLY FOR PRIVATE CIRCULATION BY INVITATION

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER Editorial - CA. Suhas P. Bora Dear All, Twenty five years ago Dr. Manmohan Singh presented in what is now being described as a path breaking budget that unleashed a spate of economic reforms. He opened the doors of our country to the world and India began its transformation from a third world country to a significant player in the global economy. It is said that the government of the day was left with no choice but to embark on these reforms, such was the state of the economy then. However, credit for taking the plunge must also be given to then Prime Minister – Mr. P. V. Narasimha Rao. A mention of the Long Term Fiscal Policy presented by Mr. V. P. Singh as the Finance Minister is also not out of place. Since then India has been ruled by different political parties or political combinations. By and large, there has been a consensus on the direction of economic reform, though on account of political compulsions the parties in power and opposition have made different noises for public consumption. There has certainly been a difference in the pace in which the liberalisation process has moved and at times there has been a derailment on account of reservations of the left parties, whenever they have had a say in policy making. Now the stage is set for Goods & Services Tax regime. It is a landmark legislation which will give further impetus to ease of doing business in the world’s fastest growing economy and will help in curbing the black money. It is expected that it will promote Make in India campaign, help exports and boost employment while providing enhanced revenue. GST will dramatically alter India’s Indirect Tax structure by replacing a string of Central and local levies into one single unified tax and will get stitched to a common market. To make it work it is imperative to have a robust information Technology (IT) network infrastructure that will make the implementation seamless. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER Editorial - CA. Suhas P. Bora This reform is a major step post the liberalization phase of 1991. The fiscal laws should have the flexibility of getting adopted to changing times and the aspirations of the people. To put it in a simplistic manner, this should happen by default in a democracy. Unfortunately, in our country this particular reform which was accepted and endorsed by all political parties took ten years to roll out. The Government’s acid test on deliver ability starts now. If the Government is keen on efficient and expeditious implementation of the GST, then it should allow professionals to participate in the finalisation of delegated legislation. Otherwise, many rules and regulations will have to be brought on statute book on trial and error basis. We professionals are keenly observing and waiting for the actual roll-out of the Goods & Services Tax Act. I really feel proud to interact with you all in this month from the state of the art new office of SPCM. We have started many new activities at SPCM including activation of SPCM at face book. On GST front also a team of Associates is formed and the first meeting of the group was held on 30 th Aug 2016 on the nature of the GST. Month of August/September are the months of festivals. Eid-ul-fitr, Raksha. Bandhan, Gokulashtami, Paryushan, Parsi New Year, Ganesh Chaturthi, etc. , will be celebrated by our fellow members as per their belief in different faiths. Though the faith may be different, the ultimate lesson of each faith is the same i. e. compassion, humanity, loving to all etc. CA. Suhas P. Bora EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SPCM & ASSOCIATES MONTHLY NEWSLETTER SEPT. 2016 Due Dates MONTHLY DUE DATES REGISTER FOR SEPTEMBER 2016 ACT SERVICE TAX Particulars E- Payment of Service tax by Companies for August 2016 Due dates 06 th. September 2016 INCOME TAX TDS/TCS Payment for the month of August 2016 07 th. September 2016 INCOME TAX Payment OF 2 ND Instalment for Advance Tax For A. Y. 201718 Provident Fund Payment for the month of August 2016 15 th. September 2016 EMPLOYEE STATE INSURANCE CORPORATION Employee State Insurance Corporation Payment for the month of August 2016 21 st. September 2016 MVAT/CST E-Payment of Monthly VAT and WCTTDS for August 2016 21 st. September 2016 MVAT/CST E-filling of Monthly Returns for April 2016 29 th September 2016 PROFESSION TAX E-Payment of Monthly Tax for August 2016 30 th. September 2016 LUXURY TAX E-Payment of Monthly Tax for August 2016 30 th. September 2016 INCOME TAX Due date for filing of Income Tax return for AY 2015 -16 30 th. September 2016 for assesse whose accounts are required to be audited. PROVIDENT FUND 15 th. September 2016 NOTE: - If Due date is on Sunday or Public Holidays, the next working day is to be considered as due date. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER Income Tax Updates - Deepali R. Shah INCOME TAX UPDATES A. Notification and Circulars 1. CBDT Notification Regarding Adoption of Indexed Stamp Duty Value for Income Declaration Scheme The CBDT has issued a Notification dated 17 th August 2016 by which Rule 3(1)(d) of the Income Declaration Scheme Rules 2016 have been amended to provide that where the acquisition of immovable property by the declarant is evidenced by a deed registered with any authority of a State Government, the fair market value of such property shall, at the option of the declarant, may be taken on the stamp duty value as increased by the same proportion as Cost Inflation Index for the year 2016 -17 bears to the Cost Inflation Index for the year in which the property was registered 2. CBDT PRESS RELEASE, DATED 19 -8 -2016 Section 35 AC of the Income-Tax Act, 1961 - Eligible Projects Or Schemes, Expenditure On – Notified Eligible Projects Or Schemes - Deadline For Availing Of Benefit Of Deduction Under Section 35 ac Section 35 AC of the Income Tax Act, inter alia provides for a deduction in computing the business income of an assessee, of the amount paid by him to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme. Section 35 AC of the Income Tax Act, as amended by the Finance Act, 2016, provides that no deduction under this section shall be allowed in respect of any assessment year commencing on or after 1 st April, 2018. Accordingly, the benefit of deduction under section 35 AC of the I. T. Act is available only up to previous year ending 31 -03 -2017 (Assessment Year 2017 -18) in respect of payments made to association or institution already approved by the National Committee for carrying out any eligible project or scheme. EDITORIAL DUE DATE INCOME TAX MVAT ARTICLE - COMPANY ARTICLE DOWNLOADING SHIFTING

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER Income Tax Updates - Deepali R. Shah B. Recent Reported Decisions - High Court and ITAT 1. CIT vs. Hissaria Brothers (Supreme Court) S. 275: Penalty proceedings for contravention of Sections 269 SS & 269 T are not related to the assessment proceeding but are independent of it. Therefore, the completion of appellate proceedings arising out of the assessment proceedings has no relevance. Consequently, the limitation prescribed by s. 275(1)(a) does not apply. The limitation period prescribed in s. 275(1)(c) applies to such penalty proceedings Penalty proceedings for default in not having transactions through the bank as required under Sections 269 SS and 269 T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under Sections 271 D and 271 E may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings. It was held that clause (a) of sub-section (1) of Section 275 was not attracted to such proceedings 2. Rayala Corporation Pvt. Ltd vs. ACIT (Supreme Court) S. 28: Income from letting of property on rent by an assessee engaged in the business of letting is assessable as "business profits" u/s 28 and not as "Income from house property" u/s 22. The assessee, a private limited company, had house property, which was rented and the assessee was receiving income from the said property by way of rent. As the business of the company is to lease its property and to earn rent and therefore, the income so earned should be treated as its business income 3. ACIT vs. M/s Dattani Development (ITAT Mumbai) S. 50 C: Land purchased by a builder with the knowledge that there are encumbrances on it and development is not feasible is a “capital asset” and not “stock-in-trade”. The gains on transfer of such land is assessable as capital gains and not as business profits. S. 50 C applies to development agreements if the effect of the development agreement read with the conveyance deed is that the entire land ownership rights are transferred Section 50 C of the Act is clearly applicable even to the sale of development rights in the land also held that in-fact the assessee has not only sold development rights in the land but the assessee sold the entire land with ownership rights in the land if the development agreement read in conjunction with deed of confirmation / conveyance executed by the assessee Thus, the land which was sold during the previous year by the assessee, was a capital asset within the provisions of Section 2(14) of the Act and the valuation of the land as per stamp duty valuation authorities as per section 50 C of the Act was rightly adopted by the AO as full value of consideration. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SPCM & ASSOCIATES MONTHLY NEWSLETTER SEPT. 2016 Income Tax Updates - Deepali R. Shah C. Unreported Decisions 1. Kumari Kumar Advani vs. ACIT, ITA No. 7661/M/2013 dated 13/07/2016, AY 2012 -13 (ITAT, Mumbai) Section 234 C – Interest on gifts received – Gifts received after due date of payment of installment of advance tax – Assessee could not have anticipated liability on account of gift – Interest not leviable while processing u/s. 143(1). The assessee, deriving income majorly from deposits maintained with the bank and capital gains, filed ROI which was processed u/s. 143(1). While processing, interest under section 234 C of the Act was levied on account of shortfall in payment of advance tax on first and second installments, due on 15/09 and 15/12, in respect of gift claimed to have been received on 17/12. On such deferment in payment of installments, interest was charged under section 234 C of the Act. The plea of the assessee was that the income in question, namely gift received on 17/12 was in the nature of a windfall gain and, therefore, it was not possible for the assessee to estimate accrual or receipt of such income at any time when the payment for first and second installments were due on 15/09 and 15/12. It was, therefore, contended that assessee was not liable to pay advance tax on 15/09. Held, the liability to pay advance tax enshrined under the Act is based on the principle of ‘Pay as you earn’. The income in question was by way of gifts received, which has been received by the assessee after the date of installments due on 15/09 and 15/12. Quite clearly, assessee could not have anticipated the receipt or accrual of such income before the event, and such event has taken place after the due dates of installments. A reading of section 209 would reveal that in order to calculate the amount of advance tax payable, an assessee is liable to estimate his income. Considered in this light, the facts of the case clearly show that the gift which has been received by the assessee on 17/12 could not have been foreseen by the assessee so as to enable him to estimate such income for the purpose of payment of advance tax on an anterior date, may it be 15/09 or 15/12. Hence, the levy of interest u/s. 234 C was directed to be deleted. 2. ITO vs. New Kamlesh Jewellers, ITA No. 3650/M/2011 dated 13/07/2016; AY 2003 -04 (ITAT-Mumbai) Section 271(1)(c) – Penalty – Goodwill credited to partners’ capital account-Taxability – All facts disclosed – No concealment. The assessee was a partnership firm engaged in the business of manufacture and trading in gold and silver articles. It filed its ROI which was accepted u/s. 143(1). The assessment was subsequently reopened u/s. 147. During the year, the firm created goodwill in the books of account and credited the same to the respective partners in their profit sharing ratio. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER Income Tax Updates - Deepali R. Shah The AO found that the entire sum credited to the partner’s capital account did not suffer any tax and that the assessee transferred the closing stock of the firm at cost and not at market price which was higher as compared to the cost price. The AO, taxed the entire value of Goodwill as STCG u/s. 45(4). The CIT(A) upheld the AO’s order in principle but reduced the addition. During penalty proceedings, affirming the deletion of penalty by CIT (A), the Tribunal held that the assessee disclosed all the facts before the AO during the course of assessment proceedings and merely because the appellant did not admit the capital gains u/s. 45(4), no concealment penalty can be imposed especially when the stand taken by the assessee was supported by a decision of the co-ordinate bench of the Tribunal. 3. Bastimal K. Jain vs. ITO, ITA No. 2896/M/2014 dated 08/06/2016, (ITAT, Mumbai) Section 54 – Purchase of residential flat – Date of handing over possession – Purchase of new flat before sale of original flat The assessee sold his flat for a consideration on 24 -02 -2010 resulting into Long term capital gain of after taking indexed cost of acquisition. The assessee claimed that he has purchased a flat vide agreement dated 28 -12 -2007 for a consideration from one M/s. Sharpmind Developers and the same was registered on 28 -12 -2007. According to the AO, the assessee has claimed deduction u/s. 54 of the Act on the basis of this purchase, which was made one year before the date of sale of the property. Accordingly, he denied deduction u/s. 54 of the Act. The Tribunal relied on the decision in the cases of CIT vs. Smt. Beena K. Jain 217 ITR 363 (Bom) and V. M. Dujodwala vs. ITO 36 ITD 130 (Mum. ) to hold that assessee’s claim of deduction u/s. 54 of the Act was to be reckoned from the date of handing over of the possession of the flat by the builder to the assessee and if that date is to be reckoned, the assessee was entitled to deduction u/s. 54 of the Act because the assessee had sold his residential flat on 24 -02 -2010 i. e. the date of purchase of new flat was within one year before the date of sale of the existing flat. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SPCM & ASSOCIATES MONTHLY NEWSLETTER SEPT. 2016 RECENT AMENDMENTS MVAT Updates - CA GOURAV OSWAL, CA NIKITA BAJAJ MVAT UPDATES Trade Circular No 21 T of 2016 Dt. 24. 08. 2016 The Commissioner of Sales Tax, Maharashtra State, Mumbaihas issued Trade Circular No 21 T of 2016 Dt. 24. 08. 2016. The circular is divided into two parts. First part contains details and procedures for filing online application Form-I for availing the benefits under the Settlement of Arrears in Disputes Act 2016 and second part consists of certain FAQ`s and their answers for bringing further clarity to various points and issues raised by the Trade and Associations in the Maharashtra Settlement of Arrears in Dispute Act, 2016. Internal Circular No 10 A of 2016 Dt. 22. 08. 2016 The Commissioner of Sales Tax, Maharashtra State, Mumbaihas issued Internal Circular No. 10 A of 2016, dt. 22. 08. 2016. The circular contains the stand-by arrangement made by the Maharashtra Sales Tax Department for issuance of e- CST declarations for the periods on or after 01. 04. 2016 since the return filing facility for the period from 01. 04. 2016 is not yet made available. The circular has also prescribed the procedures the officers are required to follow for old and new dealersbefore issuance of e-CST declarations. The officers are required to obtain the summary of inter-state purchases for the period covered by the e-cst application through e-mail. They are also required to obtain the reasons from the dealer, if the dealer has not paid taxes for the periods on or after 01. 04. 2016. In certain cases, EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER MVAT Updates - CA GOURAV OSWAL, CA NIKITA BAJAJ officers are also required to obtain the prior approval of their immediate supervisory authority. Hence the dealers can now make e-cst applications for the period on or after 01. 04. 2016 provided they have filed all the returns prior to 01. 04. 2016 and paid all the taxes. Trade Circular No 21 T of 2016 Dt. 26. 08. 2016 The Commissioner of Sales Tax, Maharashtra State, Mumbaihas issued Trade Circular No 22 T of 2016 Dt. 24. 08. 2016. The circular contains the procedure and steps in preparation and filing of return, guidance for filing of return template and tax payment under new Automation procedure. The extended time period for uploading return is as under: - EDITORIAL Period Start Date Extended Date for Uploading April 2016 29/08/2016 26/09/2016 May 2016 June 2016 06/09/2016 12/09/2016 05/10/2016 11/10/2016 July 2016 16/09/2016 15/10/2016 August 2016 20/09/2016 20/10/2016 September 2016 26/09/2016 25/10/2016 April-June 2016 26/10/2016 30/11/2016 July-Sept 2016 26/11/2016 31/12/2016 DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER MVAT Updates - CA GOURAV OSWAL, CA NIKITA BAJAJ RECENT NOTIFICATIONS Notification No. VAT. 1516/CR-85/Taxation-1 Dated 06. 08. 2016 The Government of Maharashtra has issued Notification No. VAT. 1516/CR-85/Taxation-1 Dated 06. 08. 2016 for amending Rule 52 Aof the Maharashtra Value Added Tax Rules, 2005 relating to set-off in respect of the goods manufactured by mega units and Rule 83 A relating to declaration to be issued by the Mega Unit or by the Ultra Mega Unit or by the Very Large Unit or, as the case may be, the Mega Unit The rule 52 A now not only covers goods manufactured by mega units but also certain dealers covered under the package scheme of incentives like the Ultra Mega Unit and Very Large Unit and accordingly the rule has been amended. The rule 83 A has amended the declaration to be issuedby the Mega Unit under the Package Scheme of Incentives, 2001 or the Package Scheme of Incentives, 2007 or the Package Scheme of Incentives, 2013 or by the Ultra Mega Unit under the Package Scheme of Incentives, 2013 or by the Very Large Unit or, as the case may be, the Mega Unit which has been granted benefits by way of deferment of payment of tax, holding a valid Certificate of Entitlement under the Package Scheme of incentives, 1993. Notification No. VAT. 1516/CR-86/Taxation-1 Dated 06. 08. 2016 The Government of Maharashtra has issued Notification No. VAT. 1516/CR-86/Taxation-1 Dated 06. 08. 2016 for amending Rule 17 A of the Maharashtra Value Added Tax Rules, 2005 relating to electronic filing, Rule 21 of the Maharashtra Value Added Tax Rules, 2005 relating to form of notice for assessment, insertion of new rule 21 A and substitution of old rule 23 with the new one. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER MVAT Updates - CA GOURAV OSWAL, CA NIKITA BAJAJ A new sub-rule 1 A has been inserted in in the Rule 17 to provide that any order, certificate, notice, intimation or any other document which may be specified in the notification, may be issued in an electronic form with or without digital signature to promote effective compliance and ensuing capability with the automated system. A new sub-rule 1 A has been inserted in the Rule 21 to provide that intimation under sub-section (5 A) of section 23 relating to evasion oftax or excess claim of set-off or incorrect disclosure of tax liability now shall be in Form 604 B. A new rule 21 A has also been inserted for determining the manner in which fair market price shall be calculated for the purpose of section 28 A. Rule 23 relating to the forms of order of assessment has been substituted with a new rule 23 which provides that the assessment order under section 23 or, as the case may be, confirmation order under sub-section (5 A) of section 23 shall be in Form 303 compatible with the type of the Form of return. The new rule further provides that where the dealer is liable to file more than one form of return then separate orders pertaining to such different forms of returns, may be issued. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER PENALTIES UNDER MVAT ACT (SECTION 29) – ADV. . ABHAY BORA PENALTIES UNDER MVAT ACT (SECTION 29) Section 29(2 A) – Failure to apply for registration or carrying on business as a dealer without being registered as per the provisions of this act This penalty can be imposed on a dealer either while passing any order under the Act or after passing any order under the Act Hearing is must before imposition of a penalty under this sub section. Quantum of penalty: Equal to the amount of tax found payable by the dealer for the period during which he has carried on the business as dealer without being registered. (B) Section 29(3) – Concealment of particulars of any transaction or knowingly furnishing inaccurate particulars of any transaction. This penalty can be imposed either While passing any order under the Act; or After passing any order under the Act. Mens rea (guilty mind) is a necessary ingredient to be proved by the authority before imposition of the penalty under this sub-section. This penalty can be imposed on a dealer (whether registered or not) and even on a person. This penalty can be imposed by an assessing authority on being noticed by himself or on being brought to his notice. This penalty can be imposed for Concealing the particulars of any transaction Knowingly furnishing inaccurate particulars of any transaction liable to tax Concealing or knowingly misclassifying any transaction liable to tax Knowingly claiming excess set-off than what is due to him. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER PENALTIES UNDER MVAT ACT (SECTION 29) – ADV. . ABHAY BORA These acts of offences can be either through ‘commission’ or ‘omission’. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty: Equal to the amount of tax found due but not less than 25% of the amount of tax due (if the subject is found guilty) (C) Section 29(4) – Knowingly issuing/producing any document including a false bill, cash memorandum, voucher, declaration or certificate which has an effect of reducing the tax liability. Mens rea (guilty mind) is a necessary ingredient to be proved by the authority before imposition of the penalty under this sub-section. This penalty can be imposed for knowingly issuing or producing any of the document including a false bill, Cash memorandum, voucher, Declaration or certificate. Transaction of sale or purchases both are covered. This transaction can either be effected by him or any other person or dealer. By issue of the above referred to documents the transaction of sale or purchase Does not become liable to tax, or Becomes liable to be taxed at the reduced rate, or Incorrect set-off is liable to be claimed. These acts of offences can be either through ‘commission’ or ‘omission’. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER PENALTIES UNDER MVAT ACT (SECTION 29) – ADV. . ABHAY BORA The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty : Equal to the amount of tax found due (if the subject is found guilty). (D) Section 29(5) – Failure to comply with the conditions or restrictions of purchase of goods under sub-sections (3), (3 A), (3 B), or (5) of section 8 SEZ unit Developer of SEZ, 100% EOU, STP, EHTP, Specified dealers in Import & Export Policy, CSD, State Government, Central Govt. , Electricity company, Telecom company, etc. shall comply condition of purchases. Quantum of penalty: Equal to one & a half times the tax which would have become payable. (E) Section 29(6) – Failure to issue Tax Invoice, Bill or Cash Memorandum as provided U/sec. 86 of the Act. Though section 29(6) is applicable to a dealer (whether registered or not) and to a person, the provision of section 86 casts liability to issue a Tax Invoice/Bill/Cash Memorandum to a Registered Dealer only. A registered dealer has to issue a Tax Invoice/Bill/Cash Memorandum for every sale made by him. There is no basic exemption limit for quantum for issuing the same. The effect of not issuing the above referred to Tax Invoice, etc. has the possibility of reducing his tax liability. The initial burden is on the authority to prove that the provision of section 86 is contravened. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty: Equal to half the amount of tax which would have been under-assessed, or Rs. 1000, whichever is more. (F) Section 29(7) – Failure (without a reasonable cause) to comply with any notice in respect of any proceedings. This penalty can be imposed on a dealer or a person EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER PENALTIES UNDER MVAT ACT (SECTION 29) – ADV. . ABHAY BORA If a dealer/person proves that there was a reasonable cause for not appearing/complying, then the penalty under this sub-section cannot be imposed. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty : A penalty equal to Rs. 5000/(G) Section 29(7 A) – Failure to file a return (without any reasonable cause) as provided in section 20 This penalty can be imposed on a dealer (whether registered or not and even on a person. If a dealer/person proves that there was a reasonable cause for not filing the return, then the penalty under this subsection cannot be imposed. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty If the return is filed before the initiation of the penalty proceeding then Rs. 1000/In any other case Rs. 2000/This penalty is without prejudice to any other penalty, which may be imposed under the Act. (H) Section 29(9)(c) – Filing of a return which is not complete and self-consistent This penalty can be imposed on a dealer (whether registered or not) Recourse of Rule 20 of the MVAT Rules, 2005, may be taken which defines what is ‘complete and self-consistent’. ‘Hearing’ is must before imposition of a penalty under this sub-section. Written order is must. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER PENALTIES UNDER MVAT ACT (SECTION 29) – ADV. . ABHAY BORA This penalty is discretionary so far as imposition of the penalty is concerned. But there is no discretion so far as the quantum of penalty is concerned. The competent authority can either choose to impose penalty at the prescribed quantum or can choose not to impose penalty at all, considering the totality of the circumstances of the case. Quantum of penalty Rs. 1000 per return. This penalty is without prejudice to any other penalty, which may be imposed under the Act. (I) Section 29(10) – Collection to Tax/Composition in contravention of Section 60 This penalty can be imposed on a dealer (whether registered or not and even on a person) No person shall collect tax on sale of goods which are not taxable goods. Unregistered dealer shall not collect tax on any sale of goods. Registered dealer shall not collect tax/composition on works contract, in excess of tax payable by him. Composition dealer (except Works Contractors) shall not collect any amount by way of composition on sale by him during the composition period. Such person/dealer is liable for penalty and forfeiture. ‘Hearing’ is must before imposition of a penalty under this sub-section. The Commissioner can hold an enquiry. The Commissioner shall publish a notice of forfeiture for the information of persons concerned. Written order is must. Here maximum penalty that can be imposed is prescribed. The assessing authority can impose a lesser amount of penalty in a deserving case. Forfeiture is in addition to penalty imposable. Quantum of penalty Penalty not exceeding Rs. 2000 and Forfeiture of an amount collected in contravention of Section 60. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER CLASS SUITS UNDER COMPANIES ACT 2013 CA MANOJ JAIN CS ADITI JOSHI CLASS SUITS UNDER COMPANIES ACT 2013. Due to various scams such as Satyam, Sahara etc this concept has been introduced in the companies Act 2013. In simple terms, a class action suit refers to a lawsuit that allows a large number of people with a common interest in a matter to sue or be sued as a group. It is a procedural device enabling one or more plaintiffs to file and prosecute litigation on behalf of a larger group or class, wherein such class has common rights and grievances. PROVISIONS RELATING TO CLASS ACTION SUIT AS CONTAINED IN COMPANIES ACT, 2013: Section 245 of the Companies Act, 2013 (Act) contains provisions regarding Class Action Suits which are discussed in detail below: As per Section 245(1) read with Section 245(3), a Class Action Suit may be filed by: 1. Member or members or any class of them, as described below – In the case of a company having a share capital, any 100 or more members of the company, or members equal to or exceeding 10% of the total number of its members, whichever is less, or any member or members singly or jointly holding at least 10% of the issued share capital of the company, Subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares In the case of a company not having a share capital, members equal to or exceeding 1/5 th of the total number of its members. 2. Depositor or depositors or any class of them, as described below – Any 100 or more depositors of the company, or depositors equal to or exceeding 10% of the total number of its depositors, whichever is less, or Any depositor or depositors’ singly or jointly holding at least 10% of the total value of outstanding deposits of the company. The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER CLASS SUITS UNDER COMPANIES ACT 2013 CA MANOJ JAIN CS ADITI JOSHI Before which authority class action suit needs to be filed? Application for class action suit has to be filed before the National Company Law Board Tribunal (NCLT/Tribunal). When can a Class Action Suit be filed? Members or depositors or any class of them, as indicated above, may file a class action suit if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors seeking all or any of the following orders, namely: — (a) To restrain the company from committing an act that is ultra vires the articles or memorandum of the company; (b) To restrain the company from committing breach of any provision of the company’s memorandum or articles; (c) to declare a resolution altering the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors; (d) To restrain the company and its directors from acting on such resolution; (e) To restrain the company from doing an act that is contrary to the provisions of this Act or any other law for the time being in force; (f) To restrain the company from taking action contrary to any resolution passed by the members; (g) To claim damages or compensation or demand any other suitable action from or against— (i) The company or its directors for any fraudulent, unlawful or wrongful act or omission or conduct or any likely act or omission or conduct on its or their part; (ii) the auditor including audit firm of the company for any improper or misleading statement of particulars made in his audit report or for any fraudulent, unlawful or wrongful act or conduct; or (iii) Any expert or advisor or consultant or any other person for any incorrect or misleading statement made to the company or for any fraudulent, unlawful or wrongful act or conduct or any likely act or conduct on his part; (h) To seek any other remedy as the Tribunal may deem fit. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER CLASS SUITS UNDER COMPANIES ACT 2013 CA MANOJ JAIN CS ADITI JOSHI Against whom a Class Action Suit can be filed? Class action suit can be filed against the Company, Any of its directors Auditor, including audit firm Expert or advisor or consultant or any other person In case of any claim against an audit firm, the liability shall be of the firm as well as of each partner who was involved in making any improper or misleading statement of particulars in the audit report or who acted in a fraudulent, unlawful or wrongful manner. What action will be taken by NCLT on a class action suit application? On receipt of a class action suit application, the Tribunal will look into the following before admitting it: whether the member or depositor is acting in good faith in making the application for seeking an order; any evidence before it as to the involvement of any person other than directors or officers of the company on any of the matters on which an order can be passed; whether the cause of action is one which the member or depositor could pursue in his own right rather than through an order under this section; any evidence before it as to the views of the members or depositors of the company who have no personal interest, direct or indirect, in the matter being proceeded under this section; where the cause of action is an act or omission that is yet to occur, whether the act or omission could be, and in the circumstances would likely to be – – authorized by the company before it occurs; or – ratified by the company after it occurs; Where the cause of action is an act or omission that has already occurred, whether the act or omission could be, and in the circumstances would be likely to be, ratified by the company. 2. If the application is admitted, the Tribunal will: Issue a public notice to all the members of the class by publishing the same within 7 days of admission of the application once in a vernacular newspaper in the principal vernacular language of the state in which the registered office of the EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER CLASS SUITS UNDER COMPANIES ACT 2013 CA MANOJ JAIN CS ADITI JOSHI company is situated and circulating in that state and at least once in English in an English newspaper circulating in that State. Require the company to place the public notice on the website of such company, if any, in addition to publication of such public notice in newspaper and such notice shall also be placed on the website of the Tribunal, if any, on the website of Ministry of Corporate Affairs, on the website, if any, of the concerned Registrar of Companies and in respect of a listed company on the website of the concerned stock exchange(s) where the company has any of its securities listed, until the application is disposed of by the Tribunal. Consolidate all similar applications prevalent in any jurisdiction into a single application and the class members or depositors shall be allowed to choose the lead applicant and in the event the members or depositors of the class are unable to come to a consensus, the Tribunal shall have the power to appoint a lead applicant, who shall be in charge of the proceedings from the applicant’s side. Not allow two class action applications for the same cause of action. 3. A copy of every application made under this section shall be served on the Regional Director and Registrar of Companies. 4. The Tribunal shall give notice of every application made to it under this section to the Central Government and shall take into consideration the representations, if any, made to it by that Government before passing a final order under those sections. 5. Where any application filed before the Tribunal is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, reject the application and make an order that the applicant shall pay to the opposite party such cost, not exceeding Rs. 1 Lakh, as may be specified in the order. Penalty for non-compliance of order passed by Tribunal: Any company which fails to comply with an order passed by the Tribunal under Section 245 shall be punishable with fine which shall not be less than Rs. 5 Lakhs but which may extend to Rs. 25 Lakhs and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years and with fine which shall not be less than Rs. 25, 000/- but which may extend to Rs. 1, 000/-. Under Section 425 of the Companies Act, 2013 the Tribunal has also been conferred the same jurisdiction, powers and authority in respect of contempt of its orders as conferred on High Court under the Contempt of Courts Act, 1971. Get Together And Fight Against Injustice! EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER THREATS IN DOWNLOADING FROM TORRENT SITES -ADV. SANKET S. BORA THREATS IN DOWNLOADING FROM TORRENT SITES There seems to be much debate and controversy surrounding the Internet Service Providers like Tata Teleservices message that comes onscreen while trying to access Torrent site. Perhaps, it is time to put things in perspective. Following is the message that appears while trying to access the torrent sites: The relevant part of the message states, "Viewing, downloading, exhibiting or duplicating an illicit copy of the contents under this URL is punishable as an offence under the laws of India, including but not limited to under Sections 63, 63 -A, 65 and 65 -A of the Copyright Act, 1957 which prescribe imprisonment for 3 years and also fine of upto Rs. 3, 000/-. " Since the relevant provisions of law are quoted above, it would be a fair exercise to try and understand what the four provisions stated above actually mean before arriving at any conclusion. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 Section No. SPCM & ASSOCIATES MONTHLY NEWSLETTER THREATS IN DOWNLOADING FROM TORRENT SITES Gist of the section Section 63 in This section makes an act of the Copyright knowingly infringing or Act, 1957 abetting copyright in a work (which includes movie, song, software, book, etc. ) an offence. -ADV. SANKET S. BORA Implications/Opinion Infringement happens when any person: makes copies of; distributes; carries out public performance (with respect to a play, script, novel, song, etc. ); makes a movie or sound recording; translates; creates adaptations ofany work without the permission of the person who has got the exclusive right to do any or all of the above acts. Further, Section 52 of the Copyright Act, 1957 lists the exceptions to infringement of copyright which includes fair dealing (except a computer program) for private use of any copyrighted work. What constitutes fair dealing is not defined in the law. So, if a person views or downloads a song, video, etc, for his own viewing, it may constitute an exception and may not amount to an offence under Section 63 A of This section provides for a If an offence under Copyright Act, 1957 is not committed the Copyright greater punishment apropos then provisions of Section 63 A are not applicable here. Act, 1957 to a second or subsequent offence. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 Section No. SPCM & ASSOCIATES MONTHLY NEWSLETTER THREATS IN DOWNLOADING FROM TORRENT SITES Gist of the section -ADV. SANKET S. BORA Implications/Opinion Section 65 of This section makes A plate is defined (only relevant to the article) as a duplicating the Copyright possessing a plate for the equipment intended for reproducing copies of any work. Act, 1957 purpose of making an Viewing or downloading work may not be interpreted as infringing copy an offence. possessing a plate for purpose of making infringing copies. Therefore, this provision is not applicable to viewing or downloading of movies or songs from a Torrent site. Section 65 A of This section refers to the Copyright circumventing technical Act, 1957 measures deployed for protecting copyright which is directly applicable to cracks used for installing pirated software. Any person using a crack for defeating activation requirements or to dispense with a license key is liable under this provision. Example: Access to a subscription site like Netflix or any other similar site by hacking would be an offence under sec 63 A. Section 65 B of This section is directly There is no equivalent of Section 63 for content other than the Copyright applicable to use of pirated software programs. Act, 1957 computer programs and Downloading or using cracked versions of Microsoft Office, makes it an offence. Windows, Tally Erp 9, etc. would be considered an offence under sec. 63 B. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER THREATS IN DOWNLOADING FROM TORRENT SITES -ADV. SANKET S. BORA To sum up, merely browsing a torrent website cannot be an offense unless one begins to download and store. Even then, if one is not distributing or circulating the content downloaded from Torrent websites, it is doubtful whether an offense is made out under the current laws. The above opinion does not apply to computer programs. We can always stretch the law and prosecute by misusing. SO IF GIVEN A CHOICE, DOWNLOAD A MOVIE, BUT DON'T SHARE IT AMONGST YOUR FRIENDS. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

SEPT. 2016 SPCM & ASSOCIATES MONTHLY NEWSLETTER SHIFTING TO OUR NEW OFFICE Spreading of Our Wings and Shifting to Our New Office Premises. We appreciate and acknowledge your faith in the SPCM family during our journey of the past 29 years. As you are aware that SPCM means Sincerity Profession and Commitment is our Motto. Keeping this in mind we have decided to spread our wings with the sole intention to serve you better. We have shifted both our offices from Subhashnagar and Shaniwar Peth to our new expanded state of art office premises where the joint operations have commenced with effect from 16 th Aug 2016. Kindly note the address is as under: - SPCM & ASSOCIATES Chartered Accountants, Sr. No 6616, Plot No 491, 5 th Floor, Centre Point, Mitra Mandal Chowk, Next to Balasaheb Thackrey Hospital, Parvati, Pune: 411009. Phone No 020 6744 7171 Kindly update the new address in your records and hence forth please do visit us at our new premises. EDITORIAL DUE DATE CHART INCOME TAX UPDATE MVAT UPDATES MVAT ARTICLE PENALTY COMPANY ACT - 2013. ARTICLE DOWNLOADING TORRENT SHIFTING OF OFFICE

S P C M & ASSOCIATES Chartered Accountants Thank You