Government Heading Towards E-Collection of Taxes
CA Pradeep Jain,
CA Neetu Sukhwani
Kushal Shah
Introduction:- The Hon'ble Finance Minister, Mr. Arun Jaitley in his budget speech delivered on 10th July, 2014 had expressed his desire to create an e-biz platform that is aimed to create a business and investor friendly ecosystem in India by making all business and investment related clearances and compliances available on a 24X7 single portal, with an integrated payment gateway. It was stated by him that all Central Government Departments and Ministries will integrate their services with e-biz platform on priority basis by 31st December, 2014. With a view to implement and effect the said technological change, amendments have been made in the recent budget 2014-15 by making payment of excise duties and service taxes mandatory through internet banking. However, discretion has also been given to the Assistant/Deputy Commissioners to allow payment of taxes via any other mode in exceptional circumstances on reasons to be recorded in writing. This article is an attempt to analyse the above change introduced by the government.
History:- The government followed the practice of collecting the taxes manually through challans. However, with the technological advancement, the method of collection of taxes also changed and gradually, the government resorted to facilitate tax collections electronically. This may be better observed if we look at the series of amendments being made from time to time as follows:-
The proviso to Rule 6(2) as regards electronic payment of service tax was first introduced by the Service Tax (Fourth Amendment ) Rules, 2006 with effect from 01.10.2006 which read as follows:-
The assessees shall deposit the service tax liable to be paid by him with the bank designed by the Central Board of Excise and Customs for this purpose in Form TR-6 or in any other manner prescribed by the Central Board of Excise and Customs:
"Provided that the assessee, who has paid service tax of rupees fifty lakhs or above in the preceding financial year or has already paid service tax of rupees fifty lakhs in the current financial year, shall deposit the service tax liable to be paid by him electronically through internet banking."
Thereafter, this limit was reduced by the Service Tax (Amendment Rules), 2010, w.e.f. 01.04.2010 vide Notification no. 01/2010-ST dated 19.02.2010 wherein the proviso was substituted as follows:-
"Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall deposit the service tax liable to be paid by him electronically, through internet banking."
Subsequently, this limit was further reduced w.e.f. 01.01.2014 vide Notification no. 16/2013-ST dated 22.11.2013 to Rs. One Lakhs.
Similarly, amendments have been also effected in the Central Excise Rules, 2002 and the same are summarized as follows:-
The third proviso to Rule 8 regarding manner of payment of excise duty was inserted w.e.f. 01.04.2007 by Notification no. 08/2007-CE (N.T.) dated 01.03.2007 which provided that an assessee who has paid total duty of Rs. Ten lakhs or more including the amount of duty paid by utilisation of cenvat credit in the preceding financial year, shall thereafter, deposit the duty electronically through internet banking.
The limit specified in the proviso was substituted from Rs. 10 Lakhs to Rs. 1 Lakhs w.e.f. 01.01.2014 vide Notification no. 15/2013-C.E. (N.T.) dated 22.11.2013.
Amendment vide Notification no. 09/2014-ST w.e.f 1st October,2014 :-
In rule 6 of the said rules, for sub-rule (2), the following sub-rule shall be substituted with effect from the 1st October, 2014, namely:-
" (2) Every assessee shall electronically pay the service tax payable by him, through internet banking:
Provided that the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction, may for reasons to be recorded in writing, allow the assessee to deposit the service tax by any mode other than internet banking."
Simultaneously, similar amendments have been made in the Central Excise Rules, 2002 vide Notification no. 19/2014-C.E. (N.T.) dated 11.07.2014 wherein it has been stated as follows:-
After sub rule (1A) of Rule 8, the following sub-rule shall be inserted w.e.f. 01.10.2014, namely:-
(1B) Every assessee shall electronically pay duty through internet banking:
Provided that the Assistant Commissioner or the Deputy Commissioner of Central Excise, for reasons to be recorded in writing, allow the assessee payment of duty by any mode other than internet banking."
Implication of Amendment:-
With effect from 01.10.2014, every assessee will be required to pay excise duty and service tax payable by him electronically through internet banking and there is no other option available except in certain peculiar circumstances. Therefore, with the technological advancement, the government has also adopted advanced means of revenue collection. However, realising the fact that still there are villages in the country that are not equipped with sufficient internet facilities, a proviso has also been added wherein the powers have been given to the Assistant Commissioner or the Deputy Commissioner to allow the assessees for reasons recorded in writing to deposit excise duty or service tax by any mode other than internet banking. But, the facility of making payment of excise duty or service tax by any other mode is not available to every assessee and it is dependent on the desire and discretion of the revenue officers. Moreover, the reasons for allowing payment to be made by other mode are also not mentioned which may lead to controversies and unnecessary litigation. All that we can hope is that in the desire to collect taxes electronically, the government does not harass the small assessees who are unable or incapable to pay taxes electronically due to lack of adequate facilities because even in the present times there are certain remote areas in the country that are not even connected with uninterrupted electricity.
National Pension System – A Government's New Initiative
CA Kapil Goel
The National Pension System (NPS) reflects Government's new effort to find a suitable & sustainable solution to the problem of providing adequate retirement benefits to the people at large. As a first step towards initiating this, Government of India moved from a defined benefit pension to a defined contribution based pension system by making it mandatory for its new recruits (except armed forces) with effect from January 1st, 2004. Since April 1st, 2008, the pension contributions of Central Government employees covered by the NPS are being invested by professional Pension Fund Managers in line with investment guidelines of Government applicable to non-Government Provident Funds.Twenty eight States/Union Territory Governments have notified the NPS for their new employees. Some states have already signed agreements with the intermediaries of the NPS architecture appointed by PFRDA for carrying forward the implementation of the NPS.
NPS has been made available to every citizen from 1st May, 2009 on a voluntary basis. The NPS architecture is transparent and will be web-enabled. It would allow a subscriber to monitor his/her investments and returns under NPS, the choice of Pension Fund Manager and the investment option would also be decided by the subscriber. The design allows the subscriber to switch his/her investment options as well as pension funds. The facility for seamless portability and switch between Portfolio Fund Managers is designed to enable subscribers to maintain a single pension account throughout their saving period (i.e. till 60 years age).
PFRDA has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the Portfolio Fund Managers. The NPS Trust is composed of members representing diverse fields and brings wide range of talent to the regulatory framework.
The NPS has been designed to enable the subscriber to make optimum decisions regarding his/her future and provide for his/her old-age through systemic savings from the day he/she starts his/her employment. It seeks to inculcate the habit of saving for retirement amongst the citizens.
The NPS has been making progress in terms of investment options and showcasing performance superior to the traditional EPF and PPF investments.
What is more interesting is that the NPS funds fared quite well when compared with mutual fund category averages. The table shows the average returns of mutual funds in similar categories for the year ending March 2013. The recent press release by PFRDA for NPS (private) for non-government employees showed sound double-digit returns by NPS funds. This is far higher than the under 9 per cent returns that EPF or PPF delivered (see table).
| Returns of private NPS (%)* | Avg. returns of mutual funds (%)** | |
| Scheme E | 8.4 | 4.7 |
| Scheme C | 14.2 | 10.4 |
| Scheme G | 13.5 | 11.0 |
| *weighted average return between April 2012 and March 2013 | ||
| **category average of funds for the above period | ||
| Scheme E: equity; Scheme C: corporate bonds; Scheme G: government securities | ||
Income Tax
Whether if Revenue declines to grant exemption u/s 10(23C)(vi), such denial automatically leads to refusal of registration u/s 12AA - NO: HC
THE assessee is a Society registered under the Societies Registration Act since 1991. It was also registered u/s 12A and claimed exemption u/s 10 (23C) (vi) on the income for the AYs 2004-05 to 2006-07 & 2007-08 to 2009-10 on the ground that the Society was imparting education. The said claim had been rejected by the Chief Commissioner of Income Tax, Allahabad vide order dated 25.3.2008. Against the said order, Writ Petition No. 1210 of 2009 had been rejected and the order of the Chief Commissioner of Income Tax, Allahabad had become final.
THE issues before the bench are - Whether if the exemption under Section 10 (23C)(vi) is declined, it would amount to refusal of registration under Section 12AA and Whether registration u/s 12A can be denied without recording the reasons for satisfaction that the activities of assessee are not genuine or are not being carried out in accordance with the objects of the trust or the institution. And the verdict goes against the Revenue.
Pursuant to the report furnished by the Designated Authority,the Central Government imposed anti-dumping duty on Acrylonitrile Butadiene Rubber originating in, or exported from Korea RP, by notification No. 01/2009-Customs, dated 02.01.2009. The notification in express terms was to be in force for five years, i.e. till 01.01.2014.
By amending notification 06/2014-Cus., (ADD), Dated: January 23, 2014, the following paragraph was inserted in notification 01/2009-Customs, dated the 2nd January, 2009
"3. Notwithstanding anything contained in paragraph 2, this notification shall remain in force upto and inclusive of the st day of January, 2015, with respect to anti-dumping duty on Acrylonitrile Butadiene Rubber originating in, or exported from Korea RP, unless revoked earlier".
Claim by the petitioner
The petitioner urges that the Central Government could not levy and collect any anti-dumping duty after 01.01.2014. It urges that if the Central Government were of the opinion that such course of action was warranted, it ought to have issued a notification in the Gazette in terms of first proviso Section 9A(5) which enables the extension of such anti-dumping duty levy beyond five years. It is urged that by virtue of operation of Rules 6, 19, 20 and 23, such extension ought to have been notified in the official Gazette and published before the expiry of the five year period from the date of the original notification, i.e. 02.01.2009. The petitioner buttresses this proposition by placing reliance on the second proviso to Section 9A (5).
The petitioners complain that in the present case, the notice proposing the review was published on 06.01.2014, after the expiration of the original notification. Thus, neither the review for continuing the duty, nor the levy during the pendency of inquiry was valid. The petitioners also urge that the notification of 23.01.2014, amending the 02.01.2009 notification so as to make it remain in force till 01.01.2015, was issued without any legal authority. In as much as once the original notification lapsed on 01.01.2014, there could have been no question of resorting to the subterfuge of amending such expired notification.
It is argued that the materials on record, in the form of RTI query replies, establish beyond doubt that the initiation of the sunset review in the present case took place on 31.12.2013; the Gazette copy was sent for distribution to Kitab Mahal, a book store, only on 06.01.2014. That being the case, both the initiation, and the subsequent notification of 23.01.2014 amending a notification which ceased to exist, is invalid and the attempt to enforce it as without authority of law.
Submissions by Revenue
The first proviso to Section 9A (5) of the CTA as well as a fair reading of Rule 6 do not lead to the conclusion that the intention to review and extend the anti-dumping duty, in the facts of a given case, have to be necessarily published and made available to all, before the expiry of the original notification. It was pointed out that in this case, the extension notification was in fact printed on 31.12.2013 in the Official Gazette. The compelling inference which the Court should draw, therefore, is that the requirement of Section 9-A (5) in that regard had been fulfilled. It was argued that the sunset review proposed by the impugned notification of 31.12.2013 is mandatory in terms of the judgment of this Court, inIndian Metal and Ferro Alloys v. Designated Authority - 2007-TIOL-682-HC-Del-AD.
The initiation itself is a ground for extending the duty for such period, since the degree of injury prevailing is presumed to exist. This is because there is no requirement of any form of inquiry into the injury; the inquiry which is undertaken prior to the imposition of the duty through the first notification is deemed sufficient and the injury deemed to continue. However, if the sunset review inquiry is not closed by one year, the duty would lapse. As a result, the notification of 23.01.2014 - which sought to amend the original notification- is valid, and cannot be set aside.
Analysis and findings by the High Court
Notification of extension
+ Superficially the petitioners' argument, based on a joint reading of Rule 6 and 23 is attractive. However, it ignores that Section 9-A (5) and its proviso do not mandate a public notice or a Gazette notification as a precondition for the initiation of sunset inquiry. The reference to publication by an official Gazette is, significantly, in Section 9-A (1) which talks of imposition of anti-dumping duty. That levy can be imposed after the conclusion of inquiry under Section 9-A (6) of the Act. The only reference to initiation of sunset review before the expiry of the period mentioned in the original notification is in the second proviso to Section 9-A (5). The procedural steps outlined in the Rules, especially Rule 6(1) and 6 (2) are prerequisites for holding inquiry to determine the extent of injury in the first instance, i.e. while deciding whether to impose anti-dumping duty or not, in the first instance. Even this rule nowhere states that the notice or notification should be published in the official Gazette.+ The only consequence provided in the statute is that contemplated by second proviso to Section 9-A (5) i.e. invalidity of a levy during pendency of the sunset review, unless it is imposed before the expiry of the original levy. Courts cannot stretch the operation or effect of a restricted consequence in the manner sought to be urged.+ If the court were to accept the petitioners' argument about the compelling nature of the requirement that for a sunset review to be valid, not only should it be shown to be initiated before the expiration of the period of the original notification, but also that the public notice in that regard should be shown to be issued and made available before the period, it would be doing violence to the statute.+ As long as it is shown that the initiation is done within the time, and public notice issued within proximate time, the sunset review is valid. There could be cases, where the initiation might be within time, but public notice is unreasonably delayed; in such instances, it could be argued that the inquiry is vitiated.+ In the present case, there is no dispute that the initiation took place on 22.12.2013; the notice was published in the Official Gazette on 31.12.2013 though it could be made available on 06.01.2014. Consequently the initiation of the sunset review was valid and proper. The petitioners' first challenge to the legality of the initiation therefore, fails.
Legality of the extension of levy notification
++ It is clear that Section 9A (5) has echoed Articles 11.1, 11.2 and 11.3 of the agreement for implementation of Article VI of GATT.++ The second proviso to Section 9A (5) states that "where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year".++ The respondents' contention that continuing the anti-dumping duty during pendency of the sunset review is more or less automatic, is thus, belied by the terms of the Implementing Agreement, which was enacted in the second proviso. It consequently does not follow as a sequitur that whenever a sunset review is initiated under Section 9A (5), first proviso, the duty existing as on that date, would continue.++ If the respondents wish to continue the levy for a period beyond that, during pendency of sunset review (which might not be concluded by the time the first period expires) they have to issue a notification, before the expiry of that period.++ The petitioners' submission that a notification under Section 9A (1) issued after review is in the nature of temporary legislation, is merited. A statute is ordinarily perpetual, in the sense that no time is fixed for its duration. In that sense Section 9A is perpetual. However, that provision is merely enabling; it authorizes a levy of anti-dumping duty upon proof of injury, and upon fulfillment of other conditions. Once notified, the levy has effect - in terms of the notification and Section 9A (5) for five years. That levy is consequently, temporary as the duration is finite. In these circumstances, Section 6 of the General Clauses Act, which provides that notifications, bye-laws etc. validly made under a repealed law can continue to be in force, would have no application.++ What follows is that the levy of anti-dumping duty ended on 01.01.2014, with the lapse of the original notification. The second proviso to Section 9A (5) precluded the Central Government from continuing the levy beyond that period or date, except to the extent its conditions were fulfilled, i.e. if the levy of the duty were to have been notified before such date. In such cases, the power under the second proviso to Section 9A(5) after expiry of the date of the original notification, is unavailable.++ Neither does Section 9A(1) nor Section 9A(5) permit the extension of anti-dumping duty once the main period of five years lapses.++ The imperative nature of second proviso to Section 9A (5) leaves no room for doubt that in case the Central Government wishes to extend the levy during the sunset review period, it has to comply with the terms of that provision and do so, before expiration of the original period - which in this case was 01.01.2014. Not having done so, its attempt to levy the duty through the later notification of 23.01.2014 is without authority of law; it is contrary to the terms of proviso to Section 9A (5).The attempt to recover any amounts as duty, therefore, violates Article 265 of the Constitution of India.++ It is held that the initiation of sunset review is valid and legal; however the levy of anti-dumping duty through the impugned notification of 23.01.2014 is without authority of law.++ The said notification is declared illegal and hereby set aside. The petitioners are entitled to refund of the amounts paid till date.
The writ petitions partly succeed.
(See 2014-TIOL-1130-HC-DEL-AD)
Analysis of recent Circular on matters related to Related Party Transactions
CS Divesh Goyal
Government has received representations from stakeholders seeking certain clarifications on related party transactions covered under section 188 of the Companies Act, 2013. These representations have been examined and the following clarifications are given:1. Scope of second proviso to Section 188{1):
Bare Act Language: Second proviso to sub-section(1) of section 188 said No Member of the company shall vote on such special resolution, to approve any contract or arrangement which may be entered into by the company, if such member is a related party.
Circular Language:It is clarified that 'related party 'referred to in the second proviso has to be construed with reference only to the contract or arrangement for which the said special resolution is being passed. Thus, the term 'related party' in the above context refers only to such related party as may be a related party in the context of the contract or arrangement for which the said special resolution is being passed.
Example-1: There is Two Company XYZ and PQR. Company XYZ and PQR entering into a Contract/Transaction. Mr. A is Director in Company XYZ and Mrs. A is Member in XYZ. So Mrs. A is member and related party for company XYZ. {Before this circular peoples were saying that According to this example Mrs. A can't participate in such transaction} But this circular clarify that Mrs. A is related party but she is not interested in contract so she can vote on Special Resolution pass for contract/ transaction b/w company XYZ and PQR.
Example-2: If in the above Example. Mr. A is Director in Company XYZ, and Mrs. A is Member in XYZ and Mr. A also director in PQR. So in this case Mrs. Can't vote on Special Resolution. Because Mrs. A is now interested in transaction because her husband is Director in PQR company with whom XYZ going to enter into contract. {So Mrs. A is member and related party like above example but in this example she is also interested because her husband is interested in this transaction so Mrs. A can't vote on such resolution.}
Opinion: According to this clarification of MCA, my opinion is that if a member is related party as per *Section 2(76) of Companies Act, 2013 but member is don't have any interest in transaction then member can vote on Special Resolution even he/she is related party.
2. Applicability of Section 188 to Corporate Restructuring- Amalgamation:
Circular Language:It is clarified that transactions arising out of Compromises, Arrangements and Amalgamations dealt with under specific provisions of the Companies Act, 1956/Companies Act, 2013, will not attract the requirements of section 188 of the Companies Act, 2013.
Example: Section 188 (Related Party Transaction) of Companies Act, 2013 applicable on Both Public & Private Company. But as per General Circular No. 30/2014 Dated 17.07.2014 if a company going for Compromise, Arrangements and Amalgamation then there is no need to follow provisions of Section-188.
Company can enter into scheme of Compromise, Arrangements and Amalgamation exempt from applicability of Section-188. So mean because of Compromise, Arrangements and Amalgamation if any related party transaction attract, company can proceed with scheme without follow the provision of Secton-188.
3. Requirement of fresh approvals for Past Contracts Under Section 188:
Circular Language:Contracts entered into by companies, after making necessary compliances under Section 297 of the Companies Act, 1956, which already came into effect before the commencement of Section 188 of the Companies Act, 2013, will not require fresh approval under the said section 188 till the expiry of the original term of such contracts. Thus, if any modification in such contract is made on or after 1st April, 2014, the requirements under section 188 will have to be complied with.
Example: If a Company XYZ Limited has entered into any related party transactions/contract as per Section-297 of Companies Act, 1956 by making necessary compliances under section 297 of Companies Act, 1956 and such transaction has already came into effect before the commencement of Section 188 of the Companies Act, 2013 then it is not necessary for company XYZ Limited to comply the provisions of Section-188 till the Expiry of Original Term of Contract.
In Above Example if, original terms of contract expire after 1st April, 2014 and company wants to renew such contract then company have to comply with the provisions of Section- 188 of Companies Act, 2013.
Opinion:
Section- 188 of Companies Act, 2013 will be applicable in following situations, when:
- When company enter into related party transaction after 1st April, 2014.
- Renewal of Related Party Contract after 1st April, 2014.
But Provisions of Section 188 will not apply in following situations:
- When company entered into transaction before 1st April, 2014.
- When there is no renewal of contract entered before 1st April, 2014.
**Definition of Related Party Transaction: Section 2(76): "Related Party", with reference to a company, means—
| i. | a director or his relative; |
| ii. | a key managerial personnel or his relative; |
| iii. | a firm, in which a director, manager or his relative is a partner |
| iv. | a private company in which a director or manager is a member or director; |
| v. | a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital; |
| vi. | any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager |
| vii. | any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity |
| any company which is—(A) a holding, subsidiary or an associate company of such company; or (B) a subsidiary of a holding company to which it is also a subsidiary; | |
| ix. | such other person as may be prescribed |
(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Forms submitted prior to Commencement of New Companies 2014 are to be disposed under rules of Companies Act,1956
Government of India
Ministry of Corporate Affairs
Notification
New Delhi, dated, the 17/07/2014
G.S.R. _(E).- In exercise of the powers conferred by sub-section (1) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules to amend the Companies (Miscellaneous) Rules, 2014, namely:-
1. (1) These may be called the Companies (Miscellaneous) Amendment Rules, 2014.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Companies (Miscellaneous) Rules, 2014 after rule 10, the following rule shall be inserted, namely:-
"11. Applications or forms pending before Central Government, Regional Director or Registrar of companies.- Any application or form filed with the Central Government or Regional Director or Registrar (hereinafter referred to as `the authority') prior to the commencement of these rules but not disposed of by such authority for want of any information or document shall, on its submission, to the satisfaction of the authority, be disposed of in accordance with the rules made under the Companies Act, 1956 (1 of 1956)."
[File No 1/25/2013-CL-V]
Amardeep Singh Bhatia
Joint Secretary
Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 253 (E), dated the 31st March, 2014
CBI arrests Excise Superintendent and an Inspector from Vadodara (Gujarat) in bribery case
The Central Bureau of Investigation has arrested a Superintendent and an Inspector, both of Central Excise, Vadodara (Gujarat) in a bribery case.
It was alleged in the complaint that the Superintendent had originally demanded a bribe Rs. 15,000/- for issue of Central Excise Registration number for the firm of the complainant which was subsequently reduced to Rs.10,000/-. The Complainant did not want to pay the bribe and lodged a complaint with CBI. A case was registered and a trap was laid. The Superintendent was caught red handed while demanding & accepting the bribe of Rs.10000/- from the Complainant at his office on 24.07.2014(Evening). When the CBI team confronted the Superintendent immediately after the acceptance of the bribe amount; his subordinate officer, an Inspector of Central Excise who had processed the application of the complainant on file, tried to escape from the office building with the relevant file. He also allegedly tore apart the relevant document containing his signature & the Superintendent's signature and threw the torn pieces near the boundary wall of the office in an attempt to destroy the evidence. However, the Inspector was chased and caught by the CBI. The torn pieces of the relevant documents have also been recovered.
Searches were conducted at the office and residential premises of accused. Cash amount of Rs.Three Lakhs was recovered from the residence of the Superintendent apart from the relevant documents.
Both the arrested accused are being produced today before the Jurisdictional Court.
Further investigation is continuing.
CBI Press Release – New Delhi, 25.07.2014
Companies (Management and Administration) Second Amendment Rules, 2014
NOTIFICATION
New Delhi, 24th July, 2014
G.S.R - In exercise of the powers conferred under sub-section (1) of section 88, sub-section (4) of section 88, sub-section (1) of section 89, sub-section (2) of section 89, sub-section (6) of section 89, sub-section (1) of section 91, sub section (2) of section 92, sub-section (3) of section 92, section 93, sub-section (1) of section 94, sub-section (4) of section 100, sections 101, 102, 105, 108, sub-section (5) of section 109, sections 110, 112, 113, sub-section (2) of section 114, section 115, sub-section (1) of section 117, sub-section (1) of section 118, sub-section (2) of section 119, section 120 and sub-section (1) of section 121 and sub-section (3) of section 186, read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Management and Administration) Rules, 2014, namely:
1. Short title and commencement.- (1) These rules may be called the Companies (Management and Administration) Second Amendment Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Management and Administration) Rules, 2014,-
(i) in rule 9, after sub-rule (3), the following proviso shall be inserted, namely:-
"Provided that nothing contained in this rule shall apply in relation to a trust which is created, to set up a Mutual Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India".
(ii) in rule 13,-
(a) the words "either value or volume of the shares" shall be omitted;
(b) the Explanation shall be omitted.
(iii) in rule 23, in sub-rule (1), for the words "not less than five lakh rupees", the words "not more than five lakh rupees" shall be substituted;
(iv) in rule 27, in sub-rule (1) and in the Explanation, for the word "shall", the word "may" shall be substituted.
[F. No. 01/34/2013-CL-V Part-I]
(Amardeep S Bhatia)
Joint Secretary to the Govt. of India
Note:- The principal notification was. published in the Gazette of India, vide No. G.S.R. 260(E), dated the 31st March, 2014 and subsequently amended vide G.S.R No. 415(E), dated the 23rd June, 2014.
The Companies (Removal of Difficulties) Sixth Order, 2014
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ORDER
New Delhi, the 24/07/2014
S.O. (E)- Whereas the Companies Act, 2013 (18 of 2013) (hereinafter referred to as the said Act) received the assent of the President on 29th August, 2013 and section 1 thereof came into force on the same date;
And whereas clause (76) of section 2 of the Act, which provides for definition of the term "related party" has come into force on 12th September, 2013;
And whereas difficulties have arisen in interpreting the said clause due to the absence of the word "relative" in sub-clause (iv), although such word has occurred in sub-clauses (i), (ii), (iii) and (v) of the aforesaid clause (76) resulting in a disharmonious interpretation of the said definition.
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely:-
1. Short title and commencement.- (1) This Order may be called the Companies (Removal of Difficulties) Sixth Order, 2014.
(2) It shall come into force on the date of its publication in the Official Gazette.
2. Amendment of section 2.- In section 2 of the Companies Act, 2013, in clause (76), in sub-clause (iv), after the word "manager", the word "or his relative" shall be inserted.
[F. No. 2/ 14/2014-CL.V)
AMARDEEP SINGH BHATIA, JOINT SECRETARY
__._,_.___
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