This reminds me How the case in Hindustan Petroleum Corporation Limited allowed the Gift to Public Accounts Committee one member Rs 1,00,00,000 One crore Jewelry as expenses , 2 years back ????The Name of M P Is not given by HPCL so far,How may be a rich than Member of Parliament !!!!
Non Taxable Income of M P !!!!!!!! How many Gift of such Jewelry thy may have got it!!!!!
Has any Body discussed in Parliament ever???!!!
I Hope there may not be any such provision in M & A A of any company.
PFA
| Companies, if authorized by the MoA & AoA, are competent to make and receive gifts. Natural love and affection is a not necessary requirement for a gift. The gift is neither taxable as income s. 56 (pre-amendment) nor as capital gain nor as income u/s.2(22)(e) nor u/s.115JB |
(i) As per the provisions of law prevailing during the year under consideration, the gift received by one corporate body from another corporate bodies do not come under the ambit of income as contemplated u/s 2(24) of the Act or any other provisions of the Act. The gift received are a voluntary payments made by the donors to the assessee. Neither the assessee has any legal right to claim the gift from the donor nor donors have any legal or contractual obligations to give gift to the assessee. The gifts received by the assessee was a voluntary payments made by the donor, without consideration to the assessee. The gift received has nothing to do with the business of the assessee so as to constitute its income from business or a revenue receipt in the nature of income.
(ii) The suspicion of the AO that the transaction of gift is dubious and to bring into books any unaccounted money is contrary to the facts on record. Insofar as admittedly the gifts have been received on account of dividend by the donor companies from the Reliance Industries Limited. The Reliance Industries Ltd. have also paid dividend distribution tax, therefore, such money received by the assessee is not unaccounted money. The AO has not brought any evidence on record contrary to the claim of the assessee. Even during appellate proceeding, the CIT(A) has given opportunity to the AO, in the remand report also, the AO could not rebut the claim of the assessee on the basis of any contrary evidence on record. Hence, the claim of assessee cannot be rejected merely on the basis of doubt or suspicion.
(iii) With regard to AO's objection regarding motive behind the transaction, the A.O. has stated in para 8 of the assessment order that it could not ascertain the exact nature or motive behind the transaction because of limited time and resources available, whereas, the case was remanded to the A.O. by CIT(A) and an opportunity was again given with the specific direction to find out the nature and motive behind these transactions or gifts, whereas, A.O. could not find out any other motive behind such transactions and merely stated in the remand report that assessee has not furnished any clear and distinctive motive with regard to these transactions and the exact nature and motive is best known to the assessee. But merely blaming the assessee that it is not furnishing the correct motive is putting the cart before the horse. Whereas case of the assessee is that it has received these amounts as gifts, therefore, it is for the AO to bring on record any other contrary motive and if he fails to do so then there is no alternative but to accept the claim of the assessee that these are gifts.
(iv) With regard to the AO's objection regarding gift deed, we found that the A.O. has held that these transactions cannot be treated as gifts because there are no gift deeds and because they have not been specifically accepted, whereas, there is no such legal requirement for making a gift. Even by simple delivery the gift can be made of an amount or cheque or other movable property. Whereas, in the case of the assessee, letters certifying the gifts with corresponding resolution of their board have been furnished before the A.O. During appellate proceedings before CIT(A), assessee has also filed affidavits from all the four donor companies, certifying the gifts. Assessee has also filed its affidavit for certifying the receipt of gifts. Receipt of gift as well as making of gift are authorized by respective Memorandum and Articles of Association of the companies and the assessee. Gifts have been accepted by the assessee by adopting a resolution by the Board of Directors. After sending all these documents to the AO, the CIT(A) had called a remand report from AO, therefore, this is no violation of rule 46A also. Thus, it cannot be said that these amounts are not gifts merely on the basis that there are no gift deeds or acceptance.
(v) Now, coming to the contention of AO that company cannot make a gift and that there is a lack of natural love and affection in case of gift by the company. This issue is squarely covered by the decision of the coordinate bench in case of in the case of D.P. World Pvt. Ltd. vs. DCIT ITA No. 3627 and 3841/Mum/2012, Mumbai 'D' Bench, order dated 12/10/12 and Redington (India) Limited, ITA No. 513/Mds/2014. Companies are competent to make and receive gifts and natural love and affection are not necessary requirement. Only requirement for company is to make gifts as per respective memorandum and article of association, which authorize the company for the same. Applying the proposition of law laid down in the above decision to the facts of the instant case, we found that the assessee and the donor companies are authorized in this regard for receiving and making gifts respectively by their Memorandum and Articles of Association.
(vi) As per section 56(2)(viia) and 56(2)(viib), gift of certain kind of shares received by a company in which the public are not substantially interested are taxable and, therefore, it is clear that the Income-tax Act, itself provides that companies can receive gifts, of course, gifts of only shares of certain kind received by certain category of companies are taxable. (The provisions of section 56(2)(viia) and (viib) are applicable w.e.f. 1/6/10 and 1/4/13 respectively). Therefore, it cannot be said that the assessee could not have received such gifts from other companies. It is also clear from the Transfer of Property Act that companies can receive and make gifts and there is no requirement of any natural love and affection for making or receiving a gift by companies. Even the Income-tax Act by way of Section 56(2)(viia) and 56(2)(viib) provides that gifts of certain kind of shares are taxable in the hands of certain category of companies.
(vii) Three elements are essential in determining whether or not a gift has been made, a) delivery. b) donative intent,' and c) acceptance by the donee. All the above essentials stated by the AO are duly been fulfilled by the assessee and all the four donor of gifts. With respect to delivery of gift, the dividend has actually been received by the assessee in its bank account which conclusively prove the delivery of the gift from donor to donee. With respect to intent of donor, all four donors have passed a resolution in the meeting of shareholders and board of Directors that they intend to transfer the dividend on shares of Reliance Industries held by them to the assessee donee as gift. Thus, the donative intent to transfer the dividend as gift is clear from the resolution passed by the donors. With respect to acceptance by the donee, the assessee has duly passed a resolution in the meeting of shareholder and board of directors duly conveying their acceptance of the gift. Thus all the essential requisites of gifts stated by the AO in assessment order have been duly fulfilled by the assessee and no adverse conclusion can be drawn in the case of the assessee.
(viii) The AO has limited power of making increase or reduction as provided in the Explanation to the said Section. Furthermore, the Explanation to section 115JB of the Act is applicable only if the item of expense or income is debited or credited to the Profit & Loss Account. However, when the item of expense or income is not debited or credited to the Profit & Loss Account, Explanation to section 115JB of the Act cannot apply and hence no adjustment is required under that section to the books profit. In the case of the assessee gift of Rs.161,86,77,034/- was received from corporate bodies were not credited to the Profit & Loss Account and hence no adjustment is required to the book profit declared by the assessee u/s 115JB of the Act.
Related Judgements
- Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot) S. 56(2)(v) exempts gifts from a "relative". Though the definition of the term "relative" does not specifically include a Hindu Undivided Family, a 'HUF" constitutes all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters. As all these persons fall in…
- In Re Orient Green Power Pte. Ltd (AAR) U/s 82 of the Companies Act, shares in a company is moveable property transferable in the manner provided by its Articles of Association. The applicant has not shown the gift was authorized by its Articles. It is difficult to imagine the Articles of Association of a company providing for…
- Shantikumar D Majithia vs. DCIT (ITAT Mumbai) U/s 2(22)(a), any distribution by a company of accumulated profits, whether capitalized or not, constitutes "dividend" if such distribution entails the release by the company to its shareholders of all or any part of the assets. As the assessee received the occupancy rights to the flat in perpetuity and…
PFA
| S. 271(1)(c): Disclosing income but classifying it under a wrong head amounts to furnishing inaccurate particulars and attracts penalty |
The assessee's argument supra of the same being only a differential treatment of the very same, i.e., rental, income, so that there has been thus neither any concealment nor furnishing of inaccurate particulars of income, though appealing, is misconceived. The reason is simple. Yes, the assessee has apparently stated the quantum and nature of the income correctly. However, penalty u/s 271(1)(c) is not only qua the misstatement of fact/s but also of law. When the law is clear and well settled, as in the facts of the present case, the so called 'differential treatment', which the law does not admit of, i.e., qua the admitted nature of the income, is only admittedly a wrong claim in law. This is more so where the said claim has tax implication. Income has to be necessarily computed under separate, mutually exclusive heads of income, allowing deductions as per the computational provisions of the respective head of income, and toward which the Assessing Officer (A.O.) has relied on United Commercial Bank Ltd. vs. CIT [1957] 32 ITR 688 (SC) and CIT vs. Chugandas and Co. [1965] 55 ITR 17 (SC). In fact, the 'differential treatment' would be rendered as of no consequence, so that no penalty could be levied, where it carries the same or a similar tax burden; the whole premise thereof being only a lesser tax liability, so that whole issue therefore boils down to whether it is the case of tax avoidance, which is legally permissible, or of tax evasion, which the law seeks to penalize, and which therefore has to be adjudged on the basis or edifice of the assessee's explanation for its adopted treatment. The term 'differential treatment', which is thus to be examined on the touchstone of the validity or plausibility, or otherwise, of the legal claim, carries no legal meaning in itself. How could, one may ask, the assessee justify its' claim of the declared nature of the income as 'rent', when it declares as it as 'business income', claiming all expenses there-against? That is, could it be said that the assessee has furnished accurate particulars of income when it, de hors settled law, claims all regular, business expenditure, including depreciation on building, there-against, so that the assessee's claim of having stated 'fact/s' correctly is also highly suspect.
Related Judgements
- Automated Securities vs. ITO (ITAT Pune) (1.8 MB) In order to attract the non-discrimination clause in Article 26, mere differential treatment is not enough. The assessee has to show that not only has it been subjected to differential treatment vis-à-vis others but also that the ground for this differentiation in treatment is unreasonable, arbitrary or irrelevant and…
- CIT vs. Bonanza Portfolio (Delhi High Court) Since the brokerage payable by the client to the broker was a part of the debt and that debt had been taken into account in computing the income, the conditions of s. 36 (2) (i) read with s. 36 (1) (viii) were satisfied and the bad debt was allowable…
- CIT vs. N. R. Portfolio Pvt. Ltd (Delhi High Court) Though in previous decisions (Lovely Exports) it was held that the assessee cannot be faulted if the share applicants do not respond to summons and that the Revenue authorities have the wherewithal to compel anyone to attend legal proceedings, this is merely one aspect. An assessee's duty to establish…
PFA
| S. 40(a)(ia): Merilyn Shipping 136 ITD 23 (SB) cannot be followed but Q whether the second proviso to s. 40(a)(ia) is retrospective or not requires to be considered by the AO |
Though the issue as to whether disallowance u/s 40(a)(ia) can be made only in respect of amounts that are "payable" as at the end of the year or whether it can also be made for amounts "paid" during the year has to be decided against the assessee (as the Special bench verdict in Merilyn Shipping and Transport Ltd. 136 ITD 23 (SB) has not been approved by some High Courts, the legal argument that the second proviso to section 40(a)(ia) of the Act (which was inserted by the Finance Act, 2012 w.e.f 01.04.2013 to provide that the disallowance u/s 40(a)(ia) of the Act would not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act) is retrospective in nature as it has been introduced to eliminate unintended consequences which may cause undue hardships to the tax payers requires to be restored to the file of the Assessing Officer for consideration.
Note: There is a controversy over whether the second proviso to s. 40(a)(ia) is retrospective or not as shown byRajeev Kumar Agarwal (ITAT Agra), G. Shankar (ITAT B'Lore) & The Ramanthali Service Co-operative Bank Ltd vs. ITO (ITAT Cochin). Merilyn Shipping has been held to be good law despite the various contrary HC verdicts inArcadia Share & Stock Brokers Pvt. Ltd vs. DCIT (ITAT Mumbai)
Related Judgements
- DCIT vs. Gupta Overseas (ITAT Agra) S. 40(a)(i): Disallowance of payment to Non-residents without TDS violates 'deduction neutrality non-discrimination' clause in DTAA as there is no similar bar for residents as per Merilyn Shipping 136 ITD 23 (SB)In Rajeev Sureshbhai Gajwani 137 TTJ 1 (Ahd)(SB) it was held that differentiation simplicitor is enough to…
- Arcadia Share & Stock Brokers Pvt. Ltd vs. DCIT (ITAT Mumbai) The Tribunal had to consider whether in view of the Special Bench verdict in Merilyn Shipping & Transport 146 TTJ 1 (Vizag), a disallowance u/s 40(a)(ia) could be made in respect of the amounts that have already been paid during the year and are not "payable" as of 31st…
- CIT vs. Md. Jakir Hossain Mondal (Calcutta High Court) We already have delivered a judgment on 3rd April, 2013 in ITAT No. 20 of 2013, G.A. No. 190 of 2013 (CIT, Kolkata-XI Vs. Crescent Export Syndicates) holding that the views expressed in the case of Merilyn Shipping & Transports (ITA.477/Viz./2008 dated 20.3.2012) were not acceptable. That is one…
PFA
| S. 40(a)(ia): If an amount becomes taxable due to a retrospective amendment, payments prior to the amendment cannot be disallowed for want of TDS |
It is an undisputed fact that the Finance Act, 2010 received the assent of the President on 8.5.2010 and all the payments have been made by the Assessee to the non-resident party prior to receiving of assent of the President making the retrospective amendment by adding explanation to Sec. 9(1). At the time when the Assessee made the payment there was no provision u/s 9(1) making the technical fees deemed to accrue or arise in India whether or not (a) the non-resident has residence or place of business or business connection in India or (b) the non-resident has rendered services in India. It is not disputed by the ld. DR that the non-resident did not have residence or place of business or business connection in India. The non-resident has also not rendered services in India. The source of the income in the hands of the non-resident was outside India. Even the place of business which earned the income was also outside India. Since the technical fees was not deemed to accrue or arise in India at the time when the Assessee made the payment as there was no provision under Sec. 9(1), the income received by the non-resident as per the existing law at the time when the Assessee made the payment, in our opinion, was not taxable in India under the Income Tax Act. Prior to the insertion of explanation to Sec. 9(1) by the Finance Act, 2010 with retrospective effect, the professional and consultancy services even though rendered outside India were not deemed to accrue or arise in India irrespective of the fact whether the party who rendered the services is having place of residence or place of business in India. It is only due to the retrospective amendment made by the Finance Act, 2010 that the position has become clear. If the income was not taxable in India it cannot be made taxable in view of the tax treaty. This is a fact that as argued by the ld. AR the retrospective amendment brought by the Finance Act, 2010 was not in existence at the time when the Assessee had made the payments. The Assessee cannot be penalized for performing an impossible task of deducting TDS in accordance with the law which was brought into the statute book much after the point of time when the tax deduction obligation was to be discharged (Channel Guide India Ltd. vs. ACIT, 139 ITD 49 (Mum.) followed)
Related Judgements
- ACIT vs. Vilas N. Tamhankar (ITAT Mumbai) The law laid down in GE India Technology Centre (P.) Ltd. vs. CIT 327 ITR 456 (SC) that there is no obligation to deduct TDS u/s 195 if the sum is not chargeable to tax in India is not affected by Explanation 2 to section 195(1) inserted by…
- Mathewsons Exports & Imports vs. ACIT (ITAT Cochin) It is very clear that the payments made by the assessee company were in the nature of simple payments for chartering ships on hire for doing the business outside India. Therefore, the payments do not satisfy the test laid down in s.9 of the IT Act, 1961. When s….
- CIT vs. Montedison of Italy (Bombay High Court) Section 9(1) of the Act provides which incomes shall be deemed to accrue or arise in India. Sub-clause (vii)(b) of section 9(1) of the Act, as applicable to the facts of the present case, inter alia provides that income by way of fees for technical services payable by a…
PFA
| (i) Modification to client code of client is not necessarily a mala fide act, (ii) Disclosure made in a statement recorded at unearthly hours cannot be given credence, (iii) if a voluntary disclosure is retracted, the AO has to make addition on the basis of documentary evidence |
(i) The AO held the client code modifications to be malafide with the intention to transfer the profit to other person by modifying the client code so as to avoid the payment of tax. From the circular of the Commodity Exchange, it is evident that client code modification is permitted on the same day. Therefore, we are unable to find out any justification for the allegation of the Assessing Officer that the client code modification was with the malafide intention. When the client code was modified on the same day, there cannot be any malafide intention. Had client modification done after the transactions period when the price of the commodity has already changed, then perhaps there could have been some basis to presume that client code modification is intentional. However, when the client code modification is done on the same day, in our opinion, there was no basis or justification to hold the same to be malafide.
(ii) Moreover, the AO has computed the notional profit/loss till the transactions period and not till the period by which the client code modification took place. Even if the view of the Revenue is accepted that the client code modification was with malafide intention, then the profit or loss accrued till the client code modification can be considered in the case of the assessee but by no stretch of imagination the profit/loss arising after the client code modification can be considered in the hands of the assessee.
(iii) In Kailashben Manharlal Chokshi vs. CIT (2010) 328 ITR 411 (Guj), the High Court held that if a statement is recorded at midnight, much credence cannot be given to such statement because the person would not be in a position to make any correct or conscious disclosure in a statement recorded at odd hours. The ratio of the above decision of the jurisdictional High Court would be squarely applicable to the facts of the assessee's case because the statement was recorded at the midnight of 25th and 26th March 2008.
(iii) In Kailashben Manharlal Chokshi the Hon'ble High Court has noticed that when during the course of assessment proceedings the assessee has given the proper explanation for investment in various properties, the addition cannot be made on the basis of statement made at odd hours. Similarly, in the case of Ratan Corporation(2005) 145 Taxman 503 (Guj.), the Hon'ble jurisdictional High Court reiterated that when the statement made during the course of search has been retracted, then it is duty of the Assessing Officer to make further inquiries. Similar view is expressed by their Lordships of Hon'ble Jurisdictional High Court in the case of Radhe Associates (2013) 37 taxmann.com 336 (Guj.), wherein the Assessing Officer has made the addition by mentioning that there were clinching documentary evidences with respect to receipt of on-money. However, these clinching documentary evidences were not specified. In the case under appeal before us also, we find that the officer recording the statement of Shri Nayan Thakkar has mentioned that various defects and discrepancies have been observed from the papers and documents seized from the assessee's premises. However, any defects or discrepancies were not specified. In view of the above, we are of the opinion that on the facts of the assessee's case the decisions of the Hon'ble Jurisdictional High Court in the cases of Kailashben Manharlal Chokshi, Ratan Corporation and Radhe Associates would be squarely applicable.
PFA
| S. 10A/10B: loss suffered in s. 10A/10B units cannot be set-off against the profits of taxable units |
The High Court had to consider whether the loss suffered by the assessee in a unit entitled for exemption under sections 10A and 10B of the Income Tax Act, 1961, can be set off against income from any other unit not eligible for such exemption after the amendment by the Finance Act 2000 w.e.f. 1.4.2001 which converted the said sections from an "exemption" provision into a "deduction" provision. HELD by the High Court:
(i) Parliament was aware of the various restricting and limiting provisions like section 80A and section 80AB which was in Chapter VI-A which do not appear in Chapter III. The fact that even after its recast, the relief has been retained in Chapter III indicates that the intention of Parliament it is to be regarded as an exemption and not a deduction. The Act of Parliament in consciously retaining this section in Chapter III indicates its intention that the nature of relief continues to be an exemption. Chapter VII deals with the incomes forming part of the total income on which no income-tax is payable. These are the incomes which are exempted from charge, but are included in the total income of the assessee. Parliament, despite being conversant with the implications of this Chapter, has consciously chosen to retain section 10A in Chapter III;
(ii) There is a difference of opinion between the Karnataka and Bombay High Courts as to whether Section 10A or Section 10B are in the nature of exempt income or deductions. However, there is agreement in both the opinions as to the manner of computation and that such profits have to be eliminated at the first stage itself, that is, as soon as they are computed, suggesting that it is an exemption provision. It was held that the eligible profits are not to be subjected to the adjustment under Section 72 of the Act, and the brought forward loss from the unit eligible for the relief under Section 10B cannot be adjusted against the profits from the other three eligible units, which in effect reiterates the position that the loss does not enter the field of taxation just as the profits also do not enter the field. This, with respect, lends support more to the view that Section 10A and Section 10B are in the nature of exemption provisions, rather than provisions for deduction;
(iii) Even if Section 10A/ Section 10B are treated as exemption provisions, Section 80A (4) cannot defeat that interpretation. The object of Section 80-A (4) is to ensure that double benefit does not result to an assessee in respect of the same income, once under Section 10A or Section 10B or under any of the provisions of Chapter VIA and again under any other provision of the Act. Even if Section 10A or Section 10B is construed as exemption provisions, it is still possible to invoke the sub-section and ensure that the assessee does not obtain a deduction in respect of the exempted income under any other provision of the Act. The only object of the sub-section is to ensure that there is no double benefit arising to the assessee in respect of the same income.
(iv) Consequently, the tax-exempt income of the assessee, eligible under Section 10-B cannot be set off against the losses from tax-liable income.
(CIT v. TEI Technologies (P) Ltd [2014] 361 ITR 36), CIT vs. Galaxy Surfactants Ltd. (343 ITR 102), Hindustan Lever Ltd. vs. Deputy Commissioner of Income Tax (2010) 325 ITR 102 (Bom), CIT v. Himatasingike Side Ltd. 286 ITR 255 Black and Veatch Consulting Pvt. Ltd [2012] 348 ITR 72 (Bom), Commissioner of Income-tax v. Williamson Financial Services and Ors., (2008) 297 ITR 17 (SC) & CIT v. Yokogawa India Ltd., (2012) 341 ITR 385 (Kar) referred)
PFA
| S. 147/ 151: Sanction of CIT instead of JCIT renders reopening void. The error cannot be saved u/s 292BB |
The Assessing Officer obtained sanction for issuance of notice under section 148 of the Income-tax Act, 1961 for reopening of assessment from the Commissioner of Income-tax instead of the Joint Commissioner of Income-tax (JCIT). Since the approval was not obtained from the competent authority, notice issued under section 148 of the Act is void ab-initio and the assessment framed consequent thereto is not a valid assessment. The error is fatal and cannot be saved under section 292BB.
(CIT v. SPL's Siddhartha Ltd 345 ITR 223 (Delhi), Ghanshyam K Khabrani vs. ACIT 346 ITR 443 (Bom), Jai Prakash Ahuja vs. Income Tax Officer [2014] 48 taxmann.com 86 (Lucknow Trib.) referred)
Related Judgements
Big victory for Wipro, Karnataka HC grants Foreign Tax Credit to tax holiday entities
IT major Wipro has won a legal victory with the Karnataka High Court allowing it to save a significant amount in taxes from its overseas operations.
The judgment is likely to have an impact on Indian companies that have overseas operations.
US taxes
In a ruling on Thursday, the High Court said Wipro can take credit for taxes it paid in the US out of revenues it earned from its operations there. Earlier, Wipro was denied tax credit since the Indian operations came under the tax holiday ambit.
The issue relates to Wipro's operations in the US, and the taxes it has paid — both at the state and Federal levels, which comes under the ambit of foreign tax credits. According to Amit Maheshwari, Partner, Ashok Maheshwary & Associates, Wipro did not get this tax credit and appealed to the Karnataka High Court, since it would amount to double taxation. Wipro also enjoyed tax holiday status in India at the time.
While the income under consideration could not be ascertained, Wipro had filed the income for the assessment year 2007-08. Further, it disputed the total income computed and the total tax computed. When contacted, Wipro officials did not comment as they have not yet received the formal order. Industry watchers believe this is an important development. According to Maheshwari, this is a significant judgment when it comes to the principle of foreign tax credits and sets a precedent.
Finance Bill,2015
Section 295 is amended to provide for the power to the Board to make rules for the purpose of granting relief for deduction of foreign taxes paid in other countries.
This amendment is effective from 1st June, 2015
Allows Regional Director to raise tax-objections to amalgamation scheme, rejects MCA Circular reliance |
HC allows Regional Director (RD) to raise tax related objections to scheme of amalgamation, rejecting petitioners' contention that RD was precluded to raise such objections, and levies costs on petitioners for suppressing tax liabilities; Holds that, "Regional Director is not only entitled to but is duty bound to bring to the attention of the Court any provision in the scheme which may contravene/circumvent the provisions of any law including the law pertaining to Income Tax"; Rejects petitioners' reliance on MCA Circular dated January 15, 2014 that since Income Tax Authorities did not raise any objection within 15 days of notice, it was presumed that they did not object to the scheme, and thus, RD was precluded to raise any tax related objection; Rules that, "The Circular merely provides a mechanism for the Regional Director to invite the comments of the Income Tax Department.. does not prevent the Regional Director from raising such objections..with regard to the scheme as he may deem fit including objections and observations pertaining to taxation laws"; Further rejects petitioners' reliance on SC tax ruling in Marshall Sons & Co. (India) Ltd to contend that since Income Tax Authorities had made protective assessment on them, they had accepted the scheme; Holds that, "merely because a protective assessment is made, it does not mean that the Income Tax Department has accepted a scheme. It only means that the protective assessment is not a final assessment and the same would be finalised after the Court passes an order approving or rejecting the scheme"; With respect to RD's objection that petitioners by choosing a retrospective appointed date in the scheme violated Section 139(5) of Income Tax Act, which provides for filing revised income tax return, as then the return would not be filed within the prescribed period, directs petitioners to delete the respective clause and directs Income Tax Dept to decide petitioners' tax liability pursuant to scheme approval not bound by appointed date:Bombay HC |
The ruling was delivered by Justice S.J. Kathawalla. Senior Advocate Virag Tulzapurkar along with Advocates Alpana Ghone and Amit Naik argued on behalf of the petitioners. Senior Advocate Shyam Mehta alongwith Advocate S. V. Bharucha represented Regional Director. |
PFA earlier
Dear Patrons,
Recently, Ministry of Corporate Affairs ('MCA') vide its Notification dated March 19, 2015amended the Companies (Management and Administration) Rules, 2014 with regard to e-voting norms. It introduced the concept of 'remote e-voting', explained the process of counting votes and stated that a resolution proposed to be considered through e-voting shall not be withdrawn.
In this article, the author, Mr. Prashant Vaishampayan (Practising Company Secretary)analyses the new norms and compares them with the earlier provisions. With regard to the provision of intimation of e-voting, author notes that under new rule, advertisement is required to be published atleast 21 days before general meeting alongwith a public notice on company's website, as compared to 5 days before beginning of voting period under earlier norms. The author mentions that by requiring a public notice on company's website, "MCA demonstrated its keenness on resolution of Investor grievances in respect of E-voting and related issues, by making it compulsory for the companies to disclose in detail the name, designation, address, email id and phone number of the person responsible to address the grievances connected with e-voting facility."
Further appreciating the new norms with regard to e-voting procedure, author states that, "new rule provides that the scrutiniser shall, immediately after the conclusion of voting at the general meeting, first count the votes cast at the meeting, thereafter unblock the votes cast through remote e-voting. However, the existing rule was, in a way, allowed scrutinizer to unblock the e-votes prior to date of general meeting". However, with regard to the provision of dispatch of notice, author criticises and states, "There was a good opportunity to address this issue in the new rule. However, the provision in new rule continued to be as it was and no respite has been given to the Corporates."
Click here to read the article titled, "Critical appraisal of new e-voting norms".
Best Regards,
LSI Team
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