India: Revised General Meetings Process: Secretarial Standard 2
 |  |  |  |  |  | |
Introduction
The Ministry of Corporate Affairs notified secretarial standard 2 ("SS-2") on April 23, 2015 which came into effect from July 1, 2015. The objective of SS-2 is to ensure good corporate governance and better accountability towards shareholders in all general meetings ("GM"). Section 118(10) of the Companies Act, 2013 ("the Act") imposes an obligation on companies to strictly comply with SS-2 at all times.
This bulletin highlights the process of holding GMs by private limited companies after coming into force of SS-2. While some of the procedures are already practiced as per the Act, our aim is to provide an overview of the entire process to be followed to hold GMs now.
1. Amended Meeting Process
With effect from July 1, 2015, all Indian companies have to follow the provisions of the Act, their articles of association1 and SS-2 to convene their GMs on or after July 1, 2015. Indian law mandates convening of an annual general meeting ("AGM") within six months of the closing of the financial year to transact ordinary2 and special business.3 The gap between two AGMs should not exceed fifteen months. In case directors fail to convene the AGM, the members may also convene it. The Board or members on requisition4 may call an extra-ordinary general meeting ("EGM"), whenever required to carry out any urgent special business. AGM or EGM on requisition will be held at the registered office or some place within the same city but other EGMs can be convened at any place within India. The section below covers the process for GMs of private limited companies.
(a) Notice and Agenda – The directors have to circulate written notice to all members including directors, auditors and debenture trustees, if any, by hand, post or e-mail at least twenty-one clear5 days prior to the GM. If the company holds a GM at shorter notice for urgent matters, consent of at least 95% percent of the members is required. The company must necessarily maintain proof of dispatch. Notice should contain day, date, time, full address of venue of the GM including the route map and a statement that any individual member can appoint a proxy. Accordingly, a proxy form and attendance slip should be attached with the notice. If the company has a website, notice should be hosted there as well.
Further, the GM must be conducted on any day, except national holiday, during business hours i.e. from 9 am to 6 pm. If it is not held on the date fixed, it may be adjourned and re-convened by giving a notice at least three days before the GM. Further, the notice has to contain an explanatory statement in case of special business stating background of the resolutions.
(b) Quorum – The quorum for a GM is 2 members unless articles change this requirement. Members constituting quorum should be personally present throughout the Meeting. Proxies nominated by individual members are not counted for quorum; however, authorized representative of a body corporate is counted towards quorum. A person authorized by two or more body corporate will be treated as more than one person. However, it is not enough that one authorized representative represent 2 members for the purpose of quorum, at least two individuals should be present. Presence of the member who has already voted by remote e-voting6 also constitutes quorum.
(c) Chairman – The chairman of the board will be the chairman of the GM. If he is absent, the directors will have to elect a chairman from amongst themselves. If none of the directors are present or willing to act as chairman, the members present shall elect one of themselves by show of hands. The chairman's overall job is to ensure the GM is held in a fair and legal manner. In case of equality of votes, he has a casting vote.
(d) Proxies – A member may appoint his proxy to attend GM on his behalf at least 48 hours before the Meeting. Such appointment shall be through a proxy form which shall be duly filled, dated, signed and stamped. A proxy can only act on behalf of up to 50 members at a time so long as the aggregate shareholding represented by such proxy should not exceed 10% of the total share capital of the members carrying voting rights. However, a member holding 10% or more share capital can appoint a single person as proxy but that proxy cannot act on behalf of any other shareholder. Proxy's appointment is valid for both, the original and the adjourned GM, and he should carry a valid identity proof while attending such GMs. A proxy's authority can be revoked in writing anytime before the GM. In case a member who had appointed a proxy also attends the GM, the proxy's authority automatically stands revoked.
(e) Voting – The voting process involves a member proposing a resolution and another member seconding it. An "interested member" cannot vote in any contract in which he is a related party. The company may put all resolutions for voting by show of hands but members or the chairman may demand for poll even after the declaration of result of voting by show of hands. Further, companies having at least 1,000 shareholders can put any resolution for electronic voting or e-voting.
Remote e-voting and ballot at the Meeting – If a company circulates any resolution for e-voting, it will necessarily have to put that resolution for ballot at the GM. E-voting has to remain open for at least three days and should close by 5 p.m. preceding the Meeting day. Members who have already voted on that resolution can attend the GM but cannot vote again. In the event any member has nominated a proxy, such proxy cannot vote by show of hands but only through postal ballot. The Board will decide the last date for casting vote through the e-voting process. Such date should not be earlier than 7 days prior to the meeting date. The notice facilitating e-voting has to be circulated in the same manner as in case of other GMs but it should contain date and time of commencement and closure of e-voting, cut-off date, manner of obtaining log-in ID and password, process for e-voting and ballot at the GM, website address where notice is displayed, details of the concerned person for any grievances related to e-voting and a statement stating that e-voting cannot be allowed after the fixed date and time. It should specifically state that the members who cast their votes through e-voting can attend GM but cannot vote again.
To ensure that e-voting is carried out efficiently, the Board will have to appoint any company secretary, chartered accountant, cost accountant, advocate or any other reputed person to scrutinize the e-voting process. Such appointed person can take assistance of any other person who is not in the employment of the company but aware of the e-voting process. The scrutinizer has to submit his report within 3 days of the conclusion of the GM to the chairman for signatures. The chairman will declare the result of the voting and the number of votes for and against each resolution. He will also display such results including scrutinizer's report on the notice board of the registered and corporate office of the company as well as on its website.
Conduct of poll – Before or after the declaration of result of voting by show of hands, the chairman or the members may demand for poll. In case of poll for appointment of the chairman or adjournment of the GM, the chairman may allow an immediate poll but in other cases, it will be exercised within 48 hours of the demand. One ballot paper may be used for more than one item. The chairman will have to declare the result within 2 days of the submission of scrutinizer's report. It is noteworthy that process for appointment of scrutinizers and declaration of result is the same as for e-voting.
Postal ballot – The company which has more than 200 members can pass the following resolutions only by postal ballot: (a) alteration of object clause but in case of companies incorporated under the Companies Act, 1956, alteration of main objects only; (b) shifting of registered office from one city, town or village to another; (c) issue of shares with differential rights; (d) variation in rights attached to a class of securities; (e) buy-back of shares; (f) appointment of a director by small shareholders; (g) sale of the whole or substantially the whole of an undertaking; (h) giving loans, guarantee or security in excess of limits specified. Notice of the meeting where such resolutions shall be passed should include the postal ballot form and a postage prepaid envelope addressed to the scrutinizer along with the necessary instructions for filling and sending it back. Any resolution passed by postal ballot can only be rescinded by another resolution passed in the same manner.
(f) Minutes – The minutes have to be drafted, finalized and signed by the chairman within 30 days of the GM and entered in the minute book. However, in case the chairman is not able to sign them, any authorized director can sign. All minutes should state the date and place of signature so that no alteration can be made thereafter. The Company Secretary ("CS") or any authorized director if there is no CS, must certify the signed minutes. All resolutions passed through postal ballot should also reflect in the minutes.
SS-2 has supplemented some more provisions for maintenance of minutes such as (i) meetings, resolutions and minute sheets should be serially numbered; (ii) loose-leaf minute sheets should be bound and kept in the safe custody of CS at the registered office or at any other place with board's approval; (iii) minutes must contain company's name, serial number, type, day, date, venue and time at the beginning and conclusion of the GM; (iv) names of directors present in alphabetical order; (v) qualifications or comments on the financial transactions mentioned in auditors' report (vi) proxies and number of shares represented (vii) names of the scrutinisers appointed in case of poll (viii) unambiguous language and fair and correct summary of the noting and resolutions passed.
Further, SS-2 has widened the scope of the maintenance of minutes. Companies can maintain them electronically, but will have to comply with the provisions of "time stamp" i.e. the real time of an event is recorded by a secure computer system.7 The "time stamp" will add the time to a file ensuring compliance with all timelines mentioned in SS-2 and the Act. Electronic minutes have to be digitally signed by chairman.
2. Penalty
SS-2 applies to all types of general meetings including those with debenture-holders and creditors of all companies.8 Failure to comply with SS-2 can result in penalty of INR 25,000 (USD 384 approximately) on the company and INR 5,000 (USD 77 approximately)9 on every officer-in-default. SS-2 supplements the provisions of the Act and if a particular standard or any part thereof becomes inconsistent with the Act due to any amendments, the provisions of the Act shall prevail.
3. Impact and Conclusion
It is clear from the above that the procedure for convening GMs has become more stringent and cumbersome. It now requires a lot more compliances. Closely-held private companies and unlisted public companies have to comply with fairly stringent procedural requirements. The ultimate intent behind these changes is that companies will operate in a consistent and transparent manner and have better disclosures. All this is likely to enhance corporate governance standards and investors' confidence.
Footnotes
1 Table F contains model clauses for company's articles of association. As a matter of practice, most companies typically adopt Table F as it is unless they specifically wish to modify some clauses
2 Business relating to (i) approval and adoption of financial statements, auditors' and directors' report; (ii) declaration of dividend; (iii) appointment of non-retiring directors; and (iv) appointment or ratification or fixing of remuneration of auditors are considered as ordinary business
3 Business other than ordinary business are deemed as special business
4 Meetings by requisition have to be called by members holding at least 1/10th of the total paid-up share capital having voting rights in case of a company having share capital and by members holding 1/10th of the total voting power in cases of companies not having share capital
5 Clear days do not include the day of sending notice and the day of meeting
6 Remote voting is the facility of casting vote electronically from a place other than meeting venue
7 A system reasonably reliable and secured from unauthorized access or misuse. It should be correct and support generally accepted security features
8 The exception is one person companies that have only one director on its Board
9 Section 118(11)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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India: Revised General Meetings Process: Secretarial Standard 2
 |  |  |  |  |  | |
Introduction
The Ministry of Corporate Affairs notified secretarial standard 2 ("SS-2") on April 23, 2015 which came into effect from July 1, 2015. The objective of SS-2 is to ensure good corporate governance and better accountability towards shareholders in all general meetings ("GM"). Section 118(10) of the Companies Act, 2013 ("the Act") imposes an obligation on companies to strictly comply with SS-2 at all times.
This bulletin highlights the process of holding GMs by private limited companies after coming into force of SS-2. While some of the procedures are already practiced as per the Act, our aim is to provide an overview of the entire process to be followed to hold GMs now.
1. Amended Meeting Process
With effect from July 1, 2015, all Indian companies have to follow the provisions of the Act, their articles of association1 and SS-2 to convene their GMs on or after July 1, 2015. Indian law mandates convening of an annual general meeting ("AGM") within six months of the closing of the financial year to transact ordinary2 and special business.3 The gap between two AGMs should not exceed fifteen months. In case directors fail to convene the AGM, the members may also convene it. The Board or members on requisition4 may call an extra-ordinary general meeting ("EGM"), whenever required to carry out any urgent special business. AGM or EGM on requisition will be held at the registered office or some place within the same city but other EGMs can be convened at any place within India. The section below covers the process for GMs of private limited companies.
(a) Notice and Agenda – The directors have to circulate written notice to all members including directors, auditors and debenture trustees, if any, by hand, post or e-mail at least twenty-one clear5 days prior to the GM. If the company holds a GM at shorter notice for urgent matters, consent of at least 95% percent of the members is required. The company must necessarily maintain proof of dispatch. Notice should contain day, date, time, full address of venue of the GM including the route map and a statement that any individual member can appoint a proxy. Accordingly, a proxy form and attendance slip should be attached with the notice. If the company has a website, notice should be hosted there as well.
Further, the GM must be conducted on any day, except national holiday, during business hours i.e. from 9 am to 6 pm. If it is not held on the date fixed, it may be adjourned and re-convened by giving a notice at least three days before the GM. Further, the notice has to contain an explanatory statement in case of special business stating background of the resolutions.
(b) Quorum – The quorum for a GM is 2 members unless articles change this requirement. Members constituting quorum should be personally present throughout the Meeting. Proxies nominated by individual members are not counted for quorum; however, authorized representative of a body corporate is counted towards quorum. A person authorized by two or more body corporate will be treated as more than one person. However, it is not enough that one authorized representative represent 2 members for the purpose of quorum, at least two individuals should be present. Presence of the member who has already voted by remote e-voting6 also constitutes quorum.
(c) Chairman – The chairman of the board will be the chairman of the GM. If he is absent, the directors will have to elect a chairman from amongst themselves. If none of the directors are present or willing to act as chairman, the members present shall elect one of themselves by show of hands. The chairman's overall job is to ensure the GM is held in a fair and legal manner. In case of equality of votes, he has a casting vote.
(d) Proxies – A member may appoint his proxy to attend GM on his behalf at least 48 hours before the Meeting. Such appointment shall be through a proxy form which shall be duly filled, dated, signed and stamped. A proxy can only act on behalf of up to 50 members at a time so long as the aggregate shareholding represented by such proxy should not exceed 10% of the total share capital of the members carrying voting rights. However, a member holding 10% or more share capital can appoint a single person as proxy but that proxy cannot act on behalf of any other shareholder. Proxy's appointment is valid for both, the original and the adjourned GM, and he should carry a valid identity proof while attending such GMs. A proxy's authority can be revoked in writing anytime before the GM. In case a member who had appointed a proxy also attends the GM, the proxy's authority automatically stands revoked.
(e) Voting – The voting process involves a member proposing a resolution and another member seconding it. An "interested member" cannot vote in any contract in which he is a related party. The company may put all resolutions for voting by show of hands but members or the chairman may demand for poll even after the declaration of result of voting by show of hands. Further, companies having at least 1,000 shareholders can put any resolution for electronic voting or e-voting.
Remote e-voting and ballot at the Meeting – If a company circulates any resolution for e-voting, it will necessarily have to put that resolution for ballot at the GM. E-voting has to remain open for at least three days and should close by 5 p.m. preceding the Meeting day. Members who have already voted on that resolution can attend the GM but cannot vote again. In the event any member has nominated a proxy, such proxy cannot vote by show of hands but only through postal ballot. The Board will decide the last date for casting vote through the e-voting process. Such date should not be earlier than 7 days prior to the meeting date. The notice facilitating e-voting has to be circulated in the same manner as in case of other GMs but it should contain date and time of commencement and closure of e-voting, cut-off date, manner of obtaining log-in ID and password, process for e-voting and ballot at the GM, website address where notice is displayed, details of the concerned person for any grievances related to e-voting and a statement stating that e-voting cannot be allowed after the fixed date and time. It should specifically state that the members who cast their votes through e-voting can attend GM but cannot vote again.
To ensure that e-voting is carried out efficiently, the Board will have to appoint any company secretary, chartered accountant, cost accountant, advocate or any other reputed person to scrutinize the e-voting process. Such appointed person can take assistance of any other person who is not in the employment of the company but aware of the e-voting process. The scrutinizer has to submit his report within 3 days of the conclusion of the GM to the chairman for signatures. The chairman will declare the result of the voting and the number of votes for and against each resolution. He will also display such results including scrutinizer's report on the notice board of the registered and corporate office of the company as well as on its website.
Conduct of poll – Before or after the declaration of result of voting by show of hands, the chairman or the members may demand for poll. In case of poll for appointment of the chairman or adjournment of the GM, the chairman may allow an immediate poll but in other cases, it will be exercised within 48 hours of the demand. One ballot paper may be used for more than one item. The chairman will have to declare the result within 2 days of the submission of scrutinizer's report. It is noteworthy that process for appointment of scrutinizers and declaration of result is the same as for e-voting.
Postal ballot – The company which has more than 200 members can pass the following resolutions only by postal ballot: (a) alteration of object clause but in case of companies incorporated under the Companies Act, 1956, alteration of main objects only; (b) shifting of registered office from one city, town or village to another; (c) issue of shares with differential rights; (d) variation in rights attached to a class of securities; (e) buy-back of shares; (f) appointment of a director by small shareholders; (g) sale of the whole or substantially the whole of an undertaking; (h) giving loans, guarantee or security in excess of limits specified. Notice of the meeting where such resolutions shall be passed should include the postal ballot form and a postage prepaid envelope addressed to the scrutinizer along with the necessary instructions for filling and sending it back. Any resolution passed by postal ballot can only be rescinded by another resolution passed in the same manner.
(f) Minutes – The minutes have to be drafted, finalized and signed by the chairman within 30 days of the GM and entered in the minute book. However, in case the chairman is not able to sign them, any authorized director can sign. All minutes should state the date and place of signature so that no alteration can be made thereafter. The Company Secretary ("CS") or any authorized director if there is no CS, must certify the signed minutes. All resolutions passed through postal ballot should also reflect in the minutes.
SS-2 has supplemented some more provisions for maintenance of minutes such as (i) meetings, resolutions and minute sheets should be serially numbered; (ii) loose-leaf minute sheets should be bound and kept in the safe custody of CS at the registered office or at any other place with board's approval; (iii) minutes must contain company's name, serial number, type, day, date, venue and time at the beginning and conclusion of the GM; (iv) names of directors present in alphabetical order; (v) qualifications or comments on the financial transactions mentioned in auditors' report (vi) proxies and number of shares represented (vii) names of the scrutinisers appointed in case of poll (viii) unambiguous language and fair and correct summary of the noting and resolutions passed.
Further, SS-2 has widened the scope of the maintenance of minutes. Companies can maintain them electronically, but will have to comply with the provisions of "time stamp" i.e. the real time of an event is recorded by a secure computer system.7 The "time stamp" will add the time to a file ensuring compliance with all timelines mentioned in SS-2 and the Act. Electronic minutes have to be digitally signed by chairman.
2. Penalty
SS-2 applies to all types of general meetings including those with debenture-holders and creditors of all companies.8 Failure to comply with SS-2 can result in penalty of INR 25,000 (USD 384 approximately) on the company and INR 5,000 (USD 77 approximately)9 on every officer-in-default. SS-2 supplements the provisions of the Act and if a particular standard or any part thereof becomes inconsistent with the Act due to any amendments, the provisions of the Act shall prevail.
3. Impact and Conclusion
It is clear from the above that the procedure for convening GMs has become more stringent and cumbersome. It now requires a lot more compliances. Closely-held private companies and unlisted public companies have to comply with fairly stringent procedural requirements. The ultimate intent behind these changes is that companies will operate in a consistent and transparent manner and have better disclosures. All this is likely to enhance corporate governance standards and investors' confidence.
Footnotes
1 Table F contains model clauses for company's articles of association. As a matter of practice, most companies typically adopt Table F as it is unless they specifically wish to modify some clauses
2 Business relating to (i) approval and adoption of financial statements, auditors' and directors' report; (ii) declaration of dividend; (iii) appointment of non-retiring directors; and (iv) appointment or ratification or fixing of remuneration of auditors are considered as ordinary business
3 Business other than ordinary business are deemed as special business
4 Meetings by requisition have to be called by members holding at least 1/10th of the total paid-up share capital having voting rights in case of a company having share capital and by members holding 1/10th of the total voting power in cases of companies not having share capital
5 Clear days do not include the day of sending notice and the day of meeting
6 Remote voting is the facility of casting vote electronically from a place other than meeting venue
7 A system reasonably reliable and secured from unauthorized access or misuse. It should be correct and support generally accepted security features
8 The exception is one person companies that have only one director on its Board
9 Section 118(11)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Suri Sons vs. ACIT (ITAT Amritsar)
| COURT: | ITAT Amritsar |
| CORAM: | A. D. Jain (JM), Pramod Kumar (AM) |
| SECTION(S): | 10(10D), 37(1) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | keyman insurance |
| COUNSEL: | Y. K. Sud |
| DATE: | August 31, 2015 (Date of pronouncement) |
| DATE: | September 11, 2015 (Date of publication) |
| AY: | 2006-07 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 10(10D): Keyman Insurance: Even a "United Linked Endowment Assurance Plan" with the main object of guaranteed returns rather than life insurance is a "keyman insurance" as defined in s. 10(10D). The fact that policy was not termed as a "keyman insurance" and the fact that the IRDA Guidelines disapproved the issue of such policies is irrelevant | |
Related Judgements
- Capsugel Healthcare Limited vs. ACIT (ITAT Delhi) Even though a transfer pricing adjustment under section 92CA(1) was made to the income of the assesse, and accordingly the assessee is covered by the provisions of Section 144C(15), the Assessing Officer did not furnish to the assessee a draft…Read more ›
- DCIT vs. Aakash Arogya Mindir P.Ltd (ITAT Delhi) On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be "satisfied" that inter alia any document seized or requisitioned "belongs to" a person other than the searched person. It is…Read more ›
- B.T. Patil & Sons Belgaum Constructions Pvt. Ltd vs. ACIT (ITAT Pune) The view of the Larger Bench that the assessee had to be directly engaged in developing, maintaining and operating the facility and that there had to be a complete development of the facility and not just a part of it is contrary to the law laid down in ABG…
- ACIT vs. NHPC Ltd (ITAT Delhi) This is a land taken for use from the State government without transferring the title for relief and rehabilitation for land evacuees because of submerges and where construction of such alternative facility is a condition for setting up a project.…Read more ›
- B. T. Patil & Sons vs. ACIT (ITAT Mumbai Larger Bench) s. 80-IA (4) (even pre-amendment) applies to a "developer". The difference between a "developer" and "contractor" is that the former designs and conceives new projects while the latter executes the same. As the assessee was merely executing the job of civil construction, it was not eligible u/s 80-IA (4)….
 | Suri Sons vs. ACIT (ITAT Amritsar)by editor |
| Comment | See all comments |
Shreelekha Damani vs. DCIT (ITAT Mumbai)
| COURT: | ITAT Mumbai |
| CORAM: | N. K. Billaiya (AM), Vijay Pal Rao (JM) |
| SECTION(S): | 153A, 153D |
| GENRE: | Domestic Tax |
| CATCH WORDS: | sanction, Search assessment |
| COUNSEL: | J.D. Mistri |
| DATE: | August 19, 2015 (Date of pronouncement) |
| DATE: | September 11, 2015 (Date of publication) |
| AY: | 2007-08 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 153A/ 153D: Approval to the assessment order granted by the Addl. CIT in a casual and mechanical manner and without application of mind renders the assessment order void | |
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- CIT vs. Akil Gulamali Somji (Bombay High Court) Though the question raised proceeds on the basis that approval of the JCIT was given as he had corrected the draft assessment order and the changes were incorporated by the AO in the final assessment order, the finding of fact was recorded by the Tribunal is that no prior…
- Akil Gulamali Somji vs. ITO (ITAT Pune) S. 153C authorises the AO to exercise jurisdiction over any person in whose case incriminating material has been found during the course of search conducted on another person. S. 153D provides that no order of assessment shall be passed by an AO below the rank of Joint Commissioner except…
- Ghanshyam K. Khabrani vs. ACIT (Bombay High Court) There is merit in the contention of the assessee that the requirement of s. 151(2) could have only been fulfilled by the satisfaction of the JCIT that this is a fit case for the issuance of a notice u/s 148. S. 151(2) mandates that the satisfaction has to be…
- DCIT vs. Damani Estates & Finance Pvt. Ltd (ITAT Mumbai) S. 14A/ Rule 8D: Scope in the context of shares held as stock-in-trade explainedS. 14A gets attracted on incurring of expenditure in relation to tax-exempt income. The purpose for which the shares are purchased and held would not impact the applicability of s. 14A. S. 14A comes into play…
- Amarlal Bajaj vs. ACIT (ITAT Mumbai) S. 147/ 151: Merely writing "approved" in the sanction form without recording satisfaction renders the reopening voidS. 147 and 148 are a charter to the Revenue to reopen earlier assessments and are, therefore protected by safeguards against unnecessary harassment of the assessee. They are sword for the Revenue and…
| | Shreelekha Damani vs. DCIT (ITAT Mumbai)by editor |
| Comment | See all comments |
ACIT vs. Kamlakar Moghe (Bombay High Court)
| COURT: | Bombay High Court |
| CORAM: | B. P. Dharmadhikari J, P. N. Deshmukh J |
| SECTION(S): | 49(1), 54EC |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital gains, exemption |
| COUNSEL: | N. S. Bhattad |
| DATE: | September 4, 2015 (Date of pronouncement) |
| DATE: | September 11, 2015 (Date of publication) |
| AY: | - |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 54EC: If REC Bonds are not available during the prescribed period, time for investment has to be extended. Fact that NHAI Bonds were available is irrelevant. Amount paid to sisters as per family arrangement for permitting transfer of property is decutible u/s 49(1) | |
Related Judgements
- CIT vs. Cello Plast (Bombay High Court) The department's contention that the assessee ought to have invested in the period that the s. 54EC bonds were available (1.7.2006 to 3.8.2006) after the transfer is not well founded. The assessee was entitled to wait till the last date (21.9.2006) to invest in the bonds. As of that…
- Mahesh Nemichandra Ganeshwade vs. ITO (ITAT Pune) Though s. 54EC requires the investment to be made within 6 months of the date of transfer, a technical interpretation cannot be adopted but it has to be interpreted having regard to the purpose and spirit of the section. In Circular No 791 dated 2.6.2000 the CBDT held in…
- CIT vs. C. Jaichander (Madras High Court) (i) On a plain reading of Section 54EC(1) of the Act it is clear that it restricts the time limit for the period of investment after the property has been sold to six months. There is no cap on the…Read more ›
- Aspi Ginwala vs. ACIT (ITAT Ahmedabad) The Proviso to s. 54EC provides that the investment made in a long term specified asset by an assessee "during any financial year" should not exceed Rs. 50 lakhs. It is clear that if the assessee transfers his capital asset after 30th September of the financial year he gets…
- Kumarpal Amrutlal Doshi vs. DCIT (ITAT Mumbai) When a payment is made by cheque, then the 'date of payment' is the 'date of the cheque' even though the cheque may be encashed subsequently. As the cheque was issued within 6 months of the transfer, s. 54EC relief was available even though the cheque was encashed, and…
| | ACIT vs. Kamlakar Moghe (Bombay High Court)by editor |
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Shreds NSE's defamation suit against Moneylife to pieces; Appreciates media's 'watchdog' role
Bombay HC dismisses defamation suit filed by National Stock Exchange ('NSE') against Moneywise Media Pvt. Ltd., and their editors Ms. Sucheta Dalal, Mr. Debashish Basu ('defendants'), imposes Rs. 50 lakh costs on NSE; Defamation suit was filed pursuant to an article published in their monthly journal about NSE actively permitting illicit trading using high-end technology; HC notes that before article publication, the defendants had emailed, sent reminders to SEBI and NSE Chairman, seeking their responses, holds that 'it is not a query from any person from the public' but a query from much-decorated and highly regarded journalist (Ms. Sucheta Dalal) in financial sectors, who first took trouble to make her own investigations and solicit regulators' views; Rejects NSE's claim that it has no duty to respond to wild or reckless allegation made by defendant, holds that "when such enquiries are made by a person who has an established track record, not to respond to it seems to me either to be an example of the most egregious hubris and arrogance or, alternatively, an admission that there is an element of truth in what was being said. There is no third alternative"; HC observes that there is no direct question of 'freedom of press' / 'free speech', holds that "defamation action should not be allowed to be used to negate / stifle genuine criticism, even pointed criticism / criticism that is harshly worded; nor should it be allowed to choke a fair warning to the public if its interest stands threatened in some way....Every criticism is not defamation, every person criticized is not defamed .... Defamation law is not to be used to gag, to silence, to suppress, to subjugate"; Appreciates the role of media, journalists, editors, newspapers and TV news anchors in leaking scams, holds that "it is fashionable these days to deride every section of media as mere papparazzi, chasing the salacious and steamy.... but for them the many uncomfortable questions that must be asked of those in authority and those with the sheer muscle power of money would forever go unasked and unanswered. We forget that it is these persons we are so wont to mock who are, truly, the watchdogs of our body politic, the voice of our collective conscience, the sentinels on our ramparts."; States that NSE should be more transparent, accountable and open in its actions, dealing and operations, as it is a public institution, holds "it seems strangely like a claim to the kind of infallibility best left to divinities not mortal institutions and, as our mythology tells us, even our divinities have their foibles and failings. The NSE expects respect. That is to be earned. It is not to be torn out of the throats of public the NSE is meant to serve..... NSE is a custodian if not of public funds then at least of an undeniable public trust":Bombay HC
Tata's 'high deposit demand' for Indica bookings not 'unfair-trade-practice', quashes MRTP Commission order
SC set asides MRTP Commission's order that held Tata Engineering and Locomotive Company Ltd (manufacturer of Indica cars, 'appellant') guilty of unfair trade practice by demanding high deposit (exceeding basic price, including excise & sales tax) for Indica car booking; Observes that Commission was influenced by Director of Research's conclusion that appellant should not have asked for deposit of such a heavy amount as it was unfair to keep excise and sales tax with itself at any time; Holds that, "such conclusion of the Commission is based only upon subjective considerations of fairness and did not pass the objective test of law as per precise definitions under Section 36A of the Act (which defines 'unfair trade practice)"; Notes that there were no specific allegations in Commission's Notice of Enquiry which indicated that there was presence of any unfair trade practice, yet Commission held appellant guilty of such practice, states that, "The Commission could not have travelled beyond the specific allegations in the Notice of Enquiry because such a course would violate rules of fairness and natural justice"; Relies on SC ruling in M/s Lakhanpal National Limited vs. M.R.T.P. Commission and Another:SC
RBI allows resident importers to raise trade credit in INR, prescribes framework
With an intention to provide greater flexibility for structuring trade credit arrangements, RBI permits resident importer to raise trade credit in Rupees (INR) within a prescribed framework after entering into a loan agreement with the overseas lender; RBI states that: (i) Trade credit can be raised for import of all items (except gold) permissible under extant Foreign Trade Policy, (ii) Trade credit period for import of non-capital goods can be upto 1 year and for import of capital goods can be upto 5 years, (iii) No roll-over / extension can be permitted by AD Category Bank beyond the permissible period, AD Category Banks can permit trade credit upto USD 20 mn equivalent per import transaction; States that AD Banks are permitted to give Guarantee / Letter of Undertaking / Letter of Comfort in respect of trade credit for a maximum period of 3-years from date of shipment, the all-in-cost of INR denominated trade credit should be commensurate with prevailing market conditions: RBI
RBI exempts Authorised Dealer Banks from quarterly reporting on EEFC's loans/advances
With a view to liberalise procedure, RBI exempts Authorised Dealer Banks from quarterly reporting of transactions relating to loans / advances from Exchange Earners' Foreign Currency (EEFC) to RBI's Regional Office: RBI
Anjuly Chib Duggal appointed Director on RBI's Central Board
Central Govt. nominates Ms. Anjuly Chib Duggal (Secretary, Department of Financial Services, Ministry of Finance) as Director on Central Board of Directors of RBI w.e.f. September 3, 2015: RBI
RBI issues updated Master Circular on Memorandum of Instructions governing money changing activities
RBI issues updated Master Circular on Memorandum of Instructions governing money changing activities (as on September 10, 2015)
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