S. 80-IB(10): If developer does not (without just cause) develop to full extent of FSI, a part of the sale proceeds has to treated as being for sale of FSI and denied s. 80-IB(10) deduction
The assessee, engaged in development of housing projects, constructed a residential project. Though total FSI of 15312 sq. meters was available for construction, the assessee utilized only 3573 sq. meters. The residential units were constructed only on the ground floor. The said residential units were sold and the entire surplus was claimed u/s 80-IB(10) as profits derived from activity of developing housing project. The AO and CIT(A) held that a part of the consideration received by the developer was relatable to the unutilized FSI and had to be excluded from the profits eligible for s. 80-IB(10) deduction. However, the Tribunal upheld the assessee's claim on the basis that the assessee was not compelled to construct upto the maximum FSI and that it had satisfied all the other conditions of s. 80-IB(10). On appeal by the department to the High Court HELD reversing the Tribunal:
(i) For any commercial activity of construction, be it residential or commercial complex maximum utilization of FSI is of great importance to the developer. Ordinarily, therefore, it would be imprudent for a developer to underutilize available FSI. Sale price of constructed properties is decided on the built up area. It can thus be seen that given the rate of constructed area remaining same, non-utilization of available FSI would reduce the profit margin of the developer. When a developer therefore utilizes only say 25% of FSI and sells the unit leaving 75% FSI still available for construction, he obviously works out the sale price bearing in mind this special feature. Thus, therefore, when a developer constructs residential unit occupying a fourth or half of usable FSI and sells it, his profits from the activity of development and construction of residential units and from sale of unused FSI are distinct and separate and rightly segregated by the AO;
(ii) It is true that s. 80IB(10) does not provide that for deduction, the undertaking must utilize 100% of the FSI available. The question however is, can an undertaking utilize only a small portion of the available area for construction, sell the property leaving ample scope for the purchaser to carry on further construction on his own and claim full deduction u/s 80IB(10) on the profit earned on sale of the property? If this concept is accepted, in a given case, an assessee may put up construction of only 100 sq. ft. on the entire area of one acre of plot and sell the same to a single purchaser and claim full deduction on the profit arising out of such sale u/s 80IB(10) of the Act. Surely, this cannot be stated to be development of a housing project qualifying for deduction u/s 80IB(10);
(iii) This is not to suggest that for claiming deduction u/s 80IB (10), invariably in all cases, the assessee must utilize the full FSI and any shortage in such utilization would invite wrath of the claim u/s 80IB(10), being rejected. The issue has to be seen from case to case basis. Marginal under-utilization of FSI certainly cannot be a ground for rejecting the claim u/s 80IB(10). Even if there has been considerable under-utilization, if the assessee can point out any special grounds why the FSI could not be fully utilized, such as, height restriction because of special zone, passing of high tension electric wires overhead, or any such similar grounds to justify under utilization, the case may stand on a different footing. However, in cases where the utilization of FSI is way short of the permissible area of construction, looking to the scheme of s. 80IB(10) and the purpose of granting deduction on the income from development of housing projects envisaged thereunder, bifurcation of such profits arising out of such activity and that arising out of the net sell of FSI must be resorted to. On facts, none of the assessees have made any special ground for non-utilization of the FSI.
IT: Where assessee had not applied for compounding of offence by a written request in prescribed proforma as per guidelines issued by CBDT, assessee was to be permitted to submit appropriate application, which was to be disposed of on merits after giving an opportunity of personal hearing to assessee
■■■
[2013] 36 taxmann.com 559 (Madras)
HIGH COURT OF MADRAS
V.G. Paneerdas & Co. (P.) Ltd.
v.
Secretary, Central Board of Direct Taxes*
M. JAICHANDREN, J.
WRIT PETITION NO. 19136 OF 2012
M.P. NO. 1 OF 2012
M.P. NO. 1 OF 2012
AUGUST 22, 2012
Section 276CC, read with section 271(1)(a), of the Income-tax Act, 1961 - Offence and prosecution - Failure to furnish return of income [Compounding of offence] - Assessment year 1987-88 - Assessee filed belated return for which Assessing Officer imposed penalty under section 271(1)(a) - On appeal, levy of penalty was cancelled - Subsequently, Assessing Officer invoked section 276CC for prosecution on ground of wilful failure to file return of income within time prescribed - Assessee's appeal for compounding of offence was rejected on ground that assessee was a habitual defaulter and compounding could not be done where conviction order had been passed - Whether, where assessee had not applied for compounding of offence by a written request in prescribed proforma as per guidelines issued by CBDT, assessee was to be permitted to submit appropriate application, which was to be disposed of on merits after giving an opportunity of personal hearing to assessee - Held, yes [Para 10] [In favour of assessee]
S. Sridhar for the Petitioner. Ramasamy K. for the Respondent.
JUDGMENT
1. Heard the learned counsel for the petitioner, as well as the learned counsel appearing on behalf of the respondents.
2. It has been stated that the petitioner company had filed a belated return of income, on March 26, 1990, for the assessment year 1987-88. The petitioner company had shown the taxable total income as Rs. 6,281, which had been revised as Rs. 24,998, at the time of the assessment. Acting on the revised statement of taxable total income, the fifth respondent had computed the taxable total income at Rs. 1,32,100, in the assessment passed, under section 143(3) of the Income-tax Act, 1961, on December 23, 1990. In the said assessment order the expenses claimed by the petitioner had been disallowed and added back in the computation of taxable total income, for want of proper vouchers.
3. It has been further stated that the petitioner had filed an appeal against the assessment order passed by the fifth respondent, before the Commissioner of Income-tax (Appeals) I, Chennai, on February 22, 1991, with a prayer to condone the delay in filing the said appeal. By an order dated June 26, 1991, in I. T. A. No. 257/1990-91, the first appellate authority had condoned the delay in filing the appeal and had granted partial relief to the petitioner. The said order had been given effect to by the fifth respondent on July 3, 1991, and the taxable total income had been revised as Rs.91,230. Thereafter, the fifth respondent had passed another order, on October 22, 1991, determining the taxable total income of the petitioner as Rs. 55,600, by granting the relief, as ordered by the first appellate authority.
4. It has been further stated that the Joint Commissioner of Income-tax, Special Range VII, Chennai, the Assessing Officer had passed another order, for the assessment year 1987-88, determining the taxable total income as Rs. nil, after adjustment of the carried forward losses of the earlier years. It has been further stated that the parallel penalty proceedings, initiated under section 271(1)(a) of the Income-tax Act, 1961, for the belated filing of the return of income, for the assessment year 1987-88, was objected to by the petitioner. The fifth respondent, on considering the objections filed by the petitioner, dated November 4, 1991, had proceeded to levy a penalty of Rs. 20,683, for the delay in the filing of the return, by the petitioner, by an order, dated January 20, 1991.
5. It has been further stated that the appeal filed by the petitioner, belatedly, challenging the levy of penalty, under section 271(1)(a) of the Income-tax Act, 1961, for the assessment year 1987-88, had been admitted by the Commissioner of Income-tax (Appeals) I, Chennai, and on considering the reasonable cause shown by the petitioner the said authority had granted the substantial relief, in his order passed in I. T. A. No. 226 of 1991-92. The said order had been given effect to, by the fifth respondent, on August 24, 1992.
6. It has been further stated that, due to the default committed by the petitioner company, in the filing of the return of income, for the assessment year 1987-88, as per the provisions of section 139(1) of the Act, it had been issued with a show-cause notice, under section 276CC of the Act. In the said show-cause notice the petitioner had been asked to show cause as to why it should not be prosecuted, along with its directors, for willfully failing to file its return of income within the time prescribed by the statute. The prosecution, under section 276CC of the Act, for the assessment year 1987-88, had been sanctioned by the third respondent, vide his order, dated March 20, 1991. Accordingly, a complaint for an offence under section 276CC of the Income-tax Act, 1961, had been filed, by the fifth respondent, before the court of the Additional Chief Metropolitan Magistrate, Economic Offences I, Egmore, Chennai, in E. O. C. C. No. 160/1991. While so, the petitioner had moved an application, dated October 10, 1997, before the second respondent, for the compounding of the offence, under section 276CC of the Act. The petitioner had also filed a letter of willingness to pay the compounding fee of Rs. 58,730. In the meantime, the trial court had adjudicated the complaint filed by the fifth respondent, vide its judgment, dated December 31, 1998. An appeal had been filed challenging the judgment of the trial court, dated December 31, 1998, before Principal Sessions Court, Chennai, by way of a criminal appeal, in C. A. No. 15 of 1999, and the said appeal is still pending on the file of the Sessions Court, Chennai. However, during the pendency of the said criminal appeal the petitioner had approached the Chief Commissioner of Income-tax, Chennai, the second respondent herein, on April 3, 2000, in terms of section 279(2) of the Income-tax Act, 1961, for compounding the offence, relating to the assessment year 1987-88. A reminder had also been submitted in the office of the Chief Commissioner of Income-tax, Chennai, on October 4, 2002, with regard to the compounding of the offence. Another letter, dated October 10, 2003, had also been submitted for the said purpose.
7. It had been further stated that a petition, in Crl. O. P. No. 39229 of 2003, had been filed before this court to direct the respondents, to consider the request of the petitioner for compounding the offence, as per its representation made on October 4, 2002. This court had passed an order, dated November 14, 2003, stating that the second respondent therein may consider the representation made by the petitioner, on October 4, 2002, and pass suitable orders, in accordance with law. Thereafter, the petitioner had filed a writ petition, before this court, in W. P. No. 33770 of 2003, for issuing a direction, directing the Chief Commissioner of Income-tax, Chennai, to consider and dispose of the petition, filed by the petitioner, for compounding the offence. By its order, dated November 21, 2003, this court had directed the Chief Commissioner of Income-tax to consider and pass appropriate orders on the representation submitted by the petitioner, in accordance with law. Pursuant to the said direction, the Joint Director of Income-tax (Prosecution), Chennai, had passed an order, on December 30, 2003, rejecting the request of the petitioner for compounding the offence stating that the petitioner was a habitual defaulter in filing the returns of income for the assessment years, from 1974-75 to 1990-91. Thereafter, the petitioner had filed a review petition before the Chief Commissioner of Income-tax, Chennai, to review and to reconsider the request of the petitioner for compounding the offence. The said petition had been disposed of, on September 16, 2011, stating that, as per paragraph 4.4 of the guidelines, dated May 16, 2008, compounding cannot be done in cases where a conviction order had been passed. However, it had been learnt, by way of the information obtained, under the Right to Information Act, 2005, that a number of applications had been entertained for the compounding of the offences, after conviction orders had been passed. In such circumstances, the petitioner has preferred the present writ petition, before this court, under article 226 of the Constitution of India.
8. The learned counsel appearing on behalf of the petitioner had submitted, inter alia, that there is no bar for considering the request of the petitioner for compounding the offence, even if the petitioner had been convicted. The learned counsel had further submitted that a criminal appeal has also been filed against the order of conviction and it is still pending. While so, this court may be pleased to direct the first respondent to entertain the request of the petitioner for compounding the offence, in view of the decision of a Division Bench of this court, in Chairman, CBDT v. Smt. Umayal Ramanathan [2009] 313 ITR 59.
9. No counter-affidavit had been filed on behalf of the respondents. However, the learned counsel appearing on behalf of the respondents, had submitted that the petitioner had not applied for the compounding of the offence, as per the revised guidelines issued by the office of the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, dated May 16, 2008, for the compounding of offences, under the provisions of the direct tax laws. In fact, the assessee should have made a written request for the compounding of the offence, in the prescribed pro forma, as provided under paragraph 4.4.1 of the said guidelines. The petitioner should also have satisfied the other conditions contained in the said guidelines, for the compounding of the offence. Even though the guidelines prescribe that certain cases should not be compounded, normally, it is for the petitioner to show sufficient cause or reason to support his request for the compounding of the offence, based on the request made by the petitioner.
10. In such circumstances, this court finds it appropriate to set aside the impugned order of the second respondent, dated September 16, 2011, rejecting the plea of the petitioner for reviewing the order passed earlier, rejecting the request of the petitioner for the compounding of the offence, under section 276CC of the Income-tax Act, 1961, relating to the assessment year 1987-88. The petitioner is permitted to submit an appropriate application, before the second respondent, in the format prescribed in the guidelines issued by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, dated May 16, 2008, for the compounding of the offence. The petitioner shall submit such an application, within a period of four weeks from the date of receipt of a copy of this order. On receipt of the application to be submitted by the petitioner the second respondent shall consider the same and pass appropriate orders thereon, on the merits and in accordance with law, as expeditiously as possible, after giving an opportunity of personal hearing to the authorized representative of the petitioner. The writ petition is ordered accordingly. No costs.
P. SENRegards,
Pawan Singla , LLB
M. No. 9825829075Manual filing and processing of Bills of Entry / Shipping Bills – stringent checks required to prevent misuse – regarding
Instruction No. F. No. 401/81/2011-Cus.III, Dated 7th April, 2014
Subject: Manual filing and processing of Bills of Entry / Shipping Bills – stringent checks required to prevent misuse – regarding.
Attention is invited to Board's instructions of even no. dated 04.05.2011, read with Corrigendum dated 12.05.2011 on the subject mentioned above.
2. As per the referred instruction, the Board had taken a serious note of the possibility of misuse of the facility of manual filing and processing of import/export documents, which was being allowed by the field formations. Accordingly, it had been instructed that this should not be allowed except in exceptional and genuine cases where the electronic filing and processing of import/export documents is not feasible. Moreover, it was pointed out that in terms of Sections 46 and 50 of the Customs Act, 1962, the authority to allow manual filing and processing of documents rests with the Commissioner of Customs only. It is, however, noticed that despite this strict instruction, some field formations particularly vulnerable outlying CFSs/ ICDs are still routinely allowing importers/exporters to file the documents manually. This violation of the Board's instruction is not acceptable.
3. The Board hereby directs that the facility of manual filing and processing of import/export documents shall be permitted by the Commissioner of Customs strictly in accordance with the legal provisions, read with Board's instructions on the subject. It shall be the responsibility of the supervisory officers to ensure without fail that these instructions are adhered to by all concerned.
Yours faithfully
(R.P.Singh), Director (Customs)
Regarding improving the departmental representation in High Court/CESTAT
CBEC Instruction No. F.No.275/30/2014-CX.8A, Dated – 3rd April, 2014
Subject:- Improving the departmental representation in High Court/CESTAT-reg.
I am directed to invite attention to the Interim Order No. IO/E/795-802/2013-EX(DB), dated 18-12-2013 of the Principal Bench of CESTAT, New Delhi. Vide para 9 of the said order dated 18-12-2013 the bench observed "it is high time for revenue to rise to the occasion and reduce its litigation without burdening the Tribunal to list the matters frequently in cause list to know status of compliance to stay orders. Aforesaid scenario exhibits laxity of the Commissioners to pursue the litigations before the High Courts. Therefore we direct the Registrar to send a copy of this order expeditiously to the Revenue Secretary, Ministry of Finance for appropriate action so that Revenue shall be litigation free and its blocked revenue shall be realized as early as possible".
2. The aforesaid observations were made by the Bench in the context of various orders of pre-deposit made by it as per table below, and the failure of the department to ensure the compliance of the same, when the matter was posted on 18-12-2013.
Table
| S. No. | Appeal No. | Order of Tribunal on stay application | Order of High Court | Remarks of the Tribunal |
| 1. | E/2665/2008 | Pre-deposit of Rs. 7.5 lakhs ordered on 15-1-2013 | Dated 21-3-2013 in CA 33/13 | High Court while directing the Tribunal not to dismiss the appeal for non-compliance, the department was directed to file the Counter, which it had not done on time. |
| 2. | E/314/2010 | 29-1-2010 | Matter still pending in High Court vide Misc Single No. 224/2011. | |
| 3. | E/2238/2010 | Pre-deposit of Rs 55 lakhs ordered on 23-8-2012 | Dated 25-7-2013 in CA No. 43/2013 | High Court ordered deposit of 50% of the duty amount without specifying any time period for deposit. Although the appellant admitted the liability as Rs. 30 lakh, only Rs. 21 lakh had been deposited. Revenue is causal in the matter. |
| 4. | E/593/2011 | Stay granted in respect of penalty amount only on 23-3-2012, whereas no stay was given in respect of duty demand of Rs 4,40,72,632. | Dated 26-11-2012 in CEXA No. 2/2012 | The High Court has stayed recovery on undertaking to be given by the appellant through its Counsel that it will pay the demand due in case of losing its case. Revenue not able to give latest status of the case. |
| 5. | E/55166/2013 | Pre-deposit of 50% of duty element ordered on 14-3-2013 | Dated 1-5-2013 in CA No. 76/2013 | The High Court ordered that the Tribunal will not dismiss the appeal for want of compliance. Department was directed to file the Counter within 3 weeks. DR had no instruction as to the status of appeal before High Court. |
3. In all the above cases when the matter was listed before the CESTAT, for reporting compliance, the department was found lacking in its effort to get the matters disposed in the High Court and some of the cases, the departmental representative had not been kept informed of the latest status of the cases, and thereby could not satisfy the queries of the Bench.
4. After considering the various reasons given by the field formations for the various lapses observed by the Tribunal in its above referred order, Secretary (Revenue) has noted that there was failure on the part of the departmental officers either in coordinating with the departmental Counsels or there was delay in responding to the directions of the High Court/CESTAT or even keeping the AR updated. After analyzing all the deficiencies, Secretary(Revenue) has directed that departmental officers should follow up each of the cases in Court with our Standing Counsels, who will need proper directions and briefing.
5. The above observations of the Tribunal and Secretary(Revenue) are brought to the knowledge of all the concerned so that Chief Commissioners/Commissioners introduce a proper system of monitoring and handling the litigation at the field level to prevent delays in responding to the directions of the Courts/CESTAT.
6. It is also directed that pre-deposit orders are followed up for compliance and the office of the concerned Commissioner (AR) kept informed of all developments in the matter.
7. The receipt of these instructions be acknowledged.
This issues with the approval of Member(L&J), CBEC.
Your Faithfully,
Rajendra Kumar, OSD (Legal)
MCA Press Release No. 2/2010 on Implementation of IFRS dated 22.01.2010
PRESS RELEASE
A meeting of the Core Group constituted by the Ministry of Corporate Affairs for convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) from the year 2011 was held on 11th January, 2010 under the chairmanship Shri R. Bandyopadhyay, Secretary, Ministry of Corporate Affairs. The meeting was attended by the officials from Ministry of Finance, SEBI, RBI, IRDA, C&AG, PFRDA, ICAI, Industry representatives and other experts.
2. The Group agreed that in view of the roadmap for achieving convergence, there will be two separate sets of Accounting Standards u/s Section 211(3C) of the Companies Act, 1956. First set would comprise of the Indian Accounting Standards which are converged with the IFRSs which shall be applicable to the specified class of companies. The second set would comprise of the existing Indian Accounting Standards and would be applicable to other companies, including Small and Medium Companies (SMCs).
3. The first set of Accounting Standards (i.e. converged accounting standards) will be applied to specified class of companies in phases:-
(a) Phase-I:- The following categories of companies will convert their opening balance sheets as at 1st April, 2011, if the financial year commences on or after 1st April, 2011 in compliance with the notified accounting standards which are convergent with IFRS. These companies are:-
a. Companies which are part of NSE – Nifty 50
b. Companies which are part of BSE – Sensex 30
c. Companies whose shares or other securities are listed on stock exchanges outside India
d. Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores.
(b) Phase-II :- The companies, whether listed or not, having a net worth exceeding Rs. 500 crores but not exceeding Rs. 1,000 crores will convert their opening balance sheet as at 1st April, 2013, if the financial year commences on or after 1st April, 2013 in compliance with the notified accounting standards which are convergent with IFRS.
(c) Phase-III :- Listed companies which have a net worth of Rs. 500 crores or less will convert their opening balance sheet as at 1st April, 2014, if the financial year commences on or after 1st April, 2014, whichever is later, in compliance with the notified accounting standards which are convergent with IFRS
When the accounting year ends on a date other than 31st March, the conversion of the opening Balance Sheet will be made in relation to the first Balance Sheet which is made on a date after 31st March.
4. Companies which fall in the following categories will not be required to follow the notified accounting standards which are converged with the IFRS (though they may voluntarily opt to do so) but need to follow only the notified accounting standards which are not converged with the IFRS. These companies are: -
(a) Non-listed companies which have a net worth of Rs. 500 crores or less and whose shares or other securities are not listed on Stock Exchanges outside India.
(b) Small and Medium Companies (SMCs).
5. Separate roadmap for banking and insurance companies will be submitted by the Sub Group I in consultation with the concerned regulators by 28th February, 2010.
6. The draft of the Companies (Amendment) Bill, proposing for changes to the Companies Act, 1956 will be prepared by February, 2010 incorporating the recommendation of Sub-Group 1 Report.
7. Revised Schedule VI to the Companies Act, 1956 according to the converged Accounting Standards has been submitted by the ICAI to NACAS which, after review, will submit to the Ministry by 31st January, 2010. Amendments to Schedule XIV will also be made in a time bound manner.
8. In respect of the converged Accounting Standards, the Chairman of the Accounting Standards Board of ICAI will submit the converged version of Accounting Standards to NACAS from time to time for recommendations and onward submission to Ministry. However, convergence of all the accounting standards will be competed by ICAI by 31st March, 2010 and NACAS will submit its recommendations to the Ministry by 30th April 2010.
PRESS RELEASE – 2/2010
No. 1/1/2009-IFRS
Dated the 22nd January, 2010
Ministry of Corporate Affairs
The Press Information Officer, Press Information Bureau, Ministry of Information and Broadcasting, with the request that the above mentioned Press Note may be given wide publicity.
(Renuka Kumar)
Joint Secretary to the Government of India
Tel: 23074056
MCA Press Release No. 3/2010 on Implementation of IFRS Dated 31st March, 2010
PRESS RELEASE
A meeting of the Core Group constituted by the Ministry of Corporate Affairs for convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) from the year 2011 was held on 29th March, 2010 under the chairmanship of Shri R. Bandyopadhyay, Secretary, Ministry of Corporate Affairs. The meeting was attended by the officials from Ministry of Finance, SEBI, RBI, IRDA, C&AG, PFRDA, ICAI, Industry representatives and other experts.
2. The Core Group referred to the Roadmap for Convergence agreed to by it in its meeting held on 11th January, 2010 in respect of companies, other than insurance companies, banking companies and Non-Banking Finance Companies. Such Roadmap was brought to the knowledge of all stakeholders through the Press Release issued by this Ministry on 22nd January, 2010.
3. In the meeting held on 29th March, 2010, the Core Group deliberated and approved the Roadmap recommended by Sub-Group I in respect of insurance companies, banking companies and non-banking finance companies. The Roadmap recommended by Sub-Group I for such classes of companies is as under:-
i) Insurance companies:-
All insurance companies will convert their opening balance sheet as at 1st April, 2012 in compliance with the converged Indian Accounting Standards.
ii) Banking companies:-
(a) All scheduled commercial banks and those urban co-operative banks (UCBs) which have a net worth in excess of Rs. 300 crores will convert their opening balance sheet as at 1st April, 2013 in compliance with the first set of Accounting Standards (i.e. the converged Indian Accounting Standards).
(b) Urban co-operative banks which have a net worth in excess of Rs. 200 crores but not exceeding Rs. 300 crores will convert their opening balance sheets as at 1st April, 2014 in compliance with the first set of Accounting Standards (i.e. the converged Indian Accounting Standards).
(c) Urban co-operative banks which have a net worth not exceeding Rs. 200 crores and Regional Rural banks (RRBs) will not be required to apply the first set of Accounting Standards i.e. the converged Indian Accounting Standards (though they may voluntarily opt to do so) and need to follow only the existing notified Indian Accounting Standards which are not converged with IFRSs.
iii) Non-Banking Financial companies
(a) The following categories of non-banking financial companies (NBFCs) will convert their opening balance sheet as at 1st April, 2013 if the financial year commences on 1st April (or if the financial year commences on any other date, then on the date immediately following 1st April, 2013) in compliance with the first set of Accounting Standards (i.e the converged Indian Accounting Standards). These NBFCs are:-
a. Companies which are part of NSE – Nifty 50
b. Companies which are part of BSE – Sensex 30
c. Companies, whether listed or not, which have a net worth in excess of Rs. 1,000 crores.
(b) All listed NBFCs and those unlisted NBFCs which do not fall in the above categories and which have a net worth in excess of Rs. 500 crores will convert their opening balance sheet as at 1st April 2014 if the financial year commences on 1st April (or if the financial year commences on any other date, then on that date following 1st April 2014) in compliance with the first set of Accounting standards (i.e converged Indian Accounting Standards).
(c) Unlisted NBFCs which have a net worth of Rs. 500 crores or less will not be required to follow the first set of accounting standards (i.e the converged Indian accounting standards), though they may voluntarily opt to do so, but need to follow only the notified Indian accounting standards which are not converged with the IFRSs.
4. The Core Group expressed satisfaction about the progress being made in developing necessary capacity building measures and creating awareness on the matter and expressed confidence on the implementation of roadmap in a timely and consultative manner.
PRESS RELEASE – 3/2010
No. 1/1/2009-IFRS
Dated the 31st March, 2010
Ministry of Corporate Affairs
The Press Information Officer, Press Information Bureau, Ministry of Information and Broadcasting, with the request that the above mentioned Press Note may be given wide publicity.
(Renuka Kumar)
Joint Secretary to the Government of India
Tel:23074056
Proposed New Roadmap for Implementation of Ind AS converged with IFRS
Posted In Company Law | No Comments »
For convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRSs), a Press Release (No.2/2010) laying down roadmap for application of converged Indian Accounting Standards (Ind AS) by companies (other than Banking companies, Insurance companies and Non-Banking Finance Companies) was issued on 22nd January, 2010. Further, a Press Release (No.3/2010) related to the roadmap for the application of the converged Indian Accounting Standards (Ind AS) by the Banking Companies, Insurance companies and Non- Banking Finance Companies was issued on 31st March, 2010. Subsequently, in response to the requests seeking clarifications on the roadmaps, a Press Release (No. 4/2010) containing a consolidated statement on clarification of roadmap was issued on May 04, 2010. However, the Ind AS placed on the website of the MCA could not be implemented due to various reasons from 1st April, 2011 as per the aforesaid roadmaps issued.
A revised roadmap for implementation of Indian Accounting Standards (Ind AS) finalised by the Council of the ICAI, at its last meeting, held on March 20-22, 2014, as follows, has been submitted to the Ministry of Corporate Affairs for its consideration:
1. As stated in earlier roadmaps for achieving convergence, there shall be two separate sets of Accounting Standards notified under the Companies Act, 1956. First set would comprise the Indian Accounting Standards (Ind AS) converged with the IFRSs which shall be applicable for preparation of consolidated financial statements as defined in the Companies Act, 2013, of the specified class of companies. The second set would comprise the existing notified Accounting Standards (AS) and shall be applicable for preparation of individual financial statements of the companies preparing consolidated financial statements as per Ind AS and for financial statements of other companies.
2. The first set of Accounting Standards i.e. converged Indian Accounting Standards (Ind AS) shall be applied to the following specified class of companies for preparing their first Indian Accounting Standards (Ind AS) consolidated financial statements for the accounting period beginning on or after April 1, 2016, with comparatives for the year ending 31st March 2016 or thereafter:
(a) Whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India; or
(b) Companies other than those covered in (a) above, having net worth of Rs. 500 crore or more
(c) Holding, subsidiary, joint venture or associate companies of companies covered under (a) or (b) above.
3. Companies to which Indian Accounting Standards (Ind AS) are applicable shall prepare their first set of consolidated financial statements in accordance with the Indian Accounting Standards (Ind AS) effective at the end of its first Ind AS reporting period unless otherwise specified, i.e., companies preparing consolidated financial statements for the accounting period beginning on or after April 1, 2016 shall be required to apply the Ind AS effective for financial year ending on 31st March 2017.
4. Calculation of net worth
For the purpose of calculation of qualifying net worth of companies, the following rules shall apply:
(a) The net worth shall be calculated as per the stand alone audited balance sheet of the company falling under any of the categories covered under 2 above as at 31st March 2014 or the first balance sheet for accounting periods which end after that date.
(b) The net worth shall be calculated as the paid-up Share Capital plus Reserves and Surplus less Revaluation Reserve.
(c) For companies which are not in existence on 31st March 2014 or an existing company meets the criteria for the first time after 31st March, 2014, the net worth shall be calculated on the basis of the first balance sheet ending after that date.
5. Voluntary Adoption
(a) Companies not mandatorily required to follow Indian Accounting Standards (Ind AS) shall have the option to apply the Indian Accounting Standards (Ind AS) voluntarily for their consolidated financial statements provided they prepare consolidated financial statements under the Indian Accounting Standards (Ind AS) consistently thereafter.
(b) The option to apply the Indian Accounting Standards (Ind AS) voluntarily, once exercised, therefore, shall be irrevocable. Such companies would not be required to prepare another consolidated financial statements in accordance with existing Accounting Standards (AS).
6. Discontinuing use of the first set of Accounting Standards (i.e. the Indian Accounting Standards)
Once a company starts following the first set of Accounting Standards for consolidated financial statements, i.e., the Indian Accounting Standards (Ind AS) on the basis of the eligibility criteria, it shall be required to follow such Accounting standards for all the subsequent Consolidated Financial Statements even if any of the eligibility criteria does not subsequently apply to it.
7. The roadmap for banks, NBFCs and Insurance Companies will be decided in consultation with RBI and IRDA.
Siurce- ICAI press release dated 09.04.2014
Post Office Saving A/c- ATM Card, Online Payment, Account Statement instead of Passbook
NOTIFICATION NO. GSR 219(E), DATED 13-3-2014
In exercise of the powers conferred by section 15 of the Government Savings Bank Act, 1873 (5 of 1873), the Central Government hereby makes the following rules further to amend the Post Office Savings Bank General Rules, 1981, namely :—
1. (1) These rules may be called the Post Office Savings Bank General (Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Post Office Savings Bank General Rules, 1981, hereinafter referred to as the said rules in rule 2, after clause (v), the following clause shall be inserted, namely:—
(w) "Post Office with Core Banking Solution platform" means Post Office Savings Bank working on Core Banking Solution software.
3. In the said Rules, in rule 4, after sub-rule (4), the following sub-rule shall be inserted, namely:—
"(5) In case, of an account standing at any Post Office with Core Banking Solution platform, deposit may be made at any other post office with Core Banking Solution platform within the limits prescribed and by paying such fee as may be specified by the Central Government by notification in the official Gazette.
4. In the said rules, in rule 5, in sub-rule (1), after clause (e), the following clause shall be inserted, namely:—
"(i) (f) in the accounts standing in post offices with Core Banking Solution platform, the deposit may be made by any electronic mode."
(ii) for sub-rule (2), the following sub-rule shall be substituted namely:—
"(2) Each deposit shall be accompanied by a pay-in-slip provided that at any Post Office on Core Banking Solution platform, the deposit shall be accepted by any electronic mode."
5. In the said rules, in rule 6, sub-rule (3) shall be numbered as clause (i) thereof and after clause (i) as so numbered,
The following clause shall be inserted namely:—
"(ii) In case of an account standing at any post office with Core Banking Solution platform in place, the Post Office Savings Bank shall on the request from the depositor or otherwise may issue Automated Teller Machine or debit card to the savings account holder on payment of such fee as may be specified by the Central Government by notification in the official Gazette" and the account holder having account in Post Offices with Core Banking Solution Platform may also withdraw money by using any electronic mode."
6. In the said Rules, in rule 8 in sub-rule (i), the following provisos shall be inserted, namely:—
(i) "Provided that in post offices working on Core Banking Solution platform, a statement of account may be issued in lieu of passbook at the option of the customer on payment of such fees specified by the Central Government by notification in the official Gazette.
Provided further that balance and transactions shown in the Passbook or statement of account shall be for the information of the depositor."
(ii) for sub-rule (4), the following sub-rule shall be substituted, namely :—
"(4) The passbook shall ordinarily be presented for all withdrawals or deposits made at the counter and in case, deposits or withdrawals are made by using cheque or any electronic mode, the passbook, wherever issued, may be presented to the Post Office Savings Bank as soon as possible thereafter for bringing it up-to-date."
7. In the said rules, in rule 15, for clause (a), the following clause shall be substituted, namely:—
"(a) responsible to a depositor for any fraudulent withdrawal by a person obtaining possession of the passbook or Automated Teller Machine or Debit card or a cheque from the cheque book of the depositor or by using any electronic mode of withdrawal."
Public Provident Fund Act, 1968 (23 of 1968)
THE PUBLIC PROVIDENT FUND ACT, 1968
(ACT No. 23 OF 1968)
[16th May, 1968]
An Act to provide for the institution of a provident fund for the general public.
BE it enacted by Parliament in the Nineteenth Year of the Republic of India as follows:-
Short title and extent.
1. (1) This Act may be called the Public Provident Fund Act, 1968. (2) It extends to the whole of India.
Definitions.
2. In this Act, unless the context otherwise requires,-
(a) "Fund" means the Public Provident Fund established under the Scheme;
(b) "minor" means a person who is not deemed to have attained majority under the Indian Majority Act, 1875;
(c) "Scheme" means the Public Provident Fund Scheme framed under sub-section (1) of section 3;
(d) "subscriber" means an individual who makes subscription to the Fund under section 4 and where such subscription is made by an individual on behalf of a minor, of whom he is the guardian, such minor;
(e) "year" means the financial year.
Public Provident Fund Scheme.
3. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called the Public Provident Fund Scheme for the establishment of a provident fund for the general public and there shall be established, as soon as may be after the framing of the Scheme, a Fund in accordance with the provisions of this Act and the Scheme.
(2) Subject to the provisions of this Act, the Scheme may provide for all or any of the matters specified in the Schedule.
(3) The Scheme shall have effect notwithstanding anything contained in any law for the time being in force other than this Act or in any instrument having effect by virtue of any law other than this Act.
(4) The Central Government may, from time to time, by notification in the Official Gazette, add to, amend or vary the Scheme.
Subscriptions to Fund.
4. Any individual may, on his own behalf or on behalf of a minor, of whom he is the guardian, subscribe to the Fund in such manner and subject to such maximum and minimum limits as may be specified in the Scheme.
Interest.
5. All subscriptions made under section 4 shall bear interest at such rate as may be notified by the Central Government in the Official Gazette, from time to time, and the interest shall be calculated in such manner as may be specified in the Scheme.
Withdrawals
6. (1) A subscriber shall be entitled to make withdrawals from the amount standing to his credit in the Fund (including any interest accrued thereon) to such extent and subject to such terms and conditions as may be specified in the Scheme:
Provided that such withdrawals shall be allowed only after the expiry of a period of five years from the end of the year in which he makes the initial subscription to the Fund.
(2) Notwithstanding anything contained in sub-section (1), a subscriber shall be entitled to withdraw the entire balance standing to his credit in the fund after the expiry of a period of fifteen years from the end of the year in which he makes the initial subscription to the Fund.
(3) Subject to the provisions of sub-sections (1) and (2), an individual who has made subscriptions to the Fund on behalf of a minor, of whom he is the guardian, shall be entitled to withdraw any amount from the Fund only for the use of the minor.
Grant of Loans
7. A subscriber may be granted loans out of the amount standing to his credit in the Fund on such terms and conditions as may be specified in the Scheme and where the subscriber is a minor, such loans shall be granted to his guardian only for the use of the minor.
Payment on death of subscriber.
8. (1) If a subscriber dies and there is in force at the time of his death a nomination in favour of any person, all amounts standing to his credit in the Fund shall be payable to the nominee.
(2) Where the nominee is a minor, the amounts referred to in sub-section (1) shall be payable to any guardian of the property of the minor appointed by a competent court, or where no such guardian has been so appointed, to either parent of the minor, or where neither parent is alive, to any other guardian of the minor.
(3) Where there is no nomination in force at the time of the death of the subscriber, the amounts referred to in sub-section (1) shall be payable to his legal heirs.
Protection against attachment.
9. The amount standing to the credit of any subscriber in the Fund shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the subscriber.
Protection of action taken in good faith.
10. No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act or the Scheme.
Power to remove difficulties
11. (1) If any difficulty arises in giving effect to the provisions of this Act or the Scheme, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for the removal of the difficulty:
Provided that no such order shall be made after the expiration of three years from the commencement of this Act.
(4) Every order made under sub-section (1) shall be laid as soon as may be after it is made before each House of Parliament.
Scheme to be laid before Parliament.
12. The Scheme shall be laid, as soon as may be, after it is framed before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in any provision of the Scheme or both Houses agree that any provision in the Scheme should not be made, the provision of the Scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that provision.
THE SCHEDULE
[See section 3 (2)]
Matters for which provision may be made in the Scheme:-
(1) The manner in which subscriptions too the Fund may be made and the maximum and minimum limits of such subscriptions.
(2) The manner in which interest on subscriptions to the Fund may be calculated.
(3) The documents to be issued to subscribers as evidence of the subscriptions made by them to the Fund.
(4) The extent to which and the terms and conditions under which withdrawals may be made by subscribers from the amount standing to their credit in the Fund.
(5) The authority or authorities by or through whom subscriptions to the Fund may be collected or withdrawals therefrom may be made.
(6) The terms and conditions under which loans may be granted to subscribers out of the amounts standing to their credit in the Fund and the authority or authorities by whom such loans may be granted.
(7) The accounts to be maintained with respect to subscriptions to the Fund, and withdrawals and final payments made and loans granted therefrom and the authority or authorities by whom such accounts shall be maintained.
(8) The nomination of any person to receive the amount standing to the credit of a subscriber in the Fund in the event of his death and the cancellation or change of such nomination.
(9) The issue of duplicate of any document issued as evidence of any subscription to the Fund in the event of damage, loss or destruction of the original and the fee on the payment of which such duplicate may be issued.
(10) Any other matter which is to be provided for in the Scheme or which
may be necessary or proper for the purpose of implementing the Scheme.
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This is for public information: "This document is a copy of the notification. The accuracy of conversion to the electronic medium is subject to usual constraints. Hence, nothing in the above document may be construed as an authority. For legal purposes the original notification may be referred to."
Easy Withdrawal on closure of saving a/c maintained at Post Offices if interest payment is not involved
Notification No. GSR 220(E), Dated-13-03-2014
In exercise of the powers conferred by section 15 of the Government Savings Bank Act, 1873 (5 of 1873), the Central Government hereby makes the following rules further to amend the Post Office Savings Account Rules, 1981, namely:—
1. . (1) These rules may be called the Post Office Savings Account (Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Post Office Savings Account Rules, 1981, in Rule 9, for sub-rule (2) the following sub-rule shall be substituted, namely:—
"(2) When payment of interest is not involved and when final withdrawal on closure of an Account is made at Post Offices on Core Banking Solution platform, such withdrawal on closure may be allowed by a Sub-Savings Bank without obtaining the prior sanction of the Head Savings Bank."
Post office Saving A/c – Date of Clearance to be treated as date of Deposit ; Account can be discontinued in case of more than four defaults
Notification No. GSR 221(E) , Dated 13-3-2014
In exercise of the powers conferred by Section 15 of the Government Savings Bank Act, 1873 (5 of 1873), the Central Government hereby makes the following rules further to amend the Post Office Recurring Deposit Rules, 1981, namely:—
1. (1) These rules may be called the Post Office Recurring Deposit (Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Post Office Recurring Deposit Rules, 1981,
(i) in rule 6, for sub-rule (4), the following sub-rule shall be substituted, namely:—
"(4) Where a deposit is made by means of a cheque, pay order or demand draft, the date of its clearance into the Post Office Savings Bank shall be deemed to be the date of deposit."
(ii) in Rule 7, for sub-rule (2), the following sub-rule shall be substituted, namely:—sub-rule (2) of Rule 7 shall be substituted by the followings:—
"(2) If there are more than four defaults, the account shall be treated as discontinued and revival of the account shall be permitted only within a period of two months from the month of fifth default and in case a depositor fails to deposit next monthly deposit within the time prescribed in sub-rule (3) of rule 6, a default fee at the rate of five paise for every five rupee per defaulted deposits shall also be paid along with regular monthly deposit.
(3) An account, in which all defaulted deposits are deposited with prescribed default fee and prescribed time as specified in sub-rule (2) shall not be treated as discontinued:
Provided that notwithstanding anything contained in sub-rule (1), sub-rule (2) in the case of personal of Defence Services (excluding Civilian Defence Employees).
(i) if there are not more than seven defaults in the monthly deposits, the depositor may, at his option, extend the maturity period of the account by as many months as the number of defaults and deposit the defaulted deposits during the extended period.
(ii) If there are more than seven defaults in the monthly deposits, the account shall be treated as discontinued and the revival of the account shall be permitted only within a period of two months from the month of eighth default, subject to payment of default fee and defaulted deposits."
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