Companies which, after raising funds through Public issues, fail to file documents and balance sheets and become untraceable are called 'Vanishing Companies'. Initially 238 such companies were identified. Out of these, 128 companies subsequently started filing their returns etc. and therefore they are no longer regarded as 'Vanishing Companies' and are subjected to special monitoring […]
Fly by Night Companies
Companies which, after raising funds through Public issues, fail to file documents and balance sheets and become untraceable are called 'Vanishing Companies'. Initially 238 such companies were identified. Out of these, 128 companies subsequently started filing their returns etc. and therefore they are no longer regarded as 'Vanishing Companies' and are subjected to special monitoring by being kept under a 'watch list'. Out of the remaining companies 32 are now under liquidation. As on date, there are 78 companies in the 'vanishing companies' category. The total amount raised by these 78 companies was Rs. 310.21 crore (approx.).
A Coordinating and Monitoring Committee already exists to identify and monitor the activities of such companies. FIRs have been lodged against all 78 companies and their Directors to trace their whereabouts and also to take action against them under Indian Penal Cord (IPC). Prosecutions have also been filed against such companies and their Directors under sections 162 and 220 of the Companies Act, 1956 for non-filing of annual returns and balance sheet, respectively and also under sections 62/63, 68 and 628 of the Companies Act, 1956 for mis-statement in prospectus/fraudulently inducing persons to invest money/false statements made in the offer documents, etc.
The Ministry has also undertaken proactive measures of sensitizing the people through organizing investors awareness programmes. These programmes are organized regularly in association with the Institute of Chartered Accountants of India (ICAI), Institute of Cost Accountants of India (ICAI) and Institute of Company Secretaries of India (ICSI) under the Investor Education and Protection Fund (IEPF) for creating awareness and empowerment among the investors. Since 2012-2013, the Ministry has also started organizing such programs in rural areas through CSC e-Governance Services India Ltd. a company under Department of Electronics and Information Technology. During 2013-14, 2897 such programs were conducted.
This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today. (Source- PIB release dated- 05.12.2014)
All about Sukanya Samriddhi Account
MINISTRY OF FINANCE
(Department of Economic Affairs)
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 2nd December. 2014
G.S.R.863(E).— In exercise of the powers conferred by section 15 of the Government Savings Banks Act,
1873 (5 of 1873) , the Central Government hereby makes the following rules, namely:‑
1. Short title and commencement .- (1) These rules may be called the Sukanya Samriddhi Account Rules,2014.
(2) They shall come into force on the date of their publications in the Official Gazette.
2. Definitions In these rules, unless the context otherwise require . ‑
(a) 'account' means an account opened by a depositor in accordance with the provisions of these rules;
(b) 'Ace means the Government Savings Banks Act. 1873 (5 of 1873) ;
(c) 'deposit' means the money deposited by the depositor in an account under the rules;
(d ) Depositor' means an individual who – on behalf of a minor girl child of whom he or she is the guardian. deposits money in an account under the rules;
(e) 'post office' means any post office in India doing savings bank work and authorised to open an account under these rules;
(f) 'Bank' means any branch of a commercial bank authorised by the Central Government to open an account
under these rules;
under these rules;
(g) 'Year' means financial year i.e. 1st April to 31st March;
(h) 'Interest rate' means the rate as may be declared by the Government on yearly basis to be applicable on accounts opened under these rules;
(i) Words and expressions used herein and not defined but defined in the Post Office Savings Bank General Rules.
1981 shall have the meanings respectively assigned to them in those rules.
1981 shall have the meanings respectively assigned to them in those rules.
3. Application of Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules, 1981:
The provisions of the Post Office Savings Bank General Rules, 1981 and the Post Office Savings Account Rules. 1981 may be applied in relation to matters for which no provision has been made in these rules.
4. Opening of Account.- (1) The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules. shall also be eligible for opening of the account under these rules.
(2) A depositor may open and operate only one account in the name of a girl child under these rules.
(3) Birth certificate of a girl child in whose name the account is opened shall be submitted by the guardian at the time of opening of the account in post office or bank along with other documents relating to identity and residence proof of the depositor.
(4) Natural or legal guardian of a girl child shall be allowed to open the account for two girl children only:
Provided that the natural or legal guardian of the girl child shall be allowed to open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from the competent medical authorities where the birth of such twin or triple girl children takes place.
5. Deposits .- (I) The account may be opened with an initial deposit of one thousand rupees and thereafter any amount in multiple of one hundred rupees may be deposited subject to the condition that a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year.
(2) Deposits in an account may be made till completion of fourteen years. from the date of opening of the account.
(3) An irregular account where minimum amount as specified in sub-rule (1) has not been deposited may be regularised on payment of a penalty of fifty rupees per year along with the said minimum specified subscription for the year (s) of default any time till the account completes fourteen years.
6. Mode of Deposit .- (1) The deposit in the account opened under these rules may be made -
a) in cash; or
b) by cheque or demand draft drawn in favour of the postmaster of the concerned post office or the Manager of the concerned bank where the account stands and an endorsement on the back of such instrument shall be made and signed by the depositor indicating name of the account holder and account number in which the deposit is to be credited.
(2) Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account.
7. Interest on deposit .- (1) Interest at the rate, to be notified by the Government, compounded yearly shall be credited to the account till the account completes fourteen years.
(2) In case of account holder opting for monthly interest, the same shall be calculated on the balance in the account on completed thousands, in the balance which shall be paid to the account holder and the remaining amount in fraction of thousand will continue to earn interest at the prevailing rate.
8. Operation of account .- (1) The account shall be opened and operated by the natural or legal guardian of a girl child till the girl child in whose name the account has been opened. attains the age of ten years.
(2) On attaining age of ten years, the account holder that is the girl child may herself operate the account. however, deposit in the account may be made by the guardian or any other person or authority.
9. Premature closure of account .- (1) In the event of death of the account holder. the account shall be closed immediately on production of death certificate issued by the competent authority. and the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.
(2) Where the Central Government is satisfied that operation or continuation of the account is causing undue hardship to the account holder, it may, by order. for reasons to be recorded in writing, allow pre-mature closure of the account only in cases of extreme compassionate grounds such as medical support in life‑ threatening diseases. death, etc.
10. Pass book .- (1) On opening an account, the depositor shall be given a pass book bearing the date of birth of the girl child, date of opening of account, account number. name and address of the account holder and the amount deposited.
(2) The pass book shall be presented to the post office or bank. as the case may be, at the time of depositing money in the account and receiving payment of interest and also at the time of final closure of the account on maturity.
11. Transferor account The account may be transferred anywhere in India if the girl child in whose name the
account stands shifts to a place other than the city or locality where the account stands.
account stands shifts to a place other than the city or locality where the account stands.
12. Withdrawal .- (1) To meet the financial requirements of the account holder for the purpose of higher education and marriage. withdrawal up to fifty per cent. of the balance at the credit, at the end of preceding financial year shall be allowed.
(2) The withdrawal referred to in sub-rule (1) shall be allowed only when the account holder girl child attains the age of eighteen years.
13. Closure on maturity .- (1) The account shall mature on completion of twenty-one years from the date of opening of the account :
Provided that where the marriage of the account holder takes place before completion of such period of twenty-one years. the operation of the account shall not be permitted beyond the date of her marriage :
Provided further that where the account is closed under the first proviso. the account holder shall have to give an affidavit to the effect that she is not less than eighteen years of age as on the date of closing of account.
(2) On maturity, the balance including interest outstanding in the account shall be payable to the account holder on production of withdrawal slip along with the pass book.
(3) If the account is not closed in accordance with the provisions of sub-rule (1). interest as per the provisions of rule 7 shall be payable on the balance in the account till final closure of the account.
14. Power to relax .- Where the Central Government is satisfied that the operation of any provision of these rules causes undue hardship to the account holder or account holders. it may. by order and for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.
[F. No.213/2014.NS-II] Dr. RA.TAT BHARGAVA, Secy.
Statutory provisions- Rule 5A(2) of Service Tax Rules, 1994 authorises department to conduct audit by CAG or any audit party deputed by Commissioner & the assessee was bound to produce the specified documents within 15 days from date of demand( of the prescribed documents) the said auditor.
Legal History: Various judicial pronouncements have been made recently in the context of service tax audits. Reliance in this regard may be placed on :
- ACL Education Centre Pvt. Ltd. & Ors. Vs. Union of India [2014-TIOL-120-HC-ALL-ST] – Hon'ble Allahabad High Court held that audit under service tax is to be conducted by Chartered Accountants/ Cost Accountants only and not by officers of the Department
- SKP Securities Ltd. Vs. DD (RA-IDT) & Ors. [2013-TIOL-38-HC-KOL-ST] - Hon'ble Kolkata High Court held that audit of private assessee can't be undertaken by CAG .
- Travelite (India) Vs. Union of India & Ors.- Hon'ble Delhi High Court held that rule 5A(2) is bad in law.
Amendment:
Vide Notification No. 23/2014- ST dated- 05.12.2014, CBEC has amended rule 5A(2) and the pronouncement of Allahabad High Court has been followed principally & CAs/CMAs have been made empowered to conduct service tax audits.
Furthermore, earlier limit of 15 days for production of specified documents has now been replaced with the time limit specified by the concerned audit party/CAG/CAs/CMAs, as the case may be.
The said notification is as follows :-
NOTIFICATION No. 23/2014-SERVICE TAX
Dated- 5th December, 2014
G.S.R. (E).- In exercise of the powers conferred by clause (k) of sub-section (2), read with sub-section (1) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:-
1. (1) These rules may be called the Service Tax (Third Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.
- In the Service Tax Rules, 1994, in rule 5A, for sub-rule (2), the following sub-rule shall be substituted, namely:-
"(2) Every assessee, shall, on demand make available to the officer empowered under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, or a cost accountant or chartered accountant nominated under section 72A of the Finance Act, 1994,-
(i) the records maintained or prepared by him in terms of sub-rule (2) of rule 5;
(ii) the cost audit reports, if any, under section 148 of the Companies Act, 2013 (18 of 2013); and
(iii) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 (43 of 1961),
for the scrutiny of the officer or the audit party, or the cost accountant or chartered accountant, within the time limit specified by the said officer or the audit party or the cost accountant or chartered accountant, as the case may be."
(Himani Bhayana)
Under Secretary to the Government of India
[F.No 137/46/2014-Service Tax]
Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 2/94-SERVICE TAX, dated the 28th June, 1994 vide number G.S.R. 546 (E), dated the 28th June, 1994 and last amended vide notification No.19/2014-SERVICE TAX, dated the 25th August, 2014 vide number G.S.R. 614 (E), dated the 25th August, 2014.
STATUATORY AUDIT U/S 44AB OF the IT Act,1961
As the fees of audit is paid by the assesees, the quality of audit report is not so good. Has fees is paid by the assessee, most of the auditors do not show correct picture in audit report. no body would take the risk of erring the assessee in fear of losing his business.
To improve the quality of audit and to make it more transparent and correct, government should nominate the auditors on rotation basis. The fees of audit should be provided by the government . government may recover it from the assessee.
Cue can be taken from the system of audit of banks.IT : Where purchases made by assessee from sister concern of furnace oil, its storage and consequent sale were in complete breach of Solvent, Raffinate & Slop [Acquisition, Safe, Storage & Prevention of Use in Automobiles] Order, 2000, payment made by assessee to sister concern could not be allowed under section 37(1)
■■■
[2014] 51 taxmann.com 374 (SC)
SUPREME COURT OF INDIA
Overseas Trading & Shipping Co. (P.) Ltd.
v.
Assistant Commissioner of Income-tax*
H. L. DATTU AND R.K. AGRAWAL, JJ.
CC NO. 7296 OF 2014†
TA NO. 729 OF 2013
TA NO. 729 OF 2013
MAY 8, 2014
Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Illegal payments) - Assessment year 2004-05 - Assessee entered into a contract with foreign company for import of furnace oil - It got performed contractual obligations arising from said contract executed through its sister concern, against payment of certain consideration - Assessee claimed said payment as commission - High Court by impugned order held that though assessee got contract executed through its sister concern, but subsequent purchases from sister concern of very furnace oil, its storage and consequent sale were in complete breach of Solvent, Raffinate & Slop (Acquisition, Safe, Storage & Prevention of Use in Automobiles) Order, 2000 and, thus, any deduction under section 37(1) could not be allowed to assessee for said payment - Whether Special Leave Petition filed by assessee against impugned order was to be dismissed - Held, yes [In favour of revenue]
CASE REVIEW
Overseas Trading & Shipping Co. (P.) Ltd. v. Asstt. CIT [2013] 38 taxmann.com 86[SLP dismissed.]
J.D. Mistri, Sr. Adv. Niraj D. Sheth Adv. and Ms. Anuradha Mutatkar Adv. for the Petitioner.
ORDER
Delay Condoned.
Dismissed.
■■No action agaise govt. officers on anonymous or pseudonymous complaints
CENTRAL VIGILANCE COMMISSION
NEW DELHI
NEW DELHI
CIRCULAR NO
07/11/2014, Dated: Dated: November 25, 2014
Subject: Action on anonymous/pseudonymous complaints.
The Commission had vide its circular Nos. 3(v)/99/2 dated 29th June, 1999 and of even number dated 31st January, 2002 prescribed that no action should be taken on any anonymous or pseudonymous complaints. However, an enabling provision was made subsequently, vide circular of even number dated 11th October, 2002, that if any, verifiable facts contained in such complaints are proposed to be looked into, prior concurrence of the Commission is required to be taken by the departments/organizations.
2. The Commission has reviewed the matter and considering all aspects, would prescribe that no action should be taken on anonymous/pseudonymous complaints by Ministries/Departments/Organistations in line with its earlier instructions dated 29th June, 1999 and 31st January, 2002 and such complaints should be filed. Commission's circular of even number dated 11th October, 2002 stands withdrawn with immediate effect. Accordingly, Para 3.8.1 of Chapter – III of Vigilance Manual (Volume-I-Sixth Edition, 2004) would stand modified to that extent.
(J. Vinod Kumar)
Officer on Special Duty
Officer on Special Duty
__._,_.___
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