Daily Tax & Corporate Law Digest | Editorial Board
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Today’s newsletter analytically summarizes today’s top Tax & Corporate Law stories reported at?taxmann.com, in a unique section-wise format.
INCOME TAX
Notification No. 48/2022/F.No. 370142/18/2022-TPL(Part-1), Dated 29-04-2022
CBDT notifies Form ITR-U for filing of updated return
Editorial Note: The Finance Act, 2022 has introduced a new concept of updated return, wherein it allows up to 24 months to file the return of income. The CBDT has notified a new Rule 12AC and new Form ITR-U for filing of such updated return of income
SECTION 2(9) OF THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988 - BENAMI TRANSACTION
Definition of 'Benami Transaction' in sec 2(9) of PBPT Act has no retrospective applicability to transactions entered into prior to 1-11-2016 - Nexus Feeds Ltd. v. Assistant Commissioner of Income-tax - [2022] 137 taxmann.com 494 (Telangana)
SECTION 10(23C) OF THE INCOME-TAX ACT, 1961 - HOSPITALS
Philanthropic purposes: Where assessee trust was running a medical dispensary wherein it was providing free medical treatment to patients and annual income of assessee trust was out of interest income from investment which had been made of surplus lying with it and there being no allegation that assessee trust was involved in any activity for profit or did not exist for philanthropic purposes, assessee Trust was within its rights to accumulate receipts as per its requirement and thus, would be eligible for exemption under section 10(23C)(iiiae) even though it had incurred only 12 per cent of receipts for philanthropic purposes and accumulated 88 per cent of its receipts - Swasthya Sewa Sansthan v. Commissioner of Income-tax (Exemption) - [2022] 137 taxmann.com 311 (Kolkata - Trib.)
SECTION 32 OF THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988 - QUALIFICATIONS FOR APPOINTMENT OF CHAIRPERSON AND MEMBERS OF APPELLATE TRIBUNAL
Madras HC strikes down as unconstitutional the provisions of sec 32(2)(a) of PBPT Act regarding qualifications of Judicial Member of Appellate Tribunal - V. Vasanthakumar v. Union of India - [2022] 137 taxmann.com 495 (Madras)
SECTION 54 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAIN - PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE
General: Section 54 cannot be confined only to a residential house and cannot be interpreted to mean that it has no application to land appurtenant to a residential building - Charu Agarwal v. Deputy Commissioner of Income-tax, (International Taxation) - [2022] 137 taxmann.com 283 (Delhi - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE
Adjustments - Guarantee commission: Where assessee had provided a corporate guarantee to a bank, on strength of which, the bank had provided funds to its wholly-owned subsidiary and Tribunal in earlier year on similar facts directed Assessing Officer/TPO to compute corporate guarantee at the rate of 0.5 per cent, ALP of corporate guarantee would be computed at the rate of 0.5 per cent of guarantee value - Teleperformance Global Services (P.) Ltd. v. Assistant Commissioner of Income-tax - [2022] 137 taxmann.com 310 (Mumbai - Trib.)
Adjustments - Guarantee commission: Where the provision of performance guarantee by the assessee to the third party on behalf of its AE had benefitted the assessee itself since the actual service to be provided to the third party was outsourced to assessee by its AE and the entire compensation received from customer came back to assessee and TPO simply followed adjustment made in earlier years, issue of determination of ALP for provision of performance guarantee was restored to file of TPO for fresh adjudication - Teleperformance Global Services (P.) Ltd. v. Assistant Commissioner of Income-tax - [2022] 137 taxmann.com 310 (Mumbai - Trib.)
Dispute resolution panel - Scope of direction: Where Assessing Officer passed a final assessment order without incorporating directions of DRP in it and said order was merely a verbatim repetition of the draft assessment order, impugned order not being in conformity with provisions of section 144C was to be set aside - Olympus Medical Systems (P.) Ltd. v. ACIT - [2022] 137 taxmann.com 306 (Delhi - Trib.)
GOODS AND SERVICES TAX LAWS
Trade Notice No. 5/2022-2023, Dated 29-04-2022
Preferential Certificate of Origin for exports to UAE to be issued from CoO e-platform w.e.f 1st May 2022
Editorial Note: The DGFT has issued a trade notice to provide that the preferential certificate of origin for exports to UAE under India-UAE CECPA shall be issued from the CoO e-platform with effect from 1st May 2022.
Public Notice No. 5/2015-20, Dated 29-04-2022
Authorised Agencies to issue Certificate of Origin (preferential) for India-UAE CEPA notified
Editorial Note: The DGFT has issued a public notice to notify the list of Authorised Agencies to issue Certificate of Origin (preferential) for India-UAE CEPA.
CLASSIFICATION OF GOODS
Pressure tight cables, non-pressure tight cables and special cables: Special cables supplied for use by the Indian Navy in submarines are classifiable as parts of warships attracting a concessional rate of 5 per cent GST - Radiant Corporation (P.) Ltd., In re - [2022] 137 taxmann.com 317 (AAR- TELANGANA)
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF
Interest/penalty charged on delayed payment of subscription by members of chit fund is a supply of service classifiable under SAC 9971 and rate of tax would depend on nature of supply, i.e., whether same is intra-State or inter-State - Ushabala Chits (P.) Ltd., In re - [2022] 137 taxmann.com 318 (AAAR - Andhra Pradesh)
The exemption is not available to interest realized from defaulting subscribers of chit fund as Notification No. 12/2017-Central Tax (Rate) covers only interest against loans or advances by bankers and other financial institutions - Ushabala Chits (P.) Ltd., In re - [2022] 137 taxmann.com 318 (AAAR - Andhra Pradesh)
SECTION 11B OF CENTRAL EXCISE ACT, 1944 - CLAIM FOR REFUND OF DUTY AND INTEREST, IF ANY, PAID ON SUCH DUTY
The amount was mistakenly paid by the appellant-assessee and was to be treated as a deposit and the assessee was entitled to a refund of the amount as the principle of unjust enrichment was not applicable - Ishwar Metal Industries v. Commissioner, Central Excise & CGST, Jaipur - [2022] 137 taxmann.com 498 (New Delhi - CESTAT)
领英推荐
SECTION 54 OF CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX
A refund application cannot be rejected on grounds of delay/limitation when the limitation period is extended by order of the Supreme Court - Gamma Gaana Ltd. v. Union of India - [2022] 137 taxmann.com 497 (Allahabad)
COMPANY AND SEBI LAWS
Circular No. SEBI/HO/IMD/FPI&C/CIR/P/2022/57, Dated 29-04-2022
SEBI modifies guidelines for FPIs, Designated Depository Participants and ‘Eligible Foreign Investors'
Editorial Note: SEBI vide SEBI Circular No. IMD/FPI&C/CIR/P/2019/124 dated 05-11-2019 issued operational guidelines for FPI, DDP, and FI whereby the designated depository participant is required to grant the certificate of registration, bearing the registration number generated by NSDL in a centralised manner. SEBI has decided to modify the operational guidelines. Now, the designated depository participant is required to grant the certificate of registration, bearing the registration number generated by SEBI.
SECTION 188 OF THE COMPANIES ACT, 2013 - RELATED PARTY TRANSACTIONS
SEBI is not justified in penalising the company by taking a 'hyper-technical' view of the law on Related Party Transactions - Securities and Exchange Board of India v. R.T. Agro (P.) Ltd. - [2022] 137 taxmann.com 496 (SC)
SECTION 232 OF THE COMPANIES ACT, 2013 - AMALGAMATION
Where applicant companies i.e. transferor companies and transferee companies had jointly filed applications in relation to the scheme of amalgamation proposed between them along with relevant documents, convening and holding of meetings of Equity Shareholders, Secured and Unsecured Creditors of applicant companies was to be dispensed with - Inward Vinimay (P.) Ltd., In re - [2022] 137 taxmann.com 285 (NCLT-Jaipur)
SECTION 247 OF THE COMPANIES ACT, 2013 - VALUATION BY REGISTERED VALUERS
Where in FIR filed by CBI as regards inflated valuation of properties registered valuer 'R' was not named as an accused and there was no direct allegation on her and case was under investigation, contraventions alleged in Show Cause Notice (SCN) as regards eligibility to be registered valuer did not appear to be established and SCN was disposed of without any direction - Ms Esther Rani Jakkula., In re - [2022] 137 taxmann.com 292 (IBBI)
FEMA BANKING AND INSURANCE LAWS
Circular No. RBI/2022-23/36 DOR.GOV.REC.No.29/18.10.002/2022-23, Dated 29-04-2022
RBI prescribes guidelines on the compensation of Key Managerial Personnel (KMP) and Senior Management in NBFCs
Editorial Note: RBI vide. Circular no. DOR.CRE.REC.No. 60/03.10.001/2022 dated 22-10-2021 had revised the scale-based framework for NBFCs. Now, RBI has required NBFCs to put in place a Board approved compensation policy in order to address the issues arising out of excessive risk-taking caused by misaligned compensation packages. Further, the policy is required to include the constitution of a Remuneration Committee, the principles for fixed/variable pay structures and, malus/clawback provisions.
ED seizes mobile giant Xiaomi’s assets worth Rs 5,551 crore for illegal forex remittances
Editorial Note: The Enforcement Directorate (ED) has seized assets worth Rs 5,551 crore from Chinese company ‘Xiaomi’ for alleged illegal outward remittances. The technology giant is being questioned by the federal agency for its alleged violation of the Foreign Exchange Management Act, 1999. As per the report of ED, the company remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities including one Xiaomi group entity, in the guise of royalty.
INSOLVENCY AND BANKRUPTCY CODE
SECTION 53 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE LIQUIDATION PROCESS
Assets, distribution of: Where appellant-operational creditor prayed for a direction to the liquidator of the corporate debtor to disburse the amount of its claim, NCLT had rightly dismissed said application holding that appellant would get amount only after adjudication and in waterfall mechanism, as prescribed under section 53 - Kuldeep Enterprises v. ABG Shipyard Ltd. - [2022] 137 taxmann.com 268 (NCL-AT)
ACCOUNTS AND AUDIT
Company Law Committee (CLC) proposed to amend norms relating to Audits and Auditors
Editorial Note: The third report of the Company Law Committee (2022) (CLC-2022) recommends various changes to the Companies Act, 2013. The recommendations include recognizing new concepts, fastening the corporate's processes, improving compliance requirements, and removing ambiguities from existing provisions. It also proposed a few amendments to the norms relating to Audits and Auditors.
OPINIONS
Remedy to the bottleneck of the ITC Accumulated on account of Inverted Duty Structure - Jacky Bhansali, GST Practitioner - [2022] 137 taxmann.com 499 (Article)
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