Monthly Statutory Calendar December 2014

Date	Statutory Act	Applicable Form	Obligation
05/12/2014	Service Tax	Challan No.GAR-7	Last date for payment of Service Tax in case of companies for the month  Nov,2013 (6th if paid electronically)
05/12/2014	Central Excise	Challan No.GAR-7	Monthly-payment of Central Excise Duties for the Nov.
07/12/2014	Income Tax	Challan No.281/17	Payment of TDS/TCS deducted/collected in November
07/12/2014	Income Tax	Form No.15G,15H, 27C	Submission of Forms received in Nov. to IT Commissioner
10/12/2014	Excise	ER-1 & ER-2	Return for Non SSI assesses, EOUs for Nov
10/12/2014	Excise	ER-6	Return by units paying duty > 1 crore (CENVAT + PLA) for Nov
15/12/2014	D-VAT	DVAT-20	Deposit of DVAT TDS for Nov
15/12/2014	Provident Fund	Electronic Challan Cum Return(ECR)	E-Payment of PF for Nov
15/12/2014	Income Tax	Challan No.ITNS-280	Payment Of Advance Income Tax Installment. Companies (up to 75%) & Other (up to 60%)
15/12/2014	D-VAT	DVAT – 43	Issue of DVAT certificate for deduction made in Nov,12
21/12/2014	ESI	ESI Challan	Payment of ESI of Nov,12
21/12/2014	D-VAT	D-VAT-20 & Central	Deposit of VAT & CST for (monthly dealers for the month of Nov,12)
25/12/2014	D-VAT	Form 16 and CST 1	E- Return of VAT for Nov,12
28/12/2014	D-VAT	DVAT-16/Form-1 & Ack	Physical return of VAT & CST for Nov.
31/12/2014	D-VAT	DVAT-51	Last Date for E-filing of DVAT-51 for quarter ended September
31/12/2014	Companies Act	23AC, 23ACA. 20B and 66 & Exit Scheme	Extended date of Company Law Settlement Scheme and Fast Track Exit SCheme

Cabinet relaxes 14 Changes as proposed by professionals and corporate

The Cabinet on 2.12.14 cleared 14 changes in the Companies Act, 2013, to ease business in India. The most demanded amendments is  replacing ‘special resolution’ with ‘ordinary resolution’ for approval of related-party transactions by minority shareholders. The Companies Act, 2013, was notified in August, 2013 Out of 470 sections only 283 sections and 22 sets of rules related such sections have been brought into force and more than 50% of the Act is yet to be enforced.
Various stakeholders including corporate raised concerns and demanded changes to ease the business for small companies. The new amendments as demanded by Corporate and cleared by the Cabinet include:

-         Omit the requirement for minimum paid up share capital

-          Propose to exempt related party transactions between holding companies and wholly owned subsidiaries from the requirement of minority shareholders’ approval.

-         Empower the Audit Committee to give omnibus approvals for related party transactions on annual basis.

-         Prohibit the public inspection of the board resolutions filed with the Registrar of Companies.

-         Ensure that frauds beyond threshold limits need to be mandatorily reported by the auditors to the government and disclosed in the board report.

-         Restrain companies from raising illegal deposits, prescribing specific punishment for deposits accepted under the new Act. 

-         Provision for writing off past losses/depreciation before declaring dividend for the year.

-         Provide the winding up of companies would be heard by a two-member instead of three-member bench.

-         Provide the bail restrictions applicable only for offence relating to fraud under section 447 of the Act.

-          Ensure that special courts would try only offences carrying imprisonment of two years or more and minor violations can be resolved by magistrates.

Relaxation in Several Provisions of Companies Act,2013

Introduction of New Companies Act, 2013 has brought harsh provisions however it was expected to simplify the provisions. Industry has started calling it non business friendly and there are provisions which are draconian and must be relaxed. It brought lot of restrictions on doing business. Professionals were also not happy for some harsh penal provisions. Now it is proposed by Ministry of Corporate Affairs to provide various Exemptions to Private Limited Companies. If it approve there will be lot of relaxation to private companies and many public companies will convert themselves into Private Companies.

Proposed amendment in Companies Rules to lighten the harsh provisions are :

1.      According to the proposal floated by the MCA

·        the provisions invoking criminality in offences like mis-statement of prospectus or non-disclosure of financial statements will be made less severe.

2.      Further, as per the draft Cabinet note circulated by the ministry

·        the provisions regarding related-party transactions will be relaxed.

·        The Act under Section 188 (1) says that related-party transactions of specified nature require approval by a board resolution or special resolution.

·        It also bars a related-party member of the company from voting on special resolution.

3.   The industry has been saying that this is not business-friendly especially where holding companies and their wholly owned subsidiaries are involved. So for such transactions, the provision will be amended to make it more pro-industry.

4.  For late disclosure, not keeping books of accounts, or financial statements not giving true and fair value, the “punishment of imprisonment is being done away with as the criminality of this kind is already dealt with in the Code of Criminal Procedure”. Currently, u/s 147, for such contraventions, the company is be punishable with fine up to Rs 5 lakh while every officer of the company who is in default is punishable with imprisonment of up to one year along with a fine up to Rs 1 lakh or both.

 5. The MCA has also proposed to do away with the condition of mandatory appointment of independent directors on the board of a private or closely-held company which has no public involvement.

The Cabinet note also provides a breather to auditors regarding their responsibility of reporting frauds to the government.

“Materiality of fraud is defined in terms of percentage or absolute value as a threshold above which the auditors would be required to report to the government. Below that threshold, the auditors will need not report to the government,

They will just have to inform the audit committee of the company,” the source added.

The industry sources that this will be a huge reprieve to the auditors who currently have to report all frauds to the secretary,

MCA, adding to the compliance cost. The amendments proposed also address the issue of maintaining confidentiality of information especially those pertaining to board resolution.

According to Section 179(3), several items including pure HR issues, require a board resolution.

Contributed by Tanya Gagneja

COMPANY LAW SETTLEMENT SCHEME DATE EXTENDED UPTO 31.12.14

MCA has further extended the date of Company Law Settlement Scheme,2014 till 31st December, 2014 vide circular number 44/2014. It is so decided in continuation to the MCA Circular No.34/2014 dated 12/08/2014 and Circular 40/2014 dated 15/10/2014

Reporting on Internal Financial Control deferred for one year

Reporting on Internal Financial Control u/s 143 (3) (i) of the Companies Act, 2013 has been deferred for one year i.e., up to 31.03.2015 vide amendment  made by  Ministry of Corporate Affairs in  Rules Chapter 10 (Audit and Auditors) of the Companies Act, 2013.

The auditor may voluntarily report on Internal Financial Control for the year from 01.04.2014 to 31.03.2015.The auditor shall report on the existence of adequate internal financial control and its operational effectiveness for the financial years on or after 01.04.2015.

Statutory Compliance Calendar: November 2014

Date	Statutory Act	Applicable Form	Obligation
06/11/2014	Service Tax	Challan No.GAR-7	Last date for E- payment of Service Tax in case of companies for the month October
07/11/2014	Income Tax	Challan No.ITNS-281	Payment of TDS deducted/TCS collected in October
10/11/2014	D-VAT	D-VAT Return (20 & Form 1); DVAT 56	Extended Due Date for DVAT Return for Quarter ended on 30.09.14; Submission of DVAT Return Verification Form
10/11/2014	Excise	ER-1 and ER-2	Return for Non-SSI Units and EOU’s for October
14/11/2014	Service Tax	ST-3	Extended Due Date for Return of the Half Year ended on 30.09.2014
15/11/2014	Income Tax	Form 16A & 27D	Quarterly TDS certificate by a person being an office of the Government for the quarter ending September 30, 2014
15/11/2014	MCA – CLSS 2014	Annual Return, Balance Sheet  (Form 23AC-ACA, 20B)	Extended due date under CLSS 2014 for Annual Return of the Company, Balance Sheet  for earlier years to be filed (Due before 30.06.14 and  if not filed till date) under CLSS-2014 Scheme
15/11/2014	D-VAT	DVAT-20	Deposit of DVAT TDS for October
15/11/2014	Provident Fund	Electronic Challan Cum Return(ECR)	E-Payment of PF for October (Cheques to be cleared by 20th)
21/11/2014	ESI	ESI Challan	Payment of ESI of October
21/11/2014	D-VAT	D-VAT-20 & Central	Deposit of VAT & CST for October for Monthly Dealers
30/11/2014	Income Tax	Form 3CD, 3CA/3CB	Filing of Income Tax Return AY 2014-15 for Tax Audit Cases (audit u/s 44AB) and filing of Tax Audit Report
30/11/2014	Income Tax	Form No. 3CEB	Filing of Income Tax Return and Audit Report u/s 92E for entities on which Transfer Pricing provisions are applicable
30/11/2014	Wealth Tax	Form BB	Filing of Wealth Tax Return where Tax Audit applicable
30/11/2014	Excise	ER-4	Annual Return for units paying duty over Rs. 1 crore (CENVAT + PLA)

Madras high court stays on the levy of interest U/S 234A for Asst Year 14-15 for Income Tax Returns where due date is extended

The CBDT vide order dated 20th August, 2014 extended the due date for obtaining and furnishing of Tax Audit Report under section 44AB of the Act for AY 2014-15 from 30.09.14 to 30.11.14. Subsequently, a number of requests were made for extension of the due date for furnishing of return of income also. Writ petitions were also filed in various High Courts for directing the CBDT to extend the due date ffrom 30.09.14 to 30.11.14 for furnishing of return of income  in conformity with the extension of the due date for filing of Tax Audit Report.

It was logical to also extend the due date for filing of the I-T return to 30.11.14 as the due date for filing of the tax audit report was extended till November 30  (due to late Introduction of several changes  in Form 3CD),

However, such extension was granted subject to charge of interest under Section 234A for the period commencing from 01-10-2014 and up to the actual date of filling the return of income. Interest under section 234A will not be levied if taxpayer covered under tax audit provisions pays the tax on or before 30.09.2014.

The levy of interest under section 234A of the Income Tax Act,1961 is unjustified and against the provisions of the law. If the penalty was levied, the purpose of extending the due date of filing the I-T return itself was defeated. The Madras high court granted an interim stay on the levy of interest U/S 234A for Interest from 1.10.14 till filing of Return. It held, “I-T returns shall be accepted by tax authorities without any levy of interest under section 234A.”

DVAT extended date from 25/10/14 to 30/11/2014

DVAT Department has extended the last date of filing of online / hard copy of second quarter return in Form DVAT-16 , DVAT-17 and DVAT-48 for the year 2014-15, from 25/10/2014 to 10/11/2014. The dealers filing the returns through digital signature are not required to file hard copy of the return/Form DVAT-56.

ST-3 Due Date extended from 25th October to 14th November

CBEC vide Order No. 02/2014-ST dated 24th October, 2014 has extended the date of submission of the Form ST-3 for the period from 1st April 2014 to 30th September 2014, from 25th October, 2014 to 14th November, 2014

New E-Form ADT-1 for Intimation to MCA for Appointment of Auditor

MCA has introduced new e Form ADT-1 for appointment of auditor for filing w.e.f 20^th Oct 2014.  Earlier ADT -1 was to be filed as an attachment with GNL -2 a general form for informing MCA where no specific form issued.  Now MCA has issued E- Form ADT-1. It is to be filed independently  like 23B used to be filed earlier.

The Form ADT – 1 has some new features like  details of joint auditors, Number of financial year(s) to which appointment relates, whether the appointment of auditor is within the limits of twenty companies as specified in section 141(3)(g) of the Companies Act, 2013. Many of the columns are same of Form 23B applicable earlier for the same purpose.

Further following documents are mandatory required to be attached with the Form ADT – 1, Copy of the intimation letter sent by Company to the auditor, Copy of written consent given by auditor & Copy of resolution passed by the Company. ( All the attachment has already given in earlier article on this issue )

Only Specimen of letter intimation by company to their auditors will be uploaded very soon.

For the companies who have already filed ADT-1 as an attachment with GNL-2 need not file again and Keep the SRN No. in record as MCA has not approved the forms filed and may ask for resubmission of the E-form ADT-1 in lieu of GNL-2 already submitted under same SRN Number.