Clarification on the immunity provided u/s 270AA of the Income - tax Act, 1961
Section 270AA of the Income - tax Act, 1961 (the Act) inter alia provides that w.e.f. 1st April 2017, the Assessing Officer, on an application made by an assessee, may grant immunity from imposition of penalty under section 270A (not being penalty for misreporting) and initiation of proceedings under section 276C or section 276CC, subject to the conditions specified therein.
Apprehensions have been raised that where an assessee makes an application seeking immunity under section 270AA of the Act , and in the earlier year(s) penalty under section 271(1)(c) of the Act has been initiated on the same issue, the Income - tax Authority may contend that the assessee has acquiesced on the issue in such earlier year(s), by seeking immunity under section 270AA of the Act and therefore, take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act.
In this matter, the Central Government has now clarified that where an assessee makes an application seeking immunity under section 270AA of the Act, it shall not preclude such assessee from contesting the same issue in any earlier assessment year. Further, the Income – tax Authority shall not take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act in earlier assessment years merely on the ground that the assessee has acquiesced on the issue in any later assessment year by preferring an immunity on such issue under section 270AA of the Act.
Clarification on amended Form 3CD notified effective from 20th August 2018
The existing Form No. 3CD was amended vide notification no. GSR 666(E) dated 20th July 2018 with effect from 20th august, 2018. Representations have been received by the Board that the implementation of reporting requirements under the proposed clause 30C (pertaining to General Anti - Avoidance Rules (GAAR)) and proposed clause 44 (pertaining to Goods and Services Tax (GST) compliance) of the Form No. 3CD may be deferred.
The matter was examined and the Central government has notified that reporting under the proposed clause 30C and proposed clause 44 of the Tax Audit Report shall be kept in abeyance till 31st March 2019. Accordingly, for Tax Audit Reports to be furnished on or after 20th August, 2018 but before 1st April, 2019, the tax auditors will not be required to furnish details called for under the said clause 30C and clause 44 of the Tax Audit Report.
Meaning of the term “Balance Sheet “used in determination of fair market value under rule 11UA amended.
The Central government has amended Rule 11U(b)(ii) to notify the amended definition of the term “Balance Sheet “ used in determination of fair market value under rule 11UA of Income Tax rules as below.
in relation to an Indian company, the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor of the company appointed under the laws relating to companies in force and
in relation to a company, not being an Indian company, the balance-sheet of the company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor of the company, if any, appointed under the laws in force of the country in which the company is registered or incorporated.
11UAB. Determination of fair market value for inventory notified
The Central government has notified New Rule 11UAB to determine the fair market value of inventory
- being an immovable property, being land or building or both, shall be the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of such immovable property on the date on which the inventory is converted into, or treated, as a capital asset
- being jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, shares or securities referred to in rule 11UA, shall be the value determined in the manner provided in sub-rule (1) of rule 11UA and for this purpose the reference to the valuation date in the rule 11U and rule 11UA shall be the date on which the inventory is converted into, or treated, as a capital asset;
- being the property, other than those specified in clause (1) and clause (2), the price that such property would ordinarily fetch on sale in the open market on the date on which the inventory is converted into, or treated, as a capital asset
Extension of time to complete KYC requirement.
Ministry of Corporate Affairs (MCA) has extended the time limit for updating the KYC by directors without the fees of INR 5,000 from 31st August, 2018 to 15th September 2018. Accordingly, MCA has amended the Companies (Appointment and Qualification of Directors) Rules 2014 and Companies (Registration offices and fees) Rules 2014.
RBI AND FEMA
Implementing Single Master Form for reporting Foreign Direct Investment & discontinuation of ebiz portal
RBI in its circular dated 7th June 2018 introduced Entity Master Form and Single Master Form to report foreign direct investment into India. While Entity Master Form is already implemented, RBI has now made Single Master Form (SMF) effective from September 1, 2018 at the portal https://firms.rbi.org.in.
SMF form should be used for filing the following erstwhile forms viz.,
- FC-GPR - For issue of capital instruments by an Indian company to a person residing outside India. Reporting of receipt of share application money that was reported in erstwhile Form ARF is also to be reported in the new SMF.
- Form FC-TRS – For transfer of capital instruments between a person resident in India and a person residing outside India.
- Form LLP-I & Form LLP-II – For foreign direct investment in limited liability partnership (LLP) through capital contribution and profit share and divestment or transfer of capital contribution and profit shares in LLP respectively.
- Form CN – For issue or transfer of convertible notes.
Pursuant to implementing SMF from September 1, 2018, RBI also discontinued filing of the above mentioned forms in ebiz portal. If any of the above documents are pending for resubmission, they have to be cleared by 20th September 2018.
Few other forms that are mentioned in the June 7, 2018 circular like ESOP, DI, InVi, DRR are not yet incorporated in SMF and are expected to be made available subsequently.
Authorized Dealers are given five days’ time to process the forms and accept or reject the SMF and to send to RBI.
RBI has also made available one more window open to register and file Entity Master Form for those who have missed filing the same earlier.
GOODS AND SERVICES TAX
Extension of Due Dates for filing of Form GSTR – 1 & Form GSTR – 3B
The Central Board of Indirect Taxes and Customs vide Notification No. 36/2018, 37/2018 & 38/2018 Central Tax – has extended the due date for filing of Form GSTR – 1 & Form GSTR – 3B for State of Kerala, Kodagu District in Karnataka and Mahe in Union Territory of Puducherry as detailed below
Due date of furnishing details in FORM
July 2018 - September, 2018
On or before 15th November 2018
Due date of furnishing details in FORM
On or before 5th October 2018
On or before 10th October 2018
The Central Board of Indirect Taxes and Customs vide Notification No. 35/2018 Central Tax – has extended the due date for filing of Form GSTR – 3B for the month of July 2018 for others as detailed below.
Due date of furnishing details in FORM
On or before 24th August 2018
Publishing of rate of exchange for conversion of the foreign currency
The Central Board of Excise and Customs (CBEC) vide Notification No. 74 /2018 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 17th of August 2018. The Notification is appended below for reference: