CORPORATE AND PROFESSIONAL UPDATES 21ST FEB 2018

Direct Tax:

• Delhi High Court has refuses to set aside re-assessment notice U/s. 147/148 issued by Income Tax Department to the partnership firm  Sky Light Hospitality, in which Robert Vadra is a partner, in connection with the DLF- Sky Light Hospitality land deal. SKY Light Hospital LLp Vs Assistant Commissioner of Income Tax (Delhi High Court)

• Mumbai ITAT denies carry forward of losses for AYs 2007-08 to 2010-11 applying provisions of Sec. 79 in case of assessee (which is a subsidiary of HDFC Ltd., a public company) however, allows set off and carry forward of losses of AY 2011-12 in subject AY 2012-13 absent change in 51% shareholding. [TS-66-ITAT-2018(Mum)]

• Karnataka HC dismisses Google India’s plea for absolute stay of ITAT order holding Adwords Program payment as royalty; Accepts Revenue’s stand that “the appellant is seeking to obtain stay of liability in proceedings under Section 143(3) of the Act in this indirect manner.”

• ITAT Jaipur held that merely because the matter was referred for special audit and the assessing officer has made certain additions based on the observations of the special auditor, it cannot be held that the assessing officer has rejected the books of account of the assessee. There has to be a specific finding given by the assessing officer in terms of satisfaction of any or all of the conditions as specified under section 145(3) before he rejects the books of accounts of the assessee. Further, the assessing officer has to specifthe reasons as to why he feels that the results declared by the assessee as per the books of accounts are not acceptable. {ITO Vs. Babu Lal Somani (ITAT Jaipur)}

• ITAT Jaipur held that Brokerage and commission income earned by assessee engaged in the field of real estate was to be taxed as business income and not as income from other sources. Further held that assessee cannot be taxed for money received as power of attorney of land owner. {Gyan Chand Agarwal Vs Addl. CIT (ITAT Jaipur)}
• Notices for  Prosecution u/s 276CC of Income Tax Act for AY 2015-16  have started coming for late filing of IT Return (filed after assessment year) where tax due after advance tax & TDS exceeded Rs. 3000/-.
• Supreme Court in the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd vs. CIT held that The CIT has no power to cancel/withdraw/recall the registration certificate granted u/s 12A until express power to do so was granted by s. 12AA(3).

GST Updates:

• A petition has been filed before the Bombay High Court against the central Government seeking a direction from the Court to file a criminal complaint about tampering of the status of Petitioner’s GST TRAN-1 Form online against GSTN.
• GST/VAT– Work over operations in oil wells not liable to VAT in absence of transfer of right to use work over rigs: Delhi High Court- Deep Industries Ltd. v. State of Gujarat.

MCA Updates:

• Form DIR-3, SPICe, DPT-3, MGT-6, MGT-15, MGT-14, ADT-1, ADT-2, SH-7 and URC-1 are revised on MCA21 Company Forms w.e.f 17th FEB -2018.
• Bankruptcy provisions for individuals and proprietorship firms, among others, under the Insolvency and Bankruptcy Code (IBC), are unlikely to be put into effect anytime soon due to a heavy workload on DRT.

FAQ on Condonation of Delay Scheme (CODS):

• Query: Is any relaxation from prosecution has been provided to defaulting companies under CODS, 2018.

• Answer:In this scheme a relaxation from prosecution is providing which is vide Para 6 against matters related to filing of the overdue documents only. Under the provision of law provided that the other acts of default under any other provisions shall equally be liable to action.

• Query: What will be the status of pending proceedings/prosecution post registering into the CODS scheme?
• Answer: The pending prosecution proceedings w.r.t. the overdue documents shall be withdrawn by the ROCs as stated in Para 6. The applicants availing the benefits of the Scheme shall also withdraw their application from all forums w.r.t. the overdue documents and other non-compliances under the Act. Proof of withdrawal of such applications must be attached in e-Form CODS 2018.