CORPORATE AND PROFESSIONAL UPDATE JANUARY 8,2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 8,2016

Company Law:

• Query:Kindly let us know about the appointment of auditor in a Government company?
• Answer:The appointment and re-appointment of auditor of a Government Company or a government controlled company is governed by the provisions of section 139 of the
• Companies Act, 2013 which are summarized as under:

• The first auditor shall be appointed by the Comptroller and Auditor General of India within 60 days from the date of incorporation and in case of failure to do so, the Board shall appoint auditor within next 30 days and on failure to do so by Board of Directors, it shall inform the members, who shall appoint the auditor within 60 days at an extraordinary general meeting (EGM), such auditor shall hold office till conclusion of first Annual General Meeting.

• In case of subsequent auditor for existing government companies, the Comptroller & Auditor General of India shall appoint the auditor within a period of 180 days from the commencement of the financial year and the auditor so appointed shall hold his position till the conclusion of the Annual General Meeting.

Direct Tax:

• Deemed dividend u/s 2(22)(e) – non deduction of TDS – looking to large number of adjustment entries in the accounts between two entities the amounts were not in the nature of loan or deposit but merely adjustments application of section 2(22)(e) of the Act would not arise – HC – Income Tax- (The Commissioner of Income Tax (TDS) Versus Schutz Dishman Bio-Tech Pvt. Ltd. – 2016 (1) TMI 84 – GUJARAT HIGH COURT).

• Clarification on the question of liability to deduct tax at source arising out of the amended section 194A w.e.f 01.06.2015 – TDS on interest on payment of compensation awarded by the Motor Accident Claims Tribunals to the claimants – This Court would not act as advisory jurisdiction in abstract. – HC – Income Tax- (New India Assurance Company Ltd. And 1 Versus Commissioner of Income Tax (TDS) – 2016 (1) TMI 83 – GUJARAT HIGH COURT)

Indirect Tax:

• Notification of Negotiable Instruments (Amendment) Bill, 2015 which mainly clarifies the jurisdiction related issues for filing cases for offences committed under section 138 of the Act.

• For preventing money laundering & violation of other Banking laws RBI to share Banks Inspection Reports with Intelligence wing of Central Government.

• Refund of service tax – period of limitation – whether protest is required to submitted at every time of making payment of service tax – Held No – it is not understood why the department had been insistent on separate written protest for each payment against the said services which were not liable for payment of service tax. – Tri – Service Tax- (Bharath Auto Cars Pvt Ltd Versus Commissioner of Central Excise And Service Tax Mangalore – 2016 (1) TMI 68 – CESTAT BANGALORE).

• Levy of service tax on incentive received – the same is more in the nature of a prize money for a good performance by the appellant and are in no way linked to the value of the services. – Tri – Service Tax- (AMR India Ltd. Versus Commissioner of Central Excise, Customs And Service Tax Hyderabad-II – 2016 (1) TMI 67 – CESTAT BANGALORE)

• President clears new Juvenile Justice Act, 2015

Service Tax :

• Taking over management/running of business and bearing profit/loss on own accou nt does not amount to ‘business support services’ and, therefore, profit so earned cannot be charged to service tax, [2015] 64 taxmann.com 374 (Bombay) Commissioner of Central Excise & Service Tax v. Karan Agencies

Excise & Customs :

• Mere sharing of certain facilities by two assessees cannot lead to holding one unit as dummy of another, where both assessees are having full manufacturing facilities, [2015] 64 taxmann.com 375 (Punjab & Haryana) Commissioner of Central Excise v. Saron Mechanical Works

• CIT(A) gets flak from ITAT for enhancing income of assessee without providing hearing opportunity to him [2015] 64 taxmann.com 381 (Delhi – Trib.) Roshan Motors v. ITO

Competition Act:

• Where there were other prominent brands of laptops available in India, it appeared that consumers in India had adequate choice and OP-computer manufacturer/seller did not enjoy a position of strength, hence no contravention of provisions of section 4 was made out against OP[2015] 64 taxmann.com 387 (CCI)
  Trend Electronics v. Hewlett Packard India Sales (P.) Ltd.

• President clears amended Act enforcing stringent action against persons involved in crime against SC/ST persons.

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