If Your Struck off Company is having some property in its name it could ...

Pending Litigation, at the request
of unsecured creditor , to take delivery of imported goods from port,  agreement to sell the properties of struck
off companies, proof of new orders on hand or a development contract company’s
name can be restored by NCLT.

GRIFFIN DEVELOPERS PVT LTD v. ROC KERALA

The appellant company applied for striking off
the name of the company under Fast Track Exit Scheme (FTE). ROC Kerala
accordingly struck off the company.

In the mean time , the Directors of
the company purchased some lands and this was inadvertently registered in the
name of the company instead of directors Name.

As the lands purchased were
registered in the name of the company inadvertently , it has become necessary
for the members of the company to restore the name of the company under section
252 of the Companies Act , 2013.

Consequent upon striking-off from
the Register of Companies, any transaction pertaining to properties owned by
such companies by the Directors or authorized signatories of such companies
would be void ab initio and a nullity, till such companies are restored by an
NCLT order u/s. Section 252 of Companies Act, 2013;

 Properties of struck off cos. from RoC cannot be used,
operated, transferred or alienated in any manner until revival by NCLT.

NCLT
RESTORES 46 Struck Off Companies to protect Revenue’s Interest.

NCLT, vide its interim orders,
directs 46 companies (which were struck-off by ROC) to be deemed to be restored
to its original number and entitles petitioner (Tax Dept.) to raise demand by
serving notice in accordance with law; In case of few
of the companies, NCLT notes that re-assessment proceedings u/s. 148 have to be
initiated,

It was argued by the ROC that the
company has concealed and filled FTE application concealing the fact that It
does not have any assets and liabilities.

Further , ROC informed that they
received tax arrears demand from the Income Tax authorities against the
company.

Where appellant-company was able to
satisfy that it was owner of property when its name was struck off by
respondent-RoC from its register which it wants to utilize now to carry on its
business activities and since no objection to restoration of name of
appellant-company had been raised in report of RoC, name of appellant-company
was to be restored in register of companies.

Company Law  NCLT - Kochi  
No objections were received in ROC’s report; name of company was to be
restored in register of companies.

Restoration despite annual filing default for 14 years

One can apply for the Restoration of
the Name of the Company within 20 years of struck off notice.

Mumbai High Court Allowed pvt co’s
name restoration despite annual filing default for 14
years in (Bulakidas Mohta Co. P. Ltd.) v. RoC, Maharashtra, &Ors.

Cannot Operate the Bank Account

Ex-Directors and ex-Authorized
Signatories will “not be able to operate bank accounts of such companies till
such companies are legally restored under Section 252 of the Companies Act by
an order of the National Company Law Tribunal.

ASM Consultant Private Limited, VS  ROC, Pune

t is seen from the
petition that the company generated revenue in the F.Y. 2016- 17 & 2017-18.
The Company has generating revenue to the tune of ₹ 29,18,960/- in the F.Y.
2016-17 and ₹ 12,15,280/- in the F.Y. 2017-18. Therefore, it can be said to be
a running concern, the ground for strike-off i.e. “no business operations for a
period of last two financial years” by ROC appears to be unfounded

The Company has not
deposited heavy cash in its Bank Account during the period of Demonetizations
i.e. from 8th November 2016 to 31st December 2016, as noticed from the annexed
Affidavit along with this Petition/Application.

However, it is further
submitted in the said report that the RoC has no objection to restore the name
of the Petitioner Company, if the Petitioner Company is willing to comply with
the provisions of the Act, subject to imposition of Cost.

New Delhi NCLT: Allows restoration of Company’s name at
the behest of unsecured creditor

Allahabad NCLT: Pending litigation a valid reason
for name restoration, allows petition

Allahabad
NCLT: Name Restoration necessary for taking delivery of goods from Port, allows
application

Non performing Directors and Reappointment of director barred by minorit...

SHAREHOLDERS OUST TPG'S
BHATIA FROM SHRIRAM TRANSPORT FINANCE BOARD

REAPPOINTMENT OF DIRECTOR IS
BARRED BY MINORITY SHAREHOLDERS

Most proxy advisory firms
had recommended ‘against’ vote on the resolution, raising red flags over his
poor attendance at board and other committee meetings

Minority shareholders of
Shriram Transport Finance Company (STFC) overwhelmingly voted against a resolution to reappoint private
equity major TPG Capital Asia’s co-managing partner and India head Puneet
Bhatia as a board member.

This makes it a rare
instance of public shareholders coming together to oust a high-profile India
Inc board member. The issue also highlights the growing scrutiny by investors and voting advisory firms
of the performance of board members.

RESOLUTION FOR REAPPOINTMENT
OF DIRECTORS

Vehicle finance company STFC
got shareholders’ approval on all the seven resolutions it floated at the
annual general meeting (AGM) on Thursday, barring the one “to appoint Puneet
Bhatia, who retires by rotation as a director.”

While the resolution got 100 per cent promoter votes,
over 83 per cent of public shareholders, mainly institutional investors, voted
‘against’. Overall, the resolution
got only 43.1 per cent votes, failing to reach the 50 per cent threshold
required to pass an ‘ordinary resolution.

PROXY
ADVISORY FIRMS IN ACTION

Most proxy advisory firms
had recommended ‘against’ vote on the resolution, raising red flags over his poor attendance at board and
other committee meetings.

“No concern regarding
profile and time commitment. However, director (Bhatia) has low attendance,”
said Stakeholders Empowerment Services (SES), in its voting advisory note.

POOR
ATTENDANCE BY THE DIRECTOR

In 2019-20, Bhatia attended
only three of the six board meetings held by STFC, where he served as
non-executive director. Also, his attendance in audit committee and corporate
social responsibility meetings was just 40 per cent and 33 per cent,
respectively.

 “A director is no more an ornament
for the company or a badge for an individual.

BOARD ATTENDANCE IS SEEN AS
A SURROGATE MEASURE OF BOARD-LEVEL PARTICIPATION

Investors expect directors
to be more engaged with companies whose boards they serve on. In the absence of
any parameter on this, board attendance is seen as a surrogate measure of
board-level participation,”

Voting advisory firms expect a director to
attend at least 75 per cent of board meetings.

STFC’s management was
batting for Bhatia’s reappointment despite his sub-par attendance.

IT
IS UNFAIR SAYS STFC

“It would be unfair to
arrive at any judgement or vote against recommendation solely based on the
guideline that he did not attend 75 per cent board meetings of STFC in FY
2019-20. This will not be in the larger interest of shareholders of the
company,” STFC had said.

Justifying his
reappointment, the Chennai-based firm had said

“Bhatia has made significant
contributions for success and excellent performance of the company. The management has highly benefited
from his association, guidance and advice through discussions and deliberations
on strategic matters.”

Voting advisory firms are
often criticised by companies for strictly following quantitative metrics such as attendance, age and number of
director positions held.

In 2018, the issue had come
to the fore after some global voting advisory firms had recommended ‘against’
vote on HDFC’s resolution to re-appoint Deepak Parekh as director as he held board positions in eight
other companies.

Besides heading TPG Capital
Asia, which manages $6 billion in assets, Bhatia serves as director in about a
dozen other entities. Before joining TPG in April 2002, Bhatia was head of GE
Capital India, another private equity. He had joined STFC’s board as nominee
director of TPG in 2006 after the PE firm acquired an indirect stake in STFC.

LESSONS
LEARNED

·    
This highlights the growing scrutiny by
investors and voting advisory firms of the performance of board members.

·     A
director is no more an ornament for the company or a badge for an individual

·     Board attendance is seen as a surrogate
measure of board-level participation

·     Market
watchdogs expect a director to attend at least 75 per cent of board meetings

·     On
the Company side , it is argued that we should not see alone the percentage of
attendance but we have to see the contribution of director to the growth of the
company.

·     One
should not focus  f quantitative metrics
such as attendance, age and number of director positions but one should look
into the significant contributions for success and excellent performance of the
company by such director.

WAS GETTING THE REGISTRATION CERTIFICATE FOR THE CLIENT IS A CRIME?

WHETHER THE ARREST OF CA IS IT A FAIR ?

 WHY REAL CULPRITS
HAVE NOT BEEN ARRESTED ?

IT IS THE TIME FOR PROFESSIONAL’S BODIES TO
PROTECT THE PROFESSIONAL’S INTEREST IN NEAR FUTURE?

Getting GST & Other registration on behalf of the
clients is the normal activity for Chartered Accountants, Advocates, Tax
consultants, Accountants & other professionals.

In all such cases, the tax
professionals act as a
mere facilitator to the clients in getting the registration and not as agents
of the clients. The ultimate registration is granted by the
Department after verifications of the documents and records.

If any of the taxpayers subsequently commits frauds or dupe the
Government, whether the tax professionals can be arrested?

 Whether
the officer who has granted the registration is not the proper officer to be
arrested in such cases, rather than the tax consultants?

Is it right to prosecute the tax consultants who is just facilitating
the process of registration in such case?

Whether the tax consultants is expected
to carry out the due diligence of the clients before accepting any routine
work?

Even in marriages proposal also, the due diligence may
not be full proper, can it be expected in professional-client relationship?

If the activity carried out by the taxpayer is illegal or
not as per the permissible mode, whether tax consultants be held as responsible
for this?

This is the time
to introspect and professional’s bodies like ICAI, Bar Association, Tax
chambers need to take a call on this.

It’s not the question of One Paridhi Jain who was only
getting the firms registered at the behest of her clients after collecting
requisite documents from them. She was prosecuted for more than one month. It’s  a question of each and every tax consultants.
If not now, then get ready for more instances like this.

The matter comes to light when the bail application is
rightfully accepted by the Hon’ble Rajasthan High Court in the case of Paridhi
Jain Vs State in S.B. Criminal Miscellaneous Bail Application No. 742/2020.

The issue is not that she has been granted bail but the
main issue to be observed is that she has been arrested. Why the question of bail has arisen for this 27
years old lady?

Similar issues
have happened in the past also. Why the matter be not taken up with the
appropriate political & administrative forum of Finance Ministry &
CBIC, at least when the person is a member of the most respected fraternity and
deserves respect and recognition.

Was getting the registration certificate for the client is crime?

Let the Government
comes with a model code of conduct for the model code for the tax professionals
so that they can distinct themselves from the clients?

 This is the time
to revisit the routine activities and identify the areas & role the tax
consultants should play. Taking
actual ground level action is such case is more important than planning CPE
programme.

If not we, who
will be with Paridhi Jain? If not now, then when? It is she now, who will be
the next?

Questions to Ponder

·     The
main question in this case , why the tax authorities have arrested a tax
consultant ? Why the real culprits have not been arrested? Why the owners of
the firm who  committed the fraud have
not been arrested ? Why a CA has been made as a scape goat? Which prevented the
tax officials from arresting the real culprits?

·     The
tax professionals act as a mere facilitator to the clients in getting the
registration and not as agents of the clients

·     If
any of the taxpayers subsequently commits frauds or dupe the Government,
whether the tax professionals can be arrested?

·     Whether
the officer who has granted the registration is not the proper officer to be
arrested in such cases, rather than the tax consultants?

·     Is
it right to prosecute the tax consultants who is just facilitating the process
of registration in such case?

·     Whether
the tax consultants is expected to carry out the due diligence of the clients
before accepting any routine work?

·     This
is the time to introspect and professional’s bodies like ICAI, Bar Association,
Tax chambers need to take a call on this.

·     These
bodies should make immediate lobbying at the highest level of government to safeguard
their members interest and to protect them in cases where they have acted genuinely
.

27 YEAR OLD LADY CA IS IN JAIL FOR GST REGISTRATIONS DONE FOR ALLEGED FR...

WOMEN CA ARRESTED FOR FRAUDULENT GST FIRM REGISTRATION &
COMPANY AND DIRECTORS FINED FOR NOT DISPLAYING CIN ON THEIR LETTER HEADS

She filed bail application contending that she was only
registering the firms on behalf of the clients after collecting required
documents from them. The present petitioner is a professional
Chartered Accountant. She further submitted that the petitioner was only
getting the firms registered at the behest of her clients after collecting requisite
documents from them. It was the duty of the competent authority of the
department to get the details furnished by the present petitioner verified as
per KYC (Know Your Customer).

As the petitioner being a practising Chartered Accountant
and a lady of 27 years  is in Jail for
last more than one month and in view of the undertaking submitted by the
petitioner to fully cooperate with the investigating agency and provide the
information/documents asked for by the investigating agency, this Court is of
the opinion that the bail applications filed by the petitioner deserve to be
accepted.

Rajasthan High Court granted
bail on personal bond of Rs. 10 lakh and two sureties Rs. 10 lakh each.

COMPANY AND ITS DIRECTORS PENALISED IF CIN NUMBER IS NOT
DISPLAYED ON COMPANY’S LETTER HEAD

Section 12 of the Companies Act, 2013 - CIN on the
company's letter head. Numerous instances where Companies have been penalized.

Sec. 12 of the Companies Act, 2013 inter alia requires a
Company to have a registered office within 30 days of its incorporation and for
all times thereafter.

Further, Sec. 12(2)(d) r/w Rule 26 of the Companies
Incorporation Rules provides further requirements in this regard. Companies
must ensure that they have Corporate Identification Numbers printed on all
letter heads, bill heads, official documents etc. to ensure compliance with
this section.

Have seen many instances of RoC Orders in recent days
where Companies have been penalized for violation of this Section.

Snip from the operative part of the Order

1	Anup Industries Limited	Rs 2000
2	Mr. Gaurav Nautam Nanavaty Managing Director	Rs 2000
3	Mr. MItali Nanavathy Gaurav Whole-time Director	Rs 2000
	Total Fine Amount	Rs 6000

SEBI TAMPERING OF PHONES,SINGLE E-COMPLIANCE WINDOW ,VIEW PUBLIC DOCUMEN...

CENTRAL GOVERNMENT REJECTS SEBI’S DEMAND TO TAP PHONE CALLS TO PREVENT
INSIDER TRADING.

The Centre has rejected the
Securities and Exchange Board of India’s (Sebi’s) proposal for being granted
the powers to tap phone calls to book those doing insider trading.

The government authority concerned is
learnt to be of the view that access to the details of phone calls should be
used in only cases such as threats to national security, terror financing, and
money laundering.

 

According to government sources, such powers are the last
resort and are meant to be used sparingly because they conflict with
fundamental rights.

SINGLE E-COMPLIANCE WINDOW SOON: MCA
INITIATES DISCUSSIONS WITH RBI, SEBI, DPIIT ON TRANSFER OF DATA

Companies at present have to make
multiple filings. Different regulators have different requirements and formats
for submission of data.

Once the common platform is in place, companies can file all
their data in one place and regulators can get their data from one source,
experts said.

The objective of the proposed single platform would be to
integrate databases of the corporate affairs ministry (MCA) and other bodies to
bring down duplication in filing, the official said. “This will help in ease of
doing business.”

HOW TO VIEW PUBLIC DOCUMENTS IN MCA WEBSITE INSTANTLY?

Is there any problem with MCA?

I have made payment for inspection of public documents
two times but it is not showing under cart to download the documents?

Even the complaint is also not registering on the MCA
(showing error)

MCA view public document is having technical problem,
payment is debited and must wait for 2 days and after 2 days payment status is
showing as paid. MCA helpdesk also not reachable and cannot create
service-related complaint unless payment status is paid or not applicable. If
anyone has solution, please guide.

you can use couple of webiste for MCA downloads.
Corpdata.in or eformsdownload.com. costing around 150/- per company. They will
download entire data in 30 min and send you the link.

HOW TO FILE EXTENSION OF AGM WITH ROC ? ROC Has to grant Extension of AG...

REASONS WHY AUDITORS RESIGN BEFORE THEIR TERM EXPIRY

REASONS WHY AUDITORS RESIGN BEFORE THEIR TERM EXPIRY

RESIGNATION
OF STATUTORY AUDITOR

Section 140(2) of Companies Act, 2013, deals with
resignation of auditor and its related compliance. As per provisions, if any
auditor resigns from the company then he shall file an intimation about its
resignation with RoC and with the company within 30 days from the date of
resignation. Further, in case of Government Company,

FILING FORM ADT-3 BY RESIGNING AUDITOR

In purview of Section 140(2) of the Act, Rule 8 of The
Companies (Audit and Auditors) Rules, 2014 requires auditor to file intimation
about its resignation with RoC in form ADT-3.

Auditor who resigns from his office of auditor of the
company is required to file form ADT-3 within 30 days from the date of his
resignation.  Please note that
responsibility to file ADT-3 lies with auditor not the company. It is
applicable all companies including private limited company.

A record number of 35 auditors have resigned from
NSE-listed firms in the first six months of financial year 2019-20.

MID-TERM CESSATION OF AUDITORS IN NSE LISTED
COMPANIES

CESSATION REASON	2019-2020 April to September
Pre-occupation	11
Resigned without stating reasons	7
Resigned due to Commercial Reasons	3
Reasons due to unsatisfactory responses to queries	3
Non-payment of dues	1

DELOITTE
RESIGNS AS 8K MILES’ STATUTORY AUDITORS, RAISES FRAUD CONCERNS

Deloitte Haskins and Sells has resigned from 8K Miles as
its statutory auditors effective November 15,2019 the company intimated to
stock exchanges.

“Considering the significance and gravity of the matters,
including, inter alia, the concerns relating to revenue recognition, management
override of controls, the material weakness noted in the Company's internal
financial controls over financial reporting, the management imposed scope
limitation on the audit of subsidiaries and providing other information, the
non-receipt of the forensic investigation report, etc. as reported by us in our
Audit Reports containing a disclaimer of opinion on the standalone and
consolidated financial statements of the company for the year ended 31 March,”
Deloitte cited as its reasons for resignation.

PRICE WATERHOUSE
QUITS AS STATUTORY AUDITOR OF GVK POWER

Price Waterhouse Chartered Accountants LLP on 14 August
2020 announced that it has quit as the statutory auditor of GVK Power and
Infrastructure Ltd, alleging that the group was not cooperating in the audit
work for their Mumbai airport operations.

INFIBEAM FIRED ITS
JOINT STATUTORY AUDITOR

Infibeam, the BSE listed company based in Ahmedabad, on 14
June 2019 appraised the Ministry of Corporate Affairs (MCA) of its decision to
sack SRBC and Co as its joint statutory auditor.
This comes about a month after the company alleged that the auditor, part of
the EY network, leaked sensitive information two years back.

PWC RESIGNED AS
RELIANCE CAPITAL AS AUDITOR

On June 14 , 2019 PwC resigned as
Reliance Capital and Reliance Home Finance auditor and shot a letter to MCA
alleging divergence of funds in the group companies. In the letter dated June
11 2019, PwC also alleged that the company also threatened legal action,
impairing the ability of the auditor. The firm also stated in the letter that
it suspected fraud and raised red flags over some transactions involving
Reliance Capital and Reliance Home Finance.

Statutory auditors
resigned by mentioning the real genuine reason transparently –

“FEES INCREASE IS
NOT AGREED BY CLIENT.”

        SHR & CO , Mumbai , an audit firm
resigned as statutory auditor from Gufic Biosciences Private Ltd as auditor of
the company. The reason cited by the auditor is as follows:

We have indicated to the Management that our audit fee is
not commensurate with the time and efforts involved , hence requested to
increase our audit fees which has not been accepted favourably by the
Management. In these circumstances , we are unable to continue to act as the
Statutory Auditor and hence tendered our resignation as Statutory Auditors of
the Company.

TREAT CSR EXPENDITURE MADE AS DONATIONS TO BE QUALIFIED FOR DEDUCTION SA...

TREAT
CSR EXPENDITURE MADE AS DONATIONS TO BE QUALIFIED FOR DEDUCTION UNDER SECTION
80G OF THE IT ACT- SAYS BANGALORE TAX TRIBUNAL

CSR
COMMITTEE

Section 135 (1) Every
company having net worth of rupees Rs 500 crore or more, or turnover of rupees 1000
crore or more or a net profit of Rs 5 or more during immediately preceding
financial year shall constitute a Corporate Social Responsibility Committee of
the Board consisting of three or more directors, out of which at least one
director shall be an independent director. Proviso to Section 135 (1) .

MANDATORY
CSR SPENDING

Section 135 (5)  of Companies Act 2013 The Board of every company referred to
in sub-section (1), shall ensure that the company spends, in every financial
year, at least two per

cent of the average net
profits of the company made during the three immediately preceding financial years,
in pursuance of its Corporate Social Responsibility Policy:

While such companies are
required to make this CSR spending compulsorily, the Finance (No.2) Act 2014
restricted its deduction for tax purpose by amending section 37(1) of the
Income-tax Act, 1961 (IT Act).

NO SPECIFIC  NO SPECIFIC TAX EXEMPTION

 There is no specific
tax exemption that has been extended to expenditure incurred on CSR.

However spending on several
activities which are governed by section other than section 37(1) of the IT Act
could be claimed as deduction. One of this section is 80G of the IT Act.
However, the claim under section 80G of the IT Act is not free from litigation.

Goldman Sachs Services Pvt
Ltd vs JCIT

 In Goldman Sachs Services Pvt Ltd vs JCIT, Bangalore , an
interesting question was raised  whether
the expenses incurred to fulfil the CSR obligation under CA 2013 could be
claimed as deduction under section 80G of the IT Act

Goldman Sachs in the year
2014-15, spent Rs 2.25 Crores towards CSR and claimed Rs 1.12 Crores as
deduction under section 80 G of IT Act. However, the Tax officer denied
taxpayer's claim under section 80G of the IT Act except for contribution made
to PM National Relief Fund. Dispute Resolution Panel (DRP) confirmed the tax
officer's action. DRP observed that the claims are in the nature of CSR policy
expenditure and hence does
not qualify for deduction under section 80G of the IT Act.

Explanation
2 to section 37(1) of the IT Act

IT Tribunal , Bangalore held
that  CSR expenses are mandatorily  to be incurred by companies in terms of
section 135 of the CA 2013 and the deduction under section 37(1) of the IT Act is not available in light of Explanation 2 to section 37(1) of the IT Act

Explanation 2 narrates that
for the removal of doubts, it is hereby declared that for the purposes of
sub-section (1), any expenditure incurred by an assessee on the activities
relating to corporate social responsibility referred to in section 135 of the
Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred by the
assessee for the purposes of the business or profession.

CSR SPENDING IS NOT A
VOLUNTARY DONATION

In the present case, the tax
officer has rejected the taxpayer's claim under section 80G of the IT Act
without verifying the nature of contributions and observed that it is not a donation, and was
not spent voluntarily for the eligibility of claim under section 80G of the IT
Act but due to legal obligation prescribed under section 135 of the CA 2013.
Further, after examining section 80G of the IT Act, the Tribunal observed that
in respect of following donations, it is specifically provided that if they are
incurred in pursuance of CSR, deduction under section 80G of the IT Act will
not be available to the following:

·     Swachh
Bharat Kosh

·     Clean
Ganga Fund

Tribunal observed that while
these two exceptions are provided in Section 80G of the IT Act, it can be
inferred that the other contributions made under section 135(5) of the CA 2013
are also eligible for deduction section 80G of the IT Act subject to taxpayer
satisfying the requisite conditions prescribed for deduction under section 80G
of the IT Act.

As the tax officer did not
deal with these aspects and merely considered the contributions as not
voluntary but a legal obligation under CSR policy, the Tribunal remanded back
to the tax officer for a fresh examination and verification of facts, subject
to taxpayer satisfying requirements of section 80G of the IT Act.

Findings

Tribunal has made an
important observation that CSR spend, even though made under a legal obligation
under section 135 of CA 2013, can be claimed as deduction under section 80G of
the IT Act (except for Swachh Bharat Kosh and Clean Ganga Fund) subject to
fulfilment of conditions prescribed for section 80G of the IT Act. This Ruling
will give respite to many taxpayers who have incurred CSR spend in accordance
with CA 2013 and are covered by section 80G of the IT Act.

In First American (India)
Pvt Ltd vs ACIT, Bangalore Tribunal held that f the taxpayers are denied the
benefit of deduction under section 80G of the IT Act, merely because such
payments form the part of CSR spend, it would lead to double disallowance,
which is not the intention of Legislature.

While the judiciary is still
evolving on tax deductibility of CSR spends, in light of the recent rulings, it
could be fairly said that the amendment made to Section 80G of IT Act vide
Finance Act, 2015 should be interpreted in a literal manner and contribution
made to any fund / institution (other than Swachh Bharat Kosh and Clean Ganga
Fund) which qualify as CSR spend under section 135 of CA 2013, would be
eligible for deduction under section 80G of the Act.