Thursday, June 12, 2014

Board resolution for shifting of Registered office

CERTIFIED COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTOR’S OF XYZ PRIVATE LIMITED HELD ON MONDAY, 02nd DAY OF JUNE, 2014 at the Registered OFFICE OF THE COMPANY SITUATED AT OLD Registered Office Address, NEW DELHI-110001 AT 10.00 a.M.

‘RESOLVED THAT pursuant to the provisions of section 12 of the Companies Act, 2013 and rule 25 and 27 of the Companies (Incorporation) Rules, 2014 and any other provisions applicable, if any, the Registered office of the Company be and is hereby shifted from OLD ADDRESS OF XYZ COMPANY to NEW ADDRESS OF XYZ COMPANY  w.e.f. 02nd June, 2014.

RESOLVED FURTHER THAT Mr. ABC , Director of the company be and is hereby authorized to enter sign, execute, and submit various documents and to do all the acts and deeds on behalf of the Company regarding Shifting of the registered office of the Company within the local limits of city.”


Certified True Copy
For XYZ Private Limited


Name-                  ABC DIRECTOR
DIN-                     1111111
Designation-        Director
Address-               ADDRESS OF DIRECTOR

Relaxation of KYC norms

The Reserve Bank of India’s decision to allow individuals to open bank accounts with a permanent address will provide a boost to the process of financial inclusion, according to bankers and industry experts.

This will not only bring migrant workers but also students and people with a transferable job into the banking fold, experts are of the opinion.

Rishi Gupta, chief operating officer & executive director, FINO PayTech, a Mumbai-based payments technology company that works in the financial inclusion space, said relaxing the Know Your Customer (KYC) norms for opening of accounts augurs well for the financial ecosystem, as it allows more people to use banking services. “Currently, RBI is relaxing norms to open bank accounts and this is the first step in the stage of financial inclusion. Once this is done, the second step will be to ensure these accounts remain active and made productive by using other basic and advanced financial services,” he added.

Reports point out that, according to RBI,  in 2006, 150 million households across the country did not have a bank account. And if each household had presumably 4 members, than the number of people without a bank account was about 600 million.

In the last seven years, with the relaxation in the KYC norms, banks and technology-enabled business correspondents model, over 200 million no-frills bank accounts have been opened in nearly 300,000 villages.

Banks have been asked by the regulator to revise its own KYC norms accordingly. Bankers believe it is a welcome move but may pose some initial operational hurdles.

R K Bansal, executive director, IDBI Bank, said though this was a step ahead in financial inclusion, it may pose some operational challenges for the banks, initially. “Banks will have to be careful in verifying the permanent address. It will slightly increase the requirement of verification.”

The banking regulator has suggested that banks will need verify the local address through “positive confirmation” such as acknowledgment of receipt of letter, cheque books, ATM cards, telephonic conversation, visits, etc.

Murali Natarajan, managing director & chief executive, DCB, also said the banks will have to carefully look at the  operational part. “The process of how a bank will verify the address will also need to be deliberated and finalised as the genuinity of the address given will need to be verified carefully.”

Rana Kapoor, MD & CEO, YES Bank, added that though this will act as a great enabler in taking urban financial Inclusion to new level, however, necessary checks and balances, systems and procedures should be in place to ensure that no one misuses this relaxation.

Income tax - Whether for purpose of determining time-frame for completion of assessment, date on which requisition u/s 132A is made, is irrelevant - YES: HC

NEW DELHI, JUNE 12, 2014: THE issue before the Bench is - Whether for the purpose of determining the time frame for completion of the assessment proceedings, the date on which the requisition under Section 132A is made, would not be material and the time period must run from the date when AO is in a position to proceed with the assessment proceedings and conclude the same. And the verdict goes in favour of the assessee.
Facts of the case

Assessee
 derives commission income from purchase and sale of properties and from the trading of transistor parts. It also worked as an informer for DRI. CBI conducted a search and seized cash of Rs. 1.12 crores. DIT (Inv.) issued warrant of authorization u/s 132A to CBI to deliver the books of account, documents and the assets seized by CBI during the search.

Assessee filed a petition before Special Judge requesting for release of cash seized by CBI. The Special Judge dismissed the petition of assessee and directed CBI to transfer the seized amount to Income Tax Department.

Assessee filed return declaring an income of Rs. 1.13 crores for AY 2002-03 which included Rs. 90 lacs from seized by CBI in response to notice issued u/s 158BC. AO made assessment considering the whole amount seized as undisclosed income for the block period. AO also completed assessment for AY 2002-03 separately determining the income at Rs. 90 lacs.

CIT (A) as well as ITAT both dismissed the appeals of the assessee. Before Hon’ble High Court, the question of law framed was that whether tribunal was justified to validly conclude that block period was 1.4.1996 to 21.03.2013 despite the fact that section 158BA specifically provides block period ends on the date on which, requisition was made u/s 132A and as such, the correct block period was 1.4.1996 to 18.9.2001. Whether the tribunal was justified in determining undisclosed income at Rs. 1.14 crores despite the fact that block period on the facts of the case comprised of the period 1.4.1996 to 18.9.2001 and not block period determined by the tribunal as 1.4.1996 to 21.03.2003 and whether the cash award received by assessee from DRI is to be treated as undisclosed income.

Assessee contended that the Block Period, as defined under Section 158B of the Act, means the period comprising of previous years relevant to six assessment years preceding the previous year in which search u/s 132 was conducted or requisition u/S 132A was made and also includes the period up to the date when such requisition was made. Tribunal erred, while upholding that the block period ended on 21.03.2003, as the requisition u/s 132A of the Act was made on 18.09.2001 and therefore, the block period must end on 18.09.2001. The date of execution of warrant of authorization u/s 132A cannot be held to be the date on which requisition u/s 132A was made. Regarding addition of Rs. 22.50 lacs, it was stated that it was a part of the cash rewards aggregating Rs. 27.00 lacs received from DRI.

Revenue contended that the requisition mentioned u/s 158B(a) relates to the date of the execution of the authorization issued u/s 132A. As per Explanation 2 to Section 158BE of the Act, the requisition is deemed to have been executed on the actual receipt of the books and accounts or other documents by the Authorized Officer. The block period ended on 21.03.2003 as the requisition u/s 132A was said to be complete on 21.03.2003 when the physical delivery of the amount seized by CBI and other documents were handed over to the tax authorities enabling the Assessing Officer to issue a notice under Section 158BC of the Act.

After hearing both the parties, the High Court held that,

++ Block period has been defined to mean the period comprising previous years relevant to the six assessment years preceding the previous year in which search u/s 132 is conducted or requisition u/s 132A is made. It also includes a part of the previous year till the date when the search u/s 132 is conducted or such requisition u/s 132A is made. DRI issued a warrant of authorization u/s 132A, on 18.09.2001, and the Income Tax Authorities received the books of accounts and other documents on 21.03.2003. On 28.05.2003, the Assessing Officer issued a notice to the assessee under Section 158BC of the Act to file a return of undisclosed income for the block period of 01.04.1996 to 21.03.2003;

++ The moot question is whether the Block period should end on 18.09.2001 (i.e. the date of the requisition) or on 21.03.2003 (i.e. the date on which the records were received). The words used in Section 158B(a) and Section 158BE(1) are different. Whereas, Section 158B(a) refers to making of requisition, the specific words being: “or any requisition was made under Section 132A … or requisition was made”, Section 158BE(1) refers to execution of authorizations, the specific words being: “authorizations ….. for requisition under Section 132A…. was executed”. The Legislature has, thus, consciously used different expressions in Section 158B(a) and Section 158BE. It is settled law that where a statute uses different words, it would be presumed that the Legislature intended the same to express different meanings. It, certainly, cannot be presumed that the Legislature had consciously used different expressions to mean the same thing. Moreover, a construction deriving support from different phraseology in different sections of a statute may be negated on considerations that it will lead to unreasonable or irrational results;

++ On a plain reading of Section 158B(a) and Explanation 2 to Section 158BE, it is difficult in accepting that the expression “requisition was made” must be read to mean the same as “authorizations for requisition was executed”;

++ The provision of Section 158BE(1) relates to the period of limitation within which the order of block assessment must be passed u/s 158BC. The purpose of Section 158BE (1) is to specify sufficient time within which the AO is expected to complete the exercise of assessment pursuant to the material that has been found against the assessee. The date on which the AO comes into possession of the assets and books of accounts of the assessee, would be relevant for determining the said period. AO cannot be expected to proceed and conclude the exercise of assessment in absence of the requisite records, documents and assets that form the basis on which the assessment proceedings are to be conducted under Chapter XIVB of the Act. For the purpose of determining the time frame for completion of the assessment proceedings, the date on which the requisition under Section 132A is made, would not be material and the time period must run from the date when AO is in a position to proceed with the assessment proceedings and conclude the same. The focus of Section 158BE(1) is fixation of the time frame for completion of the assessment. This is, clearly, not the focus of Section 158B(a);

++ The income, that is, received/receivable after the date of search and seizure would not be represented by the assets that are found during the search and seizure operations and certainly, would not be assessable to tax as undisclosed income for that period. There is, thus, good reason for the Block Period to be defined as a period prior to the date of search or prior to the date when the authorized officer finds reason to believe that the assets/materials already found, represent undisclosed income. The Parliament in its wisdom has, therefore, defined Block Period u/s 158B(a), to include the period up to the date of commencement of the search under section 132 or the date on which the requisition u/s 132A is made. Therefore, there is no reason to read the expression “requisition was made” to not mean the date on which the authorized officer made the requisition but to mean the date when he received the records/assets pursuant thereto. In view of the same, the Block Period adopted by AO was not in accordance with the provisions of the Act, the assessment made by the Assessing Officer would also required to be reviewed;

++ Assessee produced a letter from DRI stating that the assessee was the recipient of cash rewards. AO doubted the letter from DRI and held that the assessee had failed to prove a corelation between the cash found and the cash rewards claimed by him. Assessee had given details of the cash rewards received by him including the names of the officers who had given the said cash rewards to the assessee. The affidavit filed by the assessee could not have been rejected summarily without verifying the facts from the relevant authority. Thus, matter is remanded back to AO.

Regards
Prarthana Jalan
__._,_.___

Reopening of Assessments - guidelines

*S. 147: Strict guidelines laid down to streamline procedure for reopening
of assessments*

(i) In large number of cases pertaining to reopening of assessments, we
have noticed that different stages of the assessees demanding reasons
recorded by the AO, supplying of such reasons, the assessees raising
objections and the AO disposing of such objections, consume considerable
time. In many cases, the last stage of disposing of the objections raised
by the assessee is reached only a few weeks, and in some cases even days,
before the assessment would be time-barred. This situation is quite
unsatisfactory, both from the point of the assessee as well as the
department. In the last minute rush, the AO frames assessment in a most
hurried manner. In the process, important and valid grounds raised by the
assessee are often times lost sight of. Additions are thus made which could
have been avoided forcing the assessee to prefer appeal which could have
been avoided, further creating needless strain on the system. On the other
hand, some times additions were made without full and proper scrutiny. The
additions which should have otherwise stood the test of appellate scrutiny
fail the test.

(ii) It can thus be seen that there are four important stages once the AO
issues notice for reopening of the assessment. Such stages are: (i) the
assessee if he so wishes, may demand the reasons recorded by the AO after
filing return in response to notice u/s 148 of the Act, (ii) the AO
supplying such reasons to the assessee, (iii) the assessee raising
objections to the notice for reopening and (iv) the AO disposing of the
objections raised by the assessee. With a view to streamlining this
procedure, and to ensure, as far as possible, the AO is not faced with the
unenviable task of completing the assessment proceedings in a few days left
before the same became time barred, we would like to give certain
directions of general implication which, we would expect, are followed by
all concerned. While doing so, we are conscious that these stages are
provided by the Supreme Court in *GKN Driveshafts (India) Ltd* 259 ITR 19
and we would be giving directions only to the extent the said judgment
already does not provide for. We have noticed that considerably long time
is consumed sometimes by the assessee demanding the reasons recorded by the
Assessing Officer and sometimes the AO complying with such a request of the
assessee. It is an accepted proposition that the reasons recorded by the AO
are not confidential and the assessee whose assessment is being reopened
has a right to know such reasons. We therefore thought that these two
stages can be substantially eliminated by giving suitable directions. The
further stage is of the assessee raising objections which often times is
done after much delay and the last stage comes where the AO deals with such
objections. This is yet another problem area where unduly long time is
consumed by the AO. Under the circumstances, following directions are
issued:

(1) Once the AO serves to an assessee a notice of reopening of assessment
u/s 148 of the Income-tax Act, 1961, and within the time permitted in such
notice, the assessee files his return of income in response to such notice,
the AO shall supply the reasons recorded by him for issuing such notice
within 30 days of the filing of the return by the assessee without waiting
for the assessee to demand such reasons.

(2) Once the assessee receives such reasons, he would be expected to raise
his objections, if he so desires, within 60 days of receipt of such reasons.

(3) If objections are received by the AO from the assessee within the time
permitted hereinabove, the AO would dispose of the objections, as far as
possible, within four months of date of receipt of the objections filed by
the assessee.

(4) This is being done in order to ensure that sufficient time is available
with the AO to frame the assessment after carrying out proper scrutiny. The
requirement and the time-frame for supplying the reasons without being
demanded by the assessee would be applicable only if the assessee files his
return of income within the period permitted in the notice for reopening.
Likewise the time frame for the AO to dispose of the objections would apply
only if the assessee raises objections within the time provided
hereinabove. This, however, would not mean that if in either case, the
assessee misses the time limit, the procedure provided by the Supreme Court
in GKN Driveshafts (India) Ltd would not apply. It only means that the time
frame provided hereinabove would not apply in such cases.

(5) In the communication supplying the reasons recorded by the AO, he shall
intimate to the assessee that he is expected to raise the objections within
60 days of receipt of the reasons and shall reproduce the directions
contained in sub-para 1 to 4 hereinabove giving reference to this judgment
of the High Court.

(6) The Chief Commissioner of Income Tax and Cadre Controlling Authority of
the Gujarat State, shall issue a circular to all AOs for scrupulously
carrying out the directions contained in this judgment.

Admissibility of entries in the books of account

  The Bhartiya Sakshya Adhiniyam 2023 (Indian Evidence Act 2023) Section 28 deals with the admissibility of entries in the books of accoun...