Law Wallet Feb'21 English edition

FEB '21 ENGLISH EDITION RS. 300

LAW WALLET
LEGAL, TAXATION & CORPORATE AFFAIRS...

Budget 2021

GST & Income Tax Amendments...

VODAFONE JUDGMENT

IMPACT ON TAX SYSTEM

MSME

KNOW TO RECOVER MONEY

MAINTENANCE TO WIFE CASE LAWS - BRIEFING

KNOW HOW MUCH TO PAY NEGOTIABLE INSTRUMENT ACT, 1881
&
GST ACT, 2017

Advocate Charanjeet Chanderpal

FROM THE EDITOR S DESK

DEAR PROFESSIONAL COLLEAGUES,

IT GIVES ME IMMENSE PLEASURE TO ISSUE THE FEBRUARY 2021 EDITION
OF LAW WALLET MAGAZINE.

YOUNG PROFESSIONALS MIGHT BE FACING CHALLENGES IN COPING UP
WITH THE CHANGING ENVIRONMENT AND KEEPING THEM UPDATED WITH
THE UPDATED DEVELOPMENTS PERTAINING TO LATEST CASE LAWS,
ACTS, RULES IN THIS SITUATION OF PANDEMIC IS THE UPHILL TASK.

WE, AT LAW WALLET, HAS COME UP WITH THE DECEMBER 2020 EDITION
OF THIS MONTHLY MAGAZINE WHEREIN WE WOULD BE DISCUSSING THE
GST AND INCOME TAX AMENDMENTS IN BUDGET 2021, HOW MUCH TO
PAY MAINTENANCE TO WIFE, SKIN TO SKIN JUDGMENT, CASE LAWS OF
NEGOTIABLE INSTRUMENT ACT, 1881, CASE LAWS OF GST ACT, LEGAL
NEWS OF LAST MONTH, TAX CALENDER ETC.

FOR BETTER UNDERSTANDING, WE HAVE PUBLISHED THIS EDITION BOTH
IN ENGLISH AND HINDI.

FOR MORE AND DETAILED INFORMATION, YOU MAY ALSO SUBSCRIBE
TO OUR YOUTUBE CHANNEL LAW WALLET.

WE WISH YOU ALL THE BEST.

JAI HIND
ADVOCATE PARVEEN SINGHAL

TEAM – LAW WALLET
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LAW & TAXATION

NEWSLETTER

INSIDE PG.13 PG.15 PG.18
THIS
ISSUE ‘WILL’ can be in your NI ACT Judgment … Effective Remedies for
favour… Know the right recovery for MSME ….
PG.3 process for it…

Maintenance to wife? PG.40
Know how much you
need to pay Income Tax Relief for Real
Estate Developers …
PG.6
PG.42
Divorce by mutual consent
….. Relaxation in

PG.9 additional fees for filing

Vodafone Judgment.. A ROC e-Forms…
must read !!

PG.29

Legal News

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PG. 32 TEAM LAW-WALLET

Budget 2021 in easy language. SUBTITLE GOES HERE

PG. 46 A team striving hard to create awareness about the various right and duties which citizen of
India are bound to follow for the peaceful enjoyment of their life
QRMP Scheme..
CA RENU SINGHAL
PG. 61
Over 20 years of experience
Word Meanings used in Article in her field, CA Renu Singhal
is ambitiously working hard
PG. 64 to deliver all the valuable
knowledge and experience
Income Tax & GST Calendar.. she has gained and is
consistently gaining through
PG. 21 her career.

Skin to Skin Touch..

PG.23 & 43

GST Case Laws..

PG.27 Available

Marital Rape..
Remedies

ADV. PARVEEN SINGHAL

A vision to make law easy to
understand for layman and help them
bust the myth related to law is the
prime focus. Several people face defeat
in court cases due to lack of knowledge
of what are their right and duties of the
opponent and more prominently due
to lack of procedural knowledge. We
believe that if law is for all it should be
known by all.

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Maintenance to wife?
Know how much you

need to pay

Adv. Vikas Aggarwal

Where at one phase maintenance is a supporting hand to a women, parent or child who are
abandoned or separated from the person who is liable to maintain any of the above mentioned
relations. It in several cases acts as a hammer on the pocket of the person paying the amount of
maintenance. There are cases where the women, child and parent are living a life of destitute
whereas the person is enjoying all the luxuries of life. In other case, the person himself is not able
to bear his expenses and paying maintenance becomes far more difficult for him.

We are discussing ‘case law’ decided by Hon’ble Supreme Court which can be referred for better
understanding.

----------------------------------------------------------------------------------------------------------------------------

Case Name: Rajnesh Vs. Neha

Facts: Wife left her matrimonial home in January, 2013 and thereafter, filed an application under
Section 125 CrPC for maintenance for herself and minor son. Family court ordered maintenance of
Rs. 15,000/- per month to wife and Rs. 5,000/- per month to minor son till 31.08.2015 and Rs.
10,000/- from 01.09.2015 onwards.

Husband challenged the order of family court before the High Court and High Court dismissed the
Writ petition.

Hence, husband filed the appeal before Supreme Court.

Issues: (1) What shall be the criteria for determining
quantum of interim maintenance to be awarded to the
wife?
(2) Quantum of final maintenance?

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(3) Date from which maintenance is awarded?
(4) Enforcement date of such order of maintenance?
(5) When successive claims for maintenance are made by a party under different statutes, would
the court consider adjustment or not?

Conclusion: Court concluded by dismissing the appeal and holds that appellant/husband is liable
to pay maintenance to his wife. It further directed the husband to pay arrears of maintenance.

Along with this order, court further laid down the factors to be considered for determining
quantum of maintenance.

1. For determining interim maintenance, court shall keep the following criteria in mind:
 Status of the wife;
 Reasonable needs of wife and dependent children;
 Whether the wife is educated and professional qualified or not?
 Whether applicant has independent source of income or not?
 If she has independent source of income, whether such income is sufficient to enable her to

maintain the same standard of living, as she was accustomed to her in her matrimonial
home?
 Whether wife was employed prior to her marriage or not?
 Whether she was working during subsistence of marriage or not?
 Reasonable cost of litigation for a non-working wife?
 Financial capacity of the husband;
 Actual income of the husband;
 Reasonable expense for his own maintenance and of his dependent family members.

2. For determining quantum of final maintenance:
 Duration of marriage;
 Trust funds or investment created by spouse or grand-father in favour of children;
 For determining maintenance for child/children support:
 Food;
 Clothing;
 Residence;
 Medical Expenses;
 Education;
 And, extra coaching classes or vocational training.

If the wife is working and earning sufficiently, expenses for maintaining the child/children shall
be shared proportionately.

 And, for determining reasonable expense for marriage of children, when custody is with
wife, Customs of family and financial position is required to be considered:

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Court further held that the maintenance shall be awarded from the date of application and not
from the date of order in all cases including application for maintenance under CrPC, Hindu
Marriage Act and Domestic Violence Act.

4. Court held that the execution of order for maintenance may be enforced under:
 Section 28A Hindu Marriage Act;
 Section 20(6) Domestic Violence Act;
 Section 128 CrPC.

5. And for successive claims, court held that when claims for maintenance are made by a party
under different statutes, court would consider adjustment or set-off of the amount awarded in
previous proceeding/s, while determining amount in subsequent proceedings.

And if the order passed in previous proceedings required any modification or variation, party
would be required to move the concerned court in the previous preceding.
Court finally held that the application for interim maintenance shall be disposed off within 60
days of its filing.
And the applicant making claim for maintenance will be required to file an affidavit disclosing
assets and reply of the affidavit to be filed within 4 weeks and court shall not grant more than 2
opportunities for submission of affidavit.
However, in case of economically weaker section or person living below poverty line, no such
affidavit is required.
Court observed that no maintenance shall be granted when:
 Wife is living in adultery;
 Is living separately and refused to live with her husband without giving sufficient reasons;
 And, is living separately by mutual consent.

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Divorce by ‘MUTUAL CONSENT’

Adv. Pragya Jain

Divorce by Mutual Consent
Marriage has always been considered as a holy
relation under the Hindu Marriage Act, 1955.
However, if both the parties to the marriage are
not able to live together as husband and wife,
they can file a petition for divorce.
Under Section 13B of Hindu Marriage Act,
parties can obtain divorce by mutual consent.

Section 13B: Procedure for filing petition for mutual divorce:
Both the parties have to jointly file the petition of divorce by mutual consent before Principal
Judge, Family Court. The jurisdiction of family court where the petition for divorce by mutual
consent is to be filed lies with the Family court where the couple was last residing or is presently
residing as husband and wife.
However, before filing the petition these pre-requisites have to be kept in mind:

 Parties cannot file the petition for divorce by mutual consent within 1st Year of their
marriage.

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Important issues to be settled before the proceeding:
 If there is a child or children, which partner will get custody of child/children after divorce;
 If one partner is unable to meet his/her daily expenses, then what amount will the other
partner pay as alimony (One Time Settlement or Monthly Payment);
 Settling the Ownership rights of the Property and Assets.

Documents required for filing Mutual Consent Divorce petition:

 Marriage Certificate;
 Address Proof;
 Four Photographs;
 Income Tax Statement of last 3 years;
 Details of profession and income (salary slips and appointment letter);
 Details of property and assets owned;
 Evidence of staying separately for an year;
 And, evidence of failed attempts of reconciliation.

In the case of “Sureshta Devi Vs. Om Prakash”, Supreme Court made the following observation:

Living separately does not mean living in different places. Parties can be living together but not as
spouses.”After the parties have settled the important disputes and have gathered the required
documents, both the parties can jointly file a petition for Divorce by Mutual Consent under Section
13B of Hindu Marriage Act, 1955 before the Family Court where both the parties were last residing
as husband and wife.

Contents of Petition for Divorce by Mutual Consent:

 Who prefers the petition? In this case, both the husband and wife will be the petitioners and
they both give their mutual consent to dissolve their marriage.

 Date of marriage and Place where both the parties were residing together as Husband and
Wife and the date since when both the parties have parted their company from each other;

 Status and Place of residence of both the parties before the marriage and at the time of filing
of present petition;

 Details of the wedlock and children (if any) born out of such wedlock, their details;
 Statement to the effect that marriage broke down irretrievably and efforts were made for

reconciliation, which failed and that there are no further chances of reconciliation between
the parties anymore;
 Time period since the parties are residing separately and no cohabitation between t hem;

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 Statement to the effect that there are no chances of reconciliation and they have mutually
agreed to part ways by filing the petition.

 Statement consenting to the settlement of disputes between both the parties regarding
custody of children, payment of alimony and division of properties;

 Statement regarding the alimony amount: How and when it is to be paid (if any);
 Undertaking that mutual consent have not been obtained by force, fraud and undue

influence.

After filing the petition, both the parties have to jointly appear before the court for the first
motion.

If the court is satisfied and the statements are recorded, then the first motion is said to have been
passed and the cooling period for minimum of 6 months and maximum of 18 months starts.

This cooling period is the time given to the parties to reconcile and give their marriage another
chance, just in case parties decide to change their mind.

Supreme Court in the case of “Suman Vs. Surendra Kumar” observed that “The period of 6 to 18
months provided in section 13B is a period of interregnum which is intended to give time and
opportunity to the parties to reflect on their move. In this transitional period the parties or either
of them may have second thoughts.”

THE ‘SECOND MOTION’

Once the cooling period ends, if the parties still want to get divorce, they have to file another
petition for second motion. A petition for second motion cannot be filed within 6 months of
passing of first motion and cannot be filed later than 18 months of the passing of first motion.

Once the parties have decided to go further with the proceedings and appear for the second
motion, they proceed with the final hearings. This includes parties appearing and recording of
statements before the Family Court.

If the court is satisfied after hearing the parties that the contents in the petition are true and that
there cannot be any possibility of reconciliation and cohabitation and the issues pertaining to
alimony, custody of children, properties etc are settled, Court will pass a decree of divorce
declaring the marriage to be dissolved.

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Adv Charanjeet Chanderpal

HOW THE VODAFONE JUDGMENT OF SUPREME COURT IS BEING
MISUSED BY MANY INCOME TAX ASSESSEES.

It gives me immense pleasure to share this research work, which I as a Senior Counsel
appearing for the Department of Income Tax, Central Board of Direct Taxes (CBDT),
Govt. Of India, have had encountered and still do in many a tax evasion cases styled as
International Tax Planning. Today, I introduce a topic of public interest from the national
economic vis a vis International Tax planning perspective. The Income Tax Act, 1961
provides for Income arising in India, Income earned in India and Income deemed to
accrue and arise in India. The corresponding residential status provision being Section 6
of the said Act of 1961, which categorizes resident and ordinary resident, resident but
not ordinary resident and the last being- non-resident. Non-resident and foreign
companies like banks, financial institutions as well as trading and service provider
multinational companies derive a lot of income from their connections and assets in
India. At this juncture the relevant portion of Section 9 (1) of the Income Tax Act would
be necessary for reproduction:

“Income deemed to accrue or arise in India.

9. (1) The following incomes shall be deemed to accrue or arise in India :—

(i) all income accruing or arising, whether directly or indirectly, through or
from any business connection in India, or through or from any property in
India, or through or from any asset or source of income in India, [***] or
through the transfer of a capital asset situate in India.”

This provision as reproduced in part, supra, has always been in for heavy debate,
discussion and litigation even in the past. This provision became all the more important
after the opening up of foreign direct investment and globalization of Indian economy
from 1991 and after 2005 it was noted that in number of foreign multinational

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companies in areas like cellular phone operations and banking & finance started earning
huge profits due to final users in India. One cannot isolate the Sections 90 to 92 of the

Income Tax Act, 1961 which deals with Double Tax Treaties (DTT) and Double Taxation
Avoidance Agreements (DTAA). This concept of DTAA with the concept of DTT finds its
origins after the Second World War during the International Convention of Human
Rights at Hague and other places with members of the United Nations, to which India
too was a signatory. Based on the convention, treaties were designed by the
Organization for Economic Co-operation and Development between two or more
countries and the common intention was to prevent double taxation of a transaction, if
a taxpayer has been already taxed in one country. When this is read along with Section
9(1) a question arises whether to tax an entity of non-resident or foreign in nature or
not. This, in turn is determined only and only if there is a DTAA with that particular
country. However, as per the OECD base module of DTAA, DTAA cannot be used in case
the transaction is only a sham/bogus transaction or a transaction of a shell/paper
company.

This aspect of deemed to accrue and arise in India came up before the Supreme Court
of India in the case of Vodafone International Holding B.V. V/s Union of India (2012) 17
taxmann.com 202 (SC)/(2012) 204 Taxman 408 (SC)/(2012) 341 ITR 1 (SC)/ (2012) 247
CTR 1 (SC) (20-01-2012). The Supreme Court of India gave a historic, bibliographic
judgment by which it was held that “mere fact that a parent company exercises
shareholder’s influence on its subsidiaries does not generally imply that subsidiaries are
to be deemed residents of State in which parent company resides. Held, yes- whether as
per provisions of Companies Act 1956, situs of shares would be where company is
incorporated and where its shares can be transferred and not where underlying assets
of company are situated.”

However, in the same judgment the Supreme Court also held that “even if a DTAA exists
it would not preclude Income Tax Department from denying tax treaty benefits, if it is
established, on facts, that foreign company has been interposed as owner of share in
India, at the time of disposal of share to a third party, solely with a view to avoid tax
without any commercial substance.” In para 98 of the said judgment it is clearly brought
out that an investigation into a tax fraud is not prevented and nor is the Income Tax
Department under any obligation to provide the Double Taxation benefit under DTAA
for a shell company or if a company is used by an Indian resident to commit a round
tripping, illegal activities tax fraud or from looking into colorable devices such as special

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agreements, contracts or arrangements by piercing the veil and looking at the substance
of the transaction. This is naturally lying with the original International Conventions and
OECD model which clearly stated that DTAA is not to be used by bogus companies and
sham transactions for tax evasion/avoidance forum hunting.

Unfortunately, in my practice and Senior Standing Counsel of the Department of Income
Tax. I have found several judgments of the Bombay High Court with a later ratification
by dismissal at the Supreme Court wherein effect is liberally given to the emphasis of
the Supreme Court in Vodafone Internation Holdings, supra, that the parent company
was incorporated abroad and hence, the subsidiary should not be regarded as having
income deemed to accrue and arise from India. In this regard, with respects it may be
stated that the judgment of the Bombay High Court of CIT (International Taxation) v. JSH
(Mauritius) Ltd. (2017) 7 taxmann.com 37 (Bom.) is erroneous and the judgment dated
12th June 2020 in the case of Writ Petition No. 2796 of 2019 in the matter of Aberdeen
Asia Pacific Including Japan Equity Fund vs Deputy Commissioner of Income Tax
(International Taxation)-1(1)(1), Mumbai and Ors and connected matters is also
erroneous. This is because, with respects, the Bombay High Court did not consider the
aspect that in both these cases the transactions, tax avoidance planning and the lack of
commercial substance were predominant with significant aspects of them being
shell/pretense companies and organizations.

Nowadays, tax avoidance/evasion planning are done in line with adhering to the
principles of non-applicability of Section 9 given by the Hon’ble Supreme Court in the
case of Vodafone Holdings, supra. Taking an example in the case of Supermax Personal
Care Pvt. Ltd vs Asst. Commissioner of Income Tax and Ors. In WP no. 1152 and 1641 of
2016, the Bombay High Court rightly decided in favour of the revenue by directing the
assesse to go before the regular assessment authorities to comply with the provisions
of Vodafone Holdings judgment of the Supreme Court, supra, in order to allow the
revenue to examine the validity of the foreign transactions. Similarly the view taken by
the Bombay High Court in Indostar Capital v. Asst. Commissioner of Income Tax
(International Taxation) (2019) 105 taxmann.com 96 (Bombay) (which appears in Wolter
Kluwers Top 100 judgments of International Taxation of 2019.), is the proper view as it
subjects the assesse to strict conditions of providing a guarantee of Rs. 200 Crores which
is 200% of the disputed tax liability and also subjects the assesse to be put to
examination on the ingenuity of the transaction in terms of the Vodafone judgment .

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Nowadays it is a trend of many a tax evaders to make a parent company in a tax haven
country having a DTAA with India and thereafter making subsidiaries and its further
subsidiaries finally located in India. The share transfer of substantial interest and
indirectly the assets held in India is done between the parent company or between the
first subsidiary outside India and then unfortunately an application is made to Indian
Courts seeking refuge of “Parent Company Located Outside India Concept” propounded
by the Supreme Court in Vodafone Holdings, supra. It is very critical in terms of
administration of justice that many Courts are being prejudiced in arguments by skilful
Counsels/Advocates, stated with respects to the Courts, by laying more than necessary
emphasis on the “Parent Company Located Outside Concept” without paying due
emphasis to the aspect of shell companies with no commercial substance.
The following explanation 5 to Section 9(1) as per Finance Act, 2012 has been inserted:

Explanation 5.—For the removal of doubts, it is hereby clarified that an asset or a capital asset being
any share or interest in a company or entity registered or incorporated outside India shall be deemed
to be and shall always be deemed to have been situated in India, if the share or interest derives, directly
or indirectly, its value substantially from the assets located in India:]

With the above Explanation 5 to Section 9(1) it is abundantly clear that the parent
company outside concept propounded by the Supreme Court in Vodafone Holdings,
supra, also does not hold good because the above explanation is with retrospective
effect and therefore any kind of transaction which is a result of a sham company or a
result of a bogus transaction and even otherwise if it results in a capital gain or benefit
as a result of indirect transfer of shares inter se the parent companies would not escape
Income Tax liability. It is therefore, humbly supplicated before the judiciary as well as
the Income Tax Appellate Tribunals to lay emphasis and honour the proposition of law
as elucidated in this article which in all fairness sets out the proper proposition.

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Adv. Shweta Dayal

‘WILL’ can be in your favour… Know the

right process for it…

Get ‘PROBATE’ or ‘LETTER OF ADMINISTRATION’ to get your property!!

Section 2(f) Indian Succession Act, 1925 – ‘Probate’
refers to a copy of Will, which grants administration
rights of the estate of deceased to the ‘executor’, and
which is certified by the seal of a court of competent
jurisdiction.

It is judicial process through which the authenticity
and validity of a Will is determined by the court.
Probate authorize the executor to administer the
estate of the testator of the Will and court grants a
certification to that effect.
Moreover, a beneficiary can also be an executor under
the Will.
Section 2(c) Indian Succession Act, 1925 – ‘Executor’ is a person appointed by the deceased
person in his Will, to execute the immovable and movable properties as prescribed by the
Will.

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‘Letter of Administration’ – When a person dies intestate i.e. without leaving behind any

Will or when he does not appoint any executor in his Will, then letter of administration acts as
a facilitating document.
Letter of administration also grants the same administrative rights to the beneficiaries, that
the executor would have enjoyed.
However, if a Will does not nominate any executor, the beneficiaries of the deceased will have
to apply for letter of administration.

Difference between Probate and Letter of Administration – The critical difference is

that Probate is granted to an executor, nominated by the testator under his Will.
However, if a Will does not nominate an executor, the beneficiaries of the deceased will be
granted Letter of Administration.

Who is not eligible to be granted Probate or Letter of Administration?

Any person who is a minor i.e. below 18 years of age, or is of unsound mind cannot be granted
probate or letter of administration by the competent court.

Is it mandatory to obtain Probate/Letter of Administration?

Under Section 213 Indian Succession Act 1925, it is mandatory to obtain Probate or Letter of
Administration (as the case may be). However, it is not mandatory to obtain Probate/Letter of
Administration in case a Will is made by Muhammadans.

Petition for Probate and Letter of AdministrationA petition for Probate is to be made

before District Judge, where the deceased had resided at the time of his death under Section
276 Indian Succession Act, 1925.

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Adv Karan Arora

NI ACT JUDGMENT S

Case Title: AliBaba Nabibasha v. Small Farmers Agri-Business Consortium & Ors.

Issue in Case:- Director’s responsibility in the affairs of the company after he ceases to be director.

Facts: Petitioner was a director of the respondent no. 2 and he ceases to be its director w.e.f
27.10.2010.
Respondent no. 1 is a society registered under the Societies Act and facilitated by the Government
of India to facilitate agribusiness ventures.
Respondent no. 2 needed venture capital assistance (VCA) for setting up of mango pulp unit,
requested respondent no. 1 for VCA and respondent no. 1 sanctioned this amount on 23.02.2011
to the tune of Rs. 45,00,000/-.
Respondent no. 2, in discharge of its liability, issued cheques worth Rs. 45, 00,000/- on 31.12.2018,
which was returned with remarks “Funds Insufficient”.
Respondent no. 1 sent legal notice dated 28.01.2019 and subsequently filed complaint before the
LD. M.M.
Petitioner filed the present petition to get the complaint filed against him by Respondent No. 1
quashed on the ground that he was not the director of Respondent No. 2 at the time when both
the respondents entered into the agreement and the cheques were issued.
Issue: Whether a person who is not the director of the company, be held responsible for the affairs
of the company after he ceases to be the director?

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Conclusion: Court observed that petitioner ceases to be the director of respondent no. 2 on
27.10.2010, i.e. 8 years prior to the issuance of the cheques. Respondent no. 1 does not dispute
FORM 32 submitted by the petitioner to the registrar of companies through which he ceases to be
the director of respondent no. 2.

Ld. M.M. issued notice to the petitioner based on documents filed by respondent no. 1 and if the
Ld. M.M. had called for the latest company master data, he would not have issued the summons,
as it reveals that petitioner was not in-charge of the company.

The court observed that when an accused has resigned from the company and cheques are
subsequently issued and dishonored, it cannot be said that accused was responsible for day-to-day
affairs of the company, as contemplated under Section 141 NI Act. Therefore, mere repetition of
Section 141 NI Act is not sufficient and the complainant has to show that accused was in–charge
of and responsible for day-to-day affairs of the company.

The court further observed that in the present case, petitioner was neither a Director nor was he
responsible for day-to-day affairs of the company.

Therefore, the court allowed the petition and quashed the complaint and the summons issued
against the petitioner, on the ground that a person who has resigned in the year 2010 could not be
the person in –charge of the company in the year 2018 when the cheque were dishonored.

------------------------------------------------------

Case Title: Tathagat Exports Pvt. Ltd. & Ors. Vs. PEC Ltd.

Issue in Case :- Whether petition under Section 482 CrPC maintainable when revision petition

is already dismissed.

Facts: Respondent filed a complaint against the petitioner under Section 138 and 142 NI Act, in
respect of non-payment against 4 dishonored cheques amounting to Rs. 16,00,00,000/- (Rupees
16 crores only).

The Ld. M.M vide his order dated 19.12.2017, issued summons to the accused by taking cognizance
of offence under Section 138 read with Section 142 NI Act.

Petitioner challenged the said order and filed revision petition questioning legality of the said
order, which was dismissed by the sessions court vide order dated 25.10.2019.

Petitioner now challenged the order of session judge by filing petition under Section 482 CrPC.

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Issue: Whether petitioner having already availed the remedy of revision, be allowed to file petition
under Section 482 CrPC, which is barred by Section 397(3) CrPC.
Conclusion: The court observed that the petitioner’s contention that the notice is ambiguous with
regard to the demand made is not right as the notice is to be read as a whole and it clearly set out
the details of the cheque.
The court also observed that Section 142 to 147 NI Act lay down special procedure for expeditious
trial and to do away with all the stages of criminal trial, which normally cause delay in conclusion.
Moreover, the defence raised by the petitioner requires evidence, which cannot be adjudged in
proceeding under Section 482 CrPC.
The court finally observed that the court can only invoke its jurisdiction under Section 482 CrPC
when there has been failure of justice or miscarriage of judicial procedure and not as a substitute
for initiating second revision petition.
The court therefore dismissed the petition.

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Manish Singhania

Effective Remedies for recovery for MSME

Remedies and Benefits available to MSME in case of
recovery
MSME stands for Micro, small and medium enterprises.
Section 7 of Micro, Small and Medium Enterprises (MSME)
Development Act, 2006 divides these enterprises into two
sectors namely manufacturing sector and service sector.
Manufacturing Sector: Investment in Plant and Machinery
Micro Enterprise – Investment upto 25 Lakhs;
Small Enterprise – Investment more than 25 Lakhs but less
than 5 Crores;
Medium Enterprise – Investment more than 5 crores but less
than 10 Crores.
Service Sector: Investment in Equipment
Micro Enterprise – Investment upto 10 Lakhs;

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Small Enterprise – Investment more than 10 Lakhs but less than 2 Crores;

Medium Enterprise – Investment more than 2 Crores but less than 5 Crores.

Section 15 Liability of a buyer - When supplier has delivered any goods or rendered any service,
buyer shall be liable to make payment on or before the date agreed between both the parties as
per agreement. In case there is no agreement, on or before 15 days starting from the date when
buyer accepted the goods or service from the supplier. However, the period agreed between buyer
and seller, in any case shall not exceed 45 days.

Section 16 Liability of buyer to pay interest – When amount is due by buyer to seller, buyer shall
be liable to pay interest, the interest shall be 3 times the bank rate notified by RBI, and the
calculation of interest shall begin from the date when the amount becomes due.

Section 18 Reference in case of dispute – Any party to the dispute can refer the dispute to Micro
and Small Enterprises Facilitation Council. The council can either mediate itself or seek assistance
of any institution providing alternate dispute resolution. In case mediation fails, council shall either
arbitrate itself or refer the matter to any institution providing alternate dispute resolution for such
arbitration. However, every such reference shall be decided within 90 days of making such
reference.

Procedure to file MSME complaint:

 Visit the web portal https://samadhaan.msme.gov.in find the case filing option for MSE units.
 Enter your UAN along-with the mobile number used at the time of registration.
 One time password will be sent to your registered mobile number. Enter it and continue.
 Click on the option of entry application. However, before filing the complaint, keep these

documents ready;
o Invoices;
o If the invoices are less than 3, you can upload them separately, however, if the invoices
are more than 3 then you have to upload them in a single pdf file;
o Work order of the buyer;
o All other documents necessary to prove your claim.

 After uploading the complaint, one more page will pop-up asking you to review. Once you
have reviewed the application, submit it.

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 Micro and Small Enterprises facilitation Council (MSEFC) will send your application to the
concerned respondent and you can further check the status of your complaint at
Entrepreneur Application list.

Section 19 conditions when the buyer files appeal – Buyer has to deposit 75% of the amount of
decree or award and such deposited amount shall be paid to the supplier.
All the companies, who get supplies of goods or services from Micro and Small enterprise suppliers
and the payment to those suppliers exceeds 45 days, shall submit half yearly return to the Ministry
of Corporate Affairs in MSME Form I, stating therein the amount of payments due to micro and
small enterprises and the reason for delay.

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Adv Lakshay Sharma

SKIN TO SKIN TOUCH

Case Name: Satish Vs. State of Maharashtra (Bombay
High Court, Nagpur bench)

Facts: Appellant took a girl of aged about 12 years to his
house on the pretext of giving her guava, where he
pressed her breasts and attempted to remove her salwar.

When her mother reached on the spot and checked
appellant’s house, she found her daughter crying. And
when her daughter narrated all the story, they filed an
FIR under Section 354, 363 and 342 IPC and under Section
8 POCSO Act.
Special court found appellant guilty of the crime registered against him and convicted him under
Section 354, 363 and 342 IPC and Section 8 POCSO Act. Appellant filed this appeal challenging his
conviction.
Issue: Whether pressing of breast and attempting to remove salwar would fall within the ambit of
‘sexual assault’ under Section 7 POCSO Act?
Conclusion: Court observed that in order to constitute sexual offence under Section 7, following
ingredients must be involved:
Act must have been committed with sexual intent;
Act must involve touching the vagina, penis, anus or breast of the child;
Or, making the child touch the vagina, penis, anus or breast of such other person;
Or, doing any other act with sexual intent which involves physical contact without penetration.

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Court further observed that the stringent punishment of minimum 3 years under Section 8 POCSO
Act, in absence of any specific detail as to whether her top was removed or whether he inserted
his hand inside her top and pressed her breast, it
would not fall within the definition of ‘sexual assault’.
However, this act would fall within the meaning of Section 354 IPC which relates to ‘outrage
modesty of women by using criminal force’.
Court while acquitting the appellant under Section 7 POCSO Act, held that pressing of breast would
not constitute sexual assault as there is no direct physical contact i.e. skin to skin with sexual intent
without penetration.
Supreme Court, however has stayed the judgment of Bombay High Court vide order dated
28.01.2021 on the formal request of Attorney General of India on the ground that it will set a bad
and dangerous precedent and it further directed the AG to file an appeal challenging this order.

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TEAM LAW-WALLET

Rajasthan Appellate Authority for Advance Ruling

Director’s Salary would attract GST??

Appellant: M/s Clay Craft (India) Pvt. Ltd.

Facts: Appellant Company is engaged in manufacturing various utensils items and is having GST

registration number. It has 6 directors who are performing all the duties and responsibilities of the
company and therefore, is at par with other employees of the company for which company is
compensating them by way of regular salaries and other allowances.

Company is therefore, deducting TDS on their salary along-with implementing PF laws on their
salary.

The authority for advance ruling, Rajasthan by its order held that consideration paid to the
directors will attract GST under reverse charge mechanism as covered under Entry 6 of Central Tax
(Rate) dated 28.06.2017.

It further held that such consideration will attract GST even when the Director is a part time
director in other company.

Company therefore, filed this appeal against the order of Authority of advance ruling.

Issue: Whether the salary paid to the Directors who are working whole time in the company and

were paid salary under a contract of employer-employee, would attract GST under reverse charge
mechanism?

Conclusion: The appellate authority for advance ruling concluded with following observations:

 Remuneration paid to independent directors or directors who are not employee of the
company, such remuneration is taxable under Reverse charge basis under GST Act.

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 If director’s remuneration is declared as ‘salaries’ under the company books, and is
subjected to TDS deduction under Section 192, Income Tax Act, such remuneration is not
taxable under Schedule III of CGST Act.

 If part of director’s remuneration which is subjected to TDS deduction under Section 194J
Income Tax Act, under the head professional or technical services, then such remuneration
is also taxable under GST Act.

Authority for advance ruling with the following observations directed the Appellant company
to pay the GST accordingly.

Maharashtra Appellate Authority for Advance Ruling

Whether Maintenance of Lift by cooperative Housing society would attract GST?

Appellant: M/s Lab Palmas Co-Op Housing Society

Facts: Appellant Society is recovering amount from each of its society members under various
charges and is paying 18% GST on it after availing Input Tax Credit on it.

It is in the process of replacing existing lift, has awarded the contract to M/s Fujitec India Pvt. Ltd.,
and is recovering separate amount from its members for it and is charging 18% GST on it under a
separate head.

Appellant society filed an application before the Advance Ruling Authority to check if it is eligible
for input tax credit of lift installation charges when it is booked as capital expenditure in their books
without availing depreciation?

Advance Ruling Authority held that the society was not entitled for input tax credit of replacement
of lift.

Being aggrieved by the order of Advance Ruling, appellant society has filed this appeal.

Issue: No. 1: Whether the lift will be construed as immovable property after it has been
installed and commissioned in the building and whether it would fall under the category of ‘Plant
and Machinery’?

Issue No. 2: Whether services provided by the society to its members would fall under the category
of ‘works contract service’?

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Conclusion: Appellant Authority for Advance Ruling observed in the 1st issue that installation of the
goods are assembled and installed with the skill and labour at site and therefore, becomes
permanent fixture of the building, as observed by Hon’ble Supreme Court in the case of “Kone
Elevators Vs. State of Tamil Nadu”.

It further observed that once lift has been established, it would be considered as part of building
and hence, immovable property.

In concluding the first issue, the authority held that appellant society is not entitled to claim ITC
under Section 17(5)(d) CGST Act.

In concluding the second issue, authority observed that exception carved out to provide input tax
credit is for those who in turn provide works contract service.

In this case, society is not a works contract service provider neither it is in the business of providing
works contract service as it has not provided any work contract service to its members.

It further held that the circular issued by CBIC allows ITC in respect of GST paid on capital goods
and not on contract works service.

In concluding the second issue, appellate authority held that the society is not eligible for ITC.

Gujarat Authority for Advance Ruling

Employee left job without completing notice period?

CASE LAW

Applicant: M/s Amneal Pharmaceuticals Pvt. Ltd.

Facts: Applicant is manufacturer of pharmaceuticals products. They issue ‘Appointment Letter’ at

the time of appointing an employee. It is further stated that in appointment letter it is clearly
mentioned that if any party wants to terminate the contract, it shall have to give atleast 3 months
prior notice. And in case, an employee does not serve the notice period after tendering the
resignation, company is entitled to recover notice pay from agreed portion of salary.

Issue: Whether company is liable to pay GST on recovery of notice pay from employees who are

leaving without completing the notice period?

Conclusion: Authority for Advance Ruling observed that Notice pay is the amount stipulated in

employment contract for breach in serving the stipulated notice period. Therefore, this amount
can be regarded as consideration to the employer for ‘tolerating the act’ of the employee who has
not served the notice period.

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It further observed that Clause 5(e) Schedule II of CGST Act, 2017 declares that ‘to tolerate an act
of situation or to do an act’ shall be treated as supply of service.
Authority for Advance Ruling therefore concluded that the dispute regarding recovery of notice
pay from employees is liable to be taxed under GST and applicant is liable to pay GST @ 18% under
the entry “Services not elsewhere classified”.

CASE LAW

Applicant: M/s Amneal Pharmaceuticals Pvt. Ltd.
Facts: Applicant is manufacturer of pharmaceuticals products. Applicant is also carrying out

canteen services in their factory through third party, where more than 500 employees are working.
The food is being offered to the employees at subsidized rate and the cost is deducted from their
salary.
The company therefore, is only acting as a mediator between the employees and third party
vendor, as this is not the main object of their business but a facility provided to its employees
without making any profit.

Issue: Whether GST is applicable on the amount recovered from the employee on account of third

party canteen services under Section 46, Factories Act?

Conclusion: Authority for Advance Ruling observed that although applicant is 100% Export

Oriented Unit, which provides food to its employees on subsidized rates, the supply of food by
applicant to its employees would come under the clause (B) of Section 2(17) of CGST Act as a
transaction incidental or ancillary to the main business.
It concluded by holding that even though there is no profit claimed by the applicant, there is a
‘supply’ as provided under Section 7(1)(a) of CGST Act and the applicant comes under the definition
of supplier as provided under Section 2(105) CGST Act.
Authority for Advance Ruling therefore concluded that the amount recovered from employee on
account of third party canteen services would come under the definition of outward supply and is
taxable under GST.

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Victim of Marital Rape: Remedies available for you

Marriage is sacred act not just between two parties but two families as well. However, with the
passage of time, more marital rape case are coming to the light.

So are you a victim of marital rape? Are you not aware of the remedies available to you?

While, rape is unlawful sex without consent of women and is a penal
offence under Section 375 & 376 IPC, marital rape refers to undesirable
sexual intercourse by a man with his own wife without her consent

However, Indian laws unequivocally avoids marital rape from ambit of
conviction.

As observed by Justice Arjit Pasayat:

“While a murderer destroys physical frame of the victim, a rapist
degrades and defiles the soul of helpless female.”

Marital rape is an exception to Section 375 IPC and specifically exclude
acts of sexual violence in marriage, when wife is not under 15 years of
age, from the ambit of rape.

However, the Hon’ble Supreme Court in the case of “Independent Thought Vs. Union of India” held
that rape by husband with his own wife, wife not being 18 years of age, will be considered as rape.

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Therefore, the remedy available to the women who is above 18 years of age and who is subjected
to marital rape, is to file a complaint against her husband under Section 498A IPC when husband
has committed any willful conduct or has harassed her with a view to coerce her or drive the women
to commit suicide.
Moreover, if a husband beats his wife and has forcible sexual intercourse, he can be charged for
offences under Section 323, 324, 325 IPC that relates to voluntarily causing hurt or grievous hurt by
using any weapons or means and can be punishable upto 7 years of imprisonment.
Further, there is no exception clause giving immunity to the husband for offences under Section
354 (A, B, C, D) IPC that relates to use of criminal force against women with the intent to outrage
her modesty or using criminal force with the intent to disrobe, voyeurism or stalking.
In addition, protection of women from domestic violence act, although does not consider marital
rape as a crime, but it considers it as a form of domestic violence and the husband does not get any
immunity under the domestic violence Act.
In the case of “RTI Foundation Vs. Union of India”, which is pending before the Delhi High Court,
Central Government has submitted that criminalizing marital rape may destabilize marriage. It
further submitted that if all sexual acts by a man with his own wife qualifies to be marital rape, then
the judgment whether it is a marital rape or not singularly rests with the wife.
Concluding, there are various petitions pending before Hon’ble Supreme Court and various High
Courts, asking to criminalize marital rape.
However, marital rape is still not an offence but wife has several other remedies available to her.

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Komal (Law Student )

Legal News - January 2021

1. Supreme Court to consider this point on an appeal filed by State of Kerala in the case of
“State of Kerala vs. Leesamma Joseph
Whether a person can be granted reservation for having physical disability when his entry
point in the job was not under Person with Disability?

2. Do GST authorities have power to arrest under CGST Act?
Delhi High Court in the case of “Dhruv Krishnan Maggu vs. Union of India” held that GST
authorities have power to arrest under Sections 69 and 132 of CGST Act.

3. Supreme Court has directed Central and State Governments to open Anganwadi
centers.
Supreme Court in the case of “HDFC Bank Ltd. vs. Jesna Jose” directed both the Central
and State Governments to open Anganwadi Centres which were closed due to COVID-19,
in order to raise level of nutrition and standard of living of the citizens.

4. Publication of notice of marriage mandatory under the Special Marriage Act?
Allahabad High Court in the case of “ Safiya Sultana vs. State of U.P.” held that parties to
the marriage, have option to publish the notice given by them under Section 5 of Special
Marriage Act, whether they want to publish it or not?

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5. Can a complaint under POSH Act be filed against another person of same gender?

In the case of “Malabika Bhattacharjee vs. Internal Complaint” it was observed that
Section 9 POSH Act does not preclude a same gender complaint.

6. Video conferencing from jail?

Supreme Court permitted journalist Siddique Kippan who was arrested, to meet his 90
year old mother form jail via video conferencing.

7. Extra chance in UPSC?

Supreme Court asked Central Government’s opinion on whether extra chance can be
given to the aspirants of UPSC, who faced difficulties on account of COVID-19.Central
Government respondent that it has not agreed to provide such extra chance.

8. Provisional enrollment pending? Can you still appear in AIBE?

In the case of “Shivi Ravi Aggarwal vs. BCI” it was held that since the State Bar Council was
not able to verify candidate’s degree, court allowed the candidate to appear in AIBE with
the condition that her result will not be declared till the disposal of the petition.

9. Disobedience of Court’s order amount to contempt?

Supreme Court in the case of “Rama Narang vs. Ramesh Narang” held that before
punishing a person for contempt, court must be satisfied that disobedience was willful
and intentional.

10. MCD workers unpaid; councilors given haircut.

Delhi High Court observed that right to receive salary and pension is a fundamental right
and that Class I officers of MCD has to take haircut due to financial constraints of the
corporation.

11. Non-payment of debt an operational debt?

Supreme Court will consider whether non-payment of debt will be classified as
operational debt under Section 5(21) IBC, 2016.

12. Basic philosophy behind granting power to review judgment?

In the case of “Rajendra Khare vs. Swaati Nirkhi” it was observed that the philosophy
behind providing review is to universally accept human fallibility and therefore, rejection
of miscellaneous application does not bar review petition.

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13. Can accused be directed to pay compensation?
Gujarat High Court held that the accused cannot be directed to pay compensation under
Section 357 and 357A CrPC at the time of granting of bail.

14. No successive bail to be granted?
Supreme Court held that once anticipatory bail have been rejected, successive
anticipatory bail application is not maintainable.

15. POCSO Act not to be used as a weapon?
Madras High Court in the case of “VijayaLakshmi & Anr. Vs. State” held that boys and
girls are in grip of hormones and thus instead of prosecuting them, it would be better if
they are being counseled by family and friends.

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CA Renu Singhal

BUDGET 2021 focusing GST

Section 7 - Scope of Supply further expanded

A new clause (aa) after clause (a) in sub-section (1) of Section 7 of the CGST Act is proposed to be inserted, , which
is reproduced hereunder:
“(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-
versa, for cash, deferred payment or other valuable consideration.”
Impact
GST shall be levied on activities of transaction executed in between any entity (other than individual) and it’s
members for valuable consideration. This amendment is effective from July 01, 2017

. Section 16 – Additional Condition for availing ITC

A new clause (aa) is proposed to be inserted after clause (a), in sub-section 2 of section 16, which is reproduced
hereunder:
“(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the
statement of outward supplies and such details have been communicated to the recipient of such invoice or debit
note in the manner specified under section 37;”.
Impact
In addition to the conditions for availing ITC as provided in Section 16(2), another condition is proposed to be
inserted. Now the taxpayers are entitled to avail ITC on purchase invoice only when supplier has uploaded the
invoice on GST portal.
With this amendment, there will be curb on writ petitions for challenging the validity of rule 36(4) of CGST Rules,
2017.

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Section 35 – Scrapping of GST Audit

Section 35 (5) which pertains to GST Audit is proposed to be scrapped, which is reproduced hereunder:
“(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall
get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the
audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such
other documents in such form and manner as may be prescribed”
Impact
There will not be requirement of getting GST audit done by Chartered Accountant or Cost Accountant.

Section 44 – Self Certification of Annual Return

Existing Section 44 is being substituted by the new provision. The new substituted provision is reproduced
hereunder:
44. Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section
52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a
self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the
financial year, with the audited annual financial statement for every financial year electronically, within such time
and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of
registered persons from filing annual return under this section.
Provided further that nothing contained in this section shall apply to any department of the Central Government
or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and
Auditor General of India or an auditor appointed for auditing the accounts of local authorities under any law for
the time being in force.
Impact
Now, there will be no mandatory requirement of uploading reconciliation statement in form GSTR-9C. Further, the
due date of filing of Annual Return shall be notified from time to time and therefore the due date as mentioned in
GST Act has been removed.

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Section 50 – Interest on Net Liability

First Proviso of Section 50 of the CGST Act has been amended with retrospective effect (w.e.f. July 01, 2017) and
with this interest on delayed payment of GST is to be charged on net cash liability.

Section 74 – Proceedings of Detention of
goods/conveyance, confiscation of goods and

conveyance

Amendment in Section 74 of the CGST is proposed to make a separate proceeding for seizure and confiscation of
goods and conveyances in transit.
Impact
With this amendment, the proceedings pertaining to detention of goods/conveyance, confiscation of goods and
conveyance under section 129 & 130 shall continue, even though the proceedings against the main person is
concluded.

Section 75 – GST Liability to be recovered as arrears of
Tax

An explanation to Section 75 (12) of the CGST Act is proposed to be inserted in order to include the tax payable in
respect of details of outward supplies, which is reproduced hereunder:
“Explanation.––For the purposes of this sub-section, the expression “self-assessed tax” shall include the tax payable
in respect of details of outward supplies furnished under section 37, but not included in the return furnished under
section 39.”
Impact
With this amendment, the GST liability can be recovered as arrears of tax under Section 79 where such GST liability
is being shown in GSTR-1 but such GST liability is not being paid in GSTR 3B.

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Section 83 – Provisional Attachment for one year

With this amendment in Section 83 of the CGST Act, the validity of provisional attachment shall remain valid one
year from the date of order, the provision is reproduced hereunder:
“(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner
is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do,
he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable
person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed”.

Section 107 –Deposit of 25%

A proviso is proposed to be inserted after Section 129 (3) of the CGST Act, which is reproduced hereunder:
“Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to
twenty-five per cent. of the penalty has been paid by the appellant.”
Impact
An appeal against order of Proper Office can be filed only after deposit of 25% of penalty amount.

Section 129 and Section 130

Proposed to enhance the amount of Penalty from 100% to 200% for releasing the detained or seized goods and
conveyance [Section 129(1)(a)].
Where owner of detained or seized goods and conveyance do not comes forward then it is proposed to that such
goods and conveyance may be released by paying higher of the following [Section 129(1)(b)].:
Penalty equal to 50% of value of goods; or 200% of tax payable on such goods
Proposed to withdraw the provision of release of seized goods on provisional basis upon execution of a bond and
furnishing of a security. Meaning thereby, the taxpayer is compulsorily required to pay the amount of penalty
imposed by proper officer. [Section 129(2)].
Proposed to provide time of seven days for issue of notice in case of detaining or seizing goods or conveyance
specifying the penalty payable, and further an order is required to be passed within a period of seven days from
the date of service of such notice, for payment of penalty. [Section 129(3)].
Proposed to withdraw the provision of levy of penalty without opportunity of being heard in cases where penalty
is payable on detention or seizure of goods and conveyance.[ Section 129(4)]

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Proposed to provide the provision of disposing off the detained goods or conveyance where the amount of penalty
is not paid within 15 days from the date of receipt of copy of the order. [Section 129(6)]

1. Proposed to amend Section 130 of the CGST Act in order to delink the proceedings under section 130
pertaining to confiscation of goods and conveyances and levy of penalty from the proceedings under section
129 pertaining to detention, seizure and release of goods and conveyances in transit.

Section 151 – Power to call information

Proposed to substitute Section 151 of the CGST Act in order to empower the commissioner or authorised officer to
call for information from any person in any matter dealt related to CGST Act.

Section 152 – Opportunity of being heard

The commissioner or any authorised officer shall not use the information of any person for the purposes of any
proceedings under GST Act without giving an opportunity of being heard

Section 16 – Amendment in IGST Act

Any supply of goods or services to a Special Economic Zone developer or a Special Economic Zone is considered to
be a ‘Zero Rated Supply’, only when such Supply of goods or services is used for Authorized Operations
Restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies
of goods or services.
Linking non realization of sales proceeds of goods exported liable for refund so received along with
interest within 30 days after expiry of specified time limit prescribed under FEMA for receipt of sales proceeds.

BUDGET 2021 FOCUSING INCOME TAX 2021

PROPOSED INCOME TAX AMENDMENTS – BUDGET 2021

1. There will be no change in Income tax rates (including surcharge, health and education cess) for
companies (domestic and foreign), firms, Limited Liability Partnerships and individuals and for Minimum
Alternate Tax and Alternate Minimum Tax.

2. TDS shall be liable to be deducted in respect of payment of income on securities (interest, dividends, etc.)
to FPIs (Foreign Portfolio Investment)@ 20% or treaty rate, whichever is lower.

3. ‘Goodwill’ is excluded from the definition of Intangible Assets and therefore there shall be no depreciation
on goodwill [Section 32]

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Comments:- In case of self-generated goodwill, the cost of acquisition shall be taken as NIL

4. Where payment in respect of employees contribution of PF and ESI is delayed beyond the due date as
mentioned in PF Act and/or ESI Act, then deduction of such payment in respect of PF and ESI contribution
will not be available [Section 43B].

5. The provision of presumptive taxation is not available to Limited Liability Partnerships. [Section 44ADA] .
It is pertinent to note that the presumptive taxation is available to those professionals whose earnings are
less than INR 50 lakhs and minimum 50% thereof of their turnover is treated as income.
Comments- Practically, this provision is also not available to HUF

6. No exemption on Unit Linked Insurance Plans for LLPs[Section 10(10D)].
Where the amount of premium payable in respect to any unit linked insurance policy, issued on or after the
1st day of February, 2021, exceeds Rs. 2,50,000 in previous year then exemption will not be available.
Also, where more than one ULIPs are issued in the name of a person on or after 1st Feb 2021 and total
amount of premiums payable on such policies exceed Rs. 2,50,000, are not exempt under Section 10(10D).
Comments: However, where any amount is received from such ULIP(s) on death of assesse then such
amount will be exempted.

7. Interest on Provident fund contribution
Exemption will not be available on such amount of interest which pertains to the contribution of provident
fund made by employee which exceeds two lakh and fifty thousand rupees in any previous year, on or after
the 1st day of April, 2021

Comments: With this amendment, the long pending loophole of tax planning is completely plugged.
8. Interest on short payment of advance tax on Dividend income (Section 234C)

Interest will not be charged for late payment of advance tax on dividend income (other than deemed
dividend) where the amount due is paid in subsequent advance tax instalments following to the date of
payment/ declaration of dividend.
Note: In case where subsequent installments of advance tax is not due, advance tax on such dividend
income is required to be paid on or before March 31.
9. Faceless Proceedings : Where there is a disputed with small taxpayers whose returned income is upto Rs.
50 Lakhs and the disputed amount is upto Rs. 10 Lakhs then resolution of such dispute shall be done in a
faceless manner through a Dispute Resolution Committee which will be constituted for this purpose.
10. Extension of one year i.e. upto March 31, 2022 for additional deduction of interest of Rs. 150,000 u/s
80EEE which is available to first time residential home buyers.
11. Safe harbour threshold (i.e. the differential amount of the transaction value and the circle rate) on
residential property is to be increased from 10 percent to 20 percent, subject to certain
conditions.(mentioned in an article)
12. The limit for obtaining approval for claiming deduction for affordable housing projects is extended to 31
March 2022. Also, affordable housing rental projects is to be incentivize vide notification of Central
Government.
13. Revised timeline for reassessment proceedings. Time limit to issue notice reduced to three years,
however, in case of serious tax evasion time limit is 10 years provided Assessing Officer is in possession of
evidence/ documents/accounts that results in escapement of income of INR 50 lakhs or more.

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14. Notification for Faceless Appeals in Income-tax Appellate Tribunal proceedings is to be notified for
increased efficiency, transparency and accountability.

15. Increase in Income Tax Audit Limit. The turnover limit for tax audit is increased to INR 10 crores rupees
where receipts and payments (by way of cash) is not more than 5%.
Note: This amendment will promote digital economy and reduced compliance burden.

16. Income Tax Return will be Pre-filled with details like capital gain, dividend income and interest from
bank/ post office.

17. No need to file Income Tax Return to Resident senior citizens (aged 75 years or more) who are having
only pension and interest income from the same bank subject to fulfilment of other prescribed condition.

18. Extension of time limit for LTC Cash scheme Many individuals could not avail LTC exemption for block
2018-2021 on account of COVID 19. Therefore, in order to provide the benefit of the same, the benefit of
LTC cash scheme may be availed by individuals on expenditure done in between October 12, 2020 and
March 31, 2021 for purchase of goods or services which attracts GST of minimum 12%.
Further, such payment should be made through account payee cheque/draft/ECS and other prescribed
modes. And, such exemption is restricted to 1/3rd of expense or amount received from employer for LTC,
whichever is less, subject to maximum of Rs 36000 per family member.

19. TDS on purchase of Goods under Section 194Q. TDS @0.1% is required to be deducted w.e.f. July 01,
2021 on purchase of goods where total sales, gross receipts or turnover of buyer exceeds Rs. 10 Crore
during the financial year immediately preceding the financial year in which such goods are purchased and
goods purchased from the seller exceed Rs. 50 Lakh in the previous year.

However, TDS is not required to be deducted under this section if TDS / TCS is deductible or collectible under
any other the provisions of Income Tax Act Except TCS under section 206C(1H).

New Second Proviso to section 206AA :-
Where tax is required to be deducted under section 194Q and PAN is not provided, then TDS shall be
deducted at the rate of 5%

20. Higher rate of TDS and TCS on non-filing of return (New Section 206AB and 206CCA). TDS and TCS shall
be deducted at twice the specified rate or rate in force or 5% whichever is higher where a person fails to
file the Income Tax Returns for two assessment years immediately preceeding the assessment year in
which tax is required to be deducted under the time limit as specified in Section 139(1).
Further, these provisions shall be applicable where the aggregate amount of of tax deducted at
source and tax collected at source is Rs. 50,000/- or more in each of these two previous years for which
income tax return is not filed.
Note: Proposed section shall not apply where the tax is required to be deducted under sections
192 (Salaries), 192A (PF), 194B (Winning from lottery etc),194BB (Winning from horse rates),
194LBC (income received from a securitisation trust) or 194N (Cash withdrawal exceeding Rs 20 lakh) of the
Act.

21. Reduction in Time limit for filing Revised Return or Belated Return ( Section 139). Starting from AY 2021-
22, it is proposed to reduce the time limit for filing belated return or revised return by 3 months before the
end of the relevant assessment year, or before the completion of assessment, whichever is earlier. Meaning
thereby, the last date of all returns will not be 31st December, instead of 31st March.

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22. Increase in limit of Receipt by Trusts (Section 10(23C) ). There is increase in exemption limit of annual
receipt from Rs. 1 crore to Rs.5 crore for small charitable trusts running schools and hospitals.
Note: For computing the limit of Rs. 5 Crores, consolidated Turnover is required to be taken.
Amendments in Companies Act
a) Increase in threshold limit of Small companies
The definition under Companies Act, 2013 for small companies is revised by increasing their thresholds limits
for Paid up capital from “not exceeding Rs. 50 Lakh‘ to “not exceeding Rs. 2 Crore‘ and turnover from “not
exceeding Rs. 2 Crore‘ to “not exceeding Rs. 20 Cr‘.
b) Amendment in provisions of incorporation of One Person Companies (OPCs)
 No restriction of turnover and paid up capital for One Person Company.
 Also One Person Company is allowed to covert into any other type of company at any point of
time.
 Residency limit for an Indian citizen to set up an OPC is reduced from 182 days to 120 days and
 Non-Resident Indians (NRIs) will be able to incorporate OPCs in India.

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INCOME TAX RELIEF FOR
REAL-ESTATE DEVELOPERS
AND BUYERS

Advocate Ritika

As per the press released by Commissioner of Income Tax dated 13 November 2020, the following
tax relief have been provided to the seller and buyers of real estate:

In order to provide relief to real estate developers and buyers, the Finance Act, 2018, provided a
safe harbour of 5%. Accordingly, these deeming provisions triggered only where the difference
between the sale/purchase consideration and the circle rate was more than 5%. In order to provide
further relief in this matter, Finance Act, 2020 increased this safe harbour from 5% to 10%.
Therefore, currently, the circle rate is deemed to be the sale/purchase consideration for real estate
developers and buyers only where the variation between the agreement value and the circle rate
is more than 10%.

In order to boost demand in the real-estate sector and to enable the real-estate developers to
liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit
to the home buyers, it has been decided to further increase the safe harbour from 10% to 20%
under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in
respect of only primary sale of residential units of value up to Rs. 2 crore. Consequential relief by
increasing the safe harbour from 10% to 20% shall also be allowed to buyers of these residential
units under section 56(2)(x) of the Act for the said period. Therefore, for these transactions, circle
rate shall be deemed as sale/purchase consideration only if the variation between the agreement
value and the circle rate is more than 20%.

Important Points:
The press release have increased the safe harbor from 10% to 20%.
It is applicable only to sale of residential units, value of which is up to Rs. 2 crores.

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It provides benefits only on primary sale and not on resale of property by one homebuyer to
another.

The period from which this is effective is from 12 November 2020 to 30 June 2021.

In case of the following transactions, this provision will not apply:
When sale is by one homebuyer to another homebuyer.

When the sale is in respect of commercial land or unit i.e. Office or shops.

When the sale is in respect of residential unit but the consideration amount exceeds Rs. 2
crores.

EXAMPLE: (In Lakhs) Particulars PQ R S
Circle Rate 140 200 240 280
Actual Sale consideration 200 200 200 200
Acceptable Value (When Safe Harbour is 20%) 240 240 240 240

Full Value of Consideration u/s 43CA 200 200 200 280
Taxable u/s 56(2)(x) NIL NIL NIL 80

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Relaxation in additional CS Richa Srivastava
fees for filing of e-forms
with ROC

The Ministry of Corporate Affairs has once again
provided the relief in the difficult times by notifying
the circular related to Relaxation on levy of
additional fees in filing of e-forms AOC-4, AOC-4
CFS, AOC-4 XBRL AND AOC-4 NON- XBRL for the
financial year ended on 31.03.2020 under the
Companies Act,2013.

Keeping in view of various requests received from
professionals and shareholders, Ministry of
Corporate Affairs has decided that there shall be no
additional fees levied upto 15.02.2021 for the filing
of e-forms AOC-4, AOC-4 CFS, AOC-4 XBRL AND
AOC-4 NON- XBRL for the financial year ended on
31.03.2020.

Some FAQs

Q No. 1 What shall be the due date of filing AOC-4 after extension for the FY ended 31.03.2020?
A - As per the circular, the Due Date for AOC-4 shall be 15 February, 2021.
Q No.2 Whether this extension is only related to the Companies, who have held their AGM on
31st December, 2020?
A- MCA has given this extension to all the Companies for the financial year ended 31 st March
2020 irrespective of the date of AGM.
Q No. 3 Whether this extension is also for MGT-7?
A- This extension circular is related to Aoc-4 only.
Q No.4 Whether this extension shall be applicable on LLP’s also?
A- No, there is no extension for the LLP.
Ref: General Circular no. 04/2021

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Adv. JAGJEET PAHWA

Case Name: Bharat Forge Limited Vs. Principal Chief Materials Manager, Diesel

Locomotive Works & Ors.

(Allahabad High Court)
Description:- Classification of HSN code has an impact on selection of tenderers?
Facts: Petitioner is a company registered under Companies Act. Respondent No. 1 Diesel
Locomotive Works invited e-tender for procurement of Turbo Wheel Impeller Balance Assembly
with validity period of 120 days.

Petitioner submitted the e-tender with base price of Rs. 7,03,000/- and attracted GST @18%. The
total cost amounted to Rs. 8,29,540/-.

Another company, Krishna Bearing also submitted e-tender with base price of Rs. 6,00,000/- and
attracted GST @5%. The total cost amounted to Rs. 6,30,000/-.

It is stated that the original difference in price was about 17.1%, however, as Krishna Bearing
attracted wrong GST rate, the difference in total price quoted became about 31.6%.

Petitioner further contended that he could get benefit of Make in India policy being a local
manufacturer, only if margin of purchase preference is less than 20%.

Petitioner challenged the e-tender through this writ petition.

Issue: Whether classification of HSN code has an impact on selection of tenderers after opening
the financial bids?

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Conclusion: Court observed that in determining the interse ranking in the selection process, the
authority inviting tender has to clarify the applicable GST rate and HSN code of the procurement
product.

It further observed that GST value would be added to the base price to arrive at total price, which
is used to determine the ranking in the selection process. It is therefore, incumbent on the
authority inviting tender to clarify the HSN code.

Allahabad High Court held that if Railways authority or Diesel Locomotive Works have clarified the
HSN code applicable to the procurement product, all doubts would have been cleared.

It therefore, allowed the writ petition and directed the General Manager, Diesel Locomotive Works
to clarify the GST rates applicable to procurement product to stop the unfair trade practices.

Case Name: M/s Hindustan Coca-Cola Pvt. Ltd. vs. Assistant State Tax Officer & Ors.

(Kerala High Court)
Description:- Does GST authorities have power to detain your goods??
Facts: Hindustan Coca-Cola manufactured carbonated fruit drinks that attracted tax @12% i.e. 6%
under Central GST and another 6% as State GST and was classified under HSN 2202 9920.
During the course of business, their goods were brought to Kerala from Karnataka where the goods
were intercepted in Walayar, Palakkad, on the ground that the goods were wrongly classified.
It was argued that the goods will be failing under the head 2202 10, which would attract the GST
@28%.
Petitioner was also issued show-cause notice in reply of which he stated that matter pertaining to
same issue is pending before Gujarat High Court and he already had an interim stay in his favour.
Petitioner challenged the action of Kerala authorities through this petition.
Issue No. 1: Whether wrong classification of GST rate can be the ground for detention of goods?
Issue No. 2: Whether GST authorities in Kerala have jurisdiction to issue show cause notice, when
the goods were transported from Karnataka?
Conclusion: In the first issue court concluded by referring the judgments in the case of “J K
Synthetics Ltd. Vs. Commercial Taxes Officer” and “Rams Vs. Sales Tax Officer” and observing
Section 129 GST Act.

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It held that in case of bona fide dispute with regard to classification of tax between transitor of
goods and squad officer, the squad officer can intercept the goods and detain them but only for
preparing papers for effective transmission to judicial assessing officer and not beyond that, which
will at best take a few hours.
Court therefore, quashed the notice and detention of the goods and directed the authorities to
release the goods to the petitioner.
In concluding the second issue, Kerala High Court held that the power that Kerala authorities had
was to detain the goods only to prepare papers for effective transmission and not for indefinite
time period. Therefore, court directed the inspecting authority of Kerala to prepare a report and
submit the report to assessing authority, Karnataka for taking further action.

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Form to Change Profile for Quarterly Return
and Monthly Payments (QRMP) Scheme

Overview of QRMP Scheme

1. What is Quarterly Returns with Monthly Payment (QRMP) Scheme?
Quarterly Returns with Monthly Payment (QRMP) Scheme is for eligible taxpayers to file their Form
GSTR-1 and Form GSTR-3B returns on quarterly basis, while paying their tax dues on monthly basis
through a challan.

2. Who all are eligible for the QRMP scheme?
All taxpayers whose aggregate annual turnover (PAN based) is up to ₹ 5 Crore in the current
financial year and the preceding financial year (if applicable) and have already filed their last due
Form GSTR-3B return, are eligible for the QRMP scheme.
If your aggregate turnover (PAN based) for FY 2019-20 and current Financial year is up to ₹ 5 Crore
and you have filed your FORM GSTR-3B for the month of October 2020 (let’s say at least) by 30th
November 2020, you will be assigned to QRMP scheme, by the GST system.
For example: A taxpayer’s whose Annual aggregate turnover (AATO) was less than/ up to ₹ 5 Crore
in preceding FY and has filed Form GSTR-3B for the period June 2021 (let’s say at least) by last day
of the first month of the next quarter ie by 31st July, 2021.

3. Is the QRMP scheme available to every taxpayer?
No, the QRMP scheme is not available to every taxpayer.

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The QRMP scheme can be availed only by those taxpayers who are liable to file Form GSTR-1 and
Form GSTR-3B returns and can be opted by:
• Registered taxpayer (Normal taxpayer, SEZ Developer, SEZ unit)
• Taxpayers who have opted out of composition scheme
• Persons applying for a fresh registration as Normal taxpayer
Note: The scheme is not available for taxpayers whose Annual aggregate turnover (AATO) is more
than ₹ 5 Crores.

4. What are the pre-conditions for opting for QRMP scheme for a taxpayer?
Following pre-conditions must be fulfilled by a taxpayer to opt for QRMP scheme:
• Taxpayer must be registered as a regular taxpayer or opted out of composition scheme
• Taxpayer must have a valid User ID and password
• The Annual aggregate turnover (AATO) in current and preceding FY (if applicable) is up to ₹ 5 Cr.
• The Form GSTR-3B return for most recent tax period has been filed.
• There is no data saved on the portal in Form GSTR-1 for the applicable period (i.e. period for
which you are opting for QRMP scheme).

Invoice Furnishing Facility (IFF)

5. What is IFF?
IFF stands for Invoice Furnishing Facility for taxpayers who have opted for QRMP scheme to declare
outward supplies to a registered person for first two months of any quarter. It is an optional facility.
The facility will be similar to Form GSTR-1. It allows filing for only B2B invoices, credit notes, debit
notes etc. Last date of filing IFF for a month is the 13th of the next month. This will allow recipient
taxpayers to take credit of these invoices in the same month, if reported in IFF, by the supplier
taxpayer under QRMP scheme.

Opting for QRMP Scheme

6. Presently, I am filing Form GSTR-1 at quarterly frequency and Form GSTR-3B at monthly
frequency, will I be able to opt out of the QRMP scheme?
Please note that from the quarter January – March 2021 onwards, you will be assigned to QRMP
scheme by the GST System. You can choose to opt out from the QRMP scheme and if so, you would
need to file both Form GSTR-1 and Form GSTR-3B on Monthly frequency.

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