I.T. MIRROR 23-24 VOL 9

Vol. 9 February 24 Income Tax Bar Association Room No. 204, Nature View Building, Nr. Mrudul Tower, Ashram Road, Ahmedabad - 380009. Tel. No. : 079-48011947 I e-mail: [email protected] I www.incometaxbar.org INTERIM BUDGET 2024

Glimpses of Thought Provoking Seminar by Dr. Pavan Dwivedi on 07/01/2024

5 7 9 12 23 28 21 17 30 Disallowance of Delayed Payment of MSMEs us.43B of Income Tax Act effective from F.Y. 2023-24 - Adv Chintan H. Shah Changes in the Provisions relating to TDS & TCS by the Finance Act, 2023 - CA Ajit Shah Boom Times Ahead Examining the Vibrant Gujarat 2024 Impact on Dholera Special Investment Region & GIFT CITY - CA Harsh Mehta Impact of EPF and MP Act, 1952 on IBC and Treatment of claims of EPFO Authorities during Corporate Insolvency and Liquidation - An Analytical Approach - Adv P. K. Panneer Selvam Important Legal Updates - CA Parag Raval Decision Making Process While Selecting any of the Route for Refunds under Exports - CA Deep Koradia Assessment under GST - CA Rikin Parikh The Significance of Due Diligence in Analyzing Financial Statements in India - CA Samir Chaudhary All about Society Maintenance Charges - CA Harsh Mehta and Adv CS Lokesh Shah 2 Chairman's Message 3 President's Message 4 Hon. Secretary's Message - CA (Dr.) Vishves Shah - CA Ashish Tekwani - CA Jaykishan Pamnani 1 Adv. Ashutosh R. Thakkar Adv. (Dr.) Dhruven V. Shah Adv. (Dr.) Kartikey B. Shah Dhruvin D. Mehta (IPP) Bhavesh K. Govani Hiren C. Thakkar CA Kenan M. Satyawadi Narendra D. Karkar CA Parth H. Doshi Parth K. Katharia CA Pratik P. Kaneria CA Suvrat S. Shah Adv Dhiresh T Shah President Emeritus CA Ashish T. Tekwani President CA Shridhar K. Shah Vice President CA Jaykishan P. Pamnani Hon. Secretary CA Maulik B. Patel Hon. Joint Secretary CA Shivam K. Bhavsar Hon. Treasurer CA (Dr.) Vishves Shah Chairman CA Nisha Tekwani CA Suvrat Shah CA Rajesh Mewada Co – Chairman Jinal Shah CA Kaivan Parekh CA Pratik P. Kaneria Members Room No. 204, Nature View Building, Nr. Mrudul Tower, Ashram Road, Ahmedabad - 380009. Tel. No. : 079-48011947 I e-mail: [email protected] I www.incometaxbar.org Mouth Piece of Income Tax Bar Association INVITEE MEMBERS COMMITTEE MEMBERS IT MIRROR COMMITTEE OFFICE BEARERS Vol. 9 - FEB 24 CONTENTS

Chairman’s Message CA (Dr.) VISHVES SHAH Chairman 2 Dear Members and Readers, As we present to you this edition of IT Mirror, I want to warmly greet each one of you on behalf of IT Mirror, the mouthpiece of the Income Tax Bar Association. Our journey together has been exciting, and we're thrilled to continue keeping you informed about all things tax-related. Big things are on the horizon with the Interim Budget. The IT Mirror will break down the complexities and share insights, helping you understand how these changes might affect you. The Budget is a landmark milestone setting the stage for economic development, and we're committed to keeping you updated regarding the provisions of Budget. We're shining a spotlight on the MSME sector this time. These small and mediumsized businesses are the backbone of our economy. We're breaking down the tax side of the most discussed section of Income Tax in which might affect all the businesses dealing with Micro & Small Enterprises. GIFT City, a financial and tech hub, is also in the spotlight. We're exploring what's happening there, so you can stay ahead of the game. And of course, we've got the latest updates on Income Tax and GST, along with insights into other related laws. Keeping you in the loop on these changes is our top priority. A big shoutout to all our contributors and our hardworking editorial team. Your dedication makes IT Mirror what it is – a valuable resource for everyone navigating the world of taxes. As we journey through the twists and turns of tax laws, let's keep building a community that values learning and growth. IT Mirror is here to support you in understanding the ins and outs of taxation and allied laws world. I extend my invitation to all to register for Two Day Tax Conclave 2024 to be held on 15th and 16th March 2024 at AMA Ahmedabad and Decoding the Dynamics of GST: A Series covering entire GST Act with Practical Aspect to be held in the month of February, 2024 on Friday and Saturdays. Thank you for your continued support and engagement with our IT Mirror. Warm regards, CA (Dr.) Vishves A. Shah Chairman, IT Mirror Committee Income Tax Bar Association

3 Dear Members, It is with great pleasure that I extend a warm welcome to you all as we embark on a journey through the pages of our latest edition of the IT Mirror. In this edition, we delve into the intricate realms of Income Tax, Goods and Services Tax and other allied laws exploring the dynamic landscapes that shape the fiscal policies governing our economic structures. By the time you are reading this IT Mirror, the Interim Budget 2024 has been presented by the Hon. Finance Minister Smt. Nirmala Sitaraman. This whole month we shall be analysing the Budget on various forums. The articles curated within in the IT Mirror are a testament to the dedication and expertise of our esteemed contributors, who have endeavoured to unravel the complexities surrounding Income Tax, Goods and Services Tax (GST) and other allied laws. As we navigate through the diverse topics, we aim to provide you with insightful analyses and practical insights that will not only enhance your understanding but also empower you in navigating the ever-evolving tax landscape. In a world where fiscal responsibility is paramount, staying abreast of changes in tax regulations is crucial for professionals and enthusiasts alike. In continuance to that we are coming up with the most sought GyanYagna event Two Day Tax Conclave 2024. It is a unique two day event where knowledge sharing is the primary focus. To register for TWO DAY TAX CONCLAVE 2024 click here https://tinyurl.com/payTTC24 We have come up with Decoding the Dynamics of GST: A Series covering entire GST Act with Practical Aspect a series of 8 Lectures on 8 Topics. To register for the GST SERIES click here https://tinyurl.com/GSTSERIES Thank you for your continued support, and we hope you find this edition of the IT Mirror both informative and enriching. Warm regards, CA Ashish Tekwani President Income Tax Bar Association President’s Message CA ASHISH TEKWANI President

Dear Members, I am delighted to extend a cordial welcome to you as we unveil the latest edition of our IT Mirror. As Secretary of our esteemed association, it is my honour to introduce a collection of articles that delve into the diverse and ever-evolving landscape of taxation. In this edition, our contributors, comprising seasoned professionals and thought leaders in the field, have provided insightful perspectives on various facets of taxation. From legislative updates to practical case studies, these articles aim to equip you with a comprehensive understanding of the intricacies surrounding tax matters. IT Mirror serves as a beacon, illuminating the path towards a comprehensive understanding of the nuances in Income Tax, GST and other allied laws. Whether you are a tax practitioner, legal professional, academician, or a curious reader, we trust that the diverse array of perspectives presented here will prove valuable in your endeavours. As you peruse the articles within, I encourage you to engage with the material, consider the implications, and contribute to the ongoing discourse. Your active participation is integral to the success of our association and the continued growth of our collective knowledge. I also take this opportunity to invite you to be part of landmark events Two Day Tax Conclave 2024 and Decoding the Dynamics of GST. These two events will help you increase your knowledge, sharpen your skills and update you with all the latest developments in the field of taxation Happy reading!!! Warm regards, CA Jaykishan Pamnani Hon. Secretary Income Tax Bar Association Hon. Secretary’s Message CA JAYKISHAN PAMNANI Hon. Secretary 4

In a bid to facilitate timely payments to micro, small, and medium enterprises (MSMEs) and address the challenges faced by these businesses in recovering their dues, the Finance Act 2023 introduced a significant amendment under Section 43B of the Income Tax Act. This amendment aims to ensure that businesses make payments to MSMEs within a specified time frame, while also impacting the deduction claims for such payments. Section 15 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, as incorporated by the Finance Act 2023, mandates that payments due to MSMEs should be made within the agreed-upon time frame between the parties, which cannot exceed 45 days. In the absence of a written agreement, these payments must be made within 15 days from the due date. Section 43B of the Income Tax Act outlines certain expenditures or payments for which deductions can only be claimed in the year when the actual payment is made, regardless of when the liability was incurred. However, if the taxpayer follows the mercantile system of accounting, deductions for such expenses can be claimed if the payments are made before the due date of filing the income tax return under Section 139(1) of the Income Tax Act. This provision applies to all specified payments except for payments made to MSMEs. In other words, if a payment owed to an MSME as of March 31st of the previous year is not made within the prescribed 15 or 45-day period but is paid before filing the income tax return, it cannot be claimed as a deduction in the previous year when the liability was incurred. With the enactment of the Finance Act 2023, payments due to MSMEs now fall within the scope of Section 43B(h) of the Income Tax Act. Consequently, any payments to MSMEs made beyond the time limits specified in Section 15 of the MSMED Act 2006 can only be claimed as deductions when they are actually paid. Therefore, if a payment to an MSME is made beyond the time limits set by the MSMED Act but before filing the income tax return, the deduction can be claimed in the year of actual payment rather than the year in which the liability was incurred. This amendment will come into effect from April 1, 2023, and will have a significant impact on businesses' tax planning strategies, encouraging them to make timely payments to MSMEs and ensuring compliance with the provisions of the MSMED Act. By streamlining payment processes and incentivizing businesses to meet their payment obligations, this amendment seeks to promote a healthy business ecosystem and support the growth of MSMEs in the country. It is crucial for businesses to be aware of this amendment and adjust their financial practices accordingly to remain compliant with both the Income Tax Act and the MSMED Act, thereby contributing to the sustainable development of the MSME sector. For better understanding of this clause, below is an example and different situations giving the time of liability incurred. As on 31st March 2024, ABC Ltd has a liability of Rs.10 lakh to be paid to XYZ ltd. XYZ Ltd is a business registered as Micro, Small and Medium Enterprise (MSME). Disallowance of Delayed Payment of MSMEs u/s.43B of Income Tax Act effective from F.Y. 2023-24 - ADV CHINTAN H. SHAH 5

I. T. MIRROR (2023-24) Thus for the businesses to claim deduction of any payments due to the vendors, shall have to identify the businesses / vendors to which the payment is due, and are registered as MSMEs. Businesses shall continue to ensure that payments due to MSMEs are made as per the actual agreement between them which is not more the 45 days. In case where no such agreement is entered into, payments are made within 15 days from the date such liability is incurred. The idea to include Section 15 of MSMED Act 2006 under the purview of Section 43B of the Income Tax Act was to promote timely payments to MSMEs. Also, note that above details are to be verified by the Tax Auditor and also required to be reported in Tax Audit Report. Therefore, it is advisable to make complete compliance of this new requirement. However, this provision cannot fully suffice the same as the Assessees may continue to delay the overdue payments to MSMEs which were incurred in the previous year and also claim deduction by making such payment after 45 days from the date on which the liability was incurred but before 31st March. Treatment of such liability Rs.10 lakh shall be disallowed as deduction to ABC Ltd as the period of 45 days expired on 24th February 2024. Rs.10 lakh shall be disallowed as deduction to ABC Ltd as the period of 45 days expired on 31st March 2024. In this case, the period of 45 shall expire on 30th April 2024. Accordingly, if the payment is made: On or before 30th April 2024, the deduction of Rs 10 lakh shall be allowed to ABC Ltd in FY 2023-24. After 30th April 2024, the deduction of Rs.10 lakh shall be allowed to ABC Ltd in F.Y. 2024-25 or the year in which the payment is actually made. In this case, the period of 45 shall expire on 15th May 2024. Accordingly, if the payment is made: On or before 15th May 2024, the deduction of Rs.10 lakh shall be allowed to ABC Ltd in F.Y.2023-24. After 30th May 2024, the deduction of Rs 10 lakh shall be allowed to ABC Ltd in F.Y.2024-25 or the year in which the payment is actually made. Sr. No Date of incurring liability 1 Liability is incurred by ABC Ltd on 10th January 2024. 2 Liability is incurred by ABC Ltd on 14th February 2024. 3 Liability is incurred by ABC Ltd on 16th March 2024. 4 Liability is incurred by ABC Ltd on 31st March 2024. 6

A. TDS and Taxability of winning from online Games: With the technological advancement and rise of mobile and internet connectivity, a number of on line games in the nature of gambling and betting has grown manifold in the recent times. Catching hold of such income and collecting tax thereon is difficult looking to the unique nature of online platform for the games as well as payment options. In order to ensure proper tracking of such winnings as well as to bring such income in to the ambit of taxation, the Finance Bill, 2023 has proposed the following amendments. At present provision of section 194B provides that winnings from lottery or cross-word puzzle or card games or other games TDS shall be made at the time of payment when it exceeds Rs. 10,000. Section 194BB provides that winning from horse race exceeds Rs. 10,000 TDS shall be made. The existing provisions of section 194B and 194BBto be amended to provide that the TDS shall be on the amount or the aggregate amount exceeding Rs. 10,000 in a financial year. The existing section 194B, shall include gambling or betting within its scope. A new section 194BA shall be inserted w.e.f. 1st July, 2023 to provide for TDS on net winning from online games (to be computed in a prescribe manner). Consequently, the on line games shall be excluded from purview of section 194B from that date. The TDS under section 194BA shall be made from the user account at the end of the financial year. However, if the user withdraws any amount during the financial year, the TDS shall be made at the time of withdrawal on the net winnings comprised in the amount withdrawn. The remaining amount of net winnings shall be subjected to TDS at the end of the year. The proposed section 194BA provides that in case the net winning is partly or fully in kind, the responsible person shall ensure the payment of tax on such winning before releasing the winning proceeds. The following definitions are proposed to be provided. 1. “computer resource” means computer, computer system, computer network, data, computer data base or software; 2. “Internet” means the combination of computer facilities and electromagnetic transmission media, and related equipment and software, comprising the interconnected worldwide network of computer networks that transmits information based on a protocol for controlling such transmission; 3. “online game” means a game that is offered on the internet and is accessible by a user through a computer resource including any telecommunication device; 4. “ online gaming intermediary” means an intermediary that offers one or more on line games; 5. “user” means any person who accesses or avails any computer resource of an online gaming intermediary; 6. “User account” means account of a user registered with an online gaming intermediary. A new section 115BBJ shall be introduced w.e.f. A.Y.2024-25 to provide for taxability @ 30% on the winnings from online games, incomes other than the winning from online games shall be chargeable to tax at the rate applicable to the respective income. Changes in the Provisions relating to TDS & TCS by the Finance Act, 2023 - CA AJIT SHAH 7

B. Increase in rate of Tax Collection at Source(TCS) on certain remittances: The existing provisions of Section 206C provides for TCS on business trading in alcohol, liquor, forest produce, scrap etc. Section 206C(1G) provides for TCS on foreign remittance through the Liberalized Remittance Scheme(LRS) and on sale of overseas tour package. In order to increase TCS on certain foreign remittances and on sale of overseas tour packages, amendment is proposed in Section 206C(1G) of the Act. The current and proposed TCS rates are as under: Existing Rate 0.5% of the amount or the aggregate of the amountsin excess ofRs. 7 lakh 5% of theamount or theaggregate ofthe amounts in excess of Rs. 7 Lakh 5% without any threshold limit 5% of the amount Or the aggregate of the amounts in excess Rs. 7 lakh. Sr. No Types of Remittance 1 For the purpose of anyEducation, if the amount Remitted out of loan Obtained from any Financial Institution as Defined in section 80E Of the Act. 2 For the purpose of Education, other than (Mentioned in 01) orFor the purpose of Medical treatment 3 Overseas Tour package 4 Any other case Proposed Rate No Change No Change 2 0 % w i t h o u t a n y threshold limit 2 0 % w i t h o u t a n y threshold limit C. Increasing the threshold limit for co-operatives to withdraw cash without TDS: The provision of Section 194N provide that a banking company or a cooperative society carrying on the business of banking or a post office, which is responsible for paying the aggregate amounts in excess of Rs. 1crore in cash during the previous year to any person (recipient) from one or more accounts maintained by the recipient with it shall, at the time of payment of such sum, deduct 2% of such sum, as TDS. In case recipient is a non-filer of tax returns, TDS is required to be made at 2% for aggregate amount paid in cash between Rs. 20 lakh to 1crore and TDS at 5% for aggregate amount paid in cash exceeding Rs. 1crore during the financial year. It is proposed to increase the threshold limit of Rs. 1crore to Rs. 3crore, if the recipient is a “co-operative society”. This amend will take effect from 1st April, 2023 D. Removable of exemption from TDS on payment of interest on listed securities: Section 193 deals with TDS on interest on securities paid to any person. Clause (xi) of the said section provides exemption from making TDS from certain securities if such security is in demet form and is listed on recognized stock exchange in India. It has been noticed that there is under reporting of interest income by the recipient as TDS is not made from such interest income. Hence it is proposed to omit clause (xi) of Section 193. As a result, the interest income for securities held in demat form will attract TDS. This amendment will take effect from 1st April, 2023. This amendment will take effect from 1st July, 2023. I. T. MIRROR (2023-24) 8

Dholera's Dream: Will Vibrant Gujarat 2024 Make it Reality? Nestled amidst the arid plains of Gujarat, Dholera Special Investment Region (SIR) stands as a symbol of ambitious dreams and audacious promises. This sprawling 920 sq km greenfield project, touted as India's first smart city, has long captured the imagination of investors and planners. Yet, despite its potential, Dholera has remained mired in delays and unfulfilled promises. However, the recent Vibrant Gujarat Global Summit 2024 might just turn the tide, injecting a much-needed shot of adrenaline into Dholera's journey. Tata's Big Bet: A Catalyst for Growth? One of the biggest highlights of the summit was Tata Sons' announcement of a "huge" semiconductor fabrication plant in Dholera. This commitment, along with the planned expansion of C295 aircraft manufacturing, throws down a significant gauntlet. It paints Dholera as a frontrunner in the race for high-tech manufacturing, attracting ancillary industries and research facilities. With the promise of thousands of jobs, the demand for housing, retail, and office spaces in Dholera is expected to skyrocket. Developers must seize this opportunity to create a vibrant ecosystem that caters to the needs of this skilled workforce. Infrastructure: Bridging the Gap Between Promise and Reality Dholera's success hinges on robust infrastructure. Phase I, covering 22.54 sq km and boasting a 95% completion rate, offers a promising foundation. However, the remaining phases require continued investment and timely execution. The summit saw significant commitments towards infrastructure development, including smart city initiatives, transportation networks, and renewable energy projects. If these projects materialize efficiently, they will not only improve Dholera's internal connectivity but also connect it seamlessly to neighboring regions, further enhancing its attractiveness. Beyond Bricks and Mortar: Charting a Sustainable Future Dholera aspires to be more than just a city of bricks and mortar. Its focus on sustainability, evident in plans like the creation of green buildings and a focus on renewable energy, resonates with global trends. This can attract environmentally conscious businesses and individuals, seeking not just economic opportunities but also a responsible lifestyle. Developers must embrace green building practices and incorporate smart technologies that optimize energy consumption and water management. This will not only attract a niche market but also contribute to Dholera's long-term sustainability. Challenges and Roadblocks: Building a Dream City Takes More Than Promises While the optimism around Dholera is palpable, challenges remain. Efficient land acquisition and allocation are crucial to ensure timely project completion. Streamlining approvals and regulatory processes will attract investors and developers. Affordability must be a key concern. Catering to diverse income brackets with a combination of affordable housing options and high-end residences will create a truly inclusive city. Finally, attracting and retaining talent remains crucial. Building quality educational institutions and healthcare facilities will be essential to create a thriving community. Boom Times Ahead: Examining the Vibrant Gujarat 2024 Impact on Dholera Special Investment Region & GIFT CITY - CA HARSH MEHTA 9

I. T. MIRROR (2023-24) Conclusion: Time to Rise, Dholera! Vibrant Gujarat 2024 has thrown a lifeline to Dholera. The announced investments, renewed focus on infrastructure, and emphasis on sustainability paint a promising picture. However, translating grand visions into reality requires concerted effort from the government, developers, and investors. If the challenges are addressed with foresight and commitment, Dholera can emerge not just as a successful industrial hub, but as a vibrant, sustainable city that fulfills its long-held promise, becoming a shining example of India's urban future. GIFT CITY: Poised for Propulsion – Vibrant Gujarat 2024 Ignites the Financial Hub's Future The 10th Vibrant Gujarat Global Summit (VGGS 2024) reverberated with promises of progress and economic prosperity, injecting a potent dose of optimism into the state. Amongst the beneficiaries stands GIFT City, Gujarat's ambitious financial hub, poised for a thrilling ascent in the wake of the summit's record-breaking investment pledges. Let's delve into the transformative potential VGGS 2024 holds for GIFT City, exploring its economic, infrastructural, and strategic implications. Investment Tsunami: Fueling a Financial Frenzy With Rs. 26.33 lakh crore committed across diverse sectors, VGGS 2024 unleashed a wave of investments that will inevitably spill over onto GIFT City. The focus on infrastructure development, particularly in power, oil and gas, and semiconductors, will create a strong demand for financial services, propelling GIFT City's growth as a key facilitator of funding and transactions. Additionally, the rise of new industrial hubs like Dholera will attract a plethora of businesses, seeking sophisticated financial solutions, legal services, and asset management expertise, all readily available within GIFT City's confines. Infrastructural Boost: Bridging the Gap to Global Standards VGGS 2024 placed a significant emphasis on enhancing connectivity and living standards. This translates to upgraded transportation networks, smart city initiatives, and renewable energy projects, all of which will directly benefit GIFT City. Improved accessibility through upgraded highways and airports will make GIFT City even more attractive to domestic and international investors. Smart city features like advanced security systems, efficient waste management, and robust communication infrastructure will create a world-class working environment, further solidifying GIFT City's appeal. Strategic Shift: A Gateway to India's Financial Future The summit witnessed a renewed focus on positioning India as a global financial powerhouse. This presents a unique opportunity for GIFT City to emerge as a key player in this endeavor. Its existing regulatory framework, modeled after international standards, its location at the crossroads of trade routes, and its proximity to major Indian financial centers like Mumbai and Ahmedabad place it in a prime position to attract foreign direct investment (FDI) and become a gateway for global capital flows into India. Beyond Bricks and Mortar: Diversifying the Financial Landscape VGGS 2024's emphasis on technology and sustainability holds immense potential for GIFT City. The demand for data centers, fintech solutions, and green finance offerings will create exciting opportunities for innovative startups and established financial institutions alike. GIFT City's regulatory framework can adapt to nurture this burgeoning ecosystem, paving the way for India's leadership in these emerging financial verticals. Challenges and Opportunities: Navigating the Road Ahead While the outlook for GIFT City is undeniably optimistic, navigating this surge in activity will require careful 10

I. T. MIRROR (2023-24) planning and execution. Attracting and retaining top talent, streamlining regulatory processes, and ensuring efficient communication between stakeholders will be crucial. Additionally, GIFT City must remain competitive with other established financial hubs like Singapore and Dubai, constantly innovating and offering unique value propositions to attract investments. Conclusion: From Dream to Reality - GIFT City's Transformative Ascent Vibrant Gujarat 2024 has served as a powerful catalyst for GIFT City's future. The wave of investments, infrastructural upgrades, and strategic positioning towards global financial leadership sets the stage for a transformative ascent. With careful planning and sustained momentum, GIFT City can evolve into not just India's premier financial hub, but a global competitor, attracting capital, talent, and innovation, and solidifying India's place on the world financial map. 11

INTRODUCTION There is a peculiar relationship between the Employees Provident Fund and Miscellaneous Act, 1952 (EPF and MP Act) and Insolvency and Bankruptcy Code, 2016 (IBC or Code). The former is enacted by Parliament as a custodian to take care of employees and workmen's savings and pensionary needs in the evening of their life, while the latter is a code created to stream line the process of Insolvency and bankruptcy provisions for companies and individual entities. Though EPF act and the Body administering them i.e EPFO or CBT is like any other statutory body or statutory authority, yet it retains special place in the scheme of things put forward in the process of CIRP or Liquidation by virtue of the protection it guarantees for workmen and employees. Let us now look at the historical background of the claims by EPFO and and how it evolved overtime to its present status. BACKGROUND OF TREATMENT OF EPF CLAIMS In the days prior to advent of IBC and when Companies Act, 1956 was in vogue, the claim of EPFO with respect to Company under liquidation has to be submitted to the Official liquidator, who then passes an order of adjudication and quantifies the claim that is to be admitted and distributed and the dues of workmen and employees enjoyed a special status as per Sec. 529 of Companies Act, 1956 and it shall be paid in priority over any other dues. Sec. 530 of Companies Act, 1956 provides for waterfall mechanism as per which envisages as to how priority is to be given for different kinds of debts. An overt attempt was made in the interpretation of statutes to relegate the dues of workmen and employees below that of claims of secured creditor , but the same was thwarted by the Hon'ble Supreme court in decision of Official liquidator of Esskay Pharmaceuticals Limited vs Regional provident Fund Commissioner1 , wherein it was held that the amendments made in Companies Act, 1985 is only to expand the scope of the workmen and place them at par with debts due to secured creditors and there is no reason to interpret this amendment as giving priority to the debts due to secured creditor over the dues payable of provident fund payable by the employer. Subsequently after the new Companies Act came into operation in 2013, the Section 529 and 530 of old Companies Act ,1956 was replaced by Section 326 of the Companies Act, 2013 which deals with overriding preferential payments and Sec. 327 dealing in preferential payments in new Companies Act, 2013, here also the workmen dues including any amount due under provident fund, pension fund and gratuity fund are given top priority under Sec. 326. Further Sec. 325 deals with insolvency of company, the sections were subsequently omitted w.e.f 15.11.2016 due to the advent of IBC and subsequently an amendment was brought in sec. 327(7) where it was clarified that Sec. 326 and Sec. 327 will not be applicable for companies undergoing liquidation under the IBC. LEGISLATIVE INTENT BEHIND SECTION 36(4) OF IBC The legislative intent behind insertion of Sec. 36(4)a(iii) of IBC can be gathered from the report of the Joint Committee on the Insolvency and bankruptcy Code submitted to the Loksabha on 28.04.2016. The report inter alia, explains the intent behind the aforesaid provisions in the following words. The representatives of EPFO during the course of deliberations stated that the priority of payment of debts under the code is changed and EPF dues in the bill have been placed on a lower priority and the Eleventh Schedule of the Code proposes that Section Impact of EPF and MP Act, 1952 on IBC and Treatment of claims of EPFO Authorities during Corporate Insolvency and Liquidation – An Analytical Approach - ADV P. K. PANNEER SELVAM Madras High Court 12

I. T. MIRROR (2023-24) 13 326 and 327 shall not be applicable in the event of liquidation under the Code. By this provision of Section 11 of the EPF and MP Act are rendered null and void. The representative drew the attention of the committee to the Hon'ble Supreme Court judgement whereby it was held that EPF dues shall get priority over all other debts including secured creditors. As a result and in order to protect the interest of workmen, the committee decided that the workmen dues for period 12 months as provided in Section 53 of Code be increased to 24 months preceding Liquidation commencement process. In light of the same and in view of inclusion of Sec. 36(4) in IBC giving outright protection of provident fund, pension fund and gratuity fund from the assets of liquidate estate. The committee report and historical background leading to evolving of Section 36(4) was captured by the Hon'ble Supreme court of India in Sundaresh Bhatt vsSunilkumar Jain and others2. CLAIMS BY EPFO BEFORE RP/LIQUIDATOR There is a popular misconception that the claims of EPFOs are taking away the chunk of the realisable assets when the Company undergoes CIRP or the Liquidation process as the case may be. Whereas the claims of all other creditors are right over the property but the claims of the workmen and employees are right of life and therefore and rightly so they acquire such a high stature in the pedestal of claims. The claim of EPFO could be categorised as three parts, one with respect to contribution dues, where the establishment has to deduct a specific percentile of basic wages along with its own matching contribution and pay both the share to the Fund Regulator within 15 days from the day the salary or wages of the Employees have become due and payable/paid. Any deviation by the establishment would be visited with proceedings and determination of due under Sec. 7A of the EPF and MP Act. The second one is with respect to payment of interest for non-payment of contribution in time, the erring establishment will be liable to pay interest at simple rate 12% per annum from the date the contribution becomes due till the date it is being paid and Proceedings initiated and amount of interest due is determined by EPFO is under Sec.7Q of the EPF and MP Act and separate claim will be made under the head interest due. It is not known to many a stakeholders that the interest so collected/recovered goes to the interest account maintained separately by the Fund Regulator and the same is utilized for the benefit of workmen and employees alone. The third and most misunderstood concept is that of damages where determination of it is dealt under Sec. 14B of the EPF and MP Act, wherein if an establishment makes a default in the payment of contribution to the fund, then it is liable to pay damages not exceeding the amount of arrears i.e the amount of contribution due for that period as determined by proceedings under Sec. 14B of the EPF and MP Act. A separate claim will be made under this head before the RP/Liquidator as the case may be. The concept of levy of damages was effectively explained by Justice Krishna Iyer in the decision rendered in Organo chemicals case3 where he states that the stream of contributions were frozen by employers' defaults after due deduction for the wages and diversion for their own purpose, the scheme would be damnified by traumatic starvation of the Fund. The above decision was also followed in the later judgment of the Hon'ble Supreme Court 4 in Hindustan times case wherein while holding that there is no limitation period for invoking the assessment proceedings under Sec. 14B of the EPF and MP Act, The Apex Court has also held that the ultimate beneficiary of damages dues is the employees and workmen, albeit in an indirect way. Now if the Company undergoes CIRP, and if it is due for payment of PF amount, then the concerned Regional EPF Office like any other Government organisation needs to file a claim following invite of public notice from Resolution Professional, earlier EPFOs were filing their claim with proof of dues in time under Form-B meant for Operational Creditors and if the company is not able to revive itself in Resolution Process within the stipulated time, then the company skips into Liquidation, at that point the Stakeholders' Consultation Committee (SCC) will be formed including members of erstwhile Committee of Creditors(CoC) along with Liquidator and Government Nominee will also be included and usually from EPFO and ESI. At this stage, fresh claim needed to be filed by all stakeholders/claimants before the Liquidator along with proof of dues, As far as PF authorities are concerned, during CIRP, earlier they were filing the same under Form C. But now, since EPFO is neither an

I. T. MIRROR (2023-24) Operational Creditor, nor a Financial Creditor, therefore, the claims were filed under Form F meant for other creditors during resolution process and Form G in case of liquidation process. If the claims are rejected for any reason by the Resolution Professional or the Liquidator, then the jurisdictional NCLT's are moved as against the said rejection. The latest regulations by Regulating Body IBBI has brought in changes in timeline for accepting claims. The claims by EPFO need not be based on orders passed by statutory authorities, they can also be for provisional dues, if proceedings for particular period is not complete, since claim is a right of payment, whether or not such 5 right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or otherwise. It is important to bear in mind that Statutory Authorities can initiate proceedings for determination of their dues from the Corporate Debtor even after initiation of CIRP, and only recovery action based on such proceedings is prohibited as under moratorium clause under Sec. 14 of IBC as interpreted by the Hon'ble Supreme court of India in the decision of Sundaresh Bhatt, liquidator of ABG shipyard versus Central board of Indirect taxes and customs6. TREATMENT OF PF CLAIMS BY VARIOUS JUDICAL FORA Treatment of EPFO claims during CIRP period: The Provident Fund, Gratuity and Pension dues have been given priority as they are outside the Liquidated Estate assets as per Sec. 36(4)(a)(iii) of IBC, the above provision was invoked by the Hon'ble NCLAT in the case of Ramchandra D. Choudhary7 and it had interpreted the same in resolution stage of Corporate Debtor and held that the overriding effect of section 238 of the IBC will not have any bearing over the asset of the workmen lying with the possession of Corporate Debtor because that asset is not considered as the part of liquidated assets and for a worthy reason that PF dues which are not considered as assets of liquidated estate, shall also not form part of the asset of the Corporate Debtor even in resolution stage, The above decision was also approved by the Hon'ble Supreme Court of India In Kushal Limited8. In a later decision, the Hon'ble NCLAT in Sikander Singh Jamuwal case 9 had invoked Sec. 17B and directed the successful Resolution Applicant to pay the PF dues holding that it is a joint responsibility of Resolution Professional and Resolution Applicant to pay the pending statutory dues and went on to declare that compliance of law is a more important that commercial wisdom. This decision was also confirmed by Hon'ble Supreme Court in the case of S.M. Milkose10. The Hon'ble NCLAT in Jet Airways Limited case11, placing reliance on Ramchandra D. Choudhary case and interpreting Sec.18(1)(f)(i) of IBC, has held that the workmen and employees are entitled for payment of full amount of provident fund and gratuity till date of commencement of insolvency in addition to the 24 months workmen dues which the workmen are entitled to under Sec. 53(1)(b) of the Code. Any deviation would make the Resolution Plan vulnerable to interference as it violates Sec. 30(2)(e) of the IBC. The above decision was also 12 confirmed by the Hon'ble Supreme Court of India in Jalan Fritsch Consortium case . Subsequently another decision of NCLAT in the matter of Assam Tea13 while relying on its decision in Jet Airways, and placing reliance on Sec.11(2) of EPF Act as held in the judgment of the Hon'ble Supreme Court in Maharashtra State Cooperative Bank Limited vs. Assistant Provident Fund Commissioner & Others14 holding that PF dues includes contribution, interest and damages. And this decision was also approved by Supreme Court in Assam tea EPFO case15. 16 In one of the much discussed decision, the Hon'ble Supreme Court in Rainbow industries Ltd , had held that if the resolution plan ignores the statutory demands payable to any State Government or a legal authority, altogether, the Adjudicating Authority is bound to reject the resolution plan and had equated the governmental dues on par to that of secured creditor and further held that delay cannot be sole reason for rejecting a claim, But in the 17 subsequent decision of Paschimchal , the Apex Court had watered down the Rainbow judgment and held the waterfall mechanism that was envisaged under Sec. 53(1) of IBC was not brought to its notice in the Rainbow judgment and therefore went on to hold that dues of tax and other governmental authorities which comes under 14

I. T. MIRROR (2023-24) Article 265 have to be necessarily be distributed as per the waterfall mechanism, here also the Supreme Court categorically held that dues of Statutory Authority other than government dues which are outside the Liquidated Estate assets as per Sec.36(4)(a)(iii) have to be treated on different footing. The combined reading of both judgments would imply that any claim of the statutory authorities whose dues comes under Sec. 36 of IBC cannot be ignored on the reason of delay alone. The latest decision of the Hon'ble Supreme Court in Fanendra Harakchand Munot18 had while dismissing the appeal of PF authorities held that dismissal does not come in the way of EPFO to proceed in accordance with law, in view of Section 36(4)(a)(iii) of IBC. This Liberty would give scope to the PF authorities in their bid to recover the dues and how the liberty is interpreted by courts and tribunal below remains to be seen. TREATMENT OF EPFO CLAIMS DURING LIQUIDATION PERIOD: The earliest decision to come after advent of IBC regarding exclusivity of Sec. 36(4) of IBC is that of Sunil Kumar Jain, where Apex Court has categorically held that Section 53(1) of the IBC shall not be applicable to PF, Gratuity and Pension dues, which are to be treated outside the liquidation process and liquidation estate assets under the IBC since Section 36(4) of the IBC has clearly given outright protection to the workmen's dues under the provident fund, the pension fund and the gratuity fund, which are not to be treated as liquidation estate assets and the liquidator shall have no claim over such dues. Though in Sunil Kumar decision it was held that provident, pension and gratuity fund “if available”, which was interpreted by the stake holders to deny the claims on the premise that if the Corporate Debtor does not have separate provident, gratuity and pension fund, then they would not be liable to create or make available the PF, Gratuity and Pension dues. Though the mistake of the Corporate Debtor in not depositing the PF, Gratuity and Pension fund on time will not enure the Liquidator/RPs to take advantage of the same, but this doubt was cleared by the Hon'ble NCLAT in the celebrated decision of Jet Airways holding that if Corporate Debtor maintains a fund for payment of PF, Gratuity and other retirement benefits to employees and workmen, then that shall be an asset, but IRP required to take control and custody of asset over which the Corporate debtor has ownership by virtue of Sec.18(1)(f)(1) of IBC. Where if an establishment which deposits their Pf amount with the EPFO for some reason it defaults in depositing the contribution amount, then that unpaid PF amount along with attendant dues will be the claim putforth by EPFO before the Liquidator/RP as the case may be and the concerned RP, liquidator is bound to honour the same before starting distribution of assets under Sec. 53(1) of IBC. The issue whether the payment of Provident Fund dues should be made as per Sec. 53(1) of IBC or whether the Provident Fund dues is expressly excluded from the assets of the Corporate debtor as per Sec. 36(4)(a)(iii) of IBC yet again came upon for consideration before NCLAT in Moser baerKaramchari Union19 case, where it categorically held that the provisions of IBC have overriding effect in case of inconsistency in any other law for the time being in force, and held that Section 53(1)(b) read with Section 36(4) will have overriding effect on 326(1)(a), including Explanation(iv) mentioned below Section 326 of the Companies Act, 2013 and went on to assert that the provident fund, the pension fund and the gratuity fund cannot be included in the distribution. This decision was also upheld by the Hon'ble Supreme court in case of State bank of India20. Thus making clear that the dues of secured creditor, operational creditor, financial creditor and other creditors have to be distributed only after the PF, Gratuity and pension dues of the workmen and employees are cleared. On the same lines, came yet another decision of Hon'ble Supreme Court in Moser Baer Karamchari Union thr. President Mahesh Chand Sharma vs. Union of India (UOI) and Ors.23 where validity of Sec. 327(7) of Companies Act was challenged, and here also the Hon'ble Apex Court categorically held the distribution can happen under Sec. 53(1) of IBC subject to Sec. 36(4). CONCLUSION What this article captures is only a tip of iceberg in so far as the issues concerning the claims of the EPFOs and their treatment by Liquidators and RPs in the IBC process. In the new Labour Code, which was already enacted by 15

I. T. MIRROR (2023-24) Parliament and notified by Central Government but not implemented, the provisions of IBC was well recognized in so far as in priority clause existing in Sec. 11(2) of EPF and MP Act has been amended to include any amount due shall be charge on the assets on the establishment to which it relates and shall be paid in priority in accordance with provisions of IBC, 2016 and further with respect to section 14B of EPF and MP Act regarding waiver of 22 damages ,this was amended to include that “CBT may reduce or waive damages in relation to an establishment for which a resolution plan or repayment plan recommending such waiver has been approved by the adjudicating authority under IBC subject to such terms and conditions”. Therefore as and when the new Labour Code is implemented we can expect a more pragmatic approach with adjudication and disbursal of claims of EPFO by authorities under IBC so that the objects of the code and social welfare legislation are achieved to the Core. This Article was originally published in IBC Laws (www.ibclaw.in) on 06.10.2023 Reference: 1. Esskay Pharmaceuticals Limited vs Regional Provident Fund Commissioner in AIR2012SC11 2. Sunil Kumar Jain and others Vs. Sundaresh Bhatt and others (2022) ibclaw.in 23 SC. 3. Organo chemicals Industries and another Vs Union of India and another reported in (1979)1LLJ416SC 4. Hindustan times case vs Union of India reported in AIR1998SC688 5. Claim defined as per Insolvency And bankruptcy Code, 2016 6. Sundaresh Bhatt, liquidator of ABG shipyard versus Central board of Indirect taxes and customs reported in (2022) ibclaw.in 103 SC 7. Regional Provident Fund Commissioner-I, Ahmedabad vs Ramchandra D. Choudhary, (2019) ibclaw.in 463 NCLAT 8. Kushal limited Vs Regional Provident Fund Commissioner reported in (2020) ibclaw.in 145 SC 9. Sikander Singh JamuwalvsVinayTalwar and others reported in (2022) ibclaw.in 221 NCLAT 10. M. MilkosevsSikander Singh Jamuwal in Civil Appeal No. 6721 of 2022 dated 23.09.2022. 11. Regional Provident Fund Commissioner vsAshshishChawchharia, Resolution professional of Jet Airways Limited reported in (2022) ibclaw.in 861 NCLAT 12. Jalan Fritsch Consortium vs Regional Provident Fund Commissioner in (2023) ibclaw.in 12 SC 13. Assam Tea Employees Provident Fund Organisation Vs Madhur Agarwal, RP of Hail Tea Ltd and others reported in (2022) ibclaw.in 894 NCLAT 14. Maharashtra State Cooperative Bank Limited vs. Assistant Provident Fund Commissioner & Others reported in (2009) 10 SCC 123 15. Hail Tea Ltd. Vs Assam Tea Employees provident Fund Organisation in Civil Appeal No. 9383 of 2022 dated 06.01.2023. 16. State Tax Officer vs. Rainbow Industries Ltd. reported in (2022) ibclaw.in 107 SC 17. PaschimchalVitranVidyut Nigam Limited Vs Ram Ispat Pvt Limited and others reported in (2023) ibclaw.in 81 SC 18. Regional Provident Fund Commissioner vsFanendraHarakchandMunot in (2023) ibclaw.in 97 SC 19. M/s State bank of India Vs Moser baerKaramchari Union and another in (2020) ibclaw.in 206 NCLAT 20. Hon'ble Supreme court in State Bank of India vs Moser baerKaramchari Union and another in (2023) ibclaw.in 14 SC 21. Moser Baer Karamchari Union thr. President Mahesh Chand Sharma vs. Union of India (UOI) and Ors. reported in (2023) ibclaw.in 59 SC. 22. Code on Social Security 2020 – Gazette Notification dated 29.09.2020. 16

A) Mere outsourcing of services to Indian subsidiary would not give rise to PE in India: ITAT Delhi M/s EXL Service. Com INC (ITA No. 4989/DEL/2014) Facts: 1. Exl India has entered into a service agreement with ExlInc (assessee) under which, Exl India provides internet and voice-based customer care services and backroom operation services to the customers of ExlInc and in consideration of these services, Exl India invoices ExlInc at determined hourly rates and ExlInc, in turn, raises invoices on the end customers. 2. The bone of contention is the assessment order dated 30.03.2006 framed u/s 143(3) of the Income-tax Act, wherein the Assessing Officer (AO) held that the assessee had established a Permanent Establishment [PE] in India under Article 5 of the DTAA between India and the United States of America u/s 9(1)(ii) of the Income Tax Act. 3. The AO was of the view that the assessee and Exl India were nothing but one and the same, as the primary activity of the assessee is carried out by the Indian company and facilities of Exl India was a fixed place of business for the assessee. Also marketing work, technical work was all performed by Exl India, however profit was retained by the assessee. ITAT Delhi held as below: 1. None of the customers of the assessees are located in India or have received any services in India. This being the case, it is clear that the very first ingredient contained in Article 5(2)(l) is not satisfied. On account of this, Exl India does not have authority to conclude contracts with customers of the assessee too. 2. No part of the main business and revenue earning activity of the two American companies is carried on through a fixed business place in India which has been put at their disposal. It is clear from the above that the Indian company only renders support services which enable the assessees in turn to render services to their clients abroad. This outsourcing of work to India would not give rise to a fixed place PE. 3. It is not the case of the Revenue that the employees of foreign enterprises furnished services in India. Nothing has been brought on record by the Revenue to show that there was secondment of employees by Exl US to Exl India. 4. Merely because the assessee owns 100% of share capital of EXl India does not have effect or consequence of EXL India becoming the PE of the assessee in India. 5. We are of the considered view that the assessee does not have a fixed place PE in India, Service PE in India and dependent Agent PE in India. Therefore, no profit is attributable as no business connection has been established under Article 5 of the DTAA between India and the US. B) Income Tax on Convertible Bonds: 1. A convertible bond is a fixed-income corporate debt security that yields interest payments, but can be converted into a predetermined number of common stock or equity shares. The conversion from the bond to stock can be done at certain times during the bond's life and is usually at the discretion of the bond holder. Important Legal updates - CA PARAG RAVAL 17

I. T. MIRROR (2023-24) 2. According to section 2(47) of the Income Tax Act, 1961, 'Transfer' includes the exchange of assets. Any conversion of bonds into shares or any other asset is considered an “exchange” and falls within the definition of transfer. 3. As per Section 45, “any profits or gains arising from the transfer of a capital asset effected in the previous year will be chargeable to income-tax under the head Capital Gains.“ 4. However, in accordance with sec 47(x), any transfer by way of conversion of bonds or debentures, debenturestock or deposit certificates in any form, of a company into shares or debentures of that company would not be regarded as transfer for the purpose of capital gain computation. 5. Hence the said conversion of bonds into shares does not attract any capital gains tax implications at the point of conversion. 6. However, when such shares are sold off, capital gains tax would be applicable and for the purpose of computing capital gains from such shares, the acquisition cost as well as the period of holding of the debenture would be relevant. C) A Red Flag Over Chinese Nationals As Company Directors 1. The National Security Advisor has red-flagged Indian companies appointing Chinese nationals as directors without clearance from the Ministry of Home Affairs 2. As many as 27 appointments in 2022 and six in 2023 in various companies controlled mostly by Chinese nationals in Hyderabad, Bengaluru, Mumbai, and New Delhi are under the central agencies' scanner. 3. Ministry of Corporate Affairs (MCA) vide Notification No. F. No. 1/22/2013-CL-V dated 1st June 2022 had notified that government clearance is a must for Chinese nationals' appointment as directors in Indian companies. 4. Notification issued by the government, requires nationals of land border-sharing nations who are appointed as directors on boards of corporations to receive a security clearance from the Ministry of Home Affairs in order to prevent Chinese enterprises from evading Indian rules in order to do business in the country. 5. Among the companies is a supply chain firm incorporated in 2013 in Bengaluru. It made some foreign nationals as directors in August 2022, which the MCA is now verifying to determine whether there was a violation. 6. In another instance, ROC Delhi is verifying the appointment of a Chinese national as director in a packaging firm located in ShyamVihar in West Delhi. The company was incorporated in 2018, and a new director was appointed in September 2022. 7. Similarly, a company located in the Pasha Mailaram industrial area in Hyderabad is also under the scanner. It registered with ROC Hyderabad, while the director applied before June 2022. It became effective in September 2022. D) Intricacies on deduction U/S 43B for payments made to MSMEs: 1. Finance Act 2023 inserted clause (h) in Sec 43B, which says that any amount payable to Micro or Small and Medium Enterprises (MSME) shall be allowed as a deduction in the same year only if paid within time limit specified by the MSMED Act, 2006. 2. Section 15 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, mandates that payments due to MSMEs should be made within the agreed-upon time frame between the parties, which cannot exceed 45 days. In the absence of a written agreement, these payments must be made within 15 days from the due date. 18

I. T. MIRROR (2023-24) 3. Consequently now, any payment made to MSMEs beyond the time limits specified in Section 15 of the MSMED Act 2006 can only be claimed as deductions when they are actually paid. Therefore, if a payment to an MSME is made beyond the time limits set by the MSMED Act but before filing the income tax return, the deduction can be claimed in the year of actual payment rather than the year in which the liability was incurred. 4. If the payment is pending for more than 15 days as on 31st Mar 2024, the assessee will not get the benefit of exemption from expenditure. In this, a written agreement of 45 days can also be made to extend more than 15 days for payment. 5. Let us consider some examples now: I. Mr. A had an expense payable to an MSME that accrued in the financial year 2023-2024 but he settled it on 4/04/24 i.e. subsequent financial year 2024-25 after the time limit prescribed under section 15 of the MSMED Act, 2006 ended. In this scenario, as the payment is made beyond the time limit as prescribed under section 15 of the MSMED Act 2006 and also in the subsequent year 2024-25, Mr A will not be eligible for deduction of the said payment in the financial year 2023-2024 when the expenses accrued. II. Mr. A delivers goods of Rs. 35000 to Mr B (Buyer) on 15/03/2024 in absence of any agreement with regards to the time limit of Payment. Now Mr B has a time limit of 15 days i.e., within 30/03/2024 for raising any objection in case of having non satisfaction with regards to a goods delivered. Scenario A – Mr. B is satisfied with the delivery of goods and does not make any observation. In this scenario Date of acceptance is the date of first delivery of goods i.e., 15/03/2024. Due date for making the payment as per Sec 15 of MSMED act, 2006 is the appointed day which is the day after the expiry of 15 days from the date of acceptance. If Mr B makes the payment within 31/03/2024 (even though due date is 30/3/2024, since the payment is made in the same FY), he can claim the deduction in the FY 2023-24 otherwise in the FY in which he makes the payment. Scenario B – Mr. B makes objection regarding the quality of Goods delivered to the Mr.A on 31/3/2024. And Mr A resupplies goods after addressing the objection on 5/4/2024. In this scenario Date of Deemed acceptance is the date of first delivery of goods i.e., 15/03/2024, as no objection is raised within 15 days from date of delivery. So this expenses will not be allowed as a deduction in FY 2023-24. E) All about ITR -U Form ie Updated Return: Introduction: 1. Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years. 2. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimise tax compliance by taxpayers without provoking legal action. 3. Updated Return can be filed only if there is an increase in tax liability. An Updated Return can be filed in the following cases: 1. Did not file the return. Missed return filing deadline and the belated return deadline 2. Income is not declared correctly 3. Chose wrong head of income 4. Paid tax at the wrong rate 5. To reduce the carried forward loss 6. To reduce the unabsorbed depreciation 7. To reduce the tax credit u/s 115JB/115JC A taxpayer can file only one updated return for each assessment year(AY). 19

Who is not eligible to file ITR-U u/s 139(8A)? Non Eligibility: 1. Updated return is already filed. 2. For filing nil return/ loss return. 3. For claiming/enhancing the refund amount. 4. When updated return results in lower tax liability. 5. Search proceeding u/s 132 has been initiated. 6. A survey is conducted u/s 133A. 7. Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A. 8. If assessment/reassessment/revision/re-computation is pending or completed. 9. If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated ITR) What is the time limit to file ITR-U? 1. The time limit for filing ITR-U is 24 months from the end of the relevant assessment year. 2. The Return of FY 22-23 (AY 2023-24) can be updated till 31st March 2026. 3. The Return of FY 21-22 (AY 2022-23) can be updated till 31st March 2025. 4. The Return of FY 20-21 (AY 2022-23) can be updated till 31st March 2024. Should you pay additional tax when filing ITR-U? Yes, you will have to pay an additional tax of 25% or 50% on the tax amount if the updated return is filed within 12 months and 24 months respectively from the end the assessment year. F) PMLA and the burden of proof : 1. Section 45 of the Prevention of Money Laundering Act (PMLA) deals with the provision for bail. 2. Section 45 stipulates twin conditions to be satisfied in order for the judge to grant bail to the accused. a. Firstly, the public is being heard and given the opportunity to oppose the grant of bail. b. Secondly, the court believes that there are reasonable grounds for the court to believe that the accused is not guilty of the offence that he has been charged with and is not likely to commit the offence while he or she is on bail. 3. Now, these conditions are problematic in various ways, as they put the burden on the reverse side, and in fact, the accused has to satisfy the court that he or she has not committed the offence. 4. Recently, the Hon'ble Supreme Court, while hearing a petition under Article 32, denounced the trend of petitioners circumventing alternative channels of appeal and submitting Article 32 petitions to the Supreme Court in an effort to directly contest summons or request bail while pretending to be contesting the PMLA's provision. This decision came after a review petition was filed against the Vijay MadanlalChoudhary judgement delivered on July 27, 2022. 5. Interestingly, Section 45 was held unconstitutional on the grounds of violating Articles 21 and 14 of the Indian Constitution. However, the Finance Act of 2018 revived the twin conditions, and since then, these have continued to exist. 20

GST law has been evolved since its inception. The Law maker has also made so many amendments in the law as and when they came to any lacuna which is Either giving unwarranted revenue loss to the treasury Or causing unwanted harassment to the taxpayers, (though most of amendments are due to 1st reason) One of the areas in which, so many amendments were made is “Refund Under GST”. When law was introduced in July-2017, there was hardly any restriction in selecting any of the refund method (“With Payment of IGST Route” Vis-à-vis “Without Payment of IGST – LUT Route”) by Tax payer while exporting the Goods or Services Out of India. In last 6 odd years, there are dozens of restrictions has been introduced for both of the routes of getting refunds. Recently, w.e.f. 01-10-2023, Section 16 of the IGST Act has also been amended, by which, “With Payment of IGST Route” is not now a straightaway option available to the Tax Payer. As a Consultant, one should be very careful while advising the Client regarding which method is to be chosen. If by mistake, one has selected the route which is restricted, and came to know at the time of Monthly filling of Returns or Annual Compliance, it's too late. The correction process is cumbersome. It's always advisable for tax payers to consult their consultant before entering into the transaction and likewise, same goes for consultant. We have made comparative analysis of these two routes of refund's Restrictions and summarized as below in the table: (We have also deliberated on this matter Online at ICAI.TV, the recording can be accessed from the archives in the below link: https://icaitv.com/video.php?vid=1800) Decision Making Process While Selecting any of the Route for Refunds under Exports under GST 21 - CA DEEP KORADIA Particulars With Payment of IGST Without Payment of IGST Filling Mechanism Shipping bill itself is application No separate Application is required Separate application to be filled within 2 years from the relevant date Docs to be filled as per Rule 89(2) [Ref of Circular 125-2019] Who will process the refund? From the respective Custom Ports By the jurisdictional office of CGST / SGST Refund Quantum? Applicable Rate of GST to be applied on Value of export - that's refund amount Formula under 89(4)Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover Automation? Fully Automated from Day 1 [But Not for export of services, export to SEZ, and export form Non-EDI ports] Fully Online but not Fully Automated [From 26th Nov 2019, previously it's semi online process] ITC of Capital Goods Can be refunded? No Such Restrictions NO, Can't be refunded

Particulars With Payment of IGST Without Payment of IGST Inverted Duty Structure refund can be applied simultaneously? NO YES* What if goods are subject to export duty? Still can opt Can't opt What if HIGHER Drawback in Can't opt respect of Central Tax is claimed? [No Relevance after 01-10-2017] Still can opt Still can opt, subject to Restrictions of Rule 89(4A) & 89(4B) What if the exporter has received the Inputs under Deemed Export [NN 48/2017 CT] Can't opt Still can opt, subject to Restrictions of Rule 89(4A) & 89(4B) What if the exporter has received the Inputs under Concessional Rate @ 0.10%? [NN 40/2017 CT (Rate) & 41/2017 IT (Rate)] Can't opt Still can opt, subject to Restrictions of Rule 89(4A) & 89(4B) What if the exporter has availed the benefit of 78/2017-Customs, dated the 13th October, 2017 & 79/2017-Customs, dated the 13th October, 2017 [EPCG Schemes, Advance Authorisation etc] Can't opt Except when availed the benefit for Capital Good Except when benefit of only BCD has been taken] Restriction for Refunds of unutilized ITC for Construction services as per NN 15-2017 CT Rate Can be opted for Every Supply of Goods and Services? W.e.f. 01-10-2023, Only Notified Goods can be exported under this Route (Currently Pan Masala - Tobacco Product Restricted, Certain essential Oil Has been restricted) Refund to be credited in which Registered with GSTIN portal Bank account? Registered with Respective Custom Ports [EDI sections] After filling application, 90% within 7 days, rest of the 10% in 60 Days What are the time limits to process both of the refunds? After Filling GST Returns [3B & 1], Fillings by shipping line [Export General Manifest] & Transmission of refund by ICES to PFMS Yes, in case of any issue, deficiency memo in DRC-03 can be given and application to be filled again after correcting such error What kind of errors/rejection we can find in both of the methods? Refund status will shift to errors [SB001 to SB006 / TBE0001 to TBE0025]. After correcting such errors, refund will be processed Incase of “With payment of IGST”, from where can one Identity/Found the errors? GSTIN login From Ice-Gate logi From respective Port's siten 22 I. T. MIRROR (2023-24)

INTRODUCTION While designed to simplify and unify the taxation structure, the implementation of the GST Act has given rise to a complex array of legal intricacies and disputes.As the time passes, it is expected that more litigation will emerge due to the issues of interpretation over classification of rate of tax, exemptions, e-way bill procedure, retrospective changes or over determination of value of goods etc. It is due to these reasons disputes are expected to be encountered at the stages of assessment, audit, investigation so on and so forth. One of such topic which highlights the various provision and procedure is the topic of assessment. What is Assessment ? As per section 2(11) of the GST ACT the term “Assessment means determination of tax liabilities under this act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.” Types of Assessment under GST 1) Self-assessment ( Sec 59 of CGST Act 2017) 2) Provisional assessment ( Sec 60 of CGST Act 2017) 3) Scrutiny of Returns ( Sec 61 of CGST Act 2017) 4) Best judgment assessment : a) Assessment of non-filers of returns (Sec 62 of CGST Act,2017) b) Assessment of unregistered persons(Sec 63 of CGST Act, 2017) 5) Summary assessment (Section 64 of CGST Act 2017) We shall understand each type of the above term in the below paragraph of this article:- 1) Self-Assessment[Sec59ofCGSTAct] • A registered taxable person shall undertake self-assessment of the taxes payable and furnish a return for each tax period as specified in section 39 of CGST Act 2017, which deals with returns. • Determination of tax liabilities is to be undertaken by the payer himself and stated in the return to be filed by him. • Few examples of Self-Assessment are filing of GSTR1, GSTR 3B, GSTR 9 2) Provisional Assessment ( Sec 60 of CGST Act 2017): There might be situation where a taxable person encounters himself in a situation where it's is difficult either to determine Value on which tax is to be discharged or to determine the rate of tax due to difficulty in classifying the goods or service or regarding the applicability of particular notification / Circular etc, in such eventuality, the taxable registered person can approach to the authorities making request in writing to allow him in paying the tax on provisional basis at a rate or value specified by him. Assessment under GST - CA RIKIN PARIKH 23

Provisions of Provisional Assessment : • The taxable registered person can approach to the proper officer making an online application for undertaking the provisional assessment. In other words unless a written request is not given the proper officer cannot on Suo Moto undertake provisional assessment. • The proper officer may call for additional information / submission to be furnished by the taxable person to support his application / request for undertaking the provisional assessment. • On being satisfied, the proper officer then allows him in paying the tax on provisional basis at a rate or value specified by him. • The order is to be passed within period of 90 days of making application. • The proper officer shall also state about the amount of bond / security required to be furnished by the applicant. The security shall not exceed 25% of the assessed amount. • The bond amount is security promising to pay the difference between provisional assessed tax and final assessed tax. • Consequential to Provisional assessment, the final assessment shall be undertaken by the proper officer. • The time limit to undertake the Final Assessment shall be within 6 months of the provisional assessment. • The time limit can be extended by another 6 months but not beyond period of 4 years. • At the time of final assessment there could be two scenarios a) Additional Tax Liability b) Refund If the Tax as per Final Assessment is more than provisional assessed tax amount then the Taxable person shall pay interest maximum at 18 % starting from the date when the additional tax was first due on goods / services till the actual date of date of payment. If the Tax as per Final assessment is less than the provisional assessed tax then the taxable person shall be eligible for Refund which is maximum at the rate of 6%. • On completion of final assessment, the taxable person shall apply for release of security. The order of which shall be received within 7 days of the application. 3) Scrutiny of Returns ( Sec 61 of CGST Act 2017): • The proper officer can scrutinize the GST return and related particulars furnished by the registered person to verify the correctness of the return. This is called a scrutiny assessment. • Scrutiny assessment can be defined as a pre-adjudication process undertaken by the department. • The officer will ask for explanations on discrepancies noticed to the taxpayer vide Form GST ASMT-10. • The reply to Notice issued u/s 61 of CGST Act 2017 is to be made by taxpayer in Form GST ASMT 11 • The proper officer shall accept the reply of the notice issued u/s 61 in Form GST ASMT 12. • In case, satisfactory response is not received within 30 Days or extended time the proper officer, may undertake- o Departmental audit as per section 65 o Special Audit as per section 66 24

o Inspection, search and seizure as per section 67 o Determination of tax under sec 73 & 74 o The proper officer may subsequently determine tax, interest and penalty due from the taxable person. Few examples (situation) in which Form GST ASMT 10 is issued: a) Difference in tax payable as per GSTR 1 and GSTR3B b) Excess Claim of ITC in GSTR 3B vs Auto populated in GSTR 2B 4) a) Assessment of Non - Filers of Returns (Section 62 of CGST Act 2017) : This section is applicable to registered person who fails to file his return. The section is applicable to Registered person only. The Best Judgement assessment shall be initiated when: a) Normal taxable person where he fails to file his Tax return. b) A registered person opting to file return in composition scheme fails to file his return within the time limit allowed. c) A taxable person fails to file Final return after cancellation of registration Procedure for Assessment in case of Non-Filers : • The proper officer shall issue Notice in Form GSTR 3A informing the registered person about the Noncompliance in filing the return. • If registered person fails to file the return within the time limit allowed, then he may assess the tax liability to the best ofhis judgement and issue an assessment order in Form GST ASMT 13. • The time limit to pass such order is period of 5 years from the date specified u/s 44 of CGST Act 2017 for the financial year in which tax is sought to be determined. • Example: If the Transaction of Non-filers relates to FY 2017-18 then the proper officer can pass order upto 31.12.2023 (31.12.2018 + 5 years). • If the valid return is filed within 30 days of service of assessment order then proper officer may withdraw his assessment order u/s 62 (1) of CGST Act 2017 but the liability of person to pay interest u/s 50 (1) and liability to pay late fee u/s 47 of the Act shall continue. b) Assessment of Unregistered Person (Section 63 of CGST Act 2017) : Under this category of assessment, for such unregistered person who were liable to tax for the relevant tax period may be assessed to tax by the proper officer based on best judgement basis. This section is applicable to following category of person: A) A taxable person fails to obtain registration even through liable to do so, or B) Whose registration has been cancelled under Sec 29(2) but who was liable to pay tax. The same can be made applicable to following persons : i. A registered person who has contravened the provision of the Act or rules. ii. Any registered person other than composite supplier, has not furnished return for period of 6 months iii. A person who has taken voluntary registration u/s 25 (3) but has failed to commence business for a period of 6 months from the date of registration. 25

iv. A composite supplier who has failed to furnish return for a consecutive period of 3 months. v. Registration has been by means of fraud or wilful mis statement. • The proper officer shall issue a notice to taxable person in Form GST ASMT-14 containing the grounds / reason and after allowing a time of 15 days to such person to furnish his reply, if any, pass an order in Form GST ASMT-15 • The assessment order must be issued within a period of 5 years from the due date of furnishing the annual return for the financial year to which non payment of tax relates. The summary of Such Order shall be uploaded electronically in GST DRC 07 • No such assessment order shall be passed without a reasonable opportunity of being heard. 5) Summary Assessment ( Section 64 of CGST Act 2017) : • The summary assessment shall be undertaken by the proper officer, where he has sufficient evidence or reason to believe that any delay in assessment will adversely impact the interest of revenue. • In order to undertake summary assessment, the proper officer must have evidence that the liability to pay tax was incurred or likely to incurred and in order to protect the interest of revenue the said assessment shall be initiated. • The summary assessment shall be completed by proper officer only after the prior permission is obtained from Additional / Joint Commissioner. • The summary assessment order shall be passed in Form GST ASMT 16. • The summary assessment order may be withdrawn by Additional Commissioner / Joint Commissioner: A) On an application made by taxable person within 30 days of receipt of such order. B) Suo Moto if he finds such order as erroneous and instead may follow procedure laid down in Section 73 or 74 for determining tax liability. The entire summary of the above provision and the relevant forms applicable in each stage are stated as below : Sr. No. Type of Form PROVISIONAL ASSSESSMENT 1 GST ASMT 01 Application to the proper officer 2 GST ASMT 02 Issue of notice to supplier 3 GST ASMT 03 Reply to the notice 4 GST ASMT 04 Issue of order (within 90 days) 5 GST ASMT 05 Execute bond 6 GST ASMT 06 Issue of notice for finalising assessment 7 GST ASMT 07 Final order determining tax payable or refund to the supplier 8 GST ASMT 08 Application for release of security 9 GST ASMT 09 Issue order for release of securities 26

SCRUTINY 10 GST ASMT 10 Issue notice informing discrepancies 11 GST ASMT 11 Reply to the notice of ASMT 10 12 GST ASMT 12 Drop the proceeding of ASMT 10 ASSESSMENT FOR NON-FILERS 13 GSTR 3A Issue notice for access tax liability to the best judgement assessment 14 GST ASMT 13 Issue assessment order (Best judgement assessment for non filers) ASSESSMENT FOR UN REGISTERED PERSON 15 GST ASMT 14 Issue notice to unregistered person 16 GST ASMT 15 Pass an order for assessment of unregistered person SUMMARY ASSESSMENT 17 GST ASMT -16 Summary assessment order 27

INTRODUCTION In today's dynamic and rapidly evolving business landscape, where stakeholders heavily rely on financial statements as a cornerstone for decision-making, the risk of frauds and misrepresentation looms large. Financial statements serve as vital tools for investors, creditors, and regulatory bodies to assess a company's financial health and performance. However, this reliance also exposes stakeholders to the potential pitfalls of fraudulent activities and misleading financial reporting. Due diligence becomes a necessary safeguard in this context, acting as a systematic and comprehensive process to verify the accuracy and reliability of financial statements. This critical examination helps identify potential irregularities, inconsistencies, and fraudulent practices, thereby protecting stakeholders from making uninformed decisions based on misleading financial information. As the business environment continues to evolve, due diligence emerges as an indispensable practice, ensuring the integrity of financial statements and upholding the trust of stakeholders in an era where transparency and accountability are paramount. Understanding Due Diligence Due diligence involves a comprehensive examination of a company's financial records, performance metrics, and related documents to evaluate its financial health, risks, and overall viability. In India, this process has become increasingly crucial due to the growing complexity of business transactions, regulatory changes, and the need for transparency in financial reporting. Challenges in the Indian Business Environment: • India's business environment is characterized by a diverse range of industries, each with its unique challenges. • Due diligence becomes essential to navigate through complexities such as regulatory compliance, taxation issues, and varying accounting standards. Investors, creditors, and other stakeholders must conduct thorough due diligence to make informed decisions and mitigate potential risks. The Significance of Due Diligence in Analyzing Financial Statements in India - CA SAMIR CHAUDHARY 28

29 Regulatory Framework: The regulatory framework for financial reporting in India is primarily governed by the Companies Act, 2013, and the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). Due diligence helps ensure compliance with these regulations, preventing legal complications and safeguarding the interests of stakeholders. Analyzing Financial Statements: Financial statements, including the balance sheet, income statement, and cash flow statement, provide a snapshot of a company's financial performance. Due diligence involves a meticulous review of these statements, assessing the accuracy of financial reporting, identifying irregularities, and evaluating the financial position of the company. Fraud Prevention: Financial fraud is a significant concern in India's business landscape. Due diligence acts as a preventive measure against fraudulent activities by verifying the accuracy of financial data and scrutinizing transactions. This is particularly important given the increasing reliance on digital platforms and the need for secure financial practices. Risk Management: Due diligence is instrumental in identifying and managing various risks associated with investing or engaging in business transactions in India. It helps stakeholders assess the financial risks, operational challenges, and market uncertainties that may impact the performance of a company. Importance in Mergers and Acquisitions: In the context of mergers and acquisitions (M&A), due diligence becomes even more critical. Acquiring companies need to thoroughly evaluate the financial health of the target company, assess potential liabilities, and understand the overall financial impact of the transaction. This diligence helps mitigate risks and ensures a smooth transition post-acquisition. Role in Financial Institutions: • Financial institutions, such as banks and lenders, heavily rely on due diligence when assessing creditworthiness. • A thorough examination of a borrower's financial statements helps these institutions make informed decisions about loan approvals, interest rates, and terms, ultimately minimizing the risk of default. Conclusion: In conclusion, due diligence of financial statements is an indispensable process in the Indian business landscape. It provides stakeholders with a comprehensive understanding of a company's financial health, mitigates risks, and ensures compliance with regulatory frameworks. Whether for investment decisions, mergers and acquisitions, or credit approvals, due diligence plays a pivotal role in fostering transparency, accountability, and sustainability in India's dynamic business environment. As businesses continue to evolve, the importance of due diligence in financial statement analysis is set to remain a cornerstone of responsible and informed decision-making.

In Gujarat, Society Maintenance Charges represent essential and mandatory expenses imposed on flat owners or members within a cooperative housing society. These charges extend to both residential and commercial or industrial premises operating within the city. The dual purpose of these charges is twofold. Firstly, they facilitate the recovery of routine and common expenses, including property tax, water tax, property insurance, power/electricity charges, security charges, upkeep, housekeeping, etc. These charges are specifically applied to the common areas to ensure the smooth functioning of the premises. Additionally, maintenance charges serve the crucial function of collecting a regular and reasonable contribution for potential major repairs that may arise in the future. This is achieved through the establishment of a reserve fund and a sinking fund. The reserve fund enables the society to accumulate funds for future replacements of depreciating assets without imposing an additional financial burden on its members at that point in time. In essence, the funds collected from members are allocated towards covering regular overheads mentioned earlier and are strategically reserved for unforeseen events that may arise in the future, ensuring the sustained well-being and upkeep of the premises. RERA has noticed, that maximum complaints which are filed with the Hon'ble Authority majorly includes the issue ofdelayed Society handover and non-transfer of the deposit into the Society Bank Account and various issues related to the corpus fund of the Society. Looking to the same, RERA came issued an Order No. 66, which clarifies almost all the major concern of the issue related to the same. The extracts from Order No. 66 are as under: 1. Maintenance Deposit, Maintenance Advance, or the amount received for that purpose in any name shall be paid by the Allottee only after obtaining B.U. permission. 2. The amount received by the Promoter / Builder from the Allottee of the project as maintenance deposit, maintenance advance, or any amount for that purpose shall not be considered as expenditure on the project construction of the promoter and such amount shall be deposited in a separate bank account which may be managed by the Allottee in future. 3. RERA has advised that Promoter / Builder should not receive in cash the amount from the Allottees for the maintenance purpose and they should be in form of Cheque, Demand Draft, or Electronic form and it should be deposited directly into the segregated account and a proper receipt should be issued in order maintain transparency and so that disputes between allottees and promoters can be avoided in future. 4. The interest accrued on the amount deposited in the said separate account will also be treated as corpus fund (fund) of the allottees in the same account. 5. Financial transactions related to reasonable expenses as per Clause-11(4)(a) of maintenance of common services and amenities after the date of building use permission, shall be done from this segregated bank account only with the consent of the allottee-owners representatives of the project. All about Society Maintenance Charges ADV (CS) LOKESH SHAH CA HARSH MEHTA 30

I. T. MIRROR (2023-24) 31 6. The responsibility of the maintenance till the building use permission is obtained is of the promoter, if the promoter withdraws any money from this fund and uses it for this purpose before getting the BU permission, then the promoter has to deposit the amount in the maintenance fund of the society with interest. 7. An organization registered as a Service Society under the Co-Operative Societies Act or a Company under Section-8 of the Companies Act, 2013 as specified in Order-13 and 18 of the RERA Authority regarding formation of Association of Allottees for transfer of common area of ​the project under Section-17 of the RERA Act. Formation/Registration of the project shall be done within three months of receipt of Building Use Certificate and detailed report (with copy of registration certificate and list of principal sponsors of the society) to the authority. 8. At the time of Handover / assignment of common services/amenities of the project to the association formed by the allottees (co.op.ho.so., pvt., etc.) the promoter shall hand over the details along with the audited accounts of these funds and the balance amount of the account of the said funds in the bank account of the service society immediately, must be transferred. 9. According to the Real Estate (Regulation and Development) Act (RERA) 2016, the promoter or project developer is responsible for providing and maintaining essential and common services at a reasonable charge, payable by flat purchasers until the cooperative housing society or residents' welfare association is formed. Sections 11(4)(d) and 11(4)(g) of RERA outline the promoter's liabilities for essential services and payment of expenses until project maintenance is transferred to the allottees' association. If the promoter fails to pay collected outgoings before transferring the project, they remain liable for these payments and any associated penalty charges even after the property transfer. Once such a co-operative housing society or allottees' association is formed, the title and maintenance of the project are formally handed over and taken care of by the said society or association thereafter. Thus the society or association has the authority and right to formulate its own guidelines for levying and collecting maintenance charges. In the case of new projects, the builder indicates a broad range of maintenance charges as there is no clarity on the actual charges which could be payable going forward. The promoter is liable to undertake maintenance using the funds collected from flat purchasers till the time of formation of society and handover of title as mentioned before. Who should bear the charges and until when? The Real Estate (Regulation and Development) Act, 2016 (RERA) makes it compulsory under Section (4)(d), for the developer to be responsible for providing and maintaining the essential services, on reasonable charges, till it is taken over by the association of the allottees. On possession, the builder makes the buyer enter into a maintenance agreement clearly specifying the actual amount and the frequency. RERA has asked the builders to mandatorily specify the maintenance charges in the agreement so that it does not come as a shock to the buyers. Later, the society association can work it out and charge the buyer's maintenance costs accordingly. After possession, the payment of maintenance charges is the buyer's responsibility. Until a tenant has been found for the property, the owner has to pay the maintenance charges. Later, the tenant can pay the maintenance charges, given it is mentioned in the owner and tenant agreement. Till the formation of Society / Association, the promoter is responsible to take care of the maintenance of the society and thereby collect them from the homebuyers. After that, Society / Association can charge such charges as per its own rules.

I. T. MIRROR (2023-24) As per the recent circular of the Finance Ministry, the flat owners have to pay GST @ 18% if their monthly contribution exceeds Rs. 7500/-. Today the increase in the demand of the residential and commercial property has given birth to a number of builders and developers who offer or promise special features to attract prospective allottees. The same has also developed a long ending fight between the homebuyers and the builders with respect to the unfair practices used by the builders and the delay in handling over the possession the allottees in which case the ultimate sufferer is the allottee who suffers mentally as well as financially. It's always better to have a fair idea of the maintenance charges at the time of booking an apartment as they are recurring monthly charges. Moreover, As per Section 11(4) (d) of RERA Act, which states that the Promoter shall be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees;” We trust that this article has addressed your inquiries regarding the Society fund and handover thereof. 32

Glimpses of Webinar on Controversy in respect of deduction u/s 43B(h) (applicable w.e.f. AY 24-25) and recent case laws on various deductions available u/s 43B on 27/01/2024

Glimpses of ITBA BOX CRICKET LEAGUE - NIGHT SERIES 2.0 on 25th January, 2024