4,32,796 companies struck off down during last five years (MCA Press Release 08 Aug 2022)

Section 248 of the Companies Act, 2013 (the Act) provides for removal of name of company from the Register of companies, if it is not carrying on any business or operation for a period of 2 immediately preceding financial years and has not made any application within the said period for obtaining the status of a Dormant Company under section 455 of the Act. This was stated by the Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Lok Sabha today.

The removal of the name of the company from the Register of Companies is a continuous process and a total of 4,32,796 companies have been struck off during last five years and its year wise details are as under:

The Minister stated that there is no rule making power provided under section 59 ‘Voluntary liquidation for corporate persons’ in the Insolvency and Bankruptcy Code, 2016. A dormant company is covered under the provisions of section 455 of the Act, the Minister stated.

The number of Companies having dormant status as per such provisions, during the last five years are as under:

As per information provided by the Department for Promotion of Industry and Internal Trade, no such measure has been taken to address industrial sickness.

IBBI disposes off 6,172 complaints and grievances out of 6,231 against service providers under IBC (MCA Press Release 08 Aug 2022)

The Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 enable stakeholders to file a grievance or a complaint against service providers under the IBC. This was stated by the Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Lok Sabha today.

Besides this, the Minister stated, Insolvency and Bankruptcy Board of India (IBBI, the Regulator) also receives complaints and grievances from Centralized Public Grievance Redress and Monitoring System (CPGRAM), Prime Minister’s Office, MCA and other authorities. Till 31st July, 2022, the IBBI had received 6,231 such complaints and grievances, of which 6,172 have been disposed after examination.

The Minister said that the Ministry of Corporate Affairs does not have any role in corporate insolvency resolution process (CIRP) of a corporate debtor (CD) under the provisions of the Insolvency and Bankruptcy Code, 2016 (the Code). CD undergoing CIRP is resolved through a resolution plan formulated by resolution applicants based on market driven process.

The Minister further stated that the Committee of Creditors (CoC) within its commercial wisdom assesses the feasibility and viability of the resolution plan submitted by the proposed resolution applicant which is then approved by the Adjudicating Authority (AA). Further, the realisation by creditors through CIRP under the Code is dependent on quality assets at the time of its resolution, the Minister stated.

Giving more details, the Minister stated that no such investigation has been initiated as section 29A of the Code enlists certain categories of undesirable persons which include related parties ineligible to submit a resolution plan during the CIRP. Regulation 36A(8) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 imposes a duty on Resolution Professional (RP) to conduct due diligence to satisfy themselves that the prospective resolution applicant is not ineligible under section 29A of the Code. The resolution plan approved by the CoC, within its commercial wisdom is then approved by AA under section 31 of the Code thereby ensuring that any undesirable persons under section 29A are unable to take over the CD. Likewise, during liquidation proceedings of CD, the proviso to Section 35(1)(f) bars a liquidator from selling immovable and movable property to any person who is ineligible to be a resolution applicant.

Further, the Minister stated that as per information available, Directorate of Enforcement has received one complaint against an RP of one CIRP in which appropriate action under applicable law has been taken. Further, CBI has received one complaint regarding abuse of process in one CIRP matter which was forwarded to the Regulator and on examination, the Regulator has not found any actionable material.

Income Tax Department conducts searches in Mumbai on an ex-fund manager and chief trader of equities of a prominent mutual fund house along with related sharebrokers, middlemen and entry operators (Press release 05 Aug 2022)

The Income Tax Department carried out a search and seizure operation on 28.07.2022 on an ex-fund manager and chief trader of equities of a prominent mutual fund house along with related sharebrokers, middlemen and entry operators. The search action covered more than 25 premises, spread across Mumbai, Ahmedabad, Vadodara, Bhuj and Kolkata.

As a result of the search operation, various incriminating evidences in the form of documents and digital data have been found and seized. These evidences gathered during the search including sworn statements recorded from various persons have revealed the modus operandi. It has been detected that the said fund manager and chief trader were sharing specific trade related information with brokers/middlemen and persons located in certain foreign jurisdictions. These persons in turn, used such information for illicit gains in the share market by trading in such scrips either in their own account or account of their clients. These persons including family members of the fund manager have admitted in their statements that the unaccounted cash generated from the above operations was routed mainly through Kolkata based shell entities into their bank accounts. From these bank accounts, funds have been further diverted into the bank accounts of companies/entities incorporated in India and other low tax jurisdictions. The gleaning of seized evidences has exposed the nexus between the ex-fund manager, middlemen, share brokers, and entry operators.

Evidences of large-scale unaccounted investment in cash loans, fixed deposits, immovable properties and their renovation, etc. have also been found and seized. More than 20 lockers have been put under restraint. So far, unaccounted deposits exceeding Rs. 55 crore have been seized.

Further investigations are in progress.

Income tax raid on prominent business engaged in conglomerate business in Gujarat (Press release 02 Aug 2022)

The search action has resulted in unearthing unaccounted transactions exceeding Rs.1000 crore. So far, unaccounted cash of Rs. 24 crore and unexplained jewellery, bullion etc. valued at Rs. 20 crore have been seized during the course of search.

The Income Tax Department carried out a search and seizure operation on 20.07.2022 on a prominent business conglomerate engaged in diversified fields of Textiles, Chemicals, Packaging, Real estate and Education. The search action covered a total of 58 premises, spread across Kheda, Ahmedabad, Mumbai, Hyderabad and Kolkata.

As a result of the search operation, various incriminating evidences in the form of documents and digital data have been found and seized. These evidences reveal that the group has been engaged in large scale tax evasion by adopting various methods, including, by way of unaccounted cash sales outside the books of account, booking of bogus purchases and on-money receipts from real estate transactions. The group has also been found involved in layering of unaccounted sums through share premium from Kolkata-based shell companies. Certain instances of unaccounted income generated through cash based ‘sarafi’ (unsecured) advances made have also been found.

It was also found that the group has been involved in profiteering through manipulation of share prices of its listed companies through operators. Evidences seized also reveal that the group has been siphoning off funds through fictitious entities for personal use of promoters. Further, analysis of evidence suggests that the group is also involved in manipulation of books of account of its public limited companies.

The search action has resulted in unearthing unaccounted transactions exceeding Rs.1000 crore. So far, unaccounted cash of Rs. 24 crore and unexplained jewellery, bullion etc. valued at Rs. 20 crore have been seized during the course of search.

Further investigations are in progress.

Various communication and outreach initiatives to spread financial and tax literacy awareness among masses (Press release 01 Aug 2022)

The Government has launched a series of communication and outreach products aimed at spreading financial and tax literacy awareness among masses. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha today.

The Minister stated that the following communication and outreach campaigns and activities are carried out in respect of Direct Taxes:

  1. Campaigns are carried out on TV and Radio in Hindi and 10 Regional languages to spread awareness on important schemes of Government, due dates for Advance Tax installment, return filing, filing of TDS statement, SFT filing, Vivad se Vishwas Act, etc.
  2. Important circulars/information on Direct Taxes are regularly posted on social media handles of the Department including LinkedIn, Twitter, YouTube, Instagram and Facebook for information of the people.
  3. The Department has made a communication studio “Samvaad” at New Delhi where sessions with senior officers on important taxation issues are recorded and thereafter uploaded on YouTube and social media handles as a part of taxpayer outreach.
  4. The field formation of the Income tax Department under Pr. CCsIT carry out outreach programmes in their regions for different categories of taxpayers on various matters of direct taxation.

The communication and outreach activities have contributed to growth in Direct Tax collections. In F.Y. 2021-22, the Income tax Department has recorded the highest ever direct tax collections of Rs.14,09,000 crore marking a growth of 49% over the F.Y. 2020-21, the Minister stated.

In order to spread tax literacy among children two Board games, one 3D Puzzle game and three Digital Comics have been launched, the Minister stated. The details, aims and objectives are:

  1. Snakes, Ladders and Taxes: This Board game introduces good and bad habits in respect of tax events and financial transactions among the players through the well-established game pattern of snakes and ladders. The game is simple, intuitive and educational with good habits being rewarded instantaneously and bad habits being penalized instantly.
  2. Building India: This collaborative game introduces the concept of importance of paying taxes through the use of 50 memory cards based on infrastructure and social projects. The game, just like taxation, is collaborative in nature and not competitive wherein every player tries to do their best so that everyone can win together. The better everyone uses their memory, the happier the country remains.
  3. 3D Puzzle: This game consists of 30 pieces, which when connected together create a 3- dimensional structure. Each piece contains important information on various concepts and terms pertaining to Direct taxes. The game uses a 3-dimensional model to intuitively teach about income and taxes. The underlying theme is that a nation’s infrastructure is built on a foundation of taxes.
  4. Digital Comic Books – The Income tax Department has collaborated with Motu Patlu characters of Lot Pot comics to spread awareness about concepts of income and taxation among children and young adults. Three Digital comics in this series have been launched by Department.

The Government has taken many steps, the Minister stated, to widen the income tax net like higher Tax Deduction at Source (TDS)/ Tax Collection at Source (TCS) in case of non-filers, expanding the scope of TDS/TCS, broadening the coverage of Statement of Financial Transactions (SFT), implementation of Non- filers Monitoring System, introduction of Annual Information Statement and allowing updation of returns.

The number of new filers (assessees) added during the last 3 financial years is as under:

Giving more details, the Minister stated that a number of legislative measures have been taken by the Government:

  1. Dispute Resolution Committee (DRC):Section 245 MA has been inserted in the Income-tax Act, 1961 (the Act) vide the Finance Act, 2021 to create a new mechanism for small taxpayers, which allows such taxpayers to resolve their disputes with minimum cost and compliance burden. A taxpayer having taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh shall be eligible to approach the Dispute Resolution Committee. For ensuring efficiency, transparency and accountability, the e-Dispute Resolution Committee Scheme, 2021 was notified on 5th April, 2022.
  2. Vivad se Vishwas:In order to reduce pending income tax disputes, the Direct Tax Vivad se Vishwas Act, 2020 (“DTVsV Act”) was enacted on 17th March, 2020 which aims at all taxpayers, in whose case an appeal was pending as on 31st January, 2020, from the stage of first appeal to the Supreme Court, were eligible to file declaration under the DTVsV Act.
  3. Raising of monetary limit for filing of appealThe monetary thresholds limit for filing of departmental appeals have been raised from Rs. 20 lakh to Rs. 50 lakh for appeal before ITAT, from Rs.50 lakh to Rs. 1 crore for appeal before High Court and from Rs.1 crore to Rs. 2 crore for appeal before the Supreme Court.
  4. Repetitive appeals: Taking forward the policy of litigation management, a new section 158AB is inserted in the Act vide Finance Act, 2022. If a question of law in the case of an assessee is identical to a question of law pending in appeal before the jurisdictional High Court or the Supreme Court in any case, the filing of further appeal to the Appellate Tribunal or the jurisdictional High Court in the case of the assessee shall be deferred till such question of law is decided by the relevant Court, subject to certain conditions.

1,67,080 companies registered in FY 2021-22 as compared to 1,55,377 in FY 2020-21 II 43,050 LLPs registered during FY 2020-21 as compared to 42,187 in the previous year (Press release 01 Aug 2022)

Limited Liability Partnership (LLP) and Companies are incorporated under the Ministry of Corporate Affairs as per the provisions of LLP Act, 2008 and Companies Act, 2013. This was stated by Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Lok Sabha today.

Giving more details, the Minister stated that during FY 2021-22, 1,67,080 companies were registered as compared to 1,55,377 in the previous year. Further, during FY 2020-21, 43,050 LLPs were registered as compared to 42,187 in previous year.

On National Financial Reporting Authority (NFRA), the Minister stated that the Company Law Committee constituted by the Ministry of Corporate Affairs in its report of March, 2022 (Chapter 1 Para 11) has inter-alia, recommended that NFRA be empowered to take appropriate action against other contraventions under NFRA Rules, 2018, in addition to its existing powers to take action against ‘professional or other misconduct’. The report is available on the website of Ministry of Corporate Affairs (www.mca.gov.in), the Minister stated.

₹1,48,995 crore gross GST revenue collected in the month of July 2022 (Press release 01 Aug 2022)

₹1,48,995 crore gross GST revenue collected in the month of July 2022 


GST Revenue collection for July second highest ever & 28% higher than the revenues in the same month last year

Posted Date:- Aug 01, 2022

The gross GST revenue collected in the month of July 2022 is
₹1,48,995 crore of which CGST is ₹ 25,751 crore, SGST is ₹ 32,807 crore, IGST is
₹ 79,518 crore (including ₹ 41,420 crore collected on import of goods) and cess is
₹ 10,920 crore (including ₹ 995 crore collected on import of goods). This is second highest revenue since introduction of GST.

The government has settled ₹ 32,365 crore to CGST and ₹ 26,774 crore to SGST from IGST. The total revenue of Centre and the States in the month of July 2022 after regular settlement is ₹ 58,116 crore for CGST and ₹ 59,581 crore for the SGST.

The revenues for the month of July 2022 are 28% higher than the GST revenues in the same month last year of ₹ 1,16,393 crore. During the month, revenues from import of goods was 48% higher and the revenues from domestic transaction (including import of services) are 22% higher than the revenues from these sources during the same month last year.

For five months in a row now, the monthly GST revenues have been more than ₹ 1.4 lakh core, showing a steady increase every month. The growth in GST revenue till July 2022 over the same period last year is 35% and displays a very high buoyancy. This is a clear impact of various measures taken by the Council in the past to ensure better compliance. Better reporting coupled with economic recovery has been having positive impact on the GST revenues on a consistent basis. During the month of June 2022, 7.45 crore e-way bills were generated, which was marginally higher than 7.36 crore in May 2022.

The chart below shows trends in monthly gross GST revenues during the current year. The table shows the state-wise figures of GST collected in each State during the month of July 2022 as compared to July 2021.

https://static.pib.gov.in/WriteReadData/userfiles/image/image001ZVUW.png

State-wise growth of GST Revenues during July 2022

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1846881&RegID=3&LID=1

Income Tax raid on a group engaged in agro and textile business, and another group of entry operators in Mumbai (Press Release 26 July 2022)

Income Tax Department carried out a search and seizure operation on 05.07.2022 on a group engaged in agro and textile business, and another group of entry operators. A total of 27 premises were covered during the search action in Mumbai and Delhi NCR.

During the course of the search operation, a large number of incriminating evidences in the form of hard copy documents and digital data have been found and seized.

It was found during investigation that most of the turnover of the listed companies of the main group has been generated through circular trading. The promoter of the group was involved in systematic manipulation of performance of certain group companies on stock markets, with the help of stock brokers. Several instances of out of books payment to some stock brokers for unlawful purposes, have also been found. All such irregularities have been admitted by both, the promoter and the stock brokers. The group is also supported by a professional person, who is primarily engaged in providing accommodation entries to several other groups, in exchange of cash.

These evidences also revealed that the group has generated huge amount of cash through claiming bogus purchases of various materials including packing material of more than Rs. 100 crore. Moreover, the group has also indulged in unaccounted sales of agro and textile items over Rs. 150 crore. Handwritten diaries containing cash transactions have also been found and seized, which have been duly corroborated by statements of some of the counterparties/beneficiaries covered under the search action.

Searches were also conducted in case of another group which is involved in providing accommodation entry. This group is found to be operating and controlling various concerns including LLPs, companies and proprietorship concerns through which accommodation entry of sale and purchase of cut and polished diamond as well as shares are given in the guise of genuine business. The main persons of the group have admitted in their statement under oath, about arranging accommodation entries pertaining to expenses and unsecured loans for various beneficiaries, against cash. A preliminary analysis of few years of such transactions shows that accommodation entries in the nature of bogus loans and expenses exceeding few hundred crore have been provided through these entities.

Unaccounted cash of Rs. 1.4 crore has been seized during the search operation.

Further investigations are in progress

163rd Income Tax Day: A journey towards Nation Building (24 July 2022)

The 163rd anniversary of Income Tax Day was observed by Central Board of Direct Taxes (CBDT) and all its field offices across India today. As part of the celebrations, the field formations held a number of events and activities. The events by the field formations included outreach programmes for taxpayers recognising their contribution to the nation, taxpayer felicitation programmes, contributing for upgradation of resources such as computers to Government higher secondary schools, voluntary token donation to orphanages/old-age homes from the departmental employees’ contributions, organising blood donation camps, setting up medical examination and Covid-vaccination camps, tree plantation and cleanliness drives, among others. In addition, events like half marathon, cyclothon, distribution of board games on tax literacy to children and young adults, cultural programmes, inauguration of caricature exhibitions and such other events were also held.

In her message to the Income Tax Department, Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman observed that the reforms introduced by the Government in recent years have ensured a trust-based tax system. The Finance Minister noted that the taxpayers also have vindicated this trust-based approach as evident from the trend of improved tax collections and increase in the number of Income Tax Returns filed. Smt. Sitharaman appreciated the Income Tax Department for having successfully implemented the policy reforms and for having effectively reoriented itself as a taxpayer-centric organisation. The Finance Minister complimented the Department for having achieved the highest ever revenue collection of over Rs.14 lakh crore in the last fiscal and hoped that the Department would continue to maintain the momentum in the present fiscal too.

Union Minister of State for Finance Shri Pankaj Chaudhary, in his message, observed that a Tax Department’s responsibility is not just limited to efficient and effective tax administration but also extends to honoring the honest taxpayers and providing better taxpayer facilitation. He appreciated the Department for having adapted itself in tune with the needs and aspirations of the people in today’s time, and becoming transparent, non-intrusive and taxpayer friendly in its functioning.

In his message, Union Minister of State for Finance Dr. Bhagwat Kishanrao Karad observed that the Income Tax Department has played a pivotal role in the growth and development of the nation. He lauded the Department for having implemented several far-reaching reforms which have the potential to redefine its engagement with the taxpayers and other stake holders.

Secretary Revenue, Shri Tarun Bajaj, in his message, commended the Department for having proved itself a competent organisation by embracing positive change and committing itself to delivering time-bound services to taxpayers. He also complimented the Department for keeping itself updated with the latest developments and adopting latest technology such as the use of artificial intelligence and data analytics tools for garnering revenue in a non-intrusive manner. He observed that various taxpayer outreach programs organized by the Department will go a long way in creating an atmosphere of mutual trust and respect between the taxpayers and the Department

Chairman, CBDT, Shri Nitin Gupta, in his message, while complimenting the Department for having registered the highest ever net collections of Rs. 14.09 lakh crore in FY 2021-22, exhorted the Departmental personnel not to rest on their laurels and to keep working hard. He observed that prompt redressal of taxpayers’ grievances in the true spirit of the Taxpayers’ Charter shall remain a top priority area. He hoped that the Department would continue with the same service oriented approach, strengthened by right values and ethics, as it has done in the past. The Chairman CBDT also addressed the taxpayers and stakeholders through ‘Samvaad’ which was aired on the YouTube Channel of the Department.

The observance of the Income Tax Day served as an occasion for the Departmental personnel to look back at the journey so far in service to the nation and to re-dedicate themselves to contributing to the growth of the nation.

MCA is launching first set of Company Forms on MCA21 V3 portal effective from 31st Aug 2022

MCA is launching first set of Company Forms on MCA21 V3 portal effective from 31st Aug 2022.

Following forms will be rolled-out in this phase: DIR3-KYC Web, DIR3-KYC Eform, DPT-3, DPT-4, CHG-1, CHG-4, CHG-6, CHG-8 & CHG-9. To facilitate implementation of these forms in V3 MCA21 portal, stakeholders are advised to note the following points:

(1).Company e-Filings on V2 portal will be disabled from 15th Aug 2022 12:00 AM for the above 9 forms. All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status.

(2).Offline payments for the above 9 forms in V2 using Pay later option would be stopped from 07th Aug 2022 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking)