What is the date of Effective Voluntary Cancellation of Registration under the IT ACT?

Say 12AA Registration, Registration u/s Sec 10 (23C) , PAN NO, TAN NO. etc

1.Voluntary Cancellation of any Registration ( Maybe granted Sec 12AA, u/s 10(23C, etc), Assessee may apply for cancellation of the Registration to the Authority at any point of time.

2.Once the cancellation application was received by the Authority, it is the duty of the Authority Either to accept it OR issue a Show Cause Notice to the Assessee within a reasonable time.

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3.Where no show cause notice was received within a reasonable time then Date of Cancellation of Registration has to be accepted as on the date when Assessee made the application before the Authority.

4.Where Show Cause Notice was received from the Authority, towards Cancellation Application, then the Effective date of Cancellation shall be held as the Date on Conclusion of hearing before the Authority OR reply to the Show Cause notice was placed before the Authority.

The above view was based upon the Principle that
” All the Powers held by someone in a Public Office are powers held in TRUST for the benefit of the Public at Large.
Officers have no discretion either to use or not to use the powers given by the ACT to the Officers.

registration

5.Ex: For deciding the Effective Date of Voluntary Cancellation of Registration:
(i). Date of Application: 5th Feb 2019.
( ii). Show cause notice issued by Deptt: 10.03.2019.
(iii). Date of the hearing of Show Cause Notice. 20.03.2019.
(iv). Date of communication towards Cancellation from.Deptt: 05.06.2021.

Here the date of Voluntary Cancellation of Registration Shall be the date when on Conclusion of hearing of the Show Cause Notice that is 20.03.2019.

Date of Communication from Deptt. Towards Cancellation that is 05.06.2021 has no Relevance.

According Assessee is not under any obligation to fulfil the provisions relating to the Registration From.FY 2019-20.

The above view is supported by the Judgment of the ” NAVAJBAI RATAN TATA TRUST vs. PCIT (MUM.ITAT).

Nut Shell:

1.Voluntary cancellation of Registration ( Say 12AA, (10(23C)), shall be effective from the date on conclusion of the Hearing or filling reply to the Show Cause Notice towards Cancellation.

2.No Show cause notice it is the date of Application for Cancellation.

3.Date of Deptt’s letter granting Cancellation has no relevance to decide, Date of Cancellation.

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Big Changes by Ministry of Company Affairs wef 1st April 2021 to enhance transparency

Schedule III of the Companies Act 2013 contains the general instructions for preparation of the Balance Sheet and Statement of Profit and Loss of a Company.

Following are the changes made in the financials/ notes to accounts on account of amendments in Schedule III brought about by MCA:

1. Now companies have to round off the figures appearing in the financial statements, hitherto it was optional. Further, the criteria for rounding off shall be based on “total income” in place of “turnover”.

2. Company shall disclose the Shareholding of Promoters.

3. Current maturities of Long term borrowings shall be disclosed separately.

4. Trade Payables ageing schedule to be given.

5. Trade Receivables ageing schedule to be given.

6. Security deposits shall not be disclosed under ‘Long term loans and advances’ but disclosed under ‘Other non-current assets’.

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7. The company shall disclose the reason for the utilization of funds for purposes other than for which they were borrowed and shall also disclose the purposes for which the funds were utilised.

8. Company needs to disclose if the books of accounts are tallied with the quarterly or monthly returns filed with a banker in cases where the company has borrowed funds from banks on the basis of securities of current assets, or else a separate reco statement needs to be provided.

9. The company shall provide the details of all the immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held and where such immovable property is jointly held with others, details are required to be given to the extent of the company’s share.

10. In cases where revaluation has been done in the case of Property Plant and Equipment, the company shall disclose if the valuation was done by a registered valuer.

 

SEBI – Approved amendments in SEBI LODR Regulations Board Meeting


11. Disclosures to be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and related parties (loans given to promoters as a % of total loans)

12. For Capital-work-in progress, an ageing schedule shall be given

13. For Intangible assets under development, an ageing schedule to be given.

14. Disclosure of any proceedings initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition)Act, 1988 to be made.

15. Where a company is a declared wilful defaulter by any bank or financial institution or other lender, details to be given.

16. Disclosure of any transactions with companies struck off

17. Where any charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period, details and reasons thereof shall be disclosed.

18. Following Ratios to be disclosed:

(a) Current Ratio,(b)Debt-Equity Ratio,(c)Debt Service Coverage Ratio, (d) Return on Equity Ratio,(e) Inventory turnover ratio,(f)Trade Receivables turnover ratio, (g) Trade payables turnover ratio, (h) Net capital turnover ratio, (i) Net profit ratio, (j)Return on Capital employed, (k) Return on investment
(xv) Disclosure of Utilisation of Borrowed funds and share premium to be given
An explanation is required if there’s a change of more than 25% as compared to the preceding financial year.

19. Further disclosures shall be made where the company has received funds from any persons or entities including foreign entities to further lend or invest or provide any guarantee, security to third parties.

20. Where a scheme of arrangement has been approved, disclosure shall be made of the effect of the same on the books of accounts and any deviation from the accounting standards for the same.

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Post-Incorporation Compliances of Company

Following are the significant actions which need to be taken post company incorporation:

1. Filing of declaration of Commencement of Business by the company in form INC-20A.
Within 180 days, the company shall obtain a certificate of commencement of business. There is a requirement to file a disclosure made by the directors of the company stating that every subscriber has paid the amount due on the shares.

2. Share certificate
The share certificate shall be issued to a shareholder within 60 days from the date of incorporation

3. First Board meeting within 30 days from the date of Incorporation.
As per Section 173(1), of The Companies Act 2013, the company shall hold a meeting of the Board of Directors in less than 30 days from the date of its incorporation. Directors are permitted to attend the meeting either in person or through video conferencing.

4. Appointment of First Auditor
According to Section 139(1), the first auditor shall be appointed by the Board of Directors (BOD), within 30 days from the time the company is registered. Failing which, the members shall appoint the auditor within 90 days at an extraordinary general meeting. The term of the first auditor shall be until the conclusion of the first annual general meeting.

5. Disclosure of the director’s interest and declaration regarding disqualification in Form MBP-1 & DIR-8
At the first board meeting, every director shall disclose his interest in any company/firm/body corporate/association of individuals as outlined in section 184(1) of the Companies Act 2013. Any changes in the disclosures shall be intimated to the board in its first meeting held during each financial year. An independent director, if any, must give a declaration that he meets the criteria of independence during the first board meeting as a director.

Statutory registers

6. Statutory registers
The company shall be required to maintain statutory registers at the registered office of the company. The same shall be maintained in the prescribed form failing, which the company will be subject to penalties.

7. it’s all in the name
Every company shall be required to affix its name at all places from where it carries on its business operations. It shall be displayed in the language which is generally used in the locality. Additionally, letterheads with appropriate information and printed negotiable instruments.

8. Payment of stamp duty on issuance of share certificate
As per the requirement of the provision of the Indian Stamp Act 1899 every instrument must bear a stamp duty with proper amount and it must be paid to the concerned department within 30 days from the date of issue of share certificates (Revenue Department).

YEARLY COMPLIANCES
1) Minimum 4 board meeting with an interval of maximum 120 days between 2 consecutive board meeting,
2) Statutory audit of accounts,
3) Filing of annual return (form mgt-7),
4) Filing of financial statements (form aoc-4),
5) Holding an annual general meeting,
6) Preparation of directors’ report.
7) DIR-3 KYC

From 1st July 2015 onwards, every meeting of Board of Directors and Shareholders shall be conducted in consolidation with provisions of Secretarial Standards and Companies Act, 2013.

Event-Based Compliances

1) E form DPT-3 – Loan from Directors/Bank/Companies/Shareholders etc.
2) E Form MSME-1 – Pending payments to MSME
3) BEN – 2 – Disclosure of significant beneficial owner