President’s Message | February 2022

Dear Professional friends,

It is a pleasure to connect with all of you through this month’s message and share my thought. This month prevails prominence with budget being presented as usual inspite of third wave of pandemic which hit all of us. While there have been many discussions about the outcome of budget, the attempt of government to persuade the economy to US$ 5 Trillion economy and from there on giving a grand vision for next 2 decades, rather to be prepared for 100th Year of India’s independence is heartening to watch and understand. While we grew 9.2%, highest among all large economies, the roadmap ahead also ensures we grow at similar fashion and trend. Attempts are made to encourage and concentrate and capitalize on digital world, attempts like digital university, digital payments, digital mission, digital health eco system are few which found favours by this government.

The growl of third wave seems to be lesser and the economy seems to back to normal with all restriction in the state being removed. The informal sector which bears the brunt of frequent restrictions are breathing with ease, I only wish that we are not hit by another wave to jeopardize the normal life of citizens. Even for our profession, looking back – the last 24 months have taught us things which otherwise we wouldn’t have learnt, the major learning is that of technology. Pandemic allowed greater penetration of technology into the profession than ever before, within a short period of time.

Our annual conference which was scheduled in the month of March every year is postponed to the month of May 2022 due to prevailing pandemic. We hope to see you, welcome you and create the same charm and vibrancy which our seniors have created in all of their conference, date and venue will be shortly announced. I case you have any plan/ ideas, you can also send your suggestion to me personally at [email protected]

News Roundup

Direct Tax

Where the slab rates under the income Tax Act largely remained unchanged in Union budget 2022-23, there were few tax proposals promoting voluntary tax compliance and reducing tax litigation by enabling filing of updated return of income, tax on virtual digital assets, reliefs to start-up/ manufacturing companies, clarification regarding non-deductibility of education cess and surcharge as business expenditure, amendments to the faceless assessment scheme to address challenges faced, rationalization of penalty provisions etc.

Other Judicial developments :

  •   HC Karnataka : Society registered Karnataka SouhardaSahakari Act, 1997 is a Co-operative Society for Sec. 80P relief.
  •  ITAT Delhi : Assessee eligible to file rectification application if he failed to claim statutory deduction while filing ITR.
  •  HC Madras : AO can’t cancel trust registration until application for fresh registration filed u/s 12AB is disposed of.
  •  ITAT Allahabad : Co-operative banks are eligible to claim bad debts if RBI grants license of scheduled bank with retro effect.
  •  HC Calcutta : Income earned from hoarding advt. placed on foot over bridge & bus shelter eligible for deduction u/s 80-IA. Since construction of foot over bridge and bus shelter qualifies as infrastructure facility, income earned by assessee from advertisement on hoarding on foot over bridge and bus shelter constructed by it, would be eligible for deduction under section 80-IA.

Executive developments :

  •  CBDT notifies e-Advance Rulings Scheme, 2022; applicable w.e.f. 18-01-2022.
  •  CBDT notifies Rule to compute capital gains on sum received from ULIPs not exempt u/s 10(10D).
  •  CBDT notifies ‘National Skill Development Corporation’ for exemption under section 10(46).

Indirect Tax

The Union Budget 2022 brought with it certain welcome amendments such as digitisation of Customs and other measures to ease certain compliance. At the same time few amendments on ITC claim, adding more filters to claim would add to the working capital strain.

I would also like to bring to all your notice that the Gross GST Collections for the month of Jan, 2022 has been the highest ever since the time of introduction of GST and has surpassed a total of 1.4 lakh crores. Before I conclude, I would remind you once again that the annual return and reconciliation statement i.e., GSTR-9 & 9C for the financial year 2020-21 is falling due on 28th February 2022, therefore I urge all of you to plan your work and complete the filings within the due dates.

Corporate and Allied Laws

LLP – Launch of new way of e-filing for LLP on MCA portal – web based

The Ministry of Corporate Affairs is launching a new way of e-filing for LLP on MCA21 portal. All LLP filings going forward will be web based. This application is proposed to be launched on 06th Mar 2022 at 12:00 AM.

MSME – Extension of Udhyog Aadhar Memorandum (UAM) validity upto 31.03.2022.

The Ministry of Micro, Small and Medium Enterprises vide Notification No. S.O.278(E) dated 19.01.2022 has provided that the existing enterprises registered prior to 30.06.2020 shall continue to be valid only for a period up to 31.03.2022.

RBI – Clarification on Acquisition / Transfer of Immovable Property in India by Overseas Citizen of India (OCI):

The RBI vide its press release dated 29-12-2021 has clarified that the Supreme Court Judgement dated 26-02-2021 in Civil Appeal 9546 of 2010 was related to provisions of FERA, 1973, which has been repealed under section 49 of FEMA, 1999. At present, NRIs/OCIs are governed by provisions of FEMA, 1999 and do not require prior approval of RBI for acquisition and transfer of immovable property in India, other than agricultural land/farm house/plantation property, as per the terms and conditions laid down in Chapter IX of the Foreign Exchange Management (Non-Debt instruments) Rules, 2019, dated October 17, 2019 (as amended from time to time), issued under section 46 of FEMA, 1999.

ICAI – FRN Compulsory for UDIN Generation w.e.f  01.02.2022.

  •  This is to state that Firm Registration Number (FRN) will be a compulsory field for generating UDIN from 12.00 am of 1st February 2022.

Let me close the current month message with a quote by James Clear, from his book ‘Atomic Habits : An Easy & Proven Way to Build Good Habits & Break Bad Ones’ – “All big things come from small beginnings. The seed of every habit is a single, tiny decision. But as that decision is repeated, a habit sprouts and grows stronger. Roots entrench themselves and branches grow. The task of breaking a bad habit is like uprooting a powerful oak within us. And the task of building a good habit is like cultivating a delicate flower one day at a time.” With pandemic and frequent disruption of regular work for past two years, habits and discipline remain at core for all of us to remain focused.

Happy Reading !

Yours faithfully,

CA. Chandan Kumar Hegde A