President’s Message | March 2021
Dear Professional Friends,
I’m excited to write this month’s President Message which happens to be a busy month to CA’s with financial year end.
This KSCAA’s Annual conference was concluded in a grand manner, the conference saw a total participation of more than 1800 participants from across the country. This number has breached all the previous records of KSCAA and marks the confidence which the members have on this association. The attendance and response even after a sincere attempt on complete diversion from conventional topics reposes the confidence that members are ready to new catering and contemporary thinking. Alike any other organization, the association is also stressed financially during the pandemic, even during normal periods association meagerly rises amount beyond its requirement, if not for conference the association’s pockets are in deep loss. With pandemic and no revenue programs for almost a year, the losses in association are unsurprisingly skewed to make more loss. However, we see some recovery during the annual conference period.
The financial year ends in a some days for all the assesses and this year is a dynamic due to many fronts, with reduced turnover, no GST Audit or fewer tax audit the year would also throw a unique challenge to SMP practice. However, there is no dearth of skill amongst CA’s and I’m confident that we would pass through these professionally challenging times without much strain.
News Roundup
Direct Tax
While the nation awaits Finance Act, 2021, the CBDT has been active with a slew of announcements. It has
- Extended timelines to impose penalty [to 30.06.2021] & concluding assessments/reassessment [to 30.04.2021 / 30.09.2021], Direct Tax Vivad Se Vishwas Act (filing declarations extended to 31.03.2021 and payment without additional amount, to 30.04.2021).
- Transferred pending cases under Black Money Act to Central Circle.
- Amended Faceless Assessment and Penalty Scheme. Instructed ‘potential cases’ for acting under section 148 of the Act by 31.03.2021 for the A.Y 2013-14 to A.Y 2017-18 by the Assessing Officer.
- Asks NRIs facing double taxation, on account of forced stay due to COVID, to furnish information by 31.03.2021.
- Allows Assessing Officers to pass consequential order pursuant to Form 5 being issued by Designated Authorities under VSVS scheme.
The Supreme Court’s ruling on the highly contentious and litigated issue of taxability of computer software has finally seen the day of light and has brought much respite and certainty.
Indirect Tax
An expectation from the Karnataka State Budget’s was reintroduction of Karasamadhana Scheme – The Amnesty Scheme to settle legacy cases of erstwhile State Commercial Tax laws. Need for reintroduction was felt since many assessments were taken up after the closing date of earlier Comprehensive Karasamadhana Scheme and a few assessments are being taken up even now.
Glad to note that the State Government has reintroduced the scheme in its Budget on 08th Mar 2021. I would like to place on record the efforts of KSCAA in representing on the requirement for such scheme before the Hon’ble CM of Karnataka in the pre-budget consultation meeting. It is a win-win situation for both assessee and Government. However, fact remains that Karasamadhana Scheme creates a disparity between the assessee who had complied with the assessment orders and paid taxes and the assessee who hasn’t and who is eligible to opt for the amnesty scheme. Let’s wait for the fine print to see the conditions and scheme.
GST Annual Return extension finally came in the 11th hour of 28th Feb 2021, which has given a sigh of relief to many of us. However, was just wondering the number of returns that would have got filed in last 5 days to 28th Feb 2021 and if the statistics would encourage the Government to only give extension in the last moment. These actions by Government should help us bear in our mind that compliance is the requirement of law on the assessee. Many-a-times, it makes sense to mention to client well in advance on the reasons why compliance may not be possible to be taken care within time.
Corporate Law
As announced in the Union Budget 2021, the MCA has amended the definition of the Small Companies by increasing the thresholds for paid-up share capital to “not exceeding two crore rupees” and turnover to “not exceeding twenty crore rupees”.
The same shall come into effect from 1st April 2021.
To promote easier incorporation of One Person Company (OPC) the following relaxations have been given for an OPC:
- Persons incorporating OPC can be person resident outside India;
- Requirement of person for residing in India is reduced to 120 days from 180 days
- Restriction on conversion of OPC for 2 years from incorporation is removed.
The MCA has amended the Companies (Management and Administration) Rules, 2014 requiring every OPC and Small Company to file their annual return from FY 2020-21 in Form No. MGT-7A (Abridged Annual Return for OPCs and Small Companies).
The jittery among many professionals on recent reduction in audits has germinated the idea of opportunities other than conventionally practiced, the fear of change comes because the outcomes are unknown. Our brains are designed to find peace in working with what is known. When the chaos is unknown or when we don’t know what will happen, we make up scenarios and, in turn, create worry. We are trained to find it hard to move on when something known comes to an end. The fear of failure also comes into play to create a fear of change. If we don’t know how something will turn out, we may rather not try because the outcome could be bad. Trying something new becomes a risk. As read somewhere “We can’t be afraid of change. You may feel very secure in the pond that you are in, but if you never venture out of it, you will never know that there is such a thing as an ocean, a sea. Holding onto something that is good for you now, may be the very reason why you don’t have something better”
Happy Reading!
Yours’ TRUST worthy,
CA. Kumar S Jigajinni
President