BEWARE OF TAX AUTHORITIES

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for a minimum penalty of Rs.50, 000.00.

If you failed to answer questions from the tax department it can entail a penalty of upto   Rs. Two lakh from the next financial year under the new black money law, which has got the assent of the President.
Besides, tax authorities would be able to send summons or notices via electronic mails (emails) and fax to seek information from those who would be under suspect for black money stashed abroad.
The Act got the President's assent and will come into force from April 1, 2016.
The new law, which has provisions to deal with the problem of the undisclosed foreign income and assets, was passed in the Rajya Sabha on May 13, two days after it got the approval from Lok Sabha.
A person shall be liable to a penalty if he has, without reasonable cause, failed to answer any question put to him, by a tax authority in the exercise of its powers.

The penalty will be imposed if the one fails to sign any statement made by him in the course of any proceedings which a tax authority may legally require him to sign and also for their failure to attend or produce books of account or documents called in response to summons issued to him.

The penalty "shall not be less than fifty thousand rupees but which may extend to two lakh rupees", it said.

The service of any notice, summons, requisition, order or any other communication may be made by delivering or transmitting a copy to a person by post or by such courier service as may be approved by the Central Board of Direct Taxes (CBDT).

It can also be issued in the form of any electronic record and "by any other means of transmission of documents, including fax message or electronic mail message, as may be prescribed".

The CBDT may make rules providing for the addresses including the address for electronic mail or electronic mail message to which the communication may be delivered or transmitted to a person, as per the Act.

CA Shivani Agrawal
www.akvassociate.com

LIMITED LIABILITY PARTNERSHIP (LLP)

What is LLP

LLP is a way between Company and Partnership. It takes into account the benefits of both i.e. less legal and regulatory formalities as compared to Company and a Corporate Entity form which is not in the case of Partnership.

Exemption from Audit

Rule 24(8) exempt the LLP from the Audit of its accounts if its turnover does not exceed, in any financial year, Rs. 40 lakhs or its contribution does not exceed Rs. 25 Lakhs. Appointment of Auditors

LLPs have to appoint auditor within 30 days before the end of the financial year. In other words auditor has to be appointed before 1^st March every year.

Appointment by designated Partners

The designated partners may appoint an auditor:

1. At any time for the first financial year but before the end of the Financial Year.
2. Within 30 days before the end of the Financial Year.
3. To fill a casual vacancy in the office of auditor.
4. To fill up the vacancy caused by removal of an auditor.

Appointment by Partners

If the designated partners have not appointed then the Partners can assume this responsibility.

Who can be appointed

Only Chartered Accountant

Holding Office

An Auditor shall hold office from the day the previous auditor cease to hold office and upto the end of the next period for appointing auditor unless re-appointed.

Penalty

Any LLP which fails to comply with the requirements shall be punishable with fine which shall not be less than Rs. 25,000 but not exceeding Rs. 5,00,000. Every designated partner shall be punishable with fine which shall not be less than Rs. 10,000 but exceeding Rs. 5,00,000.

By- CA Shivani Agarwal

(Author can be reached at shivani@akvassociate.com)

www.akvassociate.com

NBFC

NON-BANKING FINANCIAL INSTITUTION:

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.

REQUIREMENT OF REGISTRATION:

In terms of Section 45-IA of the RBI Act, 1934, NO NBFC can commence business of a non-banking financial institution without

a) Obtaining a certificate of registration from the Bank and

b) Having a Net Owned Funds of Rs. 25 lakh (Rs two crore since April 1999).

A company incorporated under the Companies Act, 2013 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934 should get itself registered under Section 3 of the companies Act, 2013.

EXEMPTION:

 To obviate dual regulation, certain categories of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI:

TYPES OF FINANCIAL INSTITUTIONS	AUTHORITY FOR REGULATION, SUPERVISION, SURVEILLANCE AND ENFORCEMENT
Housing Finance Institutions	National Housing Bank
Merchant Banking Company, Venture Capital Fund Companies, Stock Broking, Collective Investment Schemes (CIS)	SEBI
Nidhi Companies, Mutual Benefit Companies	MCA
Chit fund Companies	State government
Insurance Companies	IRDA

PROCEDURE FOR REGISTRATION WITH RBI:

The application can be submitted online by accessing RBI’s secured websitehttps://cosmos.rbi.org.in . At this stage, the applicant company will not need to log on to the COSMOS application and hence user ids are not required.. The company can click on “CLICK” for Company Registration on the login page of the COSMOS Application. A window showing the Excel application form available for download would be displayed. The company can then download suitable application form (i.e. NBFC or SC/RC) from the above website, key in the data and upload the application form. The company may note to indicate the correct name of the Regional Office in the field “C-8” of the “Annex-Identification Particulars” in the Excel application form. The company would then get a Company Application Reference Number for the CoR application filed on-line. Thereafter, the company has to submit the hard copy of the application form indicating the online Company Application Reference Number, along with the supporting documents, to the concerned Regional Office. The company can then check the status of the application from the above mentioned secure address, by keying in the acknowledgement number.

A hard copy of the application form is available at www.rbi.org.in → Site Map → NBFC List → Forms and Returns.

DOCUMENTS REQUIRED TO BE FILLED:

An indicative checklist of the documents required to be submitted along with the application can be accessed from www.rbi.org.in → Site Map → NBFC List → Forms and Returns → Documents required for registration as NBFCs.

By- CA Meenu Agarwal
www.akvassociate.com