Expert Speak! Talk by Mr. J.P. Khaitan on different taxes in India

What: Corporate and Fiscal Laws Society (CFLS) is hosting a talk by Mr. J.P Khaitan, a renowned tax practitioner based in Calcutta.

About: Mr. Khaitan will be presenting an 'Overview of Different Taxes in India' and this will be followed by a small presentation on various channels of investment and tax planning by CFLS.

When: 25 November 2011, 2 pm onwards

Where: Room 107, NUJS, Kolkata

All are invited to attend the session. It is sure to be a treasure trove of information!

For details: Please email corpfiscnujs@gmail.com

ECJ refuses to implement Gibraltor's proposed tax reform

Court of Justice of the European Union, on 15^th November 2011, refused to allow UK to implement the proposed reform of corporate tax for Gibraltar. Under the said reform, the entities were subjected to a company registration fees, a payroll tax and a business property occupation tax (“BPOT”), to a maximum of 15% of profits. The BPOT and the payroll tax were dependent on size of premises occupied and the number of employees respectively.

Transfer Pricing Officer must observe Natural Justice, Relief to MNEs

Sections 92 to 92F contained in Chapter X of the Income Tax Act, 1961 titled “Special Provisions Relating to Avoidance of Tax” were introduced by the Finance Act, 2001 w.e.f. 1.4.2002 with a view to provide an exhaustive legislative framework relating to the fair computation of income arising from international transactions between associated enterprises (“AEs”) having regard to the arms length price (“ALP”) [Central Board of Direct Taxes, Circular No. 14/2001, 2001 252 ITR 65]. Before this amendment in 2002, cross border transactions were regulated under section 92 of the Income Tax Act, 1961 (“the Act”). However, the said section was limited in its scope and application and also employed undefined terms viz. ‘close connection’, ‘adjustment of profits’ and ‘estimation of reasonable profits’ etc.

Under the Combination Regulations, 2011, CCI review of mergers is compulsory. Does this mean that the High Court will have to wait for the CCI’s clearance before sanctioning a scheme for amalgamation? Can the CCI overrule a sanction by the court? Find out…

(Image taken from ipprospective.com)

Background 

The terms merger and amalgamation have not been defined in the Companies Act, 1956. Halsbury defines ‘amalgamation’ as “a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company becoming substantially the shareholders of the company which is to carry on the blended undertakings.”

Presently, the High Court enjoys powers of sanctioning amalgamation matters under section 394 of the Companies Act though it is only a matter of time when this power will be exercised by National Company Law Tribunal, a forum where Chartered Accountants shall be authorized to appear, and whose constitutionality has been upheld by the Supreme Court. For the court to exercise its power to pass the scheme of amalgamation, an application under Section 391 has to be made by the shareholders of the company seeking amalgamation, after fulfilling the requisite conditions therein.

Jayantilal Mistry v. RBI

The Central Information Commission [‘CIC’] in the matter of Jayantilal Mistry v. CPIO, RBI [CIC/SM/A/2011/001487/SG/15434], gave a decision on November 1, 2011. The decision concerned the issue of whether the RBI was mandated to reveal details of audit reports conducted on certain co-operative banks. The decision made news after the CIC directed the RBI to make available the said information under the RTI Act. Mr. Shailesh Gandhi, the Information Commissioner, was kind enough to supply a copy of the order. I have analysed the case below. 

Corporate Social Responsibility under the Companies Bill

Corporate Social Responsibility (CSR) is a set of actions of a company that changes business operations to improve, maintain, or mitigate a company’s impact on society and the environment. In a nutshell, it is the responsibilities of a corporation to society at large.

As per the latest draft of the Companies Bill, 2011 as finalised by the Ministry of Corporate Affairs, it has been decided to take a middle-path in enforcing CSR by giving companies the choice to either spend two percent of their net profits on philanthropic activities, or mandatorily explain why they could not do so. This has diluted the proposed mandatory CSR spending provision due of the corporate sector's serious objections to it.