MCA refuses to intervene in Sebi-Sahara case on fund raising

The Ministry of Corporate Affairs (MCA) today washed off its hands from the ongoing dispute between Sebi and Sahara Group companies, which has been restrained by the market regulator from mobilising funds from the public.

In a statement, the MCA has clarified that Sahara Prime City intended to go for an IPO and had filed information about its group companies to Sebi in its Draft Red Herring Prospectus.

Further, Sebi upon noticing inadequacy in material disclosures had asked information about some Sahara Group companies as per its disclosure requirements.

However, the information was not furnished by November 11, 2010, and Sebi passed an interim order issuing show cause to two Sahara Group companies -- SIRECL and SHICL -- and restraining them from mobilising funds from the public.

"This order has been challenged by the said companies and the case is now sub judice before the Hon'ble High Court of Allahabad, Lucknow Bench. As this is a matter between the Sahara Group companies and Sebi, the MCA cannot intervene in the matter," the MCA said.

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Posted in: MCA,SEBI

I-T Dept probes tax violations by charitable, religious trusts

New Delhi, June 19 (PTI) Leaving no stone unturned to check tax evasion, the Income Tax department has begun a countrywide investigation of charitable and religious trusts that have been found violating tax exemption rules and are using donation funds for business purposes. A classified report prepared by the department has found that "a large number" of trusts and societies are violating I-T exemption laws and are conducting "business, commerce and trade" instead of charity. The department had put in a new clause in the I-T Act in 2009-10 that such entities engaged in the "advancement of any object of general public utility" will cease to enjoy tax exemptions if they collect fees or other charges for services rendered in the nature of business, commerce or trade. "The department's unit dealing with exemptions has identified a large number of such cases and are being investigated for scrutiny," I-T sources said. Sources declined to quantify the numbers and the identity of entities under its scanner as the probe is underway.The department has also asked the Chief Commissioners of Income Tax (CCITs) in the country to identify such trusts, including those registered as religious charitable bodies, who are violating charity clauses, the sources said. Such entities are enjoying exemptions under sections 11 and 12 of the I-T Act when it comes to huge donations and contributions and on holding of property, they said. While Section 11 of the I-T Act deals with with "income from property held for charitable or religious purposes", Section 12 defines "income of trusts or institutions from contributions." According to sources, once the cases are scrutinised and investigations are complete, prosecution against violators will be launched. The department expects to uncover violations to the tune of crores of rupees in these cases. However, I-T sources said a figure can be established only after the probe finishes. PTI NES ARV

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Posted in: INCOME TAX

Bonanza for loss making MTNL, gets Rs 177 cr income tax refund

 PTI
In a bonanza for the loss making telecom PSU, state-run MTNL on Wednesday received over Rs 177 crore as income tax refund for the year 2010-11.

"MTNL has received a refund order amounting to Rs 177.76 crore from the Income Tax Department pertaining to Assessment Year 2010-11," MTNL said in a filing to the Bombay Stock Exchange.

MTNL had won the case in the Income Tax tribunal against Income Tax Department for a refund of over Rs 1,200 crore in tranches.

MTNL was earlier denied to consider the licence fee as business expense and was therefore charged income tax on it for nearly eight years. The PSU had challenged this and had won the case in the tribunal.

The company in financial year 2010-11 showed improvement in its revenue. In FY'11, total income rose to Rs 3,841.2 crore as against Rs 3,781 reported in FY 2009-10.

However, the company posted a net loss of Rs 2,826 crore, up 8.27 per cent from Rs 2,610.9 crore in the same period previous year.

Profit from the cellular service of the company had been declining drastically. In FY'11, loss of the company in this segment increased more than 10-fold from a profit margin of Rs 34.73 crore to Rs 346.47 crore loss.

The latest report of TRAI on telecom subscription shows that the company added only 367 new mobile subscribers in the month of April.

The company had been facing cash crunch and hence decided to restructure its Rs 7,000 crore loan taken for buying 3G and BWA spectrum last year.

The company is learnt to have restructured Rs 3,500 crore of debt, repaying Rs 500 crore and tying up with two state-run banks for the rest Rs 3,000 crore.

Under this kind of performance and cash crisis, the income tax refund for the company has come as a big relief for the PSU.

Shares of MTNL today closed flat at Rs 45.30 apiece on the Bombay Stock Exchange.

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Posted in: INCOME TAX

Political parties' tax return details to be disclosed

The Income Tax Department has now decided to provide full details of tax returns of political parties under the RTI Act after the Central Information Commission (CIC) issued it directives in this regard.

The department, according to sources, used to restrict such information, citing section 138 of the Income Tax Act, which allowed denial of such information under RTI Act as "disclosure of information respecting assessees."

The I-T department has taken the step to bring in transparency in the funding of both big and small parties as the information will now be in public domain. Chief Election Commissioner S Y Qureshi had earlier expressed concerns over the funding of such political parties and had asked the Central Board of Direct Taxes (CBDT) to scrutinise their accounts.

With the new development, general public will now be able to obtain the details of income, donations and expenditure by all the political parties, which file their income tax returns.

The CIC, in an order in 2008, had asked the I-T department to allow the disclosure of such information under "larger public interest" and the department has now decided to furnish this information in "full spirit".

"Such parties which are registered but do not file their income tax returns will now have to file their details in larger public interest," said a senior I-T officer.

Such a step has also been taken to check the flow of blackmoney in the electoral process and make transparent the funding of political parties, the officer said.

Large political parties had always furnished their returns but the new step will allow individuals to access the income and funding details of small parties as well, the officer added.


source: PTI

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Posted in: INCOME TAX,RETURNS FILLING

ICAI Web TV to start streaming content on July 1

“The Institute of Chartered Accountants of India will begin streaming content on its new Web TV from July 1. Educative videos will be hosted on the Web TV. All important, live events of ICAI would be beamed live on Web and mobile platforms,” Mr G. Ramaswamy, President, ICAI, told journalists here today.

He also said that ICAI has launched a ‘Certificate Course on Indirect Taxes' which would first be held in Bangalore on July 9; other cities will follow.

Mr Ramaswamy said that the Institute is in the process of bringing out “guidelines and rules” for conversion of existing chartered accountants firms to ‘limited liability partnership' entities.

He said that most firms wished to convert themselves into LLPs. (Such conversion, legally allowed recently, has advantages — unlimited number of partners (against 20 now) and limited liability of the partners.)

ICAI will hold a Global Commerce Education Summit on July 15 in New Delhi, meant mainly for Vice Chancellors of various universities and Heads of department of commerce and management.

The summit, to be inaugurated by the Union Minister for Human Resources Development and Telecommunications, Mr Kapil Sibal, would provide a platform to “view the new paradigm for commerce and professional accountancy education in India,” Mr Ramaswamy said.

The summit would also deliberate on issues and challenges faced by commerce and accounting education in India.

ICAI intends to organise another conference in July in New Delhi, where all ambassadors stationed in Delhi will be invited to sensitise them on how the Institute could contribute to the accounting profession in their countries.

“For example, ICAI can help in IFRS-training,” Mr Ramaswamy said.

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Posted in: ‘limited liability partnership' entities,chartered accountants firms,ICAI Web TV,Mr G. Ramaswamy