Legal Update

363

Circulars/Notifications
Given below are summarised important Circulars and Notifications issued by the CBDT, CBIC-GST and
FEMA since the publication of the last issue of the journal, for information and use of members. Readers
are requested to use the citation/website or weblink to access the full text of desired circular/notification.
Suggestions on this column can be submitted at [email protected]

DIRECT I. NOTIFICATIONS 3. Central Government notifies ‘the 2726247 Ontario

TAXES Inc.’ u/s 10(23E) - Notification No. 84/2021, dated 03-
1. Amendment in Rule 12 vide the Income- 08-2021
tax (20th Amendment) Rules, 2021 -
Notification No. 82/2021, dated 27-07-2021 Vide this notification, the Central Government
has specified the pension fund, namely, the
Rule 12 pertains to return of income provisions. 2726247 Ontario Inc. as the specified person for
Vide this notification, sub-rule (1) and (5) have the purposes of section 10(23FE) in respect of the
been amended to provide reference to ‘section eligible investment made by it in India on or after
148’ and year ‘2020’ in place of ‘sub-section (1) of 03.08.2021 but on or before 31.03.2024 subject to
section 148’ and year ‘2019’ respectively. the fulfilment of conditions specified therein.

The detailed Notification can be downloaded The detailed Notification can be downloaded
from the link below: from the link below:
https://www.incometaxindia.gov.in/communications/ https://www.incometaxindia.gov.in/communications/
notification/notification_82_2021.pdf notification/notification_84_2021.pdf
4. Various assessees notified u/s 10(46) - Notification
2. Insertion of Rules 130 and 131 vide the Income-
No. 85&86/2021, dated 04-08-2021
tax (21st Amendment) Rules, 2021 - Notification No.
83/2021, dated 29-07-2021 ‘National Council of Science Museums’, Kolkata
(PAN AAAAN2541C) and ‘Real Estate Regulatory
Vide this Notification, CBDT has omitted certain Authority’, Himachal Pradesh, Shimla are notified for
Rules and Forms as specified therein Rule 130. the purposes of section 10(46) in respect of specified
Further, it has also been, inter alia, specified that income subject to specified conditions for FYs 2021-
22 to 2025-26 & FYs 2020-21 to 2024-25 respectively
any proceeding pending before any income-tax
as specified in the respective notifications.
authority, any Appellate Tribunal or any court,
by way of appeal, reference or revision, shall The detailed Notification can be downloaded
be continued and disposed of as if rules and from the link below:
forms specified have not been omitted. Also, https://www.incometaxindia.gov.in/communications/
Rule 131 specifies that the PDGIT (Systems) notification/notification_85_2021.pdf
or the DGIT (Systems), as the case may be, https://www.incometaxindia.gov.in/communications/
may with the approval of the CBDT specify notification/notification_86_2021.pdf
that any of the Forms, returns, statements,
5. Insertion of Rules 21AI and 21AJ & Form No. 10IG
reports, orders, by whatever name called, and 10IH vide the Income tax Amendment (22nd
prescribed in Appendix II, shall be furnished Amendment), Rules, 2021 - Notification No. 90/2021,
electronically. dated 09-08-2021

The detailed Notification can be downloaded The CBDT has inserted Rule 21AI prescribing manner
of computation of exempt income of specified fund
from the link below: for the purposes of section 10(4D). Further, rule 21AJ
https://www.incometaxindia.gov.in/communications/ prescribes the method for determination of income
notification/notification_83_2021.pdf of a specified fund attributable to units held by non-

Matter on Direct and Indirect Taxes, is contributed by Direct Taxes Committee, GST & Indirect Taxes Committee and Corporate Laws and Corporate
Governance Committee of ICAI respectively. FEMA updates by CA. Manoj Shah, CA Hinesh Doshi and CA. Sudha G. Bhushan

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364

residents under section 115AD(1A). Also Form No. CBDT vide this Circular has further extended the
10IG (Statement of Exempt income under section due dates for electronic filing of such specified Forms
10(4D)) and Form No.10IH (Statement of income i.e Form No. 15CC, 64D, 64C, 10BBB etc. It is also
of a Specified fund eligible for concessional taxation clarified by the CBDT that the specified forms, e-filed,
under section 115AD) are notified. after the expiry of time limits provided as per Circular
No.12/2021 dated 25.06.2021 or as per the relevant
The detailed Notification can be downloaded provisions, till date of issuance of this Circular, will
from the link below: stand regularised accordingly.
https://www.incometaxindia.gov.in/communications/
notification/notification_90_2021.pdf The detailed Circular and Order can be
downloaded from the link below:
6. Central Government establishes Interim Board of
Settlements u/s 245AA(1) - Notification No. 91/2021, https://www.incometaxindia.gov.in/communications/
circular/circular_no_15_2021.pdf
dated 10-08-2021
https://www.incometaxindia.gov.in/Lists/Press%20Releases/
The Finance Act 2021 inserted section 245AA w.e.f. Attachments/955/PressRelease_CBDT_extends_due_dates_
01.02.2021 prescribing constitution of one or more for_electronic_filing_3_8_21.pdf
Interim Boards for Settlement for the settlement
of pending applications. Accordingly, vide this III. PRESS RELEASES/INSTRUCTIONS/OFFICE
notification, 7 Interim Board for Settlement has been MEMORANDUM/ORDER
established at Delhi, Kolkata, Mumbai and Chennai. 1. CBDT grants further relaxation in electronic filing
of Income Tax Forms 15CA/15CB - Press Release,
The detailed Notification can be downloaded dated 20-07-2021
from the link below:
In view of the difficulties reported by taxpayers in
https://www.incometaxindia.gov.in/communications/
notification/notification_91_2021.pdf electronic filing of Income Tax Forms 15CA/15CB
on the portal www.incometax.gov.in, it had been
7. Rule 10RB and Form No. 3CEEA notified u/s decided by CBDT that taxpayers could submit Forms
115JB(2D) vide the Income-tax (23rd Amendment), 15CA/15CB in manual format to the authorized
Rules, 2021 - Notification No. 92/2021, dated 10-08- dealer till 15.08.2021. Authorized dealers are advised
2021 to accept such Forms till 15.08.2021 for the purpose
The Finance Act 2021 inserted sub-section (2D) in of foreign remittances.
section 115JB to provide that in cases where past year The complete text of the above Press Release
income is included in books of account during the can be downloaded from the link below:
previous year on account of an APA or a secondary
adjustment, the AO shall, on an application made https://www.incometaxindia.gov.in/Lists/Press%20Releases/
to him in this behalf by the assessee, recompute the Attachments/949/PressRelease_CBDT_grants_further_
rela xation_in_electronic_filing_of_IT_Forms_15C A_
book profit of the past year(s) and tax payable, if any, 15CB_20_7_21.pdf
during the previous year, in the prescribed manner.
Rule 10RB prescribes the manner of claiming relief in 2. Income Tax Department conducts searches
tax payable u/s section 115JB(1) due to operation of PAN-India in a prominent group having diversified
provisions of section 115JB(2D). businesses - Press Release, dated 24-07-2021
ITD carried out a search operation u/s 132 on
The detailed Notification can be downloaded 22.07.2021 on a prominent business group, which is
from the link below: involved in businesses in various sectors, including
https://www.incometaxindia.gov.in/communications/ Media, Power, Textiles and Real Estate, with a
notification/notification_92_2021.pdf group turnover of more than Rs. 6,000 crore p.a. 20
residential and 12 business premises spread over
II. CIRCULARS 9 cities including Mumbai, Delhi, Bhopal, Indore,
1. CBDT extends due dates for electronic filing of Noida and Ahmedabad have been covered.
various Forms under the Income-tax Act,1961 -
Circular No. 15/2021, dated 03-08-2021 The complete text of the above Press Release
On consideration of difficulties reported by the can be downloaded from the link below:
taxpayers and other stakeholders in electronic filing https ://w w w.incometa xindia .gov.in/Lists/P re ss%20
of certain Forms under the provisions of the Income- Releases/Attachments/952/PressReleaseITD_conducts_
tax Act,1961 read with Income-tax Rules,1962, the searches_PAN_India_in_a_prominent_group_24_7_21.pdf

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3. Income Tax Department conducts searches in Uttar is in the business of manufacturing Pan Masala and
Pradesh - Press Release, dated 24-07-2021 in real estate. A total of 31 premises were searched
ITD carried out a search operation on 22.07.2021 spread across Kanpur, Noida, Ghaziabad, Delhi and
on a group in Uttar Pradesh dealing in Mining, Kolkata.
Hospitality, News Media, Liquor and Real Estate.
The search began in Lucknow, Basti, Varanasi, The complete text of the above Press Release
Jaunpur and Kolkata. can be downloaded from the link below:
https://www.incometaxindia.gov.in/Lists/Press%20Releases/
The complete text of the above Press Release Attachments/954/PressRelease_ITD_conducts_searches_in_
can be downloaded from the link below: Kanpur_30_7_2021.pdf
https://www.incometaxindia.gov.in/Lists/Press%20Releases/
Attachments/951/PressRelease_ITD_conducts_searches_in_ CORPORATE Circulars & Notifications
Uttar_Pradesh_24_7_21.pdf LAWS

4. 161st Income Tax Day: A journey towards Nation

Building - Press Release, dated 24-07-2021

The 161st anniversary of Income Tax Day was  Amendments in the Companies
observed by CBDT and all its field offices across India (Incorporation) Rules, 2014 w.e.f. 01st
on 24.07.2021. As part of the observance, the field September, 2021
formations held a range of activities. Reflecting the
ITD’s spirit of cohesion, competence, cooperation The Ministry of Corporate Affairs pursuant
and constructive engagement, the activities included to the commencement notification of section
Webinars with external stakeholders including regional 4 of the Companies (Amendment) Act, 2020
chapters of ICAI, trade associations etc, tree plantation has inserted Rule 33A in the Companies
drives, vaccination camps, issuing commendation (Incorporation) Rules, 2014 for prescribing
letters to officers who worked for Covid relief and provisions for allotment of a new name to
connecting with families of officers/officials who lost the existing company under section 16(3)
their lives to Covid in the line of duty. of the Act which shall be effective from 01st
The complete text of the above Press Release September, 2021.
can be downloaded from the link below: Accordingly, if company has failed to change
https://www.incometaxindia.gov.in/Lists/Press%20Releases/ its name or new name, as the case may be, in
Attachments/950/Press-Release-161st-Income-Tax-Day-A- accordance with the direction issued under
journey-towards-Nation-Building-dated-24-07-2021.pdf section 16(1) of the Companies Act, 2013
5. Income Tax Department conducts searches in within a period of three months from the date
Jharkhand - Press Release, dated 29-07-2021 of issue of such direction then the Registrar
shall issue a fresh certificate of incorporation
ITD carried out a search operation on 28.07.2021on to the company in Form No.INC-11C (newly
a prominent group in Jharkhand dealing in building inserted).
construction and real estate. The search began on
[Notification No. GSR 503 (E)]
28.07.2021 in Ranchi and Kolkata. More than 20
premises were covered. Details are available at:
https://mca.gov.in/bin/ebook/dms/t?doc=MjgxNzA=&d
The complete text of the above Press Release ocCategory=Notifications&type=open
can be downloaded from the link below:
 Commencement notification of the
https://www.incometaxindia.gov.in/Lists/Press%20Releases/ provisions of Companies (Amendment) Act,
Attachments/953/PressRelease_ITD_conducts_searches_in_
Jharkhand_29_7_21.pdf 2020
The Central Government vide notification
6. Income Tax Department conducts searches in
Kanpur - Press Release, dated 30-07-2021 dated 22.07.2021 has appointed the 01
September, 2021 as the date on which the
The ITD carried out a search action on 29.07.2021on provisions of Section 4 of the Companies
a large group based in Kanpur and Delhi. The group (Amendment) Act, 2021 i.e. amendment in

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Section 16 of the Companies Act, 2013 relating definitions details) Rules, 2014 by inserting an
to Rectification of name of company shall come explanation in clause (h) of sub-rule (1) of rule
into force. 2 that electronic based offering of securities,
subscription thereof or listing of securities in
[Notification No. S.O. 294 (E)] the International Financial Services Centres set
Details are available at: up under section 18 of the Special Economic
https://mca.gov.in/bin/ebook/dms/t?doc=MzMzMjQ=&
Zones Act, 2005 (28 of 2005) shall not be
docCategory=Notifications&type=open
construed as ‘electronic mode’ for the purpose
of clause (42) of section 2 of the Act.”
 Clarification on Spending of CSR funds for
COVID-19 Vaccination [Notification No. S.O. 539(E)]

The Ministry of Corporate Affairs has Details are available at:

clarified vide its circular dated 30 July, 2021 https://mca.gov.in/bin/ebook/dms/t?doc=MzMzMjM=
that spending of CSR funds for COVID-19 &docCategory=Notifications&type=open
vaccination for persons other than the
 The Companies (Registration of Foreign
employees and their families is an eligible CSR
Companies) Amendment Rules, 2021
activity under item no (i) and (xii) of Schedule
VII of the Companies Act, 2013. The Ministry of Corporate Affairs has amended
the Companies (Registration of Foreign
[Circular No: 13/2021]
Companies) Rules, 2014, vide notification
Details are available at: dated 5th August, 2021, with insertion of an
https://mca.gov.in/bin/ebook/dms/t?doc=MzEwMTU= explanation to the Rule 2(1)(c) which states
&docCategory=Circulars&type=open that electronic based offering of securities,
subscription thereof or listing of securities in
 The Limited Liability Partnership the International Financial Services Centres set
(Amendment) Bill, 2021 up under section 18 of the Special Economic
Zones Act, 2005 (28 of 2005) shall not be
The Limited Liability Partnership
construed as ‘electronic mode’ for the purpose
(Amendment) Bill, 2021 has been passed by
of clause (42) of section 2 of the Act.”
both the Houses of the Parliament, by Rajya
Sabha on 4th August 2021 and by Lok Sabha on [Notification No. S.O. 538(E)]
9th August 2021.
Details are available at:
The Bill aims to facilitate the Ease of Doing https://mca.gov.in/bin/ebook/dms/t?doc=MzMzMjI=&
Business and enable the startup ecosystem docCategory=Notifications&type=open
across the country. The Foremost Objectives
of the bill are as follows:  Exemption notification – Section 393A
 De-criminalisation of monetary penalties The Ministry of Corporate Affairs has issued a
notification to exempt foreign companies and
Accounting Standards for classes of LLPs

companies incorporated or to be incorporated
Compounding of offence
 outside India (whether the company has or
has not established, or when formed may or
Establishment of Special Court for speedy
 may not establish, a place of business in India)
trial of offences from the provisions of section 387 to 392 of the
Companies Act, 2013.
Establishment of the Appellate Tribunal

This notification relaxes the burden of
 Companies (Specification and definitions
requirements as per the Act, insofar as they
details) Third Amendment Rules 2021
relate to the offering for subscription in
The Ministry of Corporate Affairs has the securities, requirements related to the
amended the Companies (Specification of prospectus, and all matters incidental thereto

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in the International Financial Services Centres of table disclosing the shareholding

set up under section 18 of the Special Economic pattern of promoters and promoter group
Zones Act, 2005 (28 of 2005). entities. Accordingly, all listed entities shall
provide such shareholding, segregated into
[Notification No. S.O. 3156(E)] promoter(s) and promoter group. The revised
Details are available at: format of aforementioned table II is placed at
Annexure A.
https://mca.gov.in/bin/ebook/dms/t?doc=MzMzMjQ=&
docCategory=Notifications&type=open [Circular No. SEBI/HO/CFD/CMD/ CIR /P
/2021/1616]
SEBI Circulars & Notifications Details are available at:
https://www.sebi.gov.in/legal/circulars/aug-2021/
disclosure-of-shareholding-pattern-of-promoter-s-and-
promoter-group-entities_51847.html

 Holding of Annual General Meeting  Securities And Exchange Board Of

(AGM) by top 100 listed entities by market India (Issue Of Capital And Disclosure
capitalization Requirements) (Third Amendments)
Regulations, 2021
In view of the continuous impact of COVID-19,
SEBI vide its circular dated 23.07.2021 has SEBI, vide notification no SEBI/LAD-NRO/
extended the timeline for conduct of AGM by GN/2021/45 dated 13th August 2021, has
top 100 listed entities by market capitalization amended the Securities and Exchange Board
by a period of one month. of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018 by omitting/
Accordingly, such entities shall hold their inserting various sub-regulations, sub-clauses
AGM within a period of six months from the and explanations/substitution to some clauses
date of closing of the financial year for 2020- of respective regulations in exercise of powers
21. conferred under section 30 of Securities and
[Circular No. SEBI/HO/CFD/CMD1/P/ Exchange Board of India Act, 1992.
CIR/2021/602] [Circular No. SEBI/LAD-NRO/GN/2021
Details are available at: /45]

https://www.sebi.gov.in/legal/circulars/jul-2021/ Details are available at:

extension-of-time-for-holding-the-annual-general- https://www.sebi.gov.in/legal/regulations/aug-2021/
meeting-agm-by-top-100-listed-entities-by-market- secur itie s- and-e xchange-board-of -indi a-i ssue-
capitalization_51318.html of - capit al- and- di sclosure-requirement s-third-
amendment-regulations-2021_51884.html
 Disclosure of shareholding pattern of
promoter(s) and promoter group entities  Securities And Exchange Board Of India
(Listing Obligations And Disclosure
Regulation 31(4) of Securities and Exchange Requirements) (Third Amendment)
Board of India (Listing Obligations and Regulations, 2021
Disclosure Requirements) Regulations,
2015 (“LODR”) mandates that all entities SEBI has amended the SEBI (LODR)
falling under promoter and promoter group Regulations, 2015 by making omission as well
be disclosed separately in the shareholding insertion of sub-regulations and substitution
pattern on the website of stock exchanges, in to clauses of respective sub regulations.
accordance with the format(s) specified by the The summary of the abovementioned
Board. amendments are as follows:
In the interest of transparency to the  Amendment in definition, appointment,
investors, SEBI has modified the format resignation of Independent Director.

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 Clarification provided for definition of financial statements while submitting half

pecuniary relationship or transaction. yearly/annual financial statements by the
Appointment of Director to be regularised
 Listed Entity under Regulation 52(4).
by the Shareholders in General Meeting.  Amendment in Regulation 57 which now
 Amendment in Composition of reads as “Intimation/Other submissions to
Audit Committee and Nomination & Stock Exchange(s)”.
Remuneration Committee.
 Amendment in Regulation 58, the heading
Amendments in Documents and Information
 has been amended from “Documents and
to Shareholders in case of appointment or information to holders of non-convertible
re-appointment of a director. debt securities and non-convertible
[Circular No. SEBI/LAD-NRO/GN/2021/35] preference shares” to “Documents and
information to holders of non-convertible
Details are available at: securities”. Concomitant changes have
https://www.sebi.gov.in/legal/regulations/aug- been made in the sub regulations.
2021/securities-and-exchange-board-of-india-  Amendment in regulation 61 to include
listing-obligations-and-disclosure-requirements-
the words “non-convertible debt securities
third-amendment-regulations-2021_51719.html
in sub regulation 1 of 61” and omission of
 Securities And Exchange Board Of India proviso from the said sub regulation.
(Listing Obligations and Disclosure
Requirements) (Fourth Amendment) [Circular No. SEBI/LAD-NRO/
Regulations, 2021 GN/2021/42]
SEBI has amended the SEBI (LODR) Regulations, Details are available at:
2015 by making omission as well insertion of
https://www.sebi.gov.in/legal/regulations/aug-2021/
sub-regulations and substitution to clauses of securities-and-exchange-board-of-india-listing-
respective sub regulations. obligations-and-disclosure-requirements-fourth-
amendment-regulations-2021_51885.html
The summary of the abovementioned
amendments are as follows:
FEMA Summary Information on few
 Omission of requirement to disclose Compounding Orders issued after 1st
certain line items to be presented in the March 2020

Sr. Party Name Nature of Contravention Date of Compounding

No. Order Fees (Rs.)
1. Sunseries Travel Contravention under Regulation 3.1(I)(A) 03-06-2021 50,500
Technology Private of FEMA 395 for mode of payment other
Limited than those permitted in the regulation.
2. Aijal Handicrafts Private Contravention under Regulation 15 and 24-06-2021 5,65,569
Limited Regulation 9 of FEMA Notification 23R for
non realization of export proceeds within
prescribed time period and receiving advance
against exports and not making export within
1 year of receipt of such advance.
3. TV2Z India Development Contravention under Rule 4 of FEM NDI 01-06-2021 51,343
and Support Pvt. Ltd. Rules 2019 whereby unless otherwise
permitted an Indian entity shall not receive
foreign investment from person resident
outside India or record such investment in
its books.

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