REGULATORY REFERENCER

DIRECT TAX

1. Income-tax (21^st Amendment) Rules,
2020 – Rule 29B is amended. It now permits an insurer to
apply for certificate u/s 195(3). Form 15C consequently amended. [Notification No. 75 of 2020 dated 22^nd September,
2020.]

2.  Faceless Appeal Scheme, 2020 notified.
[Notification Nos. 76 and 77 of 2020 dated 25^th
September, 2020.]

3. Guidelines u/s 194-0(4) and section 206C(1-1)
of the Income-tax Act, 1961. [Circular No. 17/2020 dated
29^th September, 2020.]

4. Income-tax (22^nd Amendment) Rules,
2020 – Rule 5 amended. Rules 21AG and 21AH inserted.
Forms 3CD, 3CEB and ITR 6 amended. Forms 10IE and 10IF inserted – To prescribe
manner relating to option under sections 115BAC and 115BAD, and that of
determination of depreciation under sections 115BAA to 115BAD. [Notification No. 82 of 2020 dated 1^st October, 2020.]

5. Wholesale trading defined
for the purpose of section 92C r/w/r 10CA. [Notification
No. 83 of 2020 dated 19^th October, 2020.]

COMPANY LAW

I.  COMPANIES ACT, 2013

(I)
Various reliefs in timelines by MCA due to Covid-19 pandemic

(II)
Companies (Amendment) Bill, 2020 received President’s assent on 28^th
September, 2020 and now has become The Companies Amendment
Act, 2020. [Refer to Regulatory Referencer, page 115, October, 2020 issue of BCAJ
for more details.]

(III)
MCA eases private placement norms for qualified institutional buyers
– The MCA has notified the Companies (Prospectus and Allotment of Securities)
Amendment Rules, 2020 wherein Rule 14 has been amended. Now, a company need not
pass a special resolution again and again in case of offer or invitation of any
securities to qualified institutional buyers. It
shall be sufficient if the company passes a special resolution only once in a
year for all the allotments to such buyers. [Notification
No. G.S.R. 642(E) dated 16^th October, 2020.]

II. SEBI

(IV)
SEBI relaxes provisions relating to rights issue – SEBI
has notified the SEBI (ICDR) (Fourth Amendment) Regulations, 2020. The
amendment aims to relax provisions relating to rights issue to make the raising
of funds through such issues easier and quicker. The amended norms relax eligibility
criteria and disclosure requirements for rights issues. The amended ICDR norms
increase the limit for filing requirement of rights issue draft letter of offer
with SEBI for its observations, from Rs. 10 crores to Rs. 50 crores. [Notification No. SEBI/LAD-NRO/GN/2020/31, dated 28^th
September, 2020.]

(V)
SEBI amends norms relating to Listing Obligations and Disclosure Requirements
(LODR) – SEBI has amended the norms relating to LODR relating to
regulation 54 requiring listed entities to maintain 100%
asset cover. An amendment has also been made to
Regulation 56(1)(d) requiring listed entities to obtain half-yearly certificate
from a statutory auditor along with the half-yearly financial results. However,
the requirement of submission of half-yearly certificate is not applicable
where bonds are secured by a Government guarantee. As per the amended norms,
now listed entities are also required to make disclosure to stock exchanges
with regard to initiation of Forensic audit. Entities shall have to disclose the final forensic audit report
(other than for forensic audit initiated by regulatory / enforcement agencies)
along with comments of the management, if any. [Notification
No. SEBI/LAD-NRO/GN/2020/33, dated 8^th October, 2020.]

(VI) SEBI amends Debenture Trustees Regulations – SEBI has amended the norms relating to Debenture
Trustees whereby Regulation 14 has been amended requiring every debenture
trustee to accept the trust deeds which shall consist of two parts, i.e., Part
A containing statutory information on debt issue, and Part B containing
specific details to the particular debt issue. SEBI has further expanded the
scope of the duties of debenture trustees before creating a charge on the
security and the debenture trustees shall have to exercise due diligence to
ensure that such security is free from any encumbrance, or that it has obtained
the necessary consent from other charge-holders if the security has an existing
charge. [Notification No. SEBI/LAD-NRO/GN/2020/34,
dated 8^th October, 2020.]

(VII)
SEBI issues circular for standardisation of procedure to be followed by
Debenture Trustee(s) in case of ‘Default’ by issuers of listed debt securities
– SEBI, vide its circular dated 13^th October,
2020, has standardised the procedure to be followed by Debenture Trustee(s) in
case of ‘Default’ by issuers of listed debt securities. [Circular No. SEBI/HO/MIRSD/CRADT/CIR/P/2020/203 dated 13^th
October, 2020.]

FEMA

(i) Exporters are added to the Caution List of RBI on an automated
basis since 2016 vide A.P. (DIR Series) Circular No. 74. Barring exceptions
where an extension is granted by the AD Bank, if any shipping bill remains
outstanding for more than two years in the EDPMS system, the exporter would be
put under the caution list of RBI automatically. Once caution-listed, the
exporter would not be granted any extension in realising the export proceeds
against the outstanding bill, amongst other consequences. There was no leeway
for even genuine cases. Considering the hardships faced by exporters, this
system was sought to be discontinued by RBI as per its Statement on
Developmental and Regulatory Policies dated 9^th October, 2020.
Following the same, RBI has
now scrapped the automated caution-listing system altogether.

However,
an exporter would continue to be caution-listed by the RBI based on the
recommendations of the AD Bank and investigative agencies as was the practice
hitherto. Further, the procedures to be followed by AD Bank for such
caution-listed exporters would continue as earlier. [A.P.
(DIR Series) Circular No. 03 dated 9^th October, 2020.]

ICAI ADVISORY

*    Advisory on Compliance
with Website Guidelines – Advisory containing a
non-exhaustive list of contents and features on the
websites of members and firms that are prohibited. [14^th
October, 2020.]

ICAI MATERIAL

*    Indian Accounting
Standards: An Overview – Revised edition of publication
providing at-a-glance basic aspects of Ind ASs, differences between Ind AS and
AS / IFRS. [6^th October, 2020.]

*    Quick Insights on
Professional Opportunities Abroad for Indian CAs –
Guide to members willing to seek opportunities abroad. [14^th
October, 2020.]