REGULATORY REFERENCER

DIRECT TAX

1.
Notifications bearing Nos. 68, 70 and 80 of 2019 issued under clause (v) of the
proviso to section 194N of the Income-tax Act, 1961 prior to its
amendment by the Finance Act, 2020 shall be deemed to be issued under the
fourth proviso to section 194N as amended by the Finance Act, 2020. [Circular
No. 14/2020 dated 20^th July, 2020.]

2. Income-tax
(17th Amendment) Rules, 2020 – Rule 31AA amended. It notifies amendments in
TCS statement being Form 27EQ. [Notification No. 54 of 2020 dated 24^th
July, 2020.]

3. Income-tax
(18^th Amendment) Rules, 2020 – Rule 12CB amended. It notifies amendments
in the procedure of filing of statement of income paid or credited by an
investment fund to its unit holders as well as in Form 64C and 64D. [Notification
No. 55 of 2020 dated 28^th July, 2020.]

4. All those
whose original due date for filing returns was 31^st July, 2020 have
to pay self-assessment tax by 31^st July, 2020. Interest u/s 234A
will not be charged if senior citizens pay part of the tax payable for A.Y.
2020-21 by 31^st July, 2020 and balance tax payable does not exceed
Rs. 1 lakh. Self-assessment tax paid by senior citizens before 31^st
July, 2020 will be deemed to be advance tax paid for the purpose of levy of
interest u/s 234. [Notification No. 56 of 2020 dated 29^th July,
2020.]

5. Introduction of Faceless assessment
scheme. [Notification Nos. 60 and 61 of 2020 dated 13^th
August, 2020.]

COMPANY LAW

I.
COMPANIES ACT, 2013

(I) MCA’s relief on delivery of notice to
shareholders extended for listed companies, for rights issues opening up to 31^st
December, 2020 – In case of listed companies which
comply with the relevant circulars issued by SEBI, inability to dispatch the
relevant notice to shareholders through registered post or speed post or
courier would not be viewed as violation of section 62(2) of the Companies Act,
2013 for rights issues opening up to 31^st December, 2020.
Other requirements provided in the said General Circular 21/2020 dated 11^th
May, 2020 remain unchanged. [General Circular No. 27/2020 (F. No.
2/4/2020-CL-V); Dated 3^rd August, 2020.]

(II) Application for extension of AGM by companies
whose Financial Year ended on 31^st March, 2020 – MCA has clarified that companies whose Financial Year ended on 31^st
March, 2020 and who cannot hold their AGM by 30^th September,
2020 [even with relaxations granted vide Circular No. 20/2020 dated
5^th May, 2020 to conduct AGMs via Other Audio Visual Means (OAVM)],
need to apply in Form GNL-1 to jurisdictional Registrar on or before 29^th
September, 2020 to seek extension of time (for a maximum period of three
months) for holding the same. The Registrar of Companies has been advised
to consider the applications made by companies liberally. [General Circular
No. 28/2020 (F. No. 2/4/2020-CL-V); Dated 17^th August, 2020.]

(III) The Institute of Company Secretaries of
India Centre for Corporate Governance, Research and Training (ICSI-CCGRT) – Under its research initiatives, it has
launched a series on Companies Act Checklists Chapter-wise. Till date Checklists
on Chapter II, Chapter VI and Chapter X are launched and the same are available
on the link https://www.icsi.edu/ccgrt/research-initiatives-2/

II. SEBI

(IV) SEBI
clarifies that investors with physical securities are allowed to tender shares
in buybacks, open offers and delisting of securities – SEBI has clarified that shareholders holding securities in physical
form are allowed to tender shares in open offers, buy-backs through tender
offer route and exit offers in case of voluntary or compulsory delisting and
the restriction under Regulation 40(1) of LODR Regulations shall not apply. [Circular
SEBI/HO/CFD/CMD1/CIR/P/2020/144 dated 31^st July, 2020.]

(V) SEBI
allows extension on use of digital signature certifications for authentication
/ certification of filings / submissions made to Stock Exchanges till 31^st
December, 2020 – SEBI has permitted listed entities
to authenticate / certify any filing / submission made to stock exchanges on or
after 1^st July, 2020 under the LODR Regulations, using digital
signature certificates (DSCs) till 31^st December, 2020. Earlier,
SEBI had permitted the same until 30^th June, 2020 vide its
circular dated 17^th April, 2020. [Circular
SEBI/HO/CFD/CMD1/CIR/P/2020/145 dated 31^st July, 2020.]

(VI) Every
listed entity shall maintain public shareholding within a period of three years
instead two years – Now, every listed company which
has public shareholding below 25% on the commencement of the Securities
Contracts (Regulation) (Second Amendment) Rules, 2018, shall increase its
public shareholding to at least 25% within a period of three years from
the date of such commencement, in the manner specified by SEBI. [Notification
G.S.R. 485(E) (F. No. 5/35/CM/2006 Volume- III); dated 31^st July,
2020.]

(VII)
RESOURCES FOR TRUSTEES OF MUTUAL FUNDS – Trustees
shall appoint a dedicated officer having professional qualifications and a
minimum five years of experience in finance and financial services related
field. The officer so appointed shall be an employee of the Trustees and
directly report to them. [Circular SEBI/ HO/IMD/DF4/CIR/P/2020/0000000151
dated 10^th August, 2020.]

ACCOUNTS AND AUDIT

(A)
Companies (Indian Accounting Standards) Amendment Rules, 2020 – Amended standards / topics: (i) Ind AS 103: Definition of a Business,
Optional test to identify concentration of Fair Value, Elements of a Business,
and Assessing whether an acquired process is substantive; (ii) Ind AS 107: Uncertainty
arising from interest rate benchmark reform; (iii) Ind AS 109: Temporary
exceptions from applying specific hedge accounting requirements; (iv) Ind
AS 116: Covid-19-related rent concession for lessees; (v) Ind AS 1, 8,
10 and 34: Materiality; and (vi) Ind AS 37: Restructuring. [MCA
Notification dated 24^th July, 2020.]

(B)
Implementation of Ind AS by NBFCs and ARCs –
Unrealised gain / loss on a derivative transaction undertaken for hedging may
be offset against the unrealised loss / gain recognised in capital (either
through P&L or OCI) on the corresponding underlying hedged instrument for
the purposes of computation of regulatory capital and regulatory ratios. [RBI
Notification No. RBI/2020-21/15 dated 24^th July, 2020.]

(C)
Timeline for submission of financial results by listed entities (under
Regulation 33 of the LODR Regulations) for the quarter / half year / financial
year ended 30^th June, 2020 – extended
from 14^th August to 15^th September, 2020. [SEBI
Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/140 dated 29^th July, 2020.]

(D) Review
Engagements on Interim Financial Information in the Current Evolving
Environment Due to Covid-19 – ICAI’s Guidance
highlighting key areas of focus in the current environment when undertaking a
review of interim financial information in accordance with SRE 2410. [ICAI’s
Auditing Guidance dated 7^th August, 2020.]

FEMA

(i) FEMA was
earlier regulated and administered by RBI including with respect to capital
account transactions covered u/s 6. However, with effect from 15^th
October, 2019 this power was shifted to the Central Government for non-debt
capital account transactions including those covered for FDI under the Non-Debt
Instruments (NDI) Rules. Each change in these rules or introduction of an
instruction or circular required a notification by the Ministry of Finance.
This created delays. Further, Master Directions issued by RBI became
inoperative. Now, the powers have again been shifted back from the Central
Government to the RBI, though partly. RBI has now been empowered to:

(a) Administer the NDI Rules and, while
administering them, it may interpret and issue such directions, circulars,
instructions and clarifications as it may deem necessary.

(b) Permit investment into India by a person
resident outside India; or permit an Indian entity prescribed under the NDI
Rules to receive investment without the requirement of a consultation with the
Central Government as was needed previously.

(ii)
Sectoral caps and conditions for FDI in the sector of Air Transport Services as covered in Serial No. 9.3 and Other Conditions as prescribed in
Serial No. 9.5 for the Civil Aviation sector under Schedule I to the NDI Rules
have been amended. The position in the NDI Rules has now been brought in line
with the changes made in the FDI policy as amended by Press Note 2 of 2020
dated 19^th March, 2020. The important changes are:

(a) The benefit to OCIs to invest up to 100% under
the automatic route is now removed. Only NRIs are allowed this benefit.

(b) Further, investment by NRIs up to 100% has been
allowed in M/s Air India Limited.

(c) Foreign airlines are at present allowed to
invest in Indian companies operating scheduled and non-scheduled air transport
services up to a limit of 49% under the Government approval route. It has now
been clarified that this limit will subsume FDI and FII / FPI investment.

(d) Reference to Aircraft Rules, 1937 have been
made where necessary.

[Notification
No. S.O. 2442 (E) dated 27^th July, 2020 – F. No. 01/05/EM/2019.]

ICAI MATERIAL