GHAZIABAD BRANCH

OF CENTRAL INDIA REGIONAL COUNCIL

E- NEWS LETTER [For Private Circulation Only] March - 2021 Vol. 1

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

 GHAZIABAD BRANCH OF CIRC OF ICAI

WHAT'S INSIDE?

S.No. Particulars Page No.

1 Ghaziabad Branch Managing Committee (2021-22) 3

2 Editorial Board 4

3 Messages 5-15

4 Note from the Editor 16

5. Articles 17-24

6. Help Desk's Members 24-25

7. Latest Amendments 26

8. Compliance Calender 28

9. Glimpse of Past Events 29

10. Suggestions 33

2
GHAZIABAD BRANCH OF CIRC OF ICAI

GHAZIABAD BRANCH
Managing Committee (2021-22)

CA ADITYA GUPTA
Chairman

CA KARAN GARG CA (Dr.) AMIT TIWARI

Vice Chairman Secretary

CA. PRAVEEN KUMAR SINGHAL CA VINEET RATHI

Treasurer CICASA Chairman

CA MANSI GARG CA MANOJ SINGH

Executive Member Executive Member

CA ANUJ GOYAL CA MUKESH BANSAL

CCM, ICAI RCM, CIRC

3
 GHAZIABAD BRANCH OF CIRC OF ICAI

EDITORIAL BOARD

CA ADITYA GUPTA
Chief Editor

CA SUMIT BANSAL CA PRAVEEN SINGHAL CA ABHAY KANSAL

Editor Joint Editor Editorial Head

CA MANOJ SINGH CA NITIN GUPTA

Co-Editor Co-Editor

CA AMIT BHARGAVA CA RAVI GARG

Member Member

CA GAURAV MITTAL CA GARIMA JINDAL CA SHUBHAM JINDAL

Member Member Member
4
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
The Indian economy has been showing positive signs of recovery in the context of
the COVID-19 pandemic despite the global economy still facing the challenges. It
is really heartening that our country is able to show high resilience even in the face
of hardest of crisis being faced globally. With the growth of the Indian economy,
India will certainly play a more prominent role in global economic order.

The Indian Chartered Accountancy profession is directly and indirectly playing a

significant role in the growth of our country. The profession is widely regarded as
the key enabler and facilitator of the Government's socio-economic vision and
policies. As economies all gradually recovering from the effects of the pandemic,
the need for accounting professionals who are technically sound and have expertise
to perform complex jobs in the areas of accounting, finance, taxation, corporate
laws, business strategy has increased manifold. At the same time expectations from
the accountancy professionals have increased manifold consider the expertise and
solutions they can provide to the business community to overcome these
challenging times.

The growing Indian economy has placed great demands on specialization and
professionalism. Chartered Accountants are at the forefront in adapting to the
changing economic scenario. The role of a Chartered Accountant in the past has
been restricted to Accounting, Auditing and Taxation. Today, Chartered
Accountants need to remain connected with the evolving knowledge in light of
changes in laws, business environment, economic conditions, technological
improvements and so on. It is important for the professionals to imbibe a sense of
responsibility and integrity. A greater challenge is to keep abreast of the changes
taking place in the relevant fields and acquire contemporary knowledge and skills.

On this note, it is heartening to see that the Ghaziabad branch of the Central India
Regional Council (CIRC) of the Institute of Chartered Accountants of India (ICAI)
is coming up with its first issue of E-Newsletter to spread relevant knowledge and
inform members about the activities of the Branch.

Newsletters have always played an important role in keeping both members and
students updated about the latest developments. I am sure that this e-newsletter
would serve as an informative and useful medium for all its users who shall be able
to receive information on a broad spectrum of activities being undertaken at the
branch level.

CA. Nihar N Jambusaria

President, ICAI

5
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
It is heartening to note that the Ghaziabad Branch of CIRC of the Institute of
Chartered Accountants of India is coming out with the first ever edition of its
monthly e-Newsletter.

The Newsletter is a medium which provides the opportunity and convenience to the
members to stay updated about the activities of the Branch. It helps to establish a
connect within the fraternity on issues of professional relevance and projects the
activities and initiatives planned to be carried out. I am sure that the members shall
find this e-Newsletter extremely useful and also enable them to be abreast of the
latest developments pertaining to the profession.

I convey my best wishes and success in the future endeavours of the Branch for the
cause of the profession.

CA. (Dr.) Debashis Mitra

Vice President, ICAI

6
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
Respected Members of Ghaziabad Branch of CIRC of ICAI,

Let me start by wishing the esteemed members of Ghaziabad Branch of CIRC of

ICAI the best of health and happiness. I am pleased to note that Ghaziabad Branch is
coming up with this e-newsletter for disseminating knowledge among members. It
is rightly said by Godfrey Reggio -"It's not that we use technology, we live
technology."

With the use of technology, there is so much that we can accomplish together.
Technology is best when it brings people together. In today's globalised world,
people across nations are well connected and operate in different time zones. It is
only possible due to advancement of technology, which has become epicentre of
our day to day lives.

After the huge disruptions caused by the COVID-19 crisis in 2020, we are looking
to get back on course and importantly, build for the future. In the path of rebuilding;
e-newsletter is the need of hour and has wide relevance.

It has become clear that there is no leadership without technology leadership.

Year-2021 has brought need for a different path to light. If we as professionals

continue to have a clear-eyed perspective and sharp focus on expediting digital
transformations, we can emerge as masters of change and the new leaders.

Time has taught us that leaders don't wait for the "new normal," they build it
themselves. Big changes today require bold leadership and prioritizing
technology.

Hence, we need to evolve for upending convention and creating a new vision for the
future.

Happy Reading!

CA. Anuj Goyal

Central Council Member & Chairman,
Research Committee & Committee on Capital Markets and Investors' Protection
The Institute of Chartered Accountants of India

7
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
"None of us is as smart as all of us." - Ken Blanchard

Respected Professional Colleagues,

It is an acknowledgeable step taken by Ghaziabad Branch of CIRC of ICAI to

circulate monthly e- Newsletter. I am sure that the Newsletter will have important &
useful information. This will increase rate of major activities that branch would be
taking in near future.

Information can tell us everything. The more information that's out there, the
greater the returns to just being willing to sit down and apply yourself. Information
isn't what's scarce; it's the willingness to do something with it.

Undoubtedly, the information and matter compiled in the Newsletter would be

greatly serving not only the branch but also the branch members and will be useful
to all the users. It would act as a momentum to strengthen the bond of fraternity
amongst the members of the Branch and also for professional development. I
appreciate the efforts put in by the Chairman of Ghaziabad branch and entire team
for dedicated efforts for the cause of the profession.

I convey my best wishes to Members of Ghaziabad Branch for a great success on

the publication of Newsletter.

“Productivity is never an accident. It is always the result of a commitment

to excellence, intelligent planning, and focused effort.” - Paul J. Meyer

Warm Regards

(CA. Nilesh Gupta)

Chairman, CIRC of ICAI
Email: canileshgupta@gmail.com

8
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
I am very happy to know that Ghaziabad Branch of Central India Regional Council
of the Institute of Chartered Accountants of India is releasing its E News Letter for
members.

I would like to express all appreciation and gratitude to Chairman and members of
the Committee of Ghaziabad branch of CIRC for publishing E Newsletter for the
members of Ghaziabad Branch.

Technology will continue to redefine publishing and the way we develop and share
our most creative and powerful ideas and I am sure this Newsletter as a significant
tool would facilitate growth in sharing of thoughts on different topics related to
professional developments and accelerate the professional and branch activities.
Learning is a continuous process and this Newsletter will be a very good step in the
direction of our quest for continuous learning.

Ghaziabad Branch of CIRC of ICAI is working very hard for the continuous
knowledge updation of members and students and these activities are consistently
increasing and need a lot of time and efforts to make them successful. I once again
compliment CA Aditya Gupta Ji-Chairman and all the managing committee
members for their painstaking efforts in organising these programmes. I am quite
confident that the branch will take a number of other initiatives for the benefit of the
members and students and will reach the newer heights.

The will to win, the desire to succeed, the urge to reach your full potential...
these are the keys that will unlock the door to excellence.

CA Mukesh Bansal
Regional Council Member-CIRC
Past Chairman CIRC (2019-20)
+91 9350774515, 8800976556

9
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
“I can't change the direction of the wind, but I can adjust my sails to always
reach my destination” - Jimmy Dean

Greetings to beloved colleagues my respected seniors !

I would like to convey my sincere gratitude to all the members of the Branch and the
Managing Committee for imposing faith in me and giving me an opportunity to
serve the Branch as Chairman. I would like to extend my heartily gratitude to the
members who have reposed confidence in me by handing over this responsibility
which I take with folded hands.

In a world that is constantly changing. The most important skill to acquire now is
learning how to learn. Progress should mean that we are constantly changing with
the pace of world ,with the pace of this fast moving society. What is true today may
be false tomorrow. If you don’t make progress others will and you will be
overtaken. According to Herbert Spencer’s theory of "Survival of Fittest" only the
one who adapts to the changes and overcome the challenges is the fittest and could
survive. In this trail when we are once again ready to welcome the dawn of new rise,
hopes and opportunities after a long dark dusk of the world pandemic , It’s a great
pleasure to present before you the first E-newsletter of the year 2021-22 of
Ghaziabad branch of CIRC of ICAI.

My endeavor in future would be to work for the betterment of our esteemed

profession, in particularly, bridging the gap among the students, the members and
the Branch. I would try to work tirelessly for bringing new innovations to the
functioning and participation of the branch at various forums. Our efforts are still on
to ensure that no stone is left unturned in this noble mission of education. It is true in
the words of William Ellery Channing who said “Educating a child is a greater task
than ruling the state.” And hence I pledge to take all possible steps for it.

With this I once again take this opportunity to promise that I would leave no stone
unturned in bringing forward my share of contribution for the betterment of the
profession. We value your staying connected to us and I hope this is just another
means for you to keep in touch with the latest news ,activities and happenings in the
branch.

JAI HIND JAI ICAI

CA. Aditya Gupta

Chairman 2021-22 Ghaziabad Branch of CIRC of ICAI
Mob. No. : 9891720467
E-mail : ca.adityagupta75@gmail.com

10
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
Greetings,

I extend my regards to all my peers, seniors and guides as we enter into the summers
of 2021. This year so far has begun with all of you showering your blessings onto
me and appointing me to serve you all as the Vice-Chairman of Ghaziabad Branch
of CIRC of ICAI. It is a great honour to help us shape the future of our profession.

Moving on to the current scenario, our area of operation is getting highly dynamic
with every passing second including the ones I write this in and the ones in which
you read as well. In these regards, this E-Newsletter aims to keep you all updated
with the important areas of the profession as well as the happenings in the fraternity
in Ghaziabad. The Newsletter is the Joint effort of all of us for all of us, we are
always committed to serving you in and please also feel free to reach out myself or
anyone in the team for any support.

Please come forward for your requirements and requests in any regards. We will be
delighted to conduct any programs for similar or any developments to our
profession.

I firmly believe what Arianna Huffington said

"We need to accept that we won't always make the right decisions, that we'll screw
up royally sometimes – understanding that failure is not the opposite of success, it's
part of success."

It is also important that I mention that we are in a business that requires us to be

highly available, so please be careful of your health. Stay Hydrated and avoid too
much direct sunlight wherever possible. With these words I wish you all the best for
until we connect next time.

Kind Regards,

CA Karan Garg
Vice-Chairman
Ghaziabad Branch of CIRC of ICAI
M. No.: +91-9654875450
E-mail: gargkaran07@gmail.com

11
GHAZIABAD BRANCH OF CIRC OF ICAI

SECRETARY WRITES
Sarve Santu Niramayah
Dear CA Parivar,

Hope you all are doing well.

The aim of our executive committee is to improve the working of the branch for the
betterment of our members as well as students of the profession. Our motto is “One
for all and all for one” and I am sure that with the co-operation and blessings of all
the members Ghaziabad branch will reach to newer heights of success.

Friends! as you know that Ghaziabad branch has always been organizing various
programs such as Seminars, Study circles, workshops etc. for the benefits of
members.

We shall keep organizing such programs, physically and/or virtually, in the benefit
of members and students at large, adhering to the covid-19 guidelines.

We are delighted to share our branch is publishing the newsletter “Manthan” with
aim to keep members updated and informed with the various development on
professional front and also remind them about upcoming due dates for various
compliances.

Students are the future of our profession, keeping in view of this fact, we have also
planned to organize various educational programs for the benefits of our students of
our profession, so that they can sharpen their skills.

Construction of building of Ghaziabad Branch has been started in the month of Aug
2020 and we are making our all effort to get it ready for members by upcoming CA's
day i.e., 1st July 2021.

The Managing Committee of the Ghaziabad Branch is committed to serve the

members and students and fulfilling the vision of the Institute but needs your
constant guidance, suggestions and feedback so as to improve upon itself. I would
also like to request you to give your valuable suggestions so that the functioning of
branch can be improved to optimum level. I hope that in the leadership of energetic
chairman of the branch CA ADITYA GUPTA, we will be able to serve our CA
PARIWAR.

With warms regards to all

CA. (Dr) Amit Tiwari
Secretary
I.C.A.I. Ghaziabad Branch

12
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
Dear Members, Seniors in the profession, my dear fellow members & students, I
express my sincere gratitude from the bottom of my heart, for serving the profession
as Treasurer of Ghaziabad Branch of CIRC OF ICAI for the year 2021-2022,
I also congratulate and thank the other team members for imposing faith in me.
The Treasurer has a watchdog role over all aspects of financial management,
working closely with other members of the Management Committee to safeguard
the organisation's finances.
It has always been my endeavour to work to the best of my ability for the cause of
profession,
Being a member, it is not possible for me to do this without kind, active & positive
support of my fellow members & students,
As it is said that: - “YOU CAN DO ANYTHING, BUT NOT EVERYTHING.”
It is Truly said, that: -
“If you work with your hands & your hands only, You are a LABOR.
If you work with your hands & your mind, You are a CRAFTSMAN.
When you work with your hands, your mind & your heart,
Is only when you are a PROFESSIONAL.”
The above Lines suits best to our founder & past members, who had devoted their
Professional Knowledge, Skills & Competence to make our Ghaziabad Branch
better & better in all aspects, whether it may be Academic, Cultural & Sports
activities.
They have set the benchmark at very high, I will try at my best to touch the same.
We will ensure that we work on every aspect which is beneficial for the members and
students.
Our whole team will work as trustee and representative of all members and students
of Ghaziabad Branch.
At last, Wishing you all a very Happy and Safe Happy Holi. Stay Safe during this
again rising pandemic and enjoy.
Remember the words of our Prime Minister Shri Narendar Modi Ji "2 GAJ DOORI
MASK HAI ZAROORI"

Regards
CA Praveen Kumar Singhal
Treasurer of Ghaziabad Branch of CIRC of ICAI
Immediate Past Chairman
13
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
Esteemed Members of ICAI!

"You must be the change you wish to see in the world." ? Mahatma Gandhi

I feel privileged while interacting you all through this column in FIRST
EDITION of E-newsletter for members. I congratulate editorial board team of the
E-newsletter.

At the outset, I would like to convey my heartfelt thanks and sincere gratitude to the
Chairman and entire managing committee for electing me as CICASA Chairman of
the Ghaziabad Branch of CIRC of ICAI. Immense affection and support of the
members and students always motivate me to do the maximum for our professional
fraternity and society at large.

Today everyone is looking towards the Chartered Accountants not only as a financial
doctor but as a personal consultant too. People use to share their professional,
financial and personal problems and expect a perfect advice and rely on us. So,
whatever we do advice and suggest gives them happiness and sense of satisfaction
which ultimately increase our value in their eyes. On the other hand, one small
mistake or bad deed by us creates a negative image towards the fraternity as a whole.

In the era of faceless assessments, drafting skill is of utmost importance. The

members, especially youth members, must get expertise in drafting skill and must
have deep understanding of law. For this purpose, we must study bare act and rules
of the taxation laws. Timely updating ourselves in case of any change is the key to
success in today's era since change is very frequent and we have to be ready for the
adaption of this change.

We look forward for your suggestion in improving and making value addition in
functioning of branch so that we can serve the members, students and society at
large. I wish you all happy reading.

CA. Vineet Rathi

CICASA Chairman
Ghaziabad Branch of CIRC of ICAI
+91-9717724704
cavineetrathi@gmail.com

14
GHAZIABAD BRANCH OF CIRC OF ICAI

MESSAGE
Respected Professional Colleagues!

Hope you and your family members are good.

It is a matter of immense pleasure that Ghaziabad Branch of CIRC of ICAI is

publishing our E-News Letter on the theme "Manthan". This will help the
members to enhance their knowledge & skill. I congratulate and thanks the entire
team of Editorial Board for taken such initiative and helping in preparation of
newsletter.

Education is a continuing process journey towards self- actualisation. The world

outside is filled with possibilities and challenges and it is waiting for you. As you
move closer to your aspirations, let your moments of defeat be your motivation to
work harder and so are not only for yourself but for the nation and the society too. In
diverse situation, find opportunities to reach out and build bridges. In difficulty,
find a chance to be philanthropic; and in challenges, reasons to rise and learn in the
given situation.

" Strength and growth come only through continuous effort and struggle. "

Kindly take actively part in the Programs & Activities conducted by Ghaziabad
Branch of CIRC of ICAI and for any help & suggestions, we are always available for
you and it's our pressure to serve the members, students and society at large.

Happy Learning to you....

Wish you very Happy & Safe Holi in advance…

With Warm regards

CA Manoj Singh
Ex - Chairman - ICAI Ghaziabad.
Mo.: 9310893870 / 8375020175
E-Mail : camanojsinghca@gmail.com

15
GHAZIABAD BRANCH OF CIRC OF ICAI

NOTE FROM THE EDITOR

Dear Reader,

As winter's cold days and longer nights end, and the last of snow and ice melt away,
there is a short window of time, a month that shares itself with winter and spring,
March. March may be named after the Roman god of war but in reality, it's one of
the happiest months on the calendar. It is full of colours with blooming flowers,
fluttering butterflies, and festival of Holi. March is truly synonymous with change,
happiness and enthusiasm.

The year gone by has been truly challenging for everyone for several personal,
health and economic reasons. But it has also reminded us about the need to be agile
and adaptive. The need to constantly learn and evolve is all the more felt by our
professional fraternity due to sweeping changes and reforms being brought about in
taxation laws.

In this context, I on behalf of the leadership team of Ghaziabad branch of CIRC of

ICAI and my editorial team, would like to invite our readers to actively contribute
to this august newsletter with their insightful learnings and experiences.
Knowledge is the new rich, arm yourselves with it. And if you have knowledge, let
others light their candles in it.

We welcome your feedback and suggestions for improvement in this newsletter.

Hoping for your participation in the next edition. Happy Reading!

Regards
CA. Sumit Bansal, Editor
FCA and Insolvency Professional

16
 GHAZIABAD BRANCH OF CIRC OF ICAI

Section 50C of the Income-tax Act

CA Bhimanshu Kansal

“Rights in land or building or both” are not equated to “Land or building or both” for the purpose of
section 50C of the Income-tax Act
Section 50C of the Income-tax Act, 1961 ('the Act') was brought to the statute vide Finance Act, 2002
contemplating the deeming provisions to curb the practice of understatement of sale consideration; and to
determine the value of sale consideration on transfer of capital assets being land or building or both in certain
circumstances. The plain reading of section 50C of the Act enunciates that if the consideration received or
accruing from transfer of land or building or both, is less than the value adopted or assessed or assessable by the
stamp valuation authority of the State Government for such transfer, then the value so adopted or assessed or
assessable shall be deemed to be the full value of consideration and the capital gains will be computed
accordingly. In this context, relaxations have been enumerated from time to time by inserting proviso to the
section, and accordingly where the value adopted or assessed or assessable by the stamp valuation authority of
the state Government does not exceed certain percentage of the sale consideration received or accruing as a result
of the transfer of the land or building or both, then the such sale consideration, be deemed to be the full value of
the consideration for the purpose of calculation of capital gains.
The question under consideration is that whether the deeming provisions of section 50C of the Act can be invoked
in those cases as well, where a person has transferred the rights in land or building or both, accordingly whether
the market value determined by the Registration Authority i.e. stamp duty value to be considered as sale
consideration or not. There can be the various circumstances, where the rights in land or building or both are
transferred, but not the exact land or building or both. For instance, a person has entered into an agreement with a
constructor/builder for purchase of a flat, and he has acquired certain rights at the time of booking flat by making
payment of token money or additional payment over and above the token money. Now, before the completion of
flats, he has transferred those rights to another person, which he has obtained at the time entering into agreement
to book the flat. Another instance could be that an agreement to sale was executed between two parties to transfer
certain rights in the land or building, however no land or building has been transferred by one party to another.
Judicial Pronouncements:
Apropos to the question under consideration, let's recapitulate the view held by the Hon'ble Courts and ITATs as
hereunder:
● In the latest judgement held by the Hon'ble High Court of Karnataka in case of V.S. Chandrashekar v. ACIT
[ITA number 70 of 2015] pronounced on 2nd February 2021, the Assessee entered into an agreement to sale
with a company for purchase of land, however the Assessee was neither handed over the possession of the
land nor Power of Attorney was executed in the favour of the Assessee. With the consent of the Assessee, the
17
 GHAZIABAD BRANCH OF CIRC OF ICAI

company from which land was to be purchased by the Assessee, has sold that land to any other person. The
Assessee was not a party to sale deed; but he was only a consenting witness. The AO has applied the
provisions of section 50C of the Act and computed the capital accordingly in the hands of the Assessee. The
Hon'ble High Court has analysed the provisions of section 2(47) along with section 50C of the Act and found
that section 2(47) uses the expression 'immovable property', however no such expression is used in the
language of section 50C of the Act. A reference of another sections viz. 35(1)(a), 54G(1), 269UA(d) has
been taken by the Hon'ble High Court and by applying the law of strict interpretation, it was held that the
provisions of section 50C would be applicable in the instance case on the company, but not on the individual
Assessee being merely a consenting party. Accordingly, order passed by the Hon'ble ITAT bench of
Bangalore [ITA No. 215 and 243/Bang/2014] has been reversed.
● In the case of Kancast (P) Ltd. v. ITO [2015] 55 taxmann.com 171, the ITAT bench of Pune held that
provisions of section 50C apply only to capital asset being land or building or both, however, said provisions
do not apply in case of transfer of leasehold rights in land or building.
● In the case of M/s Baniara Engs. Pvt. Ltd. v. ITO [ITA No. 635/Kol/2018], the Assessee company has
acquired certain rights booked in a constructed flat and transferred such rights. The Assessee, inter-alia, was
the confirming party to this transaction and received consideration for sale of such rights. The ITAT bench of
Kolkata held that section 50C of the Act does not apply under the facts and circumstances of the case as what
was sold was right in property but not land or building.
● In the case of ITO v. Hari om Gupta [2017] 82 taxann.com 398, the ITAT bench of Lucknow held that the
special provision for computation of sale consideration in accordance with the provisions of section 50C of
the Act cannot be invoked in respect of transfer of leasehold rights in a plot/land.
● In the case of ITO v. Tara Chand Jain [2015] 155 ITD 956, the ITAT bench of Jaipur held that since limited
rights of 'Kashtkar' provided by the State Government on land, could not be equated with ownership of land
or with building or with both, thus long term capital gain could not be calculated by invoking deeming
provisions of section 50C of the Act.
● In the case of Ritz Suppliers (P.) Ltd. v. ITO [2020] 113 taxmann.com 349, the ITAT bench of Kolkata
analysed that since 'land or building or both' had not been transferred but leasehold rights in property were
transferred only, thus, the provisions of section 50C could not be attracted.
Conclusion:
It is settled legal proposition that deeming provision can be applied only in respect of the situation specifically
given and hence cannot go beyond the explicit mandate of a particular section. Thus it is no more res-integra that
it is essential for application of section 50C of the Act, the transfer must be of a capital asset, being land or
building or both. If the capital asset under transfer cannot be described as “land or building or both”, as it is “rights
in land or building or both” then section 50C of the Act will cease to apply.
However, it is pertinent to note that the Hon'ble High Court of Karnataka in the case of V.S. Chandrashekar v.
ACIT (supra) has remitted back the matter to ITAT bench of Bangalore to analyse and decide afresh that whether
the income from sale of rights in land will be chargeable as 'capital gains' or 'business income'.
(The author can be reached at kansalbhimanshu@gmail.com)

18
 GHAZIABAD BRANCH OF CIRC OF ICAI

FAKE INVOICES: PENALTIES AND PROSECUTION

CA Nishant Agrawal
nishant@amitsagrawal.com
+91 9910347994

In this highly compliance driven Tax environment in India, Tax Professionals and Chartered Accountants must be
completely aware of the fake invoice fraud and its integrities, to identify the risk of such activity while
conducting the audit or non-audit assignments and take timely and right action to save his clients or himself from
the consequences associated with this fraud.
The “Invoices” are called as 'fake' when GST invoices are raised by an entity without actual supply of goods or
services or payment of GST.
Fake invoices are raised for the following purposes:
(a) Claiming fraudulent ITC
(b) For showing excess turnover
(c) Transferring credit from one registration to another without any actual supply
(d) Other reasons.
GST authorities have been using deep data analytics, integrated data-sharing and AI and ML tools along with
BIFA to unearth the input tax credit utilisation frauds via fake invoicing and bogus firms. The technology has
enabled the GST ecosystem and intelligence authorities to identify layer-by-layer activities of these fake entities
and their networking without any overreach and able to pinpoint the fraudsters with specific inputs to take
targeted actions and further investigations against them.
In a release, the CBIC said that it has so far registered about 12,000 cases of ITC fraud and arrested 365 people,
yet it is a challenge for the government to curb the fake invoice as usually fake invoices are raised in a more
sophisticated and organized manner making it harder to detect.
In this article, I would like to disclose Penalty and Prosecution provisions in GST Act and Income Tax Act
Sec 122(1A) of CGST Act
Any person who retains the benefit of a transaction mentioned below:
1. Supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with
regard to any such supply;
2. Issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act
or the rules made there under;
3. Takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in

19
 GHAZIABAD BRANCH OF CIRC OF ICAI

contravention of the provisions of this Act or the rules made there under;
4. Takes or distributes input tax credit in contravention of section 20( related to Input Service Distributor), or the
rules made there under.
And at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the
tax evaded or input tax credit availed of or passed on.
Therefore in my opinion any person:
l whosoever commits,
l causes to commit and
l also who retains the benefits arising out of the offences
will be covered under this section.
Demand & Recovery Provisions for the same
Sec 74 of CGST Act
This section applies to cases of tax evasion involving:
l fraud
l wilful misstatement
l suppression of facts
Resulting in:
l unpaid/short paid tax or,
l wrong refunds or,
l wrongly availed/utilized input tax credit
Explanation: For the purposes of this Act, the expression “suppression” shall mean non-declaration of facts or
information which a taxable person is required to declare in the return, statement, report or any other document
furnished under this Act or the rules made there under, or failure to furnish any information on being asked for, in
writing, by the proper officer.
In such cases, the proper officer will serve a show cause notice to the taxpayer. They will be required to pay the
amount due along with interest and penalty.
For cases of fraud, the proper officer is required to issue the notice 6 months before the time limit. The maximum
time limit is 5 years from the due date for filing of annual return for the year to which the amount relates.
Voluntary Tax Payment before Issue of Notice/Statement u/s 74
If the person pays tax along with interest and a 15% penalty based on their own calculations before the
notice/statement is issued and informs the officer in writing, then the officer will not issue any notice and all
proceedings in respect of the said notice will be closed

20
 GHAZIABAD BRANCH OF CIRC OF ICAI

Issue of Notice/Statement
If no Voluntary Payment is made or the officer finds that there is a short payment in case of Voluntary Payment,
they he can issue a notice for the Tax amount/balance amount. If the taxpayer on issue of such Show cause Notice
pays all their dues and a penalty of 25% within 30 days from the date of the notice, then all proceedings in respect
of the said notice will be closed.
Issue of Order
In case the Tax amounts are not paid within 30 days of Notice, The tax officer on considering the taxpayer's
representation calculates interest and penalty and issues an order.
The order must be issued within five years from the due date for filing of the relevant annual return. [For wrong
refunds the order must be issued within five years from the date of the wrong refund].
If the taxpayer pays all their dues and a penalty of 50% within 30 days from the date of order, then all proceedings
in respect of the said notice will be closed.
Explanation . - For the purposes of this section,-
(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other
persons, and such proceedings against the main person have been concluded under section 74, the
proceedings against all the persons liable to pay penalty under sections 122 are deemed to be concluded.

Point of Payment of Penalty Amount of Penalty

Before issue of Notice 15% of tax amount

Within 30 days of Issuance of Notice 25% of tax amount

Within 30 days of Issuance of Order 50% of tax amount

Any other Case 100% of tax amount

Sec 132 of CGST Act

Any person:
l whosoever commits,
l causes to commit and
l also who retains the benefits arising out of the offences
namely: (I have selected offences related to fake invoices only)
l supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act
or the rules made there under, with the intention to evade tax
l issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act,
or the rules made there under leading to wrongful availment or utilisation of input tax credit or refund of tax;
21
 GHAZIABAD BRANCH OF CIRC OF ICAI

l avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit
without any invoice or bill
l collects any amount as tax but fails to pay the same to the Government beyond a period of three months from
the date on which such payment becomes due;
l evades tax, or fraudulently obtains refund and where such offence is not covered above
shall be punishable with Cognizable and Non bailable Imprisonment

Tax amount involved Rs 100-200 lakhs Rs 200-500 lakhs Above Rs 500 lakhs

Bailable or Non-Bailable Bailable Bailable Non Bailable

Jail term Upto 1 year Upto 3 years Upto 5 years

A person shall not be prosecuted for any offence under this section except with the previous sanction of the
Commissioner.
Repeat offenders
If the offense is repeated a second time then punishment can extend up to 5 years with fine. A person cannot be
prosecuted without the prior sanction of the Commissioner.
Sec 271AAD of Income Tax Act
When the Assessing Officer finds that in the books of accounts maintained by a person there is-
(i) a false entry; or
(ii) an omission of any entry which is relevant for computation of total income of such person, to evade tax
liability,
he may impose as penalty a sum equal to the aggregate amount of such false or omitted entry
Assessing officer has been given a discretionary power to impose penalty.
Not only the person but "Any other person" who causes the first person to make false entry or omit or causes to
omit any entry shall be liable to pay similar penalty.
Explanation:
False Entry includes use or intention to use
l Forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or
l Invoice in respect of supply or receipt of goods or services or both issued by the person or any other person
without actual supply or receipt of such goods or services or both; or
l Invoice in respect of supply or receipt of goods or services or both to or from a person who does not exist.

22
 GHAZIABAD BRANCH OF CIRC OF ICAI

E-INVOICING SIMPLIFIED
CA. Sumit Bansal
FCA & Insolvency Professional

th
1. Who is required to generate e-invoicing: Vide Notification No. 05/2021 – Central Tax dated 8 Mar
2021, e-invoicing has been mandated for suppliers whose aggregate turnover in the any of the previous
st
financial years exceeds Rs 50 crores w.e.f. 1 Apr 2021. The suppliers > 100 crore turnover are already
covered w.e.f 1st Jan 2021.
2. Common portal for generation of e-invoice https://einvoice1.gst.gov.in
3. Registration: Users who are already registered on the e-way bill portal need not to again register on the e-
invoice system. User can use EWB login credentials to login at e-invoice system.
4. What is E-invoice: Any invoice containing IRN and QR Code is an e-invoice.
5. What is IRN: The Invoice Reference Number (IRN) is a unique number (also known as hash) generated by
the e-invoice system using a hash generation algorithm. For every document viz., an invoice or debit or
credit note to be submitted on the e-invoice system, a unique 64-character Invoice Reference Number
(IRN) shall be generated which is based on the computation of hash of GSTIN of supplier of document
(invoice or credit note etc.), Year, Document type and Document number. This shall be unique to each
invoice and hence will be the unique identity for each invoice for the entire financial year in the entire GST
System for a taxpayer.
6. What is QR Code: As IRN is generated, simultaneously a QR code containing the unique IRN (hash)
along with some important particulars of invoice will also be generated.
7. Where to mention the QR Code? The Signed QR Code has to be printed by the tax payer on the invoice
copy issued to buyer. However, Printing of QR code on separate paper is not allowed. Printed QR code
shall be clear enough to be readable by a QR Code reader. Size and its placing on invoice is upto the
preference of the businesses.
8. How to generate: There are two modes for generation of IRN
a) Using excel offline tool
b) Using API integration (software to software)
The tax payer has to upload the complete invoice details, prepared manually or through internal
ERP/accounting system, as per Form GST-INV-01, and after due validations of the data, the IRP returns the
IRN with the signed invoice and QR code back to the tax payer.
9. Modification / Cancellation: The IRN, once generated cannot be modified or deleted. However, if IRN is
generated with wrong information, it can be cancelled. Once cancelled, the same document (with same
document number) can't be reported again for generation of IRN. The cancellation is required to be done

23
 GHAZIABAD BRANCH OF CIRC OF ICAI

within 24 hours from the time of generation.

10. What documents require e-invoicing: documents of Invoices, Debit Notes and Credit Notes for B2B and
export transactions.
11. What documents do not require e-invoicing: B2C, Bill of supply and delivery challan.
12. Details captured by the QR code: GSTIN of Supplier, GSTIN of Recipient, Invoice number as given by
Supplier, Date of generation of invoice, Invoice value (taxable value and gross tax), Number of line items,
HSN Code of main item (the line item having highest taxable value), Unique Invoice Reference Number
(hash), Date of generation of IRN.
13. What are the consequences of not issuing E-invoice? (a) A supplier who is mandatorily required to issue
E-invoice, may be penalized Rs 20,000 per invoice for not issuing normal invoice instead of e-invoice (b)
Since an invoice other than e-invoice issued by a supplier who is mandatorily required to issue E-invoice is
not a valid document, the recipient may be denied the corresponding ITC.
14. Is E-invoice required to be issued even for B2B supplies that are below Rs 50,000 in value? Yes, if
supplier is covered, then all B2B invoices have to be e-invoice. Though in such case the supplier may chose
to not fill Part -B of auto generated E-way bill.
15. What is the procedure in case of B2C invoices: As per Notification No.14/2020- Central Tax dated
st
March 21 , 2020 all taxpayers bearing an annual turnover of over Rs 500 Crores must generate dynamic
QR Codes for their B2C invoices. E-invoicing is not required for B2C invoices.
However, the CBIC vide Notification No. 89/2020 – Central Tax dated November 29, 2020 has waived the
penalty leviable under Section 125 of the CGST Act, 2017 (i.e. general penalty) for non-compliance of
provisions of Notification No. 14/2020–Central Tax dated March 21, 2020 (QR Code provisions) between
the period from December 1, 2020 to March 31, 2021, subject to the condition that the said person complies
with the provisions of the said notification from April 1, 2021.

INCOME TAX HELP DESK'S MEMBERS

CA. Jitender Goel CA. Bhupesh Gupta CA. Vaibhav Goel

Mob.: 9811242760 Mob.: 9810636822 Mob.: 92056 31051
E-mail: cajitendergoel@gmail.com E-mail: ca.bhupeshgupta@gmail.com E-mail : goelvaibhav1993@gmail.com

CA. Meetanshu Singhal CA. Rakesh K. Garg CA. Rajiv Ahuja

Mob.: 9811661999 Mob.: 9810398068 Mob.: 9958622994
E-mail: cameetanshu@gmail.com E-mail: cagargrkumar@gmail.com E-mail: rajeev.ahuja@ahujalegal.com
24
 GHAZIABAD BRANCH OF CIRC OF ICAI

BANK AUDIT HELP DESK'S MEMBERS

CA. Pawan Goel CA. Pradeep K. Gupta CA. Pradeep S. Sahni

Mob.: 9810195084 Mob.: 9810040456 Mob.: 9810036941
E-mail: pawankgoel1@gmail.com E-mail: capradeepkgupta@gmail.com E-mail:sahnibansalca@yahoo.co.in

CA. Anirudh Agarwal CA. Sandeep Goel CA. Prabuddha Gupta

Mob.: 9811291432 Mob.: 9810777405 Mob.: 9313988492
E-mail: Anirudhagarwal2007@yahoo.co.in E-mail: casandeepgoel@yahoo.com E-mail: prabuddha79@yahoo.com

GST HELP DESK'S MEMBERS

CA. Rajat Sachdeva CA. Anshul Garg CA. Ankur Goel

Mob.: 9958285831 Mob.: 9808060806 Mob.: 9811142897
E-mail: rajat212@gmail.com E-mail: anshul.garg194@gmail.com E-mail : agoel2894@gmail.com

CA. Shashank S. Gupta CA. Vedant Swaroop CA. Manoj Goyal

Mob.: 9711012424 Mob.: 9999888044 Mob.: 9810148436
E-mail: shashankgupta999@gmail.com E-mail: vedantswaroop@gmail.com E-mail: manojgoyal@rhms.in

COMPANY LAW HELP DESK'S MEMBERS

CA. Gulshan Thapar CA. Loveesh Gupta CA. Abhay Kansal

Mob.: 9891242300 Mob.: 9810927627 Mob.: 9990028500
E-mail: gulshanth@gmail.com E-mail: loveesh.gupta@gmail.com E-mail: ysaekansal@gmail.com

25
 GHAZIABAD BRANCH OF CIRC OF ICAI

LATEST AMENDMENTS
1) HSN Codes Mandatory w.e.f 1st April 2021
Notification No. 78/2020 – Central Tax, dated 15.10.2020
• The Notification has been issued to make HSN code mandatory up to 4 digits in the B2B invoices with effect
from 01.04.2021 issued by taxpayers whose aggregate turnover in the preceding financial year is upto Rs. 5
crores.
• However, For the taxpayers whose turnover in the preceding financial year is more than Rs. 5 crores, HSN
code is mandatory up to 6 digits in invoices with effect from 01.04.2021.
• The only exemption is given to the registered persons whose turnover in the preceding financial year is less
than 5 Crores is that they need not mention the HSN code in the Tax Invoice in respect of supplies made to
unregistered persons.
• For exports 8 digits to be mentioned in export invoices and is also a requirement as per Foreign Trade
Policy;
• 49 chemicals as per Notification no. 90/2020 dated 01/12/2020 have to be mandatorily shown under 8 digits
code;
• There is a fine of Rs. 50,000/- (Rs. 25,000/- under each of CGST + SGST Acts) for committing a mistake
related to this particular scenario under section 125 of the GST Acts.

2) MCA notifies new FORM NO. MGT-7 – Annual Return (other than OPCs and Small
Companies and FORM NO. MGT-7A – Abridged Annual Return for OPCs and Small
Companies for Financial Year 2020-21.
Central Government has prescribed an abridged form of annual return for “OPC and small company” by
amending the provisions of Companies (Management and Administration) Rules, 2014 which came into
force from 05th March, 2021.
Prior Amendment:
• Every company shall prepare its annual return in Form No. MGT.7.
• The extract of the annual return to be attached with the Board’s Report shall be in Form No. MGT.9
Post Amendment:
• Accordingly, w.e.f. 05.03.2021 every company, except OPC and small company, shall file its annual return
in Form No- MGT-7 whereas OPC and small company shall file their annual return from FY 2020-21 in
Form no- MGT-7A.
• Further, the requirement of attaching the extract of the annual return with the Board’s Report shall be in
Form No. MGT.9. has been omitted in Rule 12 of the said rules.
26
 GHAZIABAD BRANCH OF CIRC OF ICAI

3) E-Invoicing under GST

• E-invoicing under the GST regime will become mandatory for entities with a turnover of Rs 50 crore and
more from April 1, 2021 for business to business transactions.
• e-invoicing will be applicable to businesses exceeding the Rs.50 crore turnover limit in any of the financial
years between 2017-18 to 2019-20. Earlier, This limit was Rs. 100 Crores
• Insurance company, Banking company, Financial Institution, NBFCs, GTA, Supplier of passenger
transportation services, Supplier of services by way of admission to the exhibition of cinematograph films
in multiplex screens and Special Economic Zones (SEZs) are excluded from issuing e-invoice vide
notification No. 13/2020-CT dated 21st Mar’ 2020

4) Extension of Condonation Scheme to regularize UDINs

• Condonation Scheme to regularize UDINs provided by the ICAI vide its announcement dated 31st January
2021 which ended on 28th February 2021 is now being extended upto 31st March 2021. Whereby, all the
missed UDINs between the period 1st February 2019 to 10th March 2021 can now be generated upto 31st
March 2021 and this is in continuation to the Condonation Scheme announced previously.
• However, it may be noted that for all the documents signed from 11th March 2021 onwards, the original
guidance for generation of UDIN, i.e. within 15 days of signing the documents will be applicable.

5) Updation Regarding Selection Of Core Business Activity For Every Registered Person
On GST Portal:
• The Goods and Service Tax Network (GSTN) has enabled the new feature to select Core Business Activity
enabled on GST Portal.
• The Core Activities are Manufacturer, Trader, Retailer, Service Providers & Others.
• If more than one business Activity or all activities are applicable, kindly select your core business activity.
In case of change in Business Activity, go to MY PROFILE > CORE BUSINESS ACTIVITY STATUS
select the changed activity.

Compiled by CA Shubham Jindal

27
GHAZIABAD BRANCH OF CIRC OF ICAI

Compiled by CA Gaurav Mittal

28
GHAZIABAD BRANCH OF CIRC OF ICAI

BUDGET SEMINAR

29
 GHAZIABAD BRANCH OF CIRC OF ICAI

Appointment of New Office Bearers of Ghaziabad Branch

30
GHAZIABAD BRANCH OF CIRC OF ICAI

Annual Function

31
 GHAZIABAD BRANCH OF CIRC OF ICAI

Study Circle Meeting on Recent GST Amendments

32
 GHAZIABAD BRANCH OF CIRC OF ICAI

INVITATION FOR WRITE UP / ARTICLES

We are thankful to all the members who contributed articles for our E-Newsletter "CA FLYER".
Members are invited to send their articles on Professional Topics for publication in the newsletter.
Hope You have liked our initiative
Please write us at: enewsletter@icaigzb.org

SUGGESTIONS / FEEDBACK
Dear readers, attempts are being made to make it more informative and enjoyable, your feedback and
suggestions are valuable to us. So, if you have any feedback or suggestions, please write to us at
enewsletter@icaigzb.org
Your feedback is important to us!!!

GHAZIABAD BRANCH OF CIRC OF ICAI

Yamunotri Complex, IInd Floor, A-12, Ambedkar Road, Ghaziabad (U.P.)

Phone: 0120-4114478
E-mail: enewsletter@icaigzb.org
Website: www.icaigzb.org

DISCLAIMER

For private circulation only

This newsletter is meant for the sole purpose of creating awareness and must not be used as a guide for taking or
recommending any action or decision, commercial or otherwise. The reader must do his own research and / or seek
professional advice if he intends to take any action or decision in the matters covered in this newsletter. Further the
views and opinions expressed or implied in the newsletter are those of the authors and do not necessarily reflect
those of Ghaziabad branch of CIRC of ICAI.

33
GHAZIABAD BRANCH OF CIRC OF ICAI

34
GHAZIABAD BRANCH OF CIRC OF ICAI

35