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                                                                        What is a Producer Company?

                                                                        In generic terms, producer companies can be said a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability.

                                                                        Which law governed the Producer Company?

                                                                        The formation and regulation of Producer Company is governed under the provisions of Sections 581A to 581ZL of Companies Act, 1956, read with Companies Act, 2013, and the rules made there under.

                                                                        Producer Company can be recognized as a Private Company or Public Company?

                                                                        The name of every Producer Company ends with Producer Company Limited which reflects that it is a Public Company but according to clause (5) of the section 581C of Companies Act, 1956, on registration the Producer Company shall become a body corporate as if it is a Private Company and shall not under be deemed as a Public Company any circumstances

                                                                        What is the objective of Registration of Producer Company and how this is beneficial to Society at Large?

                                                                        The main objective of the formation of producer company shall be :

                                                                        • To Produce, harvest, procure, grading, , handling, marketing, selling, export of primary production of the Members or import of goods or services for their benefit,
                                                                        • Processing including preserving, drying, distilling, brewing, canning, & packaging of the produce of its Members.
                                                                        • To do the Manufacturing, sale or supply of machinery, equipment or consumables mainly to its Members.
                                                                        • To provide education on the mutual assistance principles, to its Members & others.
                                                                        • Providing technical services, consultancy services, training, research & development & all other activities for the promotion of the interests of its Members.
                                                                        • Generation, transmission, & distribution of power, revitalization of water resources, their use, conservation & communication relatable to primary production.
                                                                        • Insurance of producers or their primary produce.
                                                                        • Promoting techniques of mutuality & mutual assistance.
                                                                        • Welfare measures or facilities for the benefit of Members as may be decided by the Board.

                                                                         

                                                                        Basic Requirements for Producer Company Registration

                                                                        1. A producer can be formed with 10 or more producers (Individuals) but there is no upper limit on the number of members or, any 2 or more producer institutions can form a producer company.
                                                                        2. The minimum capital requirement for the formation of Producer Company is Rs.5,00,000.
                                                                        3. The producer company can be formed with minimum 5 director and maximum 15 directors in the company.
                                                                        4. The Producer cannot be converted into a public company but it can be converted into a multi-state co-operative society.

                                                                         

                                                                        Documentation required to incorporate a Producer Company From All Directors and Shareholder:

                                                                        Following documents are required for the formation of Producer Company:

                                                                        1. PAN Card of all Directors and Shareholders
                                                                        2. Latest Bank Statement/Telephone or Mobile Bill (As an Address Proof)
                                                                        3. Voter’s ID/Passport/Driver’s License (As an Id Proof)
                                                                        4. Passport-sized photograph of all directors and shareholder
                                                                        5. Email Id and Contact Number of all directors and shareholders
                                                                        6. Copy of any latest Utility bill (Electricity Bill/ Mobile Bill/ Gas Bill as an Registered Office proof)
                                                                        7. Copy of Rent agreement with NOC from the owner. (registered Office additional document)

                                                                         

                                                                        Procedure to incorporate a Producer Company

                                                                        1. The first step is to create the Digital Signature Certificate (DSC) of all the Directors and Subscribers.
                                                                        2. Then the name of the production company is to be finalized. For that, Application for Reservation of Unique Number to be filed to the Registrar of Companies (ROC) by giving two names. The Producer company shall have the words PRODUCER COMPANY LIMITED at the end of its name.
                                                                        3. After the name is approved by the ROC, the following documents are to be prepared:

                                                                        (i)  The Memorandum of Association is to be drafted by incorporating all the objects that the company intends to follow.

                                                                        1. The Articles of Association is to be drafted containing all the by-laws of the company.
                                                                        2. A declaration by a professional has to be drafted in the format of form INC – 8
                                                                        3. An affidavit has to be signed by all the subscribers of the proposed company declaring their legal competency to act as the subscribers.
                                                                        4. A utility bill and a NOC have to be taken from the owner whose address is to be used as the registered office of the company.
                                                                        5. The directors will give their consent to act in the Form DIR – 2 and details in DIR – 8
                                                                        6. After obtaining name approval, an incorporation application is filed in SPICE+ form along with    the necessary documents such as MOA, AOA, affidavit, and declaration with the MCA            (Ministry of Corporate Affairs).
                                                                        7.   After verification of the incorporation form, Certificate of Incorporation shall be issued by the concerned department.

                                                                         

                                                                        1. Open a Bank Account with minimum two officially nominated signatories in the name of the Company and deposit the paid up capital in company bank account and file form Inc-22 A within 180 days from the date of incorporation.
                                                                        2. After obtaining statement of Bank Account of the company, we need to file form 20A for commencement of the Company Business.

                                                                        Benefits of Producer Company:

                                                                        Following are the major benefits of formation of Producer Company:

                                                                        1. The members of the Producer Company receive the bonus in the ratio of the shares held by them.
                                                                        2. The Producer Company can avail the Tax benefits subject to the agriculture activity undertakes.
                                                                        3. Initially the members receive the value of the products supplied and this amount given at later stage in cash or in any kind.
                                                                        4. The members of Producer Company are primary producers and they can get financial assistance from time to time through credit facility related to business activity, loans and advances against any security mentioned in the articles.

                                                                        What is ROC filling and why we file the annual return of companies?

                                                                        Annual ROC Filing is filing certain forms to the ROC (Registrar of Companies). They are done annually and are done under the direction of The Companies Act, 2013. They are important and can’t be skipped, because under the Companies Act, 2013 every company shall be required to file an annual return. Delay or non-filing of return attracts heavy penalties.

                                                                        Annual return forms and their due dates for private/Public limited companies other than OPC?

                                                                        •             Form AOC 4 is used to file for Annual Accounts of the companies. The due date is 30th days from the conclusion of the Annual General Meeting (AGM).

                                                                        •             Form MGT 7 is used to file the Annual Return of the companies. The due date is 60th days from the conclusion of the Annual General Meeting (AGM).

                                                                        Time to held Annual general meeting

                                                                        In case the company is newly incorporated and the meeting of the members is the first annual general meeting (AGM), then in that case company allow to be held its first annual general meeting within a period of nine months from the date of closing of the first financial year of the company, and

                                                                        In any other case, within a period of six months, from the date of closing of the financial year and not more than fifteen months shall elapse between the two annual general meetings of a company.

                                                                        Further, Registrar of Companies may extend the time within which any annual general meeting, other than the first AGM, shall be held, by a period not exceeding three months, if the company file an application with the registrar in any special reason of non conducting AGM within the time frame allowed under the Companies Act 2013.

                                                                        Documents need to prepare for Annual Filling form of ROC filling:

                                                                        1.  Copy of the signed Financial Statements of the Company including Accounting policy and Auditor Report;

                                                                        2.  Copy of the Signed Directors Report and MGT-9 (EXTRACT OF ANNUAL RETURN);

                                                                        3.  Notice of Annual General Meeting;

                                                                        4.  Copy of List of Shareholders;

                                                                        The procedure of filling form AOC-4 for Annual Accounts of the companies

                                                                        1.            First, we need to download e-form AOC-4 from the MCA website.

                                                                        2.            After download the e-form AOC-4 applicant needs to fill all the required information in it like:

                                                                        (i)            Corporate Identification Number of the company;

                                                                        (ii)           Financial Year Starting and end date;

                                                                        (iii)          Date of AGM and date of the due date of AGM;

                                                                        (iv)          Details of Directors and Auditor who has signed the financial statement of the company;

                                                                        (v)           Details of the Directors who have signed the Director report of the company;

                                                                        (vi)          Details of the Auditor of the company;

                                                                        (vii)         Details of the Holding, Subsidiary and associates company;

                                                                        (viii)        Particulars of the Financials statement of the company;

                                                                        (ix)          Details related to cost records and cost audit if applicable;

                                                                        (x)           Details of the Corporate Social Responsibility if applicable;

                                                                        (xi)          Details of the Related Party Transactions;

                                                                        (xii)         Details of remarks made by auditors and applicability of CARO;

                                                                        3.            The applicant needs to affix the DSC of Authorized director in e-form AOC-4 after fill all the required information and after attaching all required attachments.

                                                                        4.            If the company is a non-small company then practicing professional DSC is also needs to affix in e form AOC-4 FORM.

                                                                        5.            Applicants need to submit e-form AOC-4 with the MCA website after affix the DSC and need to make the payment as required by the department. After making the payment of e-form the                      MCA department issue copy of the challan in reference to a payment made by the applicant.

                                                                        The procedure of filling e-form MGT-7 for Annual Return of the companies

                                                                        1.            First, we need to download e-form MGT-7 from the MCA website.

                                                                        2.            After download the e-form MGT-7 applicant needs to fill all the required information in it like:

                                                                        (i)            Corporate Identification Number of the company;

                                                                        (ii)           Financial Year Starting and end date;

                                                                        (iii)          Date of AGM and date of the due date of AGM;

                                                                        (iv)          Details of the principal business activities of the company;

                                                                        (v)           Particulars of holding, subsidiary, and associate companies;

                                                                        (vi)          Details of the share capital, debentures and other securities of the company;

                                                                        (vii)         Details of stock split/consolidation during the year;

                                                                        (viii)        Details of shares/debentures transfers;

                                                                        (ix)          Details of Outstanding Indebtedness including debentures;

                                                                        (x)           Particulars of shareholding pattern, number of promoters, members, debenture holders;

                                                                        (xi)          Details of directors and key managerial personnel;

                                                                        (xii)         Details of the meetings of members/class of members/board/committees of the board of directors;

                                                                        (xiii)        Details of remuneration of directors and key managerial personnel;

                                                                        (xiv)        Details of penalties/punishment imposed on company/directors /officers if any;

                                                                        3.            The applicant needs to affix the DSC of Authorized director in e-form AOC-4 after fill all the required information and after attaching all required attachments.

                                                                        4.            If the company is a non-small company then practicing Company Secretary DSC is also needs to affix in e form MGT-7 FORM.

                                                                        5.            Applicants need to submit e-form AOC-4 with the MCA website after affix the DSC and need to make the payment as required by the department. After making the payment of e-form the MCA department issue copy of the challan in reference to a payment made by the applicant.

                                                                        As the whole world is fighting against pandemic Covid19, and as in last few years Ministry has received requests from various stakeholder to provide a grant to fulfil necessary pending compliance with ministry without being subject to higher penalties on account of any delay.

                                                                        The scheme “Company Fresh Start Scheme 2020” is launched to provide a relaxation to file the pending compliance without penalty of certain filings delayed by the companies.

                                                                        Who is eligible to avail the fresh start scheme 2020
                                                                        Those Companies who have failed to file the mandatory ROC compliance in past years are eligible to avail the scheme benefit and can file the returns now without being subject to penalty. The aim of the scheme is to grant a chance to defaulting companies to make their company compliant with Ministry.
                                                                        Defaulting Company means a company who has failed in the filing of any return, any of statement or any of document including annual statuary document.
                                                                        This scheme does not provide this grant to “officer in default”.
                                                                        Companies have a chance to file their pending compliance till 30th September 2020.
                                                                        The scheme does not provide any other immunity for any default other than annual filing related default.

                                                                        Following forms can be filed under the fresh start scheme:
                                                                        Annual Return- MGT-7
                                                                        Financial statement- AOC-4
                                                                        PAS-3
                                                                        MGT-14
                                                                        ADT-1
                                                                        Following forms are not eligible to proceed under the scheme
                                                                        SH-7- Increase in Authorized Capital, (CHG-1, CHG-4, CHG-8 or CHG-9)

                                                                        The scheme is available for Inactive companies also; Inactive company is defined by act “A Company not been carrying any business or operations in last two years. 

                                                                        However, the following cases are not eligible to avail the benefit of Fresh Start Scheme. 

                                                                        If ROC has already under section 248 of companies act 2013 issued a final notice for striking off the name of company.
                                                                        If the company has filed the form for striking off voluntary.
                                                                        If Company has been amalgamated under the scheme of compromise & arrangement;
                                                                        If the status of the company is dormant under section 455 of the companies act 2013.
                                                                        And a vanishing company: A company who failed to file the returns with a stock exchange for two constant years, bot maintain its registered office of the company as notified to ROC or stock exchange, or directors are not traceable.

                                                                        As per the scheme, If any company, failed to file INC-22 Active Form, is also allowed to file INC-22 Form without penalty to proceed further filings.
                                                                        Further, the scheme provides relaxation to directors also for getting their DIN activated through this scheme. Directors with the status of DIN deactivated may also file DIR-3KYC/DIR-3KYC-Web within the tenure of the Scheme without being subject to penalty.

                                                                        In the following cases, CFSS 2020 scheme does not provide waive off of prosecution/penalty. 
                                                                        Court’s judgement is pending on appeal’s matter.
                                                                        Court’s judgement is pending on the matter of management dispute
                                                                        Where the court’s final judgement has been issued and no further appealing shall be entertained against the order as on 1st April 2020
                                                                        Where the court has given the final judgement on imposing penalty and no further appealing shall be entertained against the order as on 1st April 2020.

                                                                        Following are the effect of Company Fresh Start Scheme
                                                                        All penalty and an additional fee are waived off on all returns during the period of CFSS.
                                                                        Immunity Certificate shall be given to the company by Authority.
                                                                        Company shall apply for withdrawing for the appeal made against any prosecution launched.
                                                                        Pending prosecution against such forms /returns shall be withdrawn by ROC
                                                                        Proceedings of adjudication of penalties u/s 454 shall be withdrawn by ROC

                                                                        Consequences If the compliances are not filed under the CFSS scheme
                                                                        The penalty shall be imposed on the forms as normal fee
                                                                        If the filings are pending from constant years ROC may strike off the company
                                                                        Directors/Officers in default may be liable for prosecution/heavy penalty

                                                                        What is Reverse charge Mechanism (RCM) under GST?

                                                                        GST reverse charge mechanisms (RCM) means that the GST is to be paid and deposited with government by the recipient of goods /services and not by the supplier of Goods/services.

                                                                        However, Under the RCM, the receiver of goods/services pay the GST to the supplier of goods/services and such supplier then deposit the GST with the Govt.

                                                                        When is there Reverse charge Mechanism applicable?

                                                                        • Supply from an Unregistered dealer to a Registered dealer(section 9(4)):-If a person not registered under GST, supplies goods or services to a person who is registered  under GST, then in such cases RCM would get applicable i.e the GST would be required to be paid by the registered  person directly to the Govt on behalf of the supplier. However, in case of supply of exempt goods/services, GST under RCM shall not be applicable.
                                                                        • E-commerce operator will be liable for RCM. If the e-commerce operator absence in the taxable territory, then a person representing such electronic commerce operator for any purpose will be liable to pay tax. If the operator will appoint a representative who will be held liable to pay GST.
                                                                        • RCM is also applicable on certain goods and services which are notified by the govt. reverse charge under section 9(3) is applicable for both inter-state as well as same state transaction .The goods and services on which GST shall be levied under the RCM.

                                                                        Some List of goods/services under reverse charge mechanisms (RCM)

                                                                        • Reverse charge on Goods under section 9(3)
                                                                        Nature of supply of goods Supplier of goods Recipient of supply
                                                                        Supply of Cashew nuts, not shelled or peeled Agriculturist Any registered person

                                                                         

                                                                        Bidi wrappers leaves(tendu) Agriculturist Any registered person

                                                                         

                                                                        Tobacco leaves Agriculturist Any registered person

                                                                         

                                                                        Silk yam Any person who manufactures silk yarn from raw worm cocoons for supply of silk yarn Any registered person

                                                                         

                                                                        Supply of lottery tickets State government, union Territory Lottery distributor

                                                                        • Reverse charge on services under section 9(3)

                                                                        Nature of supply of services Supplier of Service Recipient of service
                                                                        Any service supplied by any person who is in a non-taxable territory Any person located in Non-taxable territory Any person located in taxable territory other than non-taxable territory
                                                                        Supply of services by a goods transport agency (GTA) who has not paid central tax at the rate of 6% in respect of transportation of goods by roads Goods Transport Agency (GTA) Any person registered under CGST, SGST and IGST Act

                                                                         

                                                                        Anybody co-operates established, by or under any law

                                                                         

                                                                        Any partnership firm if registered or not under any law

                                                                         

                                                                        Any Casual person located in the taxable territory

                                                                        Services provided by individual advocate by way of representational services before any court, tribunal, or authority by way legal services, to a Business Entity Any individual Advocate including or firm of advocates Any Business entity located in the taxable territory
                                                                        Services provided by an Arbitral tribunal. Any Arbitral tribunal Any Business entity located in the taxable territory
                                                                        Services provided by an insurance agent An insurance agent Any person carrying on the insurance Business.

                                                                        Income Tax Assessment

                                                                        Every year all the citizens in India are expected to submit their income tax return furnishing their income details, tax information along with the Investment details to the Income Tax Department. After the submission of IT returns, the Income Tax Department starts processing the return to check on its accuracy, which is called “Assessment”, under the Income Tax Law. As per section 144, this Assessment also includes re-assessment and best judgement assessment.

                                                                        The various forms of assessment are as follows:

                                                                        1. Self-Assessment
                                                                        2. Summary Assessment
                                                                        3. Regular Assessment
                                                                        4. Best Judgement Assessment
                                                                        5. Income Escaping Assessment

                                                                         

                                                                        Self-Assessment u/s 140A

                                                                        This type of Income Tax Assessment is the one in which the assessee calculate the tax by himself, usually to accompany his calculation with payment of the amount he regards as due.

                                                                        Tax payable is required to be furnished under section 139 or section 142 or section 148 or section 153A, after taking TDS and deducting Advance tax paid.

                                                                        Time limit: There are no specific dates to pay Self Assessment Tax. Payment of Self Assessment Tax of the returns should be paid within 31st July of every year.

                                                                        Self Assessment Tax can be paid by filling a tax payment challan ITNS 280. Challans are available in the designated branches of banks associated with the Income Tax Department or online NSDL website.

                                                                        Assessee can pay tax online through different websites.

                                                                         

                                                                        Summary Assessment u/s 143(1)

                                                                        Under this section, Income tax department sent intimation u/s 143(1) to the taxpayer. A Comparative Income Tax computation is sent by the Department. In income tax assessment, total income or loss incurred is computed.

                                                                        Summary Assessment”, it is not an actual assessment. Under this section, the Return of Income filed by assessee will not be scrutinized, however whatever, is claimed by assessee in his ROI will be accepted by assessing officer after only confirming arithmetical accuracy.

                                                                        1. The total income or loss shall be computed after making the following adjustments, namely:—

                                                                        (i) Any arithmetical error in the return; or

                                                                        (ii) An incorrect claim, if such incorrect claim is apparent from any information in the return;

                                                                        (iii) Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;

                                                                        (iv) Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

                                                                        (v) Disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or

                                                                        (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return. However no adjustment shall be made under this  in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018

                                                                        However no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode:

                                                                        The response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made.

                                                                        2 .the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a);

                                                                        3. the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest and fee, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest and fee;

                                                                        4. an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and

                                                                        5. The amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee:

                                                                        Assessment u/s 143(1) can be made within a period of one year from the end of financial year in which the return is filed.

                                                                         

                                                                        Regular Assessment (Section 143)

                                                                        Regular assessment is the assessment of the return filed by the assessee by giving an opportunity to the assessee to substantiate the declared income and expenses and the claims of deductions, losses, exemptions, etc. in the return with the help of evidence.

                                                                        The assessing officer gets the opportunity to conduct an inquiry and aims at ascertaining whether the income in the return is correctly shown by the assessee or not. The claims for deductions, exemptions etc. are legally and factually.

                                                                        If there is any omission, discrepancies, inaccuracies, etc. Then the assessing officer makes an own assessment for the assessee by taking all facts in mind.

                                                                        Type of cases

                                                                        • Manual scrutiny cases.
                                                                        • Not filing Income Tax Return.
                                                                        • State lesser income or more tax as compared to earlier year.
                                                                        • Mismatch in TDS credit between claim and 26AS.
                                                                        • Non-declaration of exempted income.
                                                                        • Claiming for large refunds in return of Income.
                                                                        • Taking double benefit due to the Job change.

                                                                        Compulsory Scrutiny cases as:

                                                                        • 1: relating addition in the earlier assessment year of Rs. 10 lakhs/Rs. 10 crore excess on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an appellate authority may come under compulsory scrutiny.
                                                                        • 2: CASS (Computer Added Scrutiny Selection) cases are also selected under compulsory cases. All such cases are separately intimated by DGIT (system) to the jurisdictional concerned.
                                                                        • 3: Where specific and verifiable information pointing on tax evasion is given to Government Department/ Authorities.
                                                                        • 4: Rejection of the approval u/s 10 (23C) of the Act or withdrawing the approval already is passed by the authority, yet the assessee found claiming tax exemption under the aforesaid provision of the Act.

                                                                         

                                                                        Best Judgement Assessment

                                                                        (1) If any person—

                                                                        (a)  fails to make the return required under sub-section (1) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or

                                                                        (b)  fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or

                                                                        (c)  Having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143,

                                                                        The Assessing Officer, after taking into account all relevant material which the Assessing Officer has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment:

                                                                        Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment :

                                                                        Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.

                                                                        (2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

                                                                        Also keep in mind, after giving a chance to the assessee of being heard, then only best judgment assessment can be made.

                                                                         

                                                                        Income Escaping Assessment

                                                                        If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned.

                                                                        Time Limit – Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.

                                                                        Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:

                                                                        Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.

                                                                         

                                                                        In Companies (Incorporation) Fourth amendment 2018 MCA has re-mandated that every company registered after 02-11-2018 has to file a declaration in the Form-20A along with bank statement showing deposit of paid-up capital by the shareholders within 180 days from the date of incorporation certificate received.

                                                                        Declaration:

                                                                        The declaration shall contain the details that every subscriber has paid the value of shares agreed in the memorandum and the company has commenced its business operations. Company shall file this declaration in ROC within 180 days from the date of company incorporation.

                                                                        OR

                                                                        And also the Company has to file INC-22 for verification purpose of the registered office If the company had introduced a temporary address for the registered office address at the time of company registration.

                                                                         

                                                                        How to process:

                                                                        Company shall open it’s  current account
                                                                        All subscriber shall deposit the amount against of shares value they hold as per the memorandum
                                                                        The declaration shall be filed with ROC with above details
                                                                        Company will ensure that the registered office details were filed with ROC having no status of temporary address.

                                                                        Documents Required:

                                                                        Bank Statement having entries of credits received from all subscribers as mentioned in the memorandum of the company

                                                                        If sectoral regulator regulates the company
                                                                        Regulator Name
                                                                        Registration Number/Letter Number
                                                                        Date of Registration

                                                                        If the company hold the status of Non- Banking Financial Companies has to submit Registration Certificate issued by RBI

                                                                        The consequence of non-compliance:

                                                                        If any company is failed to file the INC-20A Form within prescribed time period ROC shall impose a penalty up to Rs.50000/- on company and Rs. 10000/- on Director, however, the penalty will be imposed on a daily basis by Rs. 1000/- per day and has to be borne by every officer in default. The penalty shall not be more than 100000/- and this is the maximum penalty if any company is failed to comply with this form. Furthermore, ROC may strike off the company.

                                                                        Company will not be able to borrow money and take investment.

                                                                        Form:

                                                                        INC20 and INC22 ( INC-22 is only necessary to be filed if the registered office address of the company was introduced as temporary address of registered office address.

                                                                        FAQ

                                                                        Is it mandatory for all companies to file the Form INC20
                                                                        Ans – Yes, This form is mandatory to be filed by all companies and needs to obtain commencement certificate.

                                                                        Who is not required to file
                                                                        Ans- Companies registered with limited by guarantee and not having a share capital
                                                                        or
                                                                        Companies registered before 2018 November 2nd.

                                                                        Due date of filing the form INC20
                                                                        Ans- INC20 Form should be filed within one hundred eighty days from the day company has obtained incorporation certificate.

                                                                        If the Bank statement is not available can form be filed?
                                                                        Ans- Yes, the form can be filed with the details of NEFT/IMPS. The value of shares should be transferred to the company’s account from the account of the subscriber.

                                                                        Why ROC has re-mandated INC20 Form
                                                                        In the last few years, ROC has experienced that newly incorporated companies do not having any operation even not proceed for the opening of the current account and later companies become inactive.
                                                                        Now new companies will have to wait to commence their business operation until they make a declaration to ROC in INC20 form.

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