‘Corporate Governance’ — these words have been hitting the headlines of financial magazines for quite some years, particularly post Enron, and in India they have once again triggered debates post Satyam scam. Satyam — this word would no longer be used as an adjective to signify the attribute of truthfulness, but will now be used as a noun to signify systemic failure in history of Indian corporate governance system. Satyam story holds within it, legion of myriad hidden lessons for a spectrum of bodies, from directors to investors and from auditors to regulators.
Currently companies are required to pay MAT tax if the tax payable under normal provisions of the Act is lower than 10% (15% w.e.f. A.Y. 2010-11) of the book profit as defined u/s.115JB of the Act. An issue which arises is whether an assessee liable to MAT should pay interest u/s.234B and u/s.234C for shortfall in payment of advance tax.
In the first part, I discussed the broad para-meters such as — the importance of Code of Ethics (COE), important statistics about the disciplinary cases, reasons for delays in disposal, procedure adopted by the Council prior to the CA Amendment Act, 2006, criteria adopted by the Council, perception of various agencies towards the COE, types of punishments, and so on. I also narrated a few real-life instances of complaints. It is my experience that whenever our fellow members hear me on this topic, they confess that it is an eye-opener. Indeed, it makes one lose one’s sleep at least for a few nights. It calls for lot of awakening since people have realised the nuisance value of the complaint. The most unfortunate part is that our own members out of petty self-interests, rivalry, mean-mindedness etc., bring the other members into serious trouble. At the same time, all of us need to do lot of introspection.
We are currently in the diamond jubilee year of our Republic as well as of our Institute. The motto of our nation is Satyameva Jayate (Truth alone triumphs). We can only dream of poetic justice of truth winning over untruth. In this Kaliyug, real life events often shatter this fond belief. The recent episode of ‘Satyam Computers’ has evoked a storm in our profession as well. The motto of our Institute of Chartered Accountants of India is ‘Ya esha Supteshu Jagarti’ (He who is awake when others are asleep.) This was actually spoken about the ‘Soul’ — the ‘Atman’ in the Upanishadas. It implies that our conscience should always be awake. Unfortunately, the overall scenario is such that not only others but our own professionals have started losing faith in the profession. The situation calls for a good degree of introspection and self-criticism.
Intended or not, an influence, or a dis-proportionate bearing of supplementary factors on the process of legal adjudication could result in a deviation from the set precedents of judicial thought. One such concept discussed here is Morality, as understood in common parlance. The other is the legal premise of Estoppel.
The Limited Liability Partnership Act, 2008 (‘the LLP Act’) was brought into force with effect from 31st March 2009 to permit formation of Limited Liability Partnerships (‘LLPs’) in India. The main focus of the LLP Act is to permit a partnership structure and at the same time, limit the liability of partners which was heretofore unlimited under the provisions of the Indian Partnership Act, 1932 (‘the Partnership Act’). This article discusses briefly the limitation of liability of partners under the LLP Act as compared to the limitation of liability of a shareholder of a limited company formed and registered under the Companies Act, 1956 (‘the Companies Act’) and the manner in which such liabilities are limited under the LLP Act.
As employers, we all want people who have the right attitude and appropriate and adequate skill sets to work for us. We would like to have a work environment in which our people enjoy working. We want our people to be committed to the Firm. And of course, we are concerned about salary cost since it is the biggest item on our profit and loss account.
The reasons in support of and also against the issue under consideration have been set out above. The reasons in support of the argument that, amalgamated company can claim MAT credit of amalgamating company after merger, appears to be reasonable. Such conclusion would also be in accord with the purposive interpretation of the relevant provision. However, the tax authorities may be reluctant to allow MAT credit of the amalgamating company to amalgamated company. This may entail a tax demand and other consequences such as levy of interest and penalty on the amalgamated company. To avoid the levy of interest, one may take a pro-revenue stand while paying taxes, but adopt the liberal view while filing returns.
The Government of India has recently made fundamental changes in the Employees Provident Fund Scheme, 1952 and the Employees Pension Scheme, 1995 (collectively referred to as Indian Provident Fund schemes) which will impact the expatriates and the employers with whom they work in India.
The 1988 Basel Capital Accord (“Basel I”) has been implemented as the capital adequacy standard for banks and has been adopted by more than 100 countries successfully. The fundamental objectives of the Accord were to strengthen the soundness and stability of the international banking system. Basel I, has been adopted by the leading industrialised nations as well as the emerging economies, including most in Asia.
