Rch Group - Compliance, Cxo & Recruitment

05/09/2026

Section 119(2)(b) allows condonation of delay for unfiled ITR refund claims. Know the five-year limit, procedure, conditions and case law.

05/09/2026

05/09/2026

04/09/2026

📢 *Corporate Laws (Amendment) Bill, 2026: CSR Thresholds Proposed to Rise, Accountability Concerns Raised*

The Corporate Laws (Amendment) Bill, 2026 proposes significant changes to the Corporate Social Responsibility (CSR) framework under the Companies Act, 2013. While the proposed changes aim to reduce compliance burden for smaller companies, dissenting members of the Parliamentary Committee have raised concerns over the potential dilution of board-level oversight and accountability for CSR spending.

📌 *CSR Applicability Threshold to Increase*

Under the existing Section 135, CSR provisions apply where a company satisfies any one of these conditions:

● Net worth of ₹500 crore or more
● Turnover of ₹1,000 crore or more
● Net profit of ₹5 crore or more

The Bill proposes to increase only the net profit threshold from ₹5 crore to ₹10 crore. The ₹500 crore net-worth and ₹1,000 crore turnover thresholds remain unchanged.

📌 *Significant Number of Companies Could Exit CSR Regime*

According to data provided by the Ministry of Corporate Affairs to the Parliamentary Committee, the proposed change could take approximately 11,204 companies outside mandatory CSR requirements.

These companies would otherwise have had an estimated CSR obligation of around ₹1,281.67 crore during FY 2025–26 under the existing ₹5 crore net-profit threshold.

📌 *CSR Committee Threshold Also Proposed to Rise*

Under Section 135(9), where the CSR amount to be spent does not exceed ₹50 lakh, the Board can discharge the functions of the CSR Committee.

The Bill proposes to increase this threshold from ₹50 lakh to ₹1 crore, with scope for a further increase through prescription.

📌 *Accountability Concerns Raised*

A dissent note has raised concerns that companies spending significant amounts on CSR could operate without a separate CSR Committee, thereby reducing an existing board-level accountability mechanism.

The dissent has suggested that CSR Committees should be accountable to an independent body that periodically reviews whether CSR funds are being utilised for their intended purposes and prevents potential quid pro quo arrangements.

📌 *Government's Power to Exempt Companies Also Questioned*

The Parliamentary Committee has also objected to the proposed power to exempt prescribed classes of companies from CSR requirements, observing that the provision may amount to excessive delegation of legislative power due to insufficient statutory guidance.

📌 *Unspent CSR Amount – Longer Transfer Window*

The Bill proposes extending the period for transferring unspent CSR amounts relating to ongoing projects from 30 days to 90 days, providing companies additional time to comply with the transfer requirement.

📌 *Status*

The Corporate Laws (Amendment) Bill, 2026 is still a proposed legislation and has not yet become law. The Joint Parliamentary Committee presented its report on 3 August 2026.

📊 *Insight*

The proposed amendments seek to balance ease of doing business with CSR accountability. While higher thresholds could reduce compliance costs for smaller companies, the debate highlights the need to ensure that reduced procedural requirements do not result in weaker oversight of corporate social spending.

04/09/2026

During the audit of a listed company, I noticed ₹4 crore of critical spare parts capitalised as PPE.

They had been lying in the stores for almost two years.

The finance team said,

"Sir, we've capitalised them and depreciation is also being charged."

I asked,

"Have these spares ever been put to use?"

"No. They're kept as standby spares for the main machinery."

"Then when did we start depreciation?"

That required a second look.

Under Ind AS 16, spare parts and stand-by equipment can qualify as PPE when they meet the definition of PPE. So, not being physically used does not automatically mean they must be treated as inventory.

But depreciation is a separate question.

Under Ind AS 16, depreciation begins when the asset is available for use—when it is in the location and condition necessary to operate as intended.

So, a qualifying standby spare may be capitalised as PPE even before it is actually installed, but the depreciation commencement date needs to be assessed based on whether it was available for use, not merely the date of purchase.

We therefore revisited both the PPE classification and the depreciation commencement date.

💡 * Insight:*

Capitalisation and depreciation are two different decisions. A spare part can qualify as PPE even before it is physically used—but depreciation does not automatically begin merely because the spare was purchased and capitalised.

04/09/2026

The OTS Waiver Defense

The bank waives ₹40 Lakhs on your business term loan via a One-Time Settlement (OTS).
The Assessing Officer (AO) immediately taxes it as "business income" under Section 28(iv) or Section 41(1).

Wrong. Here is your defense:

1. Capital vs. Revenue:
The waiver of a loan taken on a capital account is a non-taxable capital receipt, not business income.

2. The Supreme Court Shield:
In CIT v. Mahindra & Mahindra Ltd, the SC settled this permanently. Section 28(iv) applies ONLY to benefits received in kind, never to cash or monetary debt relief.

3. The Section 41(1) Reversal:
Section 41(1) only triggers if you claimed the liability as a deduction in earlier years. You never expense a capital loan's principal, so there is nothing to reverse.

⚠️ The Litigator’s Caveat:
If the waived amount includes unpaid interest that you previously claimed as a deduction, that specific portion CAN be taxed. Segregate principal from interest before filing your reply.

Fight the addition. Cite the apex court.

04/09/2026

Your company owes a vendor ₹50 Lakhs.
That vendor owes your sister concern ₹50 Lakhs.
You pass a simple journal entry to square off the mutual debt. Zero cash moves.

The AO slaps you with a 100% penalty under Section 271D.

Here is how you crush it:

1. The Legislative Intent:
Section 269SS was drafted to curb the circulation of cash-based black money. It was not designed to penalize cashless book adjustments.

2. The Judicial Precedent:
Bombay High Court (CIT v. Triumph International Finance) and Delhi High Court (CIT v. Worldwide Township Projects) have ruled that a journal entry is a pure accounting mechanism. No cash movement means no violation of legislative intent.

3. The Legal Reality:
Courts and Tribunals have repeatedly deleted these arbitrary penalties on this exact reasoning.

⚠️ The Litigator’s Caveat:
This is not blanket immunity. Benches will scrutinize the transaction's genuineness heavily, especially the related-party angle. Ensure your underlying invoices and agreements are ironclad.

Never accept an arbitrary penalty silently.

02/09/2026

The curious case of share buybacks!

One transaction. Three tax regimes in just 18 months.

🔹 Pre-Oct 2024: Company paid buyback tax and taxation in shareholder hands was broadly exempt.
🔹 Oct 2024–Mar 2026: Entire buyback consideration treated as deemed dividend and Capital Loss treatment for cost of acquisition.
🔹 From Apr 2026: Back to capital gains i.e. consideration minus cost, with an additional tax for promoters.

Buyback today is a very different tax story from the buyback of 18 months ago.

02/09/2026

Confusion: “I declared 8% profit under Section 44AD, so the tax department cannot question my business.”

Reality: Section 44AD is a compliance facility, not an immunity shield. If you declare a ₹4 Lakh profit but your bank account shows massive unexplained cash deposits, mutual fund investments, or luxury car purchases, you will face a harsh scrutiny notice under Section 68. Your lifestyle must always match your declared profit.

02/09/2026

Confusion: "I sold property below the circle rate, so I am forced to pay tax on the higher stamp duty value."

Reality: The circle rate is a benchmark, not gospel. Section 50C(2) gives you an airtight statutory defense:

1. 10% Safe Harbor: If the sale price is within 10% of the circle rate, zero addition applies.
2. Mandatory DVO: Object in writing before the AO during assessment. Tribunals consistently rule the AO must refer the valuation to a Departmental Valuation Officer.
3. Zero Downside: If the DVO values it higher than the circle rate, the lower circle rate still applies. You cannot lose.
4. Void Orders: If the AO skips the DVO reference to beat the time-barring limitation deadline, the entire addition gets quashed in appeal.

Never accept a circle rate addition silently. Put your claim on record during assessment to lock in your appellate shield.