The weekly messenger | Edition 29.22

Accounting News

IASB issues narrow -scope amendments to requirements for sale and leaseback transactions – 22 September 2022

The International Accounting Standards Board (IASB) has issued amendments to IFRS 16 Leases, explaining how a company should account for a sale and leaseback after the date of the transaction. These amendments will not change the accounting for leases other than those arising in a sale and leaseback transaction.

For more information, click here.

Auditing News

Technical Guide on Audit of Charitable Institutions under Section 12A of the Income-tax Act, 1961 - 22 September 2022

The Direct Taxes Committee (DTC) of the ICAI has issued the ‘Technical Guide on Audit of Charitable Institutions under Section 12A of the Income-tax Act, 1961’ which provide detailed guidance to members on audit of Public Charitable Institutions under the Income-tax Act, 1961.

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Applicable date of certain deferred provisions of Volume-I of Code of Ethics, 2019 – 29 September 2022

The ICAI’s Revised 12th edition of the Code of Ethics came into effect from 1 July 2020, except for the following provisions of Volume-I, which were deferred till 30 September 2022:

• Responding to Non-Compliance of Laws and Regulations (NOCLAR) [Sections 260 and 360]

• Fees - Relative Size [Paragraphs 410.3 to R410.6]

• Taxation Services to Audit Clients [Subsection 604]

Now, the ICAI has notified that those provisions of Volume-I of the Code of Ethics, 2019, which were deferred from 1 July 2020 till 30 September 2022 will be applicable w.e.f. 1 October 2022, with certain amendments.

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Revised Provisions of NOCLAR, Fee – Relative size and tax service to audit clients of code of ethics – September

The Ethical Standard Board of the ICAI has released the ‘Revised Provisions on NOCLAR, Fee – Relative size and tax service to audit clients of code of ethics”.

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Extension of timeline for filing of various reports of audit for AY 2022-23 – 30 September 2022

On consideration of difficulties being faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961, the Central Board of Direct Taxes (CBDT), has decided to extend the due date of furnishing of tax audit reports till 7 October 2022.

For more information, click here.

FAQs on filing of Tax Audit Report Form 3CA-CD/3CB-CD - Income-tax Department - September

The Income Tax Department has issued ‘FAQs for Form 3CA-CD/3CB-CD’, which inter-alia includes:

• What are the prerequisites for filing of Form 3CA-3CD/3CB-3CD?

• What is the process to submit tax audit report?

• How can I assign Form 3CA-3CD/3CB-3CD to CA?

• What is the procedure to approve Tax audit report?

• How can I generate UDIN and update the same for tax audit report?

For more information, click here.

Regulatory News

Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022 – 20 September 2022

The Ministry of Corporate Affairs (MCA) has issued the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022, wherein the following changes have been made:

• Insertion of new proviso under Rule 3 (1), which states that that a company having any amount in its Unspent Corporate Social Responsibility (CSR) Account as per section 135 (6) shall constitute a CSR Committee and comply with the provisions contained in sub-sections (2) to (6) of the said section.”

• Sub-rule (2) of Rule 3 has been omitted.

• Sub-rule 1 of Rule 4 has been substituted, wherein it has been clarified that in addition to existing entities/companies as given in the aforesaid sub-rule, the companies may also undertake their CSR activities through registered societies which are exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 of the Income Tax Act, 1961. Furthermore, the word ‘entities’ has also been defined by way of an explanation.

• Earlier, as per Rule 8(3), the companies undertaking impact assessment were allowed to book the CSR expenditure for a particular financial year equivalent to 5% of the total CSR expenditure or Rs. 50 lakhs, whichever is less. Now, in the said sub-rule, the threshold of 5% has been replaced with 2% and the words ‘whichever is less’ have been substituted with the words ‘whichever is higher’.

• Annexure II, which provides the format for the ‘Annual Report on CSR Activities to be included in the Board’s Report for Financial Year Commencing on or after 1 April 2020’, has also been substituted with a new Annexure II.

• Certain changes have also been made in e-form CSR-1.

These rules shall come into force w.e.f. 21 September 2022.

For more information, click here.

Extension of time for filing e-form DIR-3-KYC and web-form DIR3-KYC-WEB – 28 September 2022

The MCA has extended the date of filing of e-form DIR-3-KYC and web-form DIR-3-KYC-WEB till 15 October 2022.

For more information, click here.