Author: inavatiq

Editorial Team – [2025] 181 taxmann.com 586 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:

1. ISSB Issues Amendments to Greenhouse Gas Emissions Disclosure Requirements in IFRS S2

The International Sustainability Standards Board (ISSB) has issued targeted amendments to the greenhouse gas emissions. The amendments relates to the disclosure requirements in IFRS S2, Climate-related Disclosures to address application challenges identified during initial implementation. Based on stakeholder feedback, the amendments provide practical reliefs and clarifications to support companies in while applying the standard. Further, it also focuses on maintaining investor information needs and minimising disruption for jurisdictions adopting ISSB Standards. Following are the targeted amendments issued by ISSB:

(a) An entity is permitted to restrict the measurement and disclosure of “Scope 3 Category 15” greenhouse gas emissions to financed emissions, as defined in IFRS S2.

(b) Allow the use of alternative classification systems.

(c) Further, it introduces a jurisdictional relief from using global warming potential values from the latest “IPCC Assessment Report” for converting greenhouse gas emissions

Source – International Financial Reporting Standard

2. Financial Reporting Council Initiates Investigation on Audit Firm Over Non-Compliance Relating to Partner’s Rotation

Financial Reporting Council (FRC) has initiated an investigation against an audit firm in relation to the statutory audit of the consolidated financial statements of a company for the financial year ended 31st December 2024. The investigation follows an announcement made by the company to the London Stock Exchange on 2nd July 2025, in which the audit firm reported non-compliance with audit partner rotation requirements, including breaches of the prescribed time limits under the “UK FRC’s Revised Ethical Standard”.

The scope of the investigation includes consideration of whether relevant ethical and regulatory requirements relating to audit partner rotation have been breached. The investigation will be carried out by the FRC’s Enforcement Division in accordance with the Audit Enforcement Procedure (AEP).

Source – Financial Reporting Council

3. Financial Accounting Standard Board issues taxonomies for 2026

Financial Accounting Standards Board (FASB) has announced the release of its 2026 taxonomies. The said taxonomy includes the GAAP Financial Reporting Taxonomy (GRT), SEC Reporting Taxonomy (SRT), and GAAP Employee Benefit Plan Taxonomy (EBPT). Further, the release also includes the 2026 DQC Rules Taxonomy (DQCRT) and the GAAP Meta Model Relationships Taxonomy (MMT). These taxonomies are collectively referred to as the “FASB Taxonomies”. The development in the taxonomies are discussed herewith:

(a) The 2026 GRT incorporates updates reflecting FASB accounting standards issued in 2025 prior to 1st December 2025, along with other recommended improvements.

(b) The 2026 SRT includes enhancements for commonly used reporting elements not explicitly specified under GAAP.

(c) The DQCRT provides a selected set of data validation rules developed by the “XBRL US Data Quality Committee”, primarily for regulatory use.

(d) The MMT is designed to support preparers in identifying the proper elements for tagging their filings, assist data users in data usability and assist rule developers by the development of business rules through additional relationship information.

Source – Financial Accounting Standard Board

Click Here To Read The Full Article

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PR No. 84/2025, Dated: 17.12.2025

The SEBI Board, at its 212th meeting, approved a series of regulatory proposals. These include replacing the SEBI (Stock Brokers) Regulations, 1992, with the SEBI (Stock Brokers) Regulations, 2025 and a comprehensive review of the SEBI (Mutual Funds) Regulations. Amendments were approved to the ICDR, LODR, and NCS Regulations, along with measures for credit rating agencies, relaxation for HVDLEs, and alignment of timelines for the transfer of unclaimed amounts.

Some of the Key highlights of the Board Meeting in detail are as follows:

1. Replacement of SEBI (Stock Brokers) Regulations, 1992 with SEBI (Stock Brokers) Regulations, 2025

The Board has approved of a proposal to replace the SEBI (Stock Brokers) Regulations, 1992, with the SEBI (Stock Brokers) Regulations, 2025, with the objective of:

(a) Streamlining the regulations to ensure simple and clear language

(b) Omission of repetitive and redundant provisions

(c) Updating regulations with contemporary changes

(d) Modification/inclusion of certain provisions to provide more clarity and to ensure ease of compliance

Some of the features of the new Regulations approved by the Board are as follows:

(a) Reorganisation of the Regulations

(b) Amendments of certain key definitions, such as clearing member, professional clearing member, proprietary trading member, proprietary trading, designated director, etc. to provide clarity

(c) Modifications or inclusion of certain provisions to provide for ease of compliance and ease of doing business by enabling provision for joint inspection and maintenance of books of accounts

(d) Removal of obsolete and non-applicable historical provisions, such as provisions relating to physical delivery of shares, Forward Market Commission sub-brokers, etc.

2. Comprehensive Review of Mutual Funds Regulations, 1996 to Ensure Transparency and Strengthen Investor Protection

Almost, for nearly three decades, the SEBI (Mutual Funds) Regulations, 1996, have served as the foundational regulatory architecture for the Indian mutual fund industry. Over time, multiple amendments were incorporated to address evolving market practices, resulting in an extensive and layered regulatory structure.

The Board has now approved a comprehensive review of the Mutual Funds Regulations. The new SEBI (Mutual Funds) Regulations, 2026, are designed to offer stakeholders greater clarity, improved readability, and enhanced structural coherence.

While simplifying compliance, the revised framework retains the core principles, safeguards, and regulatory intent built over the years and further strengthens investor protection, transparency, and governance standards within the mutual fund ecosystem.

3. Streamlining Public Issue Requirements to Enhance Ease of Doing Business and Retail Investor Participation

As per ICDR Regulations, the entire pre-issue capital held by persons other than the promoters, except for shares held by certain specified categories of shareholders, must be locked in for a period of 6 months from the date of allotment in the IPO.

Certain issuers face challenges in complying with such lock-in requirements, particularly in cases where pledges have been created by non-promoters before the IPO.

In this regard, the Board has approved an amendment to ICDR to prescribe that, in case lock-in of the specified securities cannot be created, the depositories must record such securities as “non-transferable” for the duration of the applicable lock-in period.

The depositories must ensure that, subsequent to the invocation or release of a pledge, the shares in the account of the beneficiary (pledger or pledgee) must automatically be locked-in for the balance period, as required under the ICDR Regulations.

Further, the Board has also approved that a focused, concise and standardised summary of offer documents in the form of a draft abridged prospectus must be available at the DRHP stage as well, in addition to the current requirement of filing of an abridged prospectus at the RHP stage. Also, the Board has approved the proposal to rationalise the disclosures in the abridged prospectus.

4. Permitting Debt Issuers to Offer Incentives in Public Issues to Certain Category of Investors

Currently, issuers of debt securities are not able to offer incentives to any persons for making an application in the issue, except for fees or commissions for services rendered in relation to the issue.

With a view to enhancing the participation of retail investors in the corporate debt market and also to encourage public issuances in the debt market, the Board considered and approved a proposal for amending the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, to permit debt issuers to offer incentives to specific categories of investors.

Pursuant to this amendment, issuers of debt securities will be able to offer incentives in the form of additional interest or a discount to the issue price to specific categories of allottees, viz. senior citizens, women, armed forces personnel namely, serving and retired defense personnel and widows and widowers of such personnel, retail individual investors or any other category of investors as may be specified by the Board.

5. Aligning the Timeline for Transfer of Unclaimed Amount By An Entity Having Listed Non-Convertible Securities with Companies Act

Presently, unclaimed amounts are transferred to IEPF/IPEF after 7 years of remaining unclaimed. To enable ease of doing business, the Board has now approved a proposal for amending the SEBI (LODR) Regulations, 2015, on aligning the timeline for transfer of unclaimed interest/dividend/redemption payment entities having listed non-convertible securities to the Investor Education and Protection Fund (IEPF)/ Investor Protection and Education Fund (IPEF) with the Companies Act.

Accordingly, issuers of non-convertible securities will now need to transfer the unclaimed amounts only once after completion of 7 years from the date of maturity of the security, instead of multiple transfers when interest/dividend/redemption payment becomes due.

Click Here To Read The Full Press Release

The post SEBI Board Approves Wide-Ranging Reforms for Brokers | Mutual Funds | IPOs | Debt Markets appeared first on Taxmann Blog.

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Case Details: Karaikal Co-op Milk Supply Society vs. V. Ramakrishnan [2025] 181 taxmann.com 203 (HC-Madras)

Judiciary and Counsel Details

• Dr A.D. Maria Clete, J.
• Ms S. Janani, T. Sai Krishnan & L. Poovendra Perumal, Advs. for the Petitioner.
• Xavier Felix & Ms A. Kamachi, Advs. for the Respondent.

Facts of the Case

In the instant case, the Respondent-workman raised an industrial dispute against the petitioner management seeking proper accounts of the gratuity, subsistence allowance from 11.05.2001 till retirement, and the retirement benefits.

The Industrial Tribunal-cum-Labour Court registered the dispute and issued the notice. When a case was listed for filing the counter, the petitioner’s counsel did not appear due to the bereavement of a close relative.

Thereafter, the Tribunal set the management ex parte and recorded the workman’s evidence. An ex parte award partly allowed the claim by directing the management to give a proper accounts regarding the gratuity and to pay the outstanding gratuity, subsistence allowance from 11.05.2001 till retirement, and retirement benefits.

Then, the management filed an application to set aside the ex parte award. The Tribunal dismissed the said application on the ground that the management had failed to appear on three earlier hearings and also on 03.05.2018 when the matter was posted for the ex parte evidence. That application to set aside the ex parte award had been filed after a delay of about one year and six months without a satisfactory explanation.

High Court Held

The High Court observed that, where, in the main industrial dispute, the management’s counsel was absent due to the bereavement of a close relative, and the Tribunal proceeded to set the management ex parte, the Tribunal could have granted the management one more opportunity.

The High Court held that the order of the Tribunal dismissing the application to set aside the ex parte award was to be set aside and the matter was to be remitted to the Tribunal for fresh disposal.

List of Cases Referred to

• Haryana Suraj Malting Ltd. v. Phool Chand [2018] 5 taxmann.com 755 (SC) (para 15)
• United Labour Federation v. Presiding Officer MANU/TN/3968/2023 (para 16)
• Management of Murali Enterprises v. Presiding Officer MANU/TN/8171/2021 (para 17)
• State of Punjab v. Labour Court, Jullundur 1979 taxmann.com 441 (SC) (para 18).

The post Ex Parte Labour Award Set Aside Due to Bereavement | HC appeared first on Taxmann Blog.

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Case Details: Arup Kumar Chatterjee vs. Assistant Commissioner of State Tax, Bureau of Investigation (South Bengal) [2025] 181 taxmann.com 359 (Calcutta)

Judiciary and Counsel Details

• Om Narayan Rai, J.
• Akshat Agarwal & Ms Doyel Dey for the Petitioner.
• Nilotpal Chatterjee, Tanoy Chakraborty & Saptak Sanyal for the Respondent.

Facts of the Case

The petitioner, filed a writ petition challenging the dismissal of statutory appeal for failure to comply with the mandatory pre-deposit requirement. It was contended that the demand was illegal, on which basis waiver of the pre-deposit was sought. It was further submitted that the Appellate Authority dismissed the appeal solely on the ground of non-payment of pre-deposit, notwithstanding that an amount exceeding 10 per cent of the disputed tax had already been recovered by the Department. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the Appellate Authority has no power to waive the mandatory statutory requirement of pre-deposit prescribed under Section 107(6) of the CGST Act and the West Bengal GST Act. The Court held that the statutory pre-deposit is a condition precedent for maintainability of an appeal and cannot be relaxed by the Appellate Authority. It further held that since an amount exceeding 10 per cent of the disputed tax had already been recovered by the Department of Revenue, the statutory requirement of pre-deposit stood satisfied. The Court therefore quashed the impugned order and remanded the matter to the Appellate Authority with a direction to hear and decide the appeal on merits without insisting on any further pre-deposit.

The post No Power to Waive Mandatory GST Pre-Deposit for Appeals | HC appeared first on Taxmann Blog.

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Editorial Team – [2025] 181 taxmann.com 519 (Article)

World Corporate Law News provides a weekly snapshot of corporate law developments from around the globe. Here’s a glimpse of the key corporate law update this week.

1. Securities Law

1.1 CSA and CIRO provide guidance for finfluencers and firms on how to work with them and protect investors

On December 11, 2025, the Canadian Securities Administrators (CSA) and Canadian Investment Regulatory Organisation (CIRO) released new guidance for financial content creators or influencers known as “finfluencers.” The guidance aims to help them, and the firms they work with, understand and follow securities laws when posting information about investing online.

Social media is increasingly a source of financial information for Canadians, with finfluencers shaping these conversations. Some finfluencers’ activities can introduce new risks to investors.

The CSA and CIRO want to help those creating content and posting about investing to do so transparently, honestly and legally, including identifying conflicts of interest. The guidance in the staff notice offers concrete examples of how both registrants and finfluencers can understand and comply with the requirements set by securities regulators.

“Finfluencers can have an impact on how people make investment decisions, and this comes with substantial responsibilities,”

said Stan Magidson, CSA Chair and CEO of the Alberta Securities Commission.

“This guidance helps content creators protect themselves and their followers by making sure their content complies with securities laws.”

“Social media is changing how Canadians learn about investing, and that brings new risks,”

said Andrew Kriegler, CIRO President and CEO.

“We want finfluencers to understand that compliance isn’t just about rules, it’s about protecting your reputation and your audience. Requiring finfluencers to follow this guidance helps investors make better, safer financial decisions.”

The CSA and CIRO expect finfluencers, as well as registrants and issuers who work with finfluencers, to become familiar with and follow the rules set out in the guidance. Breaking securities laws can lead to serious penalties and other enforcement actions.

The CSA, the council of the securities regulators of Canada’s provinces and territories, coordinates and harmonises regulation for the Canadian capital markets.

The Canadian Investment Regulatory Organisation (CIRO) is the pan-Canadian self-regulatory organisation that oversees all investment dealers, mutual fund dealers, and trading activity on Canada’s debt and equity marketplaces. CIRO is committed to protecting investors, providing efficient and consistent regulation, and building Canadians’ trust in financial regulation and the people who manage their investments.

Source – Official Guidance

1.2 SC seeks feedback as part of Malaysia’s Corporate Governance Framework Review

On December 12, 2025, the Securities Commission Malaysia (SC) published a Discussion Paper seeking public feedback as part of its review of Malaysia’s corporate governance framework.

The Key areas under review include reinforcing the roles of boards and management in driving long-term value creation and strengthening overall board effectiveness.

This encompasses driving necessary behavioural shifts, enhancing agility in managing emerging risks and adopting new technologies, continuous strengthening of board composition and independence, and building stakeholder trust through timely engagement and access to information.

The review aligns with the upcoming Capital Market Master Plan 4 (CMP4), which positions corporate governance as a key enabler of a resilient, inclusive, and sustainable capital market.

The feedback will guide the upcoming revision of the Malaysian Code on Corporate Governance (MCCG) and the relevant corporate governance framework, ensuring the framework remains forward-looking, relevant and aligned with global best practices.

This Discussion Paper is open for feedback from 12 December 2025 to 6 February 2026.

Source – Official Guidance

Click Here To Read The Full Article

The post [World Corporate Law News] CSA and CIRO Issue Guidance for Finfluencers to Protect Investors appeared first on Taxmann Blog.

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Case Details: Director of Income-tax (IT)-I, Mumbai vs. American Express Bank Ltd. [2025] 181 taxmann.com 433 (SC)

Judiciary and Counsel Details

• J.B. Pardiwala & K.V. Viswanathan, JJ.
• Raghavendra P Shankar, A.S.G., Ms Madhulika Upadhyay, AOR, Karan Lahiri, Navanjay Mahapatra, Sarthak Karol, V C Bharathi & Ms Priyanka Terdal, Advs. for the Appellant.
• Aniruddha A Joshi, Percy Pardiwala, Sr. Advs., Rajeev Maheshwaranand Roy, Kishore Kunal, AORs, Rajeev Kumar Panday, Nishant Thakkar, Hiten Thakkar & Nikhil Ranjan, Advs. for the Respondent.

Facts of the Case

The assessee, a non-resident banking company, filed its return of income for the relevant assessment year. While computing the income, the assessee claimed a deduction for expenses incurred at the head office directly related to the Indian branches.

The Assessing Officer (AO) contended that the expenses in question should be subject to the ceiling specified in Section 44C. The assessee claimed that the expenses in question could not have been classified as head office expenditure for the reason that Section 44C presupposes that at least a part of the expenditure is attributable to the business outside India. If this presumption does not hold, and the entire expenditure is incurred solely for the business in India, Section 44C would not apply.

The AO passed an assessment order limiting the deduction under Section 44C to 5% of the gross total income. The matter reached before the Supreme Court.

Supreme Court Held

The Supreme Court held that to be brought within the ambit of Section 44C, two broad conditions must be satisfied:

(i) The assessee claiming the deduction must be a non-resident; and

(ii) The expenditure in question must strictly fall within the definition of ‘head office expenditure’ as provided in the Explanation to the Section.

The Explanation prescribes a tripartite test to determine if an expense qualifies as ‘head office expenditure’:

(i) The expenditure was incurred outside India;

(ii) The expenditure is in the nature of ‘executive and general administration’ expenses; and

(iii) The said executive and general administration expenditure is of the specific kind enumerated in clauses (a), (b), or (c) respectively of the Explanation, or is of the kind prescribed under clause (d).

This means that even if such head office expenditure can be allowed as a deduction under Section 37(1), it would not be permitted if it exceeds the ceiling limit set under Section 44C. Section 44C of the Income Tax Act does not create a distinction between common and exclusive head office expenditure. It applies to ‘head office expenditure’ regardless of whether it is common expenditure or expenditure incurred exclusively for the Indian branches. The term ‘attributable’ in Clause (c) does not create a statutory distinction between ‘common’ and ‘exclusive’ expenditure.

Thus, the question of law is answered in favour of the Revenue, and it was held that Section 44C applies to ‘head office expenditure’ regardless of whether it is common expenditure or expenditure incurred exclusively for the Indian branches.

List of Cases Reviewed

• CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55/[2004] 134 Taxman 682 (Bombay) (para 71) disapproved.
• Order of Bombay High Court in DIT (IT) v. American Express Bank Ltd. [IT Appeal No. 1294 of 2013, dated 1-4-2015][Para 91] set aside

List of Cases Referred to

• CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55/[2004] 134 Taxman 682 (Bombay) (para 8)
• Rupanjuli Tea Co. Ltd. v. CIT [1990] 186 ITR 301/[1991] 54 Taxman 269 (Calcutta) (para 21)
• DIT, Delhi v. Ravva Oil (Singapore) (P.) Ltd. [2008] 300 ITR 53/167 Taxman 177 (Delhi) (para 23)
• CIT vs. Emirates Commercial Bank Ltd. [Civil Appeal No. 1527 of 2006, dated 27-08-2004] (para 23)
• CIT v. Deutsche Bank A.G. [Civil Appeal No. 1544 of 2006, dated 26.08.2008] (para 23)
• CIT v. Kasturi & Sons Ltd. [1999] 237 ITR 24/103 Taxman 342 (SC) (para 28)
• A.V. Fernandez v. State of Kerala 1957 SCC OnLine SC 23 (para 29)
• Commissioner of Sales Tax, U.P v. Modi Sugar Mills Ltd. 1960 SCC OnLine SC 118 (para 29)
• Godrej & Boyce Manufacturing Company Ltd. v. Dy. CIT [2017] 81 taxmann.com 111/394 ITR 449/247 Taxman 361 (SC) (para 30)
• State of Uttar Pradesh v. Dr. Vijay Anand Maharaj [1962] 45 ITR 414 (SC) (para 30)
• M.V. Joshi v. M.U. Shimpi 1961 SCC OnLine SC 56 (para 30)
• Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. & Ors (1987) 1 SCC 424 (para 33)
• Commissioner of Gift-tax v. N.S. Getti Chettiar [1971] 82 ITR 599 (SC) (para 33)
• CIT Kerala v. Tara Agencies [2007] 292 ITR 444/162 Taxman 337 (SC) (para 34)
• Dadi Jagannadham v. Jammulu Ramulu (2001) 7 SCC 71 (para 34)
• Ram Narain Medhi v. State of Bombay 1958 SCC OnLine SC 53 (para 34)
• Shashikant Laxman Kale v. UOI [1990] 185 ITR 104/52 Taxman 352 (SC) (para 36)
• Bengal Immunity Company Ltd. v. State of Bihar (1955) 1 SCC 763 (para 37)
• CIT v. Sodra Devi [1957] 32 ITR 615 (SC) (para 38)
• Kanai Lal Sur v. Paramnidhi Sadhukhan 1957 SCC OnLine SC 8 (para 38)
• CIT v. Deutsche Bank A.G. [2006] 284 ITR 463/[2007] 158 Taxman 37 (Bombay) (para 53)
• CIT v. Meghalaya Steels Ltd. [2016] 67 taxmann.com 158/383 ITR 217/238 Taxman 559 (SC) (para 62)

The post Section 44C Applies to All Head Office Expenses – Common or Exclusive | SC appeared first on Taxmann Blog.

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Case Details: Shivakar Singh vs. State of U.P. [2025] 181 taxmann.com 236 (HC-Allahabad)

Judiciary and Counsel Details

• Ajay Bhanot, J.
• Akash Khare & Hari Om for the Petitioner.
• Abhishek Srivastava & Baleshwar Chaturvedi, C.S.C. for the Respondent.

Facts of the Case

In the instant case, a government employee was imprisoned from 23-1-2015 to 18-12-2018 after a criminal case was registered against him under section 13(1)(b) of the Prevention of Corruption Act.

During the said period, he did not discharge his duties. Criminal case was not instituted at the behest of the respondent–corporation (employer). The employer did not create any hindrance or prevent the petitioner from working, and no departmental proceedings were initiated against him.

Later, the petitioner claimed back wages and arrears for the said period. The Respondent refused to pay on the application of the principle of ‘no work no pay’.

It was noted that the principle of ‘no work no pay’ is a salutary principle of general application in service jurisprudence and is accepted only in rare instances, such as when an employer prevents an employee from discharging his duties or creates impediments in regard thereof.

High Court Held

The High Court held that since the petitioner was not kept from his duties by his employer, relaxation of the principle of ‘no work no pay’ could not be countenanced in the instant case. Further, the petitioner did not have any lawful entitlement to a period of back wages during the period of his imprisonment. However, the petitioner would be entitled to continuity in service for the aforesaid period for the purposes of pension.

List of Cases Reviewed

• Raj Narain v. Union of India [2019] 4 taxmann.com 1893 (SC) (para 9)
• Anil Kumar Singh v. State of U.P. 2024 (6) ADJ 223 (para 10) distinguished

List of Cases Referred to

• MANAGEMENT OF RESERVE BANK OF INDIA v. Bhopal Singh Panchal [1994] 1993 taxmann.com 1218 (SC) (para 6)
• Ranchhodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board [1997] 1996 taxmann.com 1668 (SC) (para 7)
• Union of India v. Jaipal Singh 2003 taxmann.com 4066 (SC) (para 8)
• Raj Narain v. Union of India [2019] 4 taxmann.com 1893 (SC) (para 9)
• Anil Kumar Singh v. State of U.P. 2024 (6) ADJ 223 (para 10).

The post No Back Wages During Imprisonment Service Counts for Pension | HC appeared first on Taxmann Blog.

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Case Details: Chandra Enterprises vs. Deputy State Tax Officer [2025] 181 taxmann.com 355 (Madras)

Judiciary and Counsel Details

• C. Saravanan, J.
• K.A. Parthasarathy for the Petitioner.
• V. Prashanth Kiran, Govt. Adv. for the Respondent.

Facts of the Case

The petitioner challenged the demand proceedings initiated by the jurisdictional officer, asserting that the outward supplies were wrongly reported in Form GSTR-3B due to which there was a difference in the Form GSTR-1 and Form GSTR-3B. It was contended that the disputed tax was credited to the electronic credit ledger and applicable interest was paid. Despite such payment, a notice in Form DRC-01 was issued for the relevant period, and on account of non-response, an order was passed confirming tax, interest, and penalty, while the statutory appeal was dismissed on the ground of limitation. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the return filed prima facie reflected evasion, followed by subsequent remittance of tax along with interest, which warranted closer examination under Section 73 of the CGST Act and the Tamil Nadu GST Act. The Court examined the scope of proceedings where tax and interest had been paid prior to issuance of notice and noted that such payment was a relevant factor requiring due consideration by the original authority. It held that confirmation of demand without examining the effect of pre-notice payment and the explanation offered by the petitioner was unsustainable.

The post Pre-Notice Tax and Interest Payment Bars Demand – Matter Remanded | HC appeared first on Taxmann Blog.

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Circular no. HO/17/11/18(1)2025-DDHS-POD1/I/342/2025; Dated: 16.12.2025

1. Regulatory Background

SEBI has issued a circular mandating enhanced periodic disclosure requirements for Special Purpose Distinct Entities (SPDEs) and trustees associated with Securitised Debt Instruments (SDIs).

The move is aimed at strengthening transparency, ongoing monitoring, and investor protection in the securitisation market.

2. Entities Covered

The disclosure requirements apply to:

• Special Purpose Distinct Entities (SPDEs) created for securitisation transactions, and
• Trustees appointed in relation to SDIs

These entities play a critical role in holding, administering, and safeguarding securitised assets on behalf of investors.

3. Frequency and Timeline of Disclosures

• Disclosures must be made on a half-yearly basis
• Reporting periods:

1. 1. Half-year ending March
   2. Half-year ending September

• Disclosures must be submitted within 30 days from the end of the respective half-year

This ensures timely availability of information to regulators and market participants.

4. Recipients of Disclosures

The required disclosures must be submitted to:

• SEBI (the Board), and
• The concerned stock exchange(s) where the securitised debt instruments are listed

This dual reporting mechanism enhances both regulatory oversight and market transparency.

5. Nature of Disclosures

While the circular mandates “detailed disclosures,” the intent is to ensure comprehensive visibility into aspects such as:

• Performance and status of the underlying securitised assets
• Cash flow collections and payouts
• Credit enhancements and structural safeguards
• Compliance with transaction documents and regulatory conditions
• Any material events, deviations, or risks impacting SDIs

These disclosures enable investors and regulators to assess ongoing risk and performance, beyond initial issuance disclosures.

6. Effective Date

The provisions of the circular will be effective from March 31, 2026.

Accordingly:

• The first mandatory half-yearly disclosure cycle will commence post-March 31, 2026
• SPDEs and trustees must ensure systems, processes, and data readiness well in advance

7. Regulatory Intent

SEBI’s initiative seeks to:

• Enhance post-issuance transparency in securitised products
• Strengthen continuous disclosure norms for SDIs
• Improve investor confidence in the securitisation framework
• Enable proactive regulatory supervision and early risk identification

The move aligns SDI disclosure standards more closely with those applicable to other listed debt instruments.

8. Compliance Takeaways

SPDEs and trustees should:

• Establish robust half-yearly reporting mechanisms
• Define internal data collection and validation workflows
• Coordinate with originators, servicers, and auditors for timely inputs
• Ensure disclosures are accurate, complete, and submitted within statutory timelines
• Align disclosure formats with stock exchange and SEBI requirements

Non-compliance may result in regulatory observations, penalties, or market-related consequences.

Click Here To Read The Full Circular

The post SEBI Mandates Half-Yearly Disclosures by SPDE Trustees for SDIs appeared first on Taxmann Blog.

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1. Introduction

The research committee of the Institute of Chartered Accountants of India (ICAI) has issued a report on “Accounting for Digital Assets”. Accounting for digital assets has emerged as a critical area in contemporary financial reporting, driven by the rapid growth of cryptocurrencies, Non Fungible Tokens (NFTs), and other block chain based instruments. In the absence of uniform accounting guidance, significant challenges arise in relation to their recognition, measurement, valuation and disclosure.

The report issued by ICAI, provides an overview of the global accounting landscape for digital assets by analysing prevailing practices under International Financial Reporting Standard (IFRS), Financial Accounting Standard Board (FASB), and Ind AS, while also considering the evolving regulatory framework in India. It addresses key classification and valuation issues, disclosure requirements, and policy considerations, supported by expert insights and survey findings.

2. Background

At present, there is no standalone accounting standard that specifically addresses the accounting of digital assets. Accordingly, digital asset transactions are accounted for by applying existing Generally Accepted Accounting Principle (GAAP) standards, such as Ind AS 2, Inventory, Ind AS 32, Financial Instruments, and Ind AS 38 Intangible Assets. However, these standards do not comprehensively capture the unique characteristics of digital assets.

Broadly, two accounting approaches are evident. The first allows entities to exercise discretion in formulating accounting policies, typically classifying digital assets as inventory or intangible assets. This approach, however, results in limited disclosures, potentially restricting user’s understanding of an entity’s exposure to digital assets. The second approach involves amending or clarifying existing standards to enhance disclosure requirements. While this may improve transparency, it remains uncertain whether such amendments would ensure consistent application across entities, given the diversity of accounting treatments currently permitted.

Further, the option ICAI is looking forward is to develop a specific accounting standard for the accounting of digital assets and liabilities. The introduction of a separate standard would promote consistency in accounting treatment across entities and mandate enhanced and more rigorous disclosure requirements.

3. Objective of Research Committee

The study of research committee aims to address the significant ambiguities and inconsistencies in the current recognition, measurement, and disclosure requirements prescribed under the existing financial reporting standards. Further, it aims to recommend a policy for developing a comprehensive and robust framework for digital asset accounting. The overall objective of research committee is discussed herewith:

(a) Analyse the limitations of existing accounting standard to identify the unique characteristics and economic substance of diverse digital assets

(b) Identify the key challenges faced by accounting professionals and entities in defining, classifying, measuring, and disclosing digital assets

(c) Evaluate the global regulatory and accounting landscape for digital assets

(d) Provide solutions and tailored approach for the accounting treatment of digital assets to standard-setting bodies, regulators and businesses.

Click Here To Read The Full Story

The post ICAI Flags Need for Accounting Framework for Digital Assets appeared first on Taxmann Blog.

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