Comments
The recent CBDT circular clarifying the implication of the retrospective amendments to income-tax law provides limited relief and that too to only situations when scrutiny assessment of recipients of income have been completed before April 1, according to tax experts.
This leaves the bias exposed to payers of income, they pointed out. Simply put, this latest CBDT circular doe s not say that the income tax authorities cannot demand tax from the payer of the income.
So all pending assessments or orders relating to withholding obligations of the buyer (payer of the income) can be proceeded against on account of the validation clause introduced in the latest Finance Bill, according to tax experts.
This would imply that telecom major Vodafone, which purchased 67 per cent stake in Indian telecom unit of Hutchison Whampoa in 2007 through a maze of companies outside India, would not, as a buyer get any relief on account of the CBDT circular.
“It would have been much better to put the issue of reopening at rest by clearly mentioning in the circular that neither the recipient nor payer of income would be approached for any past transactions where no cases are pending,” Mr Rahul Garg, Executive Director, PricewaterhouseCoopers, said.
The Central Board of Direct Taxes (CBDT) had on May 29 issued a circular in response to doubts raised in various quarters about the implications of the retrospective amendments on the assessments that have already been completed and attained finality.
The circular specifies that cases where scrutiny assessments have been completed before April 1 cannot be reopened on account of the retroactive changes to income-tax law through Finance Act 2012.
The circular provides for non-retroactive action on all assessments completed under section 143(3) (scrutiny assessment) before April 1, 2012, provided that no reassessment has been initiated prior to said date.
However, the circular also provides that any other order which gets validated would be enforced and this could imply to exclude withholding tax assessments within the ambit of non-retroactive action, said Mr Amit Singhania, Principal Associate, Amarchand & Mangaldas.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.