The Finance Minister had stated that a letter would be issued by the CBDT regarding reopening of completed assessments on accounts of the retrospective amendments in the Finance Act 2012. That letter is set out below:
F. No. 500/111 12009-FTD-l (Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, dated the 29th May, 2012To
All CCITs
All DGITsSir/Madam,
Subject: Clarification regarding reopening of completed assessments on accounts of clarificatory amendments introduced by Finance Act, 2012, in Section 2 clause (14), Section 2 clause (47), Section 9 and Section 195 with retrospective effect
The Finance Act 2012 has introduced certain clarificatory amendments in Section 2 clause (14), Section 2 clause (47), Section 9 and Section 195, of the Income Tax Act, 1961 (“Act”), with retrospective effect from 01.04.1962 or 01.04.1976, whereby meaning of various terms used in these sections have been clarified in order to remove any doubt regarding their interpretations.
2. These amendments have been introduced retrospectively in order to clarify the legislative intent and state the position of law from the date of coming into effect of these sections in the Act.
3. Doubts have been raised in various quarters about the implication of these amendments on the assessments that have already been completed and attained finality.
4. The Board, after due consideration, hereby directs that in case where assessment proceedings have been completed under section 143(3) of the Act, before the first day of April, 2012, and no notice for reassessment has been issued prior to that date; then such cases shall not be reopened under Section 147/148 of the Act on account of the abovementioned clarificatory amendments introduced by the Finance Act, 2012. However, assessment or any other order which stand validated due to the said clarificatory amendments in the Finance Act 2012 would of course be enforced.
5. This may be brought to the notice of all officers in your region immediately.
Yours faithfully,
P. S. Sivasankaran)
Under Secretary to the Govt. of India
This letter and CBDT’s Circular dated 29.5.12 refer to only a few sections were retro amendments were made, as para 4 clearly refers to ‘on account of the abovementioned clarificatory amendments’, which are applicable to cases like that of Vodafone’s. Hence, in cases of residents and others who are not covered by these sections, may be reopened, even if such assessments were made u/s143(3) and more than 6 years have passed but not over 16 years. The FM clearly is kind to foreign assesses and cruel to Indian assesses. If any expert differs, please explain.
Vodafone issue far from over. Last line of para 4 worded obscurely and open to various interpretations. This clarification clarifies less and confuses more.
With this letter, VODAFONE issue over? If so, why such a hue and cry by the CBDT and Ministry in media and the whole world?
Doubts calling for a closer scrutiny and elucidation:
!. Are there any not retro-amendments not covered by the letter ; that is, other than those specified to be clarificatory hence no reopening permitted ; provided the assessment u/s 143 (3) has been completed before 1st April 2012?
2. What is the true import or implication of the rider which reads, but is lacking clarity : “However, assessment or any other order which stand validated due to the said clarificatory amendments in the Finance Act 2012 would of course be enforced.”
Over to experts.
A great relief. The clarification of CBDT sets at rest any misgivings about the amendments introduced by the Finance Act 2012 as these amendments are to apply to cases pendingbefore the departmental authorities before1st April 2012.