The controversy relating to the taxability of the capital gains arising to Hutchison Whampoa out of the $11 billion acquisition by Vodafone has returned to haunt Vodafone. It may be recalled that the Supreme Court decided the issue in favour of Vodafone (341 ITR 1). However, a controversial retrospective amendment to section 9 of the Income-tax Act, 1961 sought to torpedo the judgement of the Supreme Court. Thereafter, the new Government led by Prime Minister Narendra Modi and Finance Minister Arun Jaitley declared that they are opposed to the concept of retrospective legislation and vowed to resolve the controversy. The amount owed by Vodafone on the basis of the retrospective legislation is Rs. 14,200 crore

The CBDT has issued Circular No. 1/ 2016 dated 15.02.2016 in which it has clarified the meaning of the term “initial assessment year” in section 80-IA(5) of the Income-tax Act, 1961

The CBDT has issued Instruction No. 01/2016 dated 15.02.2016 in which it has directed Assessing Officers to strictly follow the time limit of six months prescribed under section 154(8) of the Income-tax Act, 1961 to pass rectification orders. The CBDT has also directed the supervisory officers to monitor the adherence to the prescribed time limit and initiate suitable administrative action where failure to adhere to the prescribed time limit is noticed

The CBDT has issued Instruction No. 02/2016 dated 15.02.2016 in which it has directed Assessing Officers to pass rectification orders in writing and serve a copy on the assesseee and not just make an entry on the AST system

Shri. Atulesh Jindal, the Chairperson of the CBDT, has addressed a letter dated 05.02.2016 to the Principal Chief Commissioners of Income-tax in which he has stated that the growth in collection of direct tax collections is not encouraging. He has pointed out that main cause for concern is that regular tax collection has shown a decline of 10.44% as compared to a growth of 17.25% last year. He has stated that this suggests inter alia that adequate efforts are not being made to collect the arrear demand. The CBDT Chief has directed that “outmost focus for the next two months should be on collection of the collectible demand, both out if current and arrear demand”. The Chairperson has also directed the Principal Commissioners to give the highest priority to the work of collection of demand and to monitor it personally

The CBDT has issued TDS instruction No. 51 dated 04.02.2016 in which important directions have been given with regard to the functionality for issue of online TDS certificates u/s 195(2) and 195(3) for lower/ no-deduction of tax at source

The CBDT has issued an Office Memorandum dated 29.01.2016 to deal with the issue as to whether a refund due to the assessee can be adjusted against a demand due from him u/s 245 of the Act. The CBDT has inter alia stated that in cases where the tax payer has contested the demand, CPC would issue a reminder to the jurisdictional Assessing Officers about the contention of the taxpayer, asking them to either confirm, or make appropriate changes, to the demand, within thirty days. In case no response is received from the jurisdictional Assessing Officer, within the stipulated period of thirty days, CPC would issue the refund without any adjustment. The responsibility of non-adjustment of refund against outstanding arrears, if any, would lie with the Assessing Officer

Shri. Atulesh Jindal, the Chairman of the CBDT has addressed a strongly worded letter dated 05.02.2016 to the Chief Commissioners and Directors Generals of Income-tax in which he has pulled up the department for unsatisfactory disposal of taxpayers’ grievances.

The CBDT Chief expressed dismay that repeated instructions from the CBDT had fallen on deaf ears. He stated that out of the total grievances of 7,863, 1696 grievances are pending for more than 6 months and 81 grievances are pending for more than a year. The learned Chairman reminded the department of the Citizens’ Charter which requires that all grievances should be disposed off within a period of two months.

The CBDT Chairman has directed the Chief Commissioners and Directors Generals to look into the matter personally and ensure that the grievances are disposed off on a priority basis. The Chairman has also directed that a ATR should be submitted to him in respect of grievances pending for more than six months