It may be recalled that in Vodafone International vs. UOI 341 ITR 1 the Supreme Court held that a transfer of shares of an offshore company would not chargeable to tax in India even if all the assets of the company were situated in India. To suprecede the judgement, a retrospective amendment was inserted in s. 9(1)(i) of the Income-tax Act, 1961 by the Finance Act 2012 w.r.e.f. 1.4.1962. The Shome Committee also issued a detailed report on the subject. The CBDT has now issued an Order dated 28.08.2014 u/s 119 of the Act and set up a Committee to implement the said provisions of s. 9(1)(i). The Order provides that if the AO considers that any income is deemed to accrue or arise in India before 1st April, 2012 through transfer of a capital asset situate in India in consequence of the amendments introduced with retrospective effect, he shall shall seek prior approval of the Committee for the proposed action. The Committee is required to examine the proposed action of the AO and, after providing an opportunity to the assessee, take a decision on the proposed action within 60 days. The Committee’s decision is binding on the AO.
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