Retrospective Amendment of 2012 - CBDT Constitutes High Level Committee

By Vijay Kumar

IN his Budget speech, Finance Minister Arun Jaitley had said,

This Government will not ordinarily bring about any change retrospectively which creates a fresh liability. Hon'ble Members are aware that consequent upon certain retrospective amendments to the Income Tax Act 1961 undertaken through the Finance Act 2012, a few cases have come up in various courts and other legal fora. These cases are at different stages of pendency and will naturally reach their logical conclusion. At this juncture I would like to convey to this August House and also the investors community at large that we are committed to provide a stable and predictable taxation regime that would be investor friendly and spur growth. Keeping this in mind, we have decided that henceforth, all fresh cases arising out of the retrospective amendments of 2012 in respect of indirect transfers and coming to the notice of the Assessing Officers will be scrutinized by a High Level Committee to be constituted by the CBDT before any action is initiated in such cases.

Accordingly, the CBDT has yesterday constituted a High Level Committee with (i) Joint Secretary (FT&TR-I) (ii) Joint Secretary (TPL-I) (iii) Commissioner of Income-tax (ITA).

Where any Assessing officer 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, and as on the date of this order,-

(i) no proceeding of assessment or reassessment in relation to the said income is pending; or

(ii) no notice for proposed assessment or re-assessment in relation to the said income has been issued; or (iii) no proceeding under section 201 of the Act is pending, or no notice for initiation of such proceeding has been issued in relation to the said income,

then, before proceeding with any action in relation to the said income, the Assessing Officer shall seek prior approval of the Committee for the proposed action by making a reference to the Committee through the Principal Commissioner or the Commissioner concerned. The Assessing Officer shall forward a copy of the reference to the assessee.

The Committee, on receipt of the reference from the Assessing Officer, shall examine the proposed action of the Assessing Officer and, after providing an opportunity to the assessee, take a decision on the proposed action. The committee shall convey its decision in writing to the Assessing Officer with copy to the Principal Commissioner or the Commissioner concerned and the assessee. The Committee shall endeavour to decide the reference within 60 days of its receipt by the Secretary of the Committee. However, the Committee shall have due regard to any limitation period involved in the proposed action.

The Assessing Officer shall thereafter proceed in accordance with the directions of the Committee.

CBDT Order under Section 119 in F.No. 149/141/2014-TPL, Dated: August 28, 2014