Tax cases prior to Apr 1 won't be reopened: Pranab

Pranab Mukherjee addressing at the inauguration of the Pratyaksh Kar Bhawan, a new office of Income Tax Department, in New Delhi on May 30, 2012.

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SME Times News Bureau | 31 May, 2012
In a bid to soothe investors' concerns over retrospective amendments to tax laws, Finance Minister Pranab Mukherjee Wednesday said the government would not reopen the cases finalised before April 1, 2012.

He said the Central Board of Direct Taxes (CBDT) has issued a circular, clarifying that the cases settled before the beginning of the current financial year would not be reopened despite the retrospective amendments in the legislation.

"I gave a commitment in the parliament with regard to retrospective amendments that CBDT will issue a policy circular to clarify that in cases where assessment proceedings have become final before first day of April 2012, such cases shall not be reopened," Mukherjee said.

"Now CBDT has issued a circular in this regard," the finance minister said after inaugurating a new office of Income Tax Department here.

The new building called "Pratyaksh Kar Bhawan" inaugurated Wednesday is the biggest office of income tax department.

The parliament recently approved the finance minister's budgetary proposal to amend Income Tax Act, 1961, with retrospective effect to allow authorities to tax global merger and acquisition transactions involving Indian assets and shares.

The amendment has brought into tax net the transactions like Vodafone-Hutchison, in which the government is involved in long-drawn legal battle.

Referring to the issue of transfer pricing and international taxation, Mukherjee said the government has constituted an advisory group to resolve various issues in the area.

"I have constituted an advisory group to resolve various issues in the area of transfer pricing and international taxation. The group has held its first meeting on May 25," the finance minister said.

The finance minister said on advise of Nasscom and the advisory group, he has approved issuance of a circular to avoid multi-level TDS on software.

"This will remove hardship in case of software distributors," he said.