Action in Vodafone tax only after due diligence: CBDT
Without providing any time-line for action in the Vodafone tax case, the CBDT Thursday said tax officials will not do a "rash job" and move ahead after taking into account the Supreme Court ruling and legal opinions.
New Delhi: Without providing any time-line for action in the Vodafone tax case, the CBDT Thursday said tax officials will not do a "rash job" and move ahead after taking into account the Supreme Court ruling and legal opinions.
"The amount of taxes involved is not small and therefore much due diligence has to be done by him (Assessing Officer) ... There are so many legal opinions to be taken and considered," Central Board of Direct Taxes (CBDT) Chairperson Poonam Kishore Saxena told reporters.
On the time-line for action by the AO in the Vodafone tax case, she said, "I do not think that anybody can give you any time-line. These (time-lines) are internal how we choose to go about it. If the AO needs some time to study the entire matter, it is for him. We are not going to rush him."
She was replying to questions as to when the I-T Department would send notice to Vodafone for collection of tax following amendment in the Income Tax Act with retrospective provisions during the Budget session of Parliament.
The I-T Department on October 22, 2010 passed an order determining a tax liability (including interest) of Rs 11,218 crore on Vodafone on acquisition of Hutchinson's stake in Hutch-Essar through a deal in Cayman Islands in 2007.
The Supreme Court, however, quashed the order in January this year. After the apex court's ruling, the Income Tax Act was amended with retrospective effect to bring into tax net such deals.
"The AO and the supervisory officers will take a decision in accordance with law taking into consideration amongst other things the decision of the Supreme Court, the Amendments made in the I-T Act 1961, Section 119 of Finance Act 2012 and the opinion of the Attorney General," Saxena said.
Section 119 of the Finance Act, 2012 seeks to validate the October 2010 order of the Income Tax Department. The Department had also passed an order imposing a penalty of Rs 7,900 crore in April, 2011.
However, the penalty demand was not enforced in view of a Supreme Court's direction dated April 15, 2011.
Finance Minister P Chidambaram had earlier this week said there would be no "rash" action in Vodafone tax case and the matter will be decided after considering all aspects including recommendations the Shome Committee on indirect transfer of assets.
"They (I-T assessing officers) and are not going to act rashly. These are not small amounts on which you can take a rash decision," he had said.
On taxing non-resident transfers where the underlying asset is in India, the Finance Minister said the scope of the terms of reference of the Shome Committee has been expanded to include all non-resident tax payers instead of only FIIs.