- India Inc happy with PM Narendra Modi, but holding back on investment: PollPM Narendra Modi tweets in Japanese ahead of his visit to JapanPM Narendra Modi launches Jan Dhan Yojana, calls for freedom from 'financial untouchability'Sonia, Rahul Gandhi to effect drastic revamp of Congress, muscle out the old?
The Modi government on Thursday decided to give an unbiased hearing by the top brass of the Income Tax Department to all companies, the past offshore transactions of which involve Indian assets and hence could be identified by field officers for recovering taxes invoking the retrospective amendme-nts to income tax law in 2012.
The Central Board of Direct Taxes (CBDT) has set up a four-member panel that will examine cases selected by assessing officers with potential tax liability from indirect sale of Indian assets made prior to 2012. It would take a decision on whether a tax notice is to be issued “after providing an opportunity to the assessee” to present their side of the story. Finance minister Arun Jaitley had announced in his Budget speech he would set up such a panel to review fresh cases arising from retrospective changes to the income tax law in 2012 before any action is taken.
“If field offices have based their case for reassessment on facts that suit them alone, this mechanism will give tax payers an opportunity to be heard and it will help in taking the appropriate decision. It allows the taxpayer to present relevant facts before an independent body before any action is taken,” said a person privy to the development.
Since the four senior officials in the panel — joint secretaries handling foreign tax, tax planning and legislation, income tax and director of the foreign tax division — are not from the field administration, they are unlikely to have a bias towards meeting tax targets by erring in favour of the state, sources said. Senior officials tending to routinely endorse the views taken by field officers have been considered as the reason for the failure of the collegium of commissioners called the dispute resolution panel that was introduced a few years ago to reduce litigation.
The high level committee has to report its decisions on the cases proposed by assessing officers for tax recovery to CBDT every six months. In case a discrepancy is observed, the apex policymaking body for direct taxes shall intervene.
The panel would only consider whether the retrospective law on indirect sale of Indian assets is invoked based on relevant facts. It would in no circumstance override an assessment officer's discretion to select a case for tax collection on any other consideration including low amount of potentially recoverable tax, explained the person.
Cairn UK Holdings, which has been issued a