On the issue of retrospective amendment, Union Finance Minister, Shri Pranab Mukherjee has said that he had given 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. Now CBDT has issued a circular in this regard, the Finance Minister has stated.
Regarding the issue of Advisory Group relating to transfer pricing and International taxation, the Finance Minister has said that he has 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 25th May 2012 and on advice of group and NASSCOM, the Finance Minister has approved issue of a circular to avoid multilevel TDS on software u/s194J.This will remove hardship in case of software distributors.
CLARIFICATION REGARDING REOPENING OF COMPLETED ASSESSMENTS ON ACCOUNTS OF CLARIFICATORY AMENDMENTS INTRODUCED BY FINANCE ACT, 2012, IN SECTION 2 CLAUSE (14), SECTION 2 CLAUSE (47), SECTION 9 AND SECTION 195 WITH RETROSPECTIVE EFFECT
LETTER [F.NO.500/111/2009-FTD-1(PT.)], DATED 29-5-2012
The Finance Act, 2012 has introduced certain clarificatory amendments in section 2 clause (14), Section 2 clause (47), Section 9 and Section 195, of the Income Tax Act, 1961 ("Act"), with retrospective effect from 01.04.1962 or 01.04.1976, whereby meaning of various terms used in these sections have been clarified in order to remove any doubt regarding their interpretations.
2. These amendments have been introduced retrospectively in order to clarify the legislative intent and state the position of law from the date of coming into effect of these sections in the Act.
3. Doubts have been raised in various quarters about the implication of these amendments on the assessments that have already been completed and attained finality.
4. The Board, after due consideration, hereby directs that in case where assessment proceedings have been completed under section 143(3) of the Act, before the first day of April, 2012, and no notice for reassessment has been issued prior to that date; then such cases shall not be reopened under section 147/148 of the Act on account of the above mentioned clarificatory amendments introduced by the Finance Act, 2012. However, assessment or any other order which stand validated due to the said clarificatory amendments in the Finance Act, 2012 would of course be enforced.
5. This may be brought to the notice of all officers in your region immediately.