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New Delhi: Allaying concerns of foreign investors and domestic tax-payers, Finance Minister Pranab Mukherjee today said the Income Tax Department will not re-open cases where assessment proceedings have been finalised till March 2012. Also, the I-T department has been asked not to go for litigation without solid legal ground, even as Rs 2.42 lakh crore tax claims are locked in court cases.
"I gave a commitment in Parliament with regard to retrospective amendments that CBDT (Central Board of Direct Taxes) 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", he said while inaugurating Pratyaksh Kar Bhawan here.
As soon as the government brought in amendments in the Finance Bill, 2012, to tax Vodafone-type deals with retrospective effect, several global and domestic investors raised concern. There was apprehension that the government may reopen the old cases after being empowered by the amendment in the I-T Act, which would take effect from 1961. The Finance Minister also advised the I-T authorities to avoid litigation by moving High Courts against decisions of the tribunals.
"My advice would be that if there be no point of law, if its a matter of fact, then .... the department need not rush to the High Court," Mukherjee said. However, Mukherjee said about Rs 2.42 lakh crore in taxes is locked up in litigation before the CIT appeal, ITAT and High Courts. "We must take appropriate steps to ensure that these cases are resolved as expeditiously as possible," he added.
