I-T dept won’t reopen cases prior to 1 April 2012: Pranab

Finance minister Pranab Mukherjee today allayed investor fears over the issues of retrospective amendment of tax laws and transfer pricing, saying that the income tax department will not reopen cases where assessment proceedings had been finalised before 1 April 2012.

Mukherjee said he had given a commitment in 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 will not be reopened.

Now the CBDT has issued a circular in this regard, the finance minister stated.

Mukherjee said 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 25 May 2012 and on advice of the group and NASSCOM, he has approved issue of a circular to avoid multilevel TDS on software under section194J. This will remove hardship in case of software distributors, he said.

Section 194-J of the I-T Act deals with fees for professional and technical services and covers royalty and non-competence fees.