New Delhi : Vodafone, Cairn Energy and other firms facing retrospective tax demand will have to withdraw legal cases and give up the right to contest constitutional validity of back-dated amendment to I-T laws if they want to avail of the dispute resolution scheme ending on December 31.
The government, in the Budget 2016-17, had announced a scheme to settle the retrospective tax disputes by waiving interest and penalty if the companies paid up the principal tax amount. The scheme opened on June 1 and is due to close on December 31.
In the second FAQ on the Direct Tax Dispute Resolution Scheme, 2016, the Central Board of Direct Taxes (CBDT) said that for any company to avail of the settlement, it has to withdraw writ petitions pending before any court against imposition of retrospective taxation and furnish proof of the same.
“It is, hence, clear that if the assessee avails (of) the scheme, he cannot contest the constitutional validity of retrospective amendment in the high court or the Supreme Court,” the tax department’s Frequently Asked Questions (FAQ) said, reports PTI.
So far, none of the companies facing the retrospective tax cases have come forward. After the scheme closes, the Income Tax Department will go ahead with tax demand and pursue legal course, including arbitration, sources said. The sources also said the government had asked the I-T Department not to take any coercive action during the time the scheme is open.
Weeks before the scheme was announced by Finance Minister Arun Jaitley in his budget speech on February 29, the department had issued Vodafone a reminder over its Rs 14,200-crore tax demand and threatened to seize assets in case of non-payment.
