Excel for
The Finance Act, 2012 amended section 9 of the Income-tax Act related to income which are deemed to accrue and arise in India. It widened the scope of income deemed to accrue or arise in India to non-residents directly or indirectly through the transfer of a capital asset situated in India retrospectively from 1 April 1962 to tax indirect transfer of shares in an Indian Company. A new Explanation 4 was added to clarify the expression “through” to mean and include and shall be deemed to have always meant and included “by means of”, “in consequences of” or “by reason of”. A new Explanation 5 was also added to clarify that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India. Also, the term ‘property’ section 2(14) clarified to include rights in or in relation to an Indian company including rights of management or control or any other such rights. The ambit of ‘transfer’ section 2(47) in such cases widened to include disposition of share of company registered / incorporated outside India where it relates to such ‘property’ The above amendments was made effective retrospectively from 1st April, 1962 . CBDT has formed a committee f or the proper administration of these provisions together with guideline for assessing officers on making a reference to the committee and act according to the directions issued by the committee. The Order issued u/s 119 of the Income Tax Act, 1961 is as under:
F.No. 149/141/2014-TPL Vide the Finance Act, 2012, certain clarificatory amendments were introduced in clauses (14) and (47) of section 2, in clause (i) of sub-section (1) of section 9 and in section 195 of the Income-tax Act (“the Act”), with retrospective effect from 01.04.1962 in relation to transfer of assets. For the proper administration of these provisions of the Act, the Central Board of Direct Taxes (CBDT), in exercise of its power u/s 119 of the Act, hereby directs the following:-
1.
A Committee consisting of following officers of the CBDT as Members is hereby constituted: - The Director (FT&TR-I) shall be the Secretary of the Committee.
2.
Where any Assessing officer considers that any income is deemed to accrue or arise in India before 1st April, 2012 through transfer of a capital asset situate in India in consequence of the amendments introduced with retrospective effect, and as on the date of this order,- 3. All such references shall be addressed to the Secretary of the Committee, and it shall be the responsibility of the Secretary that the meetings of the committee are convened at appropriate time and intervals so as to effectively and expeditiously dispose of the references received by it. 4. The Committee, on receipt of the reference from the Assessing Officer, shall examine the proposed action of the Assessing Officer and, after providing an opportunity to the assessee, take a decision on the proposed action. The committee shall convey its decision in writing to the Assessing Officer with copy to the Principal Commissioner or the Commissioner concerned and the assessee. The Committee shall endeavor to decide the reference within 60 days of its receipt by the Secretary of the Committee. However, the Committee shall have due regard to any limitation period involved in the proposed action. 5. The Assessing Officer shall thereafter proceed in accordance with the directions of the Committee. 6. The Committee shall submit its report in respect of references decided by it in the relevant period to the CBDT through Member (IT) in the Proforma annexed as Annexure `A’ to this order. The CBDT may intervene in the working/deliberations of the Committee, as and when required. The first report shall be submitted in respect of period ending on 31/12/2014, and subsequent reports shall be submitted on half yearly basis (30th June and 31st December every year).
(Ashish Kumar) Copy to:
1. The Chairman (CBDT), All Members, Central Board of Direct Taxes for information.
(Ashish Kumar) Annexure-A Report of the Committee for the period ending on ----
Before proceeding with any action ........., the Assessing Officer shall seek prior approval of the Committee for the proposed action by making a reference to the Committee |