June 25, 2012 – In a move to quash doubts raised by retrospective amendments concerning re-opening of assessments, the Central Board of Direct Taxes issued a circular on May 29. It clarified that the tax department would not reopen assessments simply on account of retrospective/ clarificatory amendments introduced by the Finance Act, 2012 if the regular assessment proceedings have been completed before April 1 and no notice has been issued for re-assessment before that date.
The interesting point for consideration is how far revenue can enforce these retrospective amendments/ clarifications to Sec 2(14), 2(47), Sec 9 and Sec 195, which have retrospective effect from April 1, 1962 or April 1, 1976 — meaning that these amendments/ clarifications had been part of the Act from that very date with no such extension of time in section 147 /148 for reopening of assessment. In short, the tax authorities can go back to a maximum of seven years from the end of the tax year to reopen past cases.
Read more: http://www.thehindubusinessline.com/industry-and-economy/taxation-and-accounts/article3563049.ece