Rules for the Amendments Made by the
Taxation Laws (Amendment) Act, 2021 in Voda/Cairns
Case
The Taxation Laws (Amendment)
Act, 2021 (2021 Act), which received the assent of the President on the 13th
August, 2021, has, inter-alia, amended the Income-tax Act, 1961 (Income-tax Act
) so as to provide that no tax demand shall be raised in future on the basis of
the amendment to section 9 of the Income-tax
Act made vide Finance Act, 2012 for any offshore indirect transfer of Indian assets
if the transaction was undertaken before 28th May, 2012 (i.e., the date
on which the Finance Bill, 2012 received the assent of the President).
The amendment made by 2021
Act also provides that the demand raised for offshore indirect transfer of Indian
assets made before 28th May, 2012 (including the validation of demand
provided under Section 119 of the Finance Act 2012) shall be nullified on fulfillment
of specified conditions such as withdrawal or furnishing of undertaking for withdrawal
of pending litigation and furnishing of an undertaking to the effect that no claim
for cost, damages, interest, etc. shall be filed and such other conditions are fulfilled
as may be prescribed. The amount paid/collected
in these cases shall be refunded, without any interest,
on fulfillment of the said conditions.
The aim of the amendment made by the 2021 Act is
to bring tax certainty and ensure that once specified conditions are fulfilled,
the pending Income-tax proceedings shall
be withdrawn, demand, if any, raised shall be nullified, and amount, if any, collected
shall be refunded to the taxpayer without any interest. To implement the amendment
made by 2021 Act, draft rules have been prepared to amend the Income-tax Rules,
1962 which specify the conditions to be fulfilled and the
process to be followed to give effect to the amendment made by the 2021 Act.
The draft notification containing the proposed
rules is placed in public domain and can be accessed at
www.incometaxindia.gov.in.
Suggestions/comments on the draft notification
are invited from all stakeholders and the public and can be furnished electronically
at the email address ustpl1@nic.in latest by 4th September, 2021.