Chidambaram rules out rash action against Vodafone
04 Sep 2012
Finance minister P Chidambaram today said there would be no ''rash'' action in the Vodafone tax case and the income tax department would examine all aspects of the case before taking a decision.
''They (I-T assessing officers) are not going to act rashly. These are not small amounts on which you can take a rash decision,'' he told reporters replying to a question whether tax officials would send notice to Vodafone for collection of tax following retrospective amendment in the Income Tax Act passed in the Budget 2012-13.
''There is a Supreme Court judgement. There is opinion of the attorney general. All this has to be studied by the assessing officer and his supervising officers... They will study all that. In the meanwhile, we will get the Shome committee's report also,'' the minister said.
On 22 October, 2010, the IT department passed an order determining a tax liability (including interest) of Rs11,218 crore on the acquisition of Hutchinson's stake by Vodafone in Hutch-Essar through a deal in Cayman Islands in 2007. The order was however quashed by the apex court in January this year.
In the budget, the government introduced retrospective amendments under Section 9 to tax Vodafone kind of deals.
The amendments saw Vodafone invoke the India-Netherlands bilateral investment protection agreement under which the government then formed an inter-ministerial group to look into the arbitration notice sent by the company.
