Budget Analysis: Ranina says nothing was done to override Finance Act 2012

The Union finance minister today presented the Budget for the year 2013-14.
HP Ranina, Corporate Tax Lawyer gave his reaction on the same. He wasn’t very happy with the Budget. He believes that the FM has done nothing to override what was done in Finance Act 2012.

Below is the verbatim transcript of his interview to CNBC-TV18

Q: What would you say would be the impact in terms of foreign institutional investors (FII) especially when it is routed by the Mauritius route?

A: It will also mean that this amendment will again be retrospective. In the sense that it will overrule the Supreme Court judgment in the case of Azadi Bachao Andolan, which said that a tax residency certificate (TRC) if produced is binding on the tax officer.

So, again we are back to square one. Are we trying to supersede the Supreme Court decision as it happened in 2012. Is there any provision introduced by which he will say he had committed that year after year there will be no more retrospective amendment. He has done nothing to override what was done n 2012, Finance Act 2012.

That means all those retrospective amendments made, continue to stand. We thought that after the Shome Committee recommendation, retrospective amendments will no longer be applicable. It will only be done prospectively. If TRC is not binding on the tax department, then it will override and supersede the Supreme Court’s earlier verdict which was given five or six years ago in the case of Azadi Bachao Andolan. It said that the TRC is binding on the tax department.