Finance minister Arun Jaitley assured foreign investors at the start of his US visit this week that the age of aggressive, adversarial tax regime is over as far as income tax is concerned. But the situation on the ground has hardly improved in the last one year since the NDA government has taken over, despite the promise to end tax terror. The retrospective taxation introduced by the UPA government after it lost the Vodafone tax case in the Supreme Court is still in the statute and all the existing cases including Vodafone and Cairn are yet to be resolved.
Going by the data presented in the meeting of the top officials of the Central Board of Direct Taxes last month, the litigation situation remains the same and the arrears demands are growing at an exceptional pace. There are no signs of abating in the high-handed transfer pricing adjustments made in the last few years and a final resolution of the cases involving MAT on FPIs is still pending. So, where is the non-adversarial regime that the finance minister is talking about?
