Govt's Voda non-appeal - Precedent or Exception?
That i think is the real question to be asked, as tax experts in one voice (http://www.taxsutra.com/node/430 ) welcome the Attorney General's advise to Govt. not to file an SLP against the Bombay HC judgment in the Vodafone share valuation case. Infact, what has surprised most observers is the DG - International Tax recommending a non- appeal as well, to CBDT. To go one step ahead, wouldn't it be better if in most cases if Revenue takes such a call post ITAT ruling itself ? Especially with the High Courts clogged with tax cases and the backlog touching alarming proportions !
If Vodafone non-appeal ( if it happens ultimately ) turns to be merely an exception made to dangle a carrot to the foreign investors, then am afraid it won't give more than a short term bump to the investor sentiment. The CBDT will have to encourage the CCITs to dispassionately make recommendations on whether appeals ought to be filed in cases where Revenue is on weak wicket. If the CCITs can then make an objective assessment (not always easy with CAG audits lurking in the shadows ) of a case and filter out even 50% of the cases at ITAT level itself, it will make one hell of a difference to not only the reduction of tax disputes but also lay out the red carpet to foreign investors, in the real sense!