Search Results For: retrospective operation


PCIT vs. Perfect Circle India Pvt. Ltd (Bombay High Court)

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DATE: January 7, 2019 (Date of pronouncement)
DATE: January 17, 2019 (Date of publication)
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CITATION:
S. 40(a)(ia): The second proviso to s. 40(a)(ia) is beneficial to the assessee and is declaratory and curative in nature. Accordingly, it must be given retrospective effect

Various Courts, however, have seen this proviso as beneficial to the assessee and curative in nature. The leading judgment on this point was of the Division Bench of Delhi Court in the case of CIT Vs. Ansal Land Mark Township P Ltd [2015] 377 ITR 635 (Delhi). The Court held that Section 40(a)(ia) is not a penalty and insertion of second proviso is declaratory and curative in nature and would have retrospective effect form 1.4.2005 i.e the date from the main proviso 40(a)(ia) itself was inserted

Indus Best Hospitality & Realtors Pvt. Ltd vs. PCIT (ITAT Mumbai)

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DATE: January 19, 2018 (Date of pronouncement)
DATE: June 13, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263 Revision: Explanation 2 to s. 263 inserted by the FA 2015 (which confers power upon the CIT to revise assessments where inadequate inquiries have been conducted by the AO) is prospective in nature and does not apply even to a case where the CIT passed the order after Explanation 2 came on the statute. The CIT should show that the view taken by the AO is unsustainable in law. The action of the CIT in directing the AO to conduct enquiry in a particular manner is contrary to the law interpreted by the Delhi High Court in CIT v. Goetze (India) Ltd 361 ITR 505. If such course of action is permitted, the CIT can find fault with each and every assessment order without making any enquiry or verification in order to establish that the assessment order is not sustainable in law

Ld. DR also submitted that in light of the introduction of the Explanation 2 to s.263 by the Finance Act, 2015, the Ld. CIT had power to conduct further enquiry even in a case where inadequate enquiries have been conducted by the Assessing Officer. (a) Crompton Greaves Ltd v. CIT [ITA No. 1994/Mum/2013] dated 01.02.2016, (b) Madhurima International Pvt Ltd v. Pr. CIT [ITA No. 421/Mum/2017] dated 28.04.2017. 23. In this regard, we observe that the aforesaid judgments have been later considered by Hon’ble Mumbai Tribunal in several other cases. Further, in the recent judgments, the Hon’ble Tribunal has taken a view that the provisions to Explanation 2 to s. 263 of the Act introduced by the Finance Act, 2015 is prospective in nature and would not apply to the year under consideration

DIT vs. S. R. M. B. Dairy Farming (P) Ltd (Supreme Court)

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DATE: November 23, 2017 (Date of pronouncement)
DATE: November 28, 2017 (Date of publication)
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CITATION:
Low Tax Effect Circular: The view of the two-judge bench in Suman Dhamija & Gemini Distilleries that CBDT's low tax Circular dated 09.02.2011 cannot be given retrospective effect cannot be followed as it is contrary to the three-judge bench verdict in Surya Herbal. A beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively. Circular dated 9.2.2011 has retrospective operation except for two caveats: (i) The Circular should not be applied ipso facto when the matter has cascading effect and/or (ii) where common principles are involved in subsequent group of matters or a large number of matters

We are of the view that the matter needs to be put to rest and a clarity be obtained in view of the impact of this issue on pending cases before the High Courts as well as the cases which have been disposed of by various High Courts by applying the Circular of 2011 to pending litigations. In our view the matter has been squarely put to rest taking further care of the interest of the Revenue by the order passed by the three Judges Bench of this Court in Surya Herbal Ltd. case (supra), which had put two caveats even to the retrospective application of the Circular. The subsequent orders have been passed by the two Judges Bench without those orders being brought to the notice of the Court, a duty which was cast on the Department to have done so to avoid the ambiguity which has arisen. Thus, the said view of the three Judges Bench would hold water and the Circular would apply even to pending matters but subject to the two caveats provided in Surya Herbal Ltd. case (supra).

CIT vs. Gemini Distilleries (Supreme Court)

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DATE: October 12, 2017 (Date of pronouncement)
DATE: November 1, 2017 (Date of publication)
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CITATION:
Low Tax Effect Circular: The CBDT cannot issue any circular having retrospective operation. Consequently, instruction/circular issued on 9.2.2011 directing withdrawal of low tax effect appeals applies only to appeals filed after that date and not to pending appeals. The fact that the CBDT itself vide Circular dated 10.12.2015 directed that the instruction to withdraw low tax effect appeals will apply retrospectively to pending appeals has no bearing

The question raised in this batch of Appeals is as to whether the instructions/circular issued by the Central Board of Direct Taxes on 9.2.2011 will have retrospective operation or not. This Court in Commissioner of Income Tax-VIII, New Delhi v. Suman Dhamija (Civil Appeal Nos.4919-4920/2015) has held that instructions/circular dated 9.2.11 is not retrospective in nature and they shall not govern cases which have been filed before 2011, and that, the same will govern only such cases which are filed after the issuance of the aforesaid instructions dated 9.2.2011. Learned counsel for the respondents relied upon circular dated 10th December, 2015 and specifically relied upon paragraph 10. We are of the considered opinion that the central board of direct taxes cannot issue any circular having retrospective operation. Respectfully following the above decision, we allow the instant Appeals

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