|COURT:||Gujarat High Court|
|CORAM:||M. R. Shah J, S. H. Vora J|
|CATCH WORDS:||interpretation of statutes, limitation period, Retrospective amendment, TDS deduction|
|COUNSEL:||Mihir Joshi, R. K. Patel|
|DATE:||February 5, 2016 (Date of pronouncement)|
|DATE:||February 28, 2016 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 201(3): The amendment to s. 201(3) by FA 2014 to extend the time limit for passing s. 201 orders is prospective and does not apply to cases which are already time-barred. A show-cause notice involving a pure point of law can be challenged in a Writ Petition|
The High Court had to consider whether section 201(3) of the Income Tax Act as amended on 1/10/2014 by Finance Act of 2014 would be applicable retrospectively or prospectively and whether the said provision would be applicable with respect to the proceedings under the Income Tax Act for A.Y. 2008-09 and 2009-2010, the proceedings which had already become time barred in view of the provisions of section 201(3) of the Act prior to amendment in section 201(3) of the Act by Finance Act 2014. HELD by the High Court:
(i) Though the petitioners have challenged the impugned notices / summonses issued under section 201 of the Income Tax Act and the revenue has raised objection against the maintainability and/or entertainability of the present petitions against the Show Cause Notice, it is required to be noted that in the present case, the issue involved is pure question of law, more particularly as to whether, section 201(3) as amended by Finance Act (No.2) 2014 would be applicable retrospectively or not? Under the circumstances, when pure question of law is involved, petitions cannot be dismissed solely on the ground that the present petitions are against the Show Cause Notices (Harbanslal Sahnia and another Versus Indian Oil Corpn. (2003) 2 SCC 107 (para 7) and Filterco and another Versus Commissioner of Sales Tax, Madhya Pradsesh and another, reported in (1986) 24 ELT 180 SC followed);
(ii) Section 201(3) of the Act as amended by Finance Act, 2012 amended on 28/5/2012 was specifically made applicable retrospectively w.e.f. 1/14/2012, whereby limitation period was substituted from four years to six years for passing orders where TDS Statement had not been filed. However, section 201(3) of the Act as amended by Finance Act No.2 of 2014, as mentioned in the memorandum of the Finance Bill No.2 of 2014 is stated to have effect from 1st October, 2014. Thus, wherever the Parliament / Legislature wanted to make provisions applicable retrospectively, it has been so provided. While making amendment in section 201(3) of the Act by Finance Act No.2 of 2014, does not so specifically provide that the said amendment shall be made applicable retrospectively. On the other-hand, it is specifically stated that the said amendment will take effect from 1/10/2014. As observed hereinabove, in the present cases, limitations provided for passing order under section 201(1) of the Act for A.Y. 2007-08 and 2008-09 had already been expired on 31/3/2011 and 31/3/2012, respectively, i.e. prior to section 201(3) came to be amended by Finance Act No.2 of 2014.
(iii) An accrued right to plead a time barred which is acquired after the lapse of the statutory period is in every sense a right even though it arises under an Act which is procedural. It is a right which is not to be taken away by conferring on the statute a retrospective operation unless such a construction is unavoidable.
(iv) Considering the law laid down by the Hon’ble Supreme Court in the aforesaid decisions, to the facts of the case on hand and more particularly considering the fact that while amending section 201 by Finance Act, 2014, it has been specifically mentioned that the same shall be applicable w.e.f. 1/10/2014 and even considering the fact that proceedings for F.Y. 2007-08 and 2008-09 had become time barred and/or for the aforesaid financial years, limitation under section 201(3)(i) of the Act had already expired on 31/3/2011 and 31/3/2012, respectively, much prior to the amendment in section 201 as amended by Finance Act, 2014 and therefore, as such a right has been accrued in favour of the assessee and considering the fact that wherever legislature wanted to give retrospective effect so specifically provided while amending section 201(3) (ii) of the Act as was amended by Finance Act, 2012 with retrospective effect from 1/4/2010, it is to be held that section 201(3), as amended by Finance Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(i) of the Act can be passed for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014. Under the circumstances, the impugned notices / summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted.