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2022 (8) TMI 387
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....were taken up for hearing together and disposed of by this common judgment. Facts relating to WA No. 979 of 2018 (WP No. 14165 of 2009) 3.1. The respondent herein, a non-resident company registered in Netherlands, is engaged in the business of dredging and marine contractors. According to them, during the course of such business, in the year 1996, Chennai Port Trust floated a tender for the Break Water Construction at Ennore Port titled "Ennore Coal Port Project". The respondent participated in the said tender as a joint venture company along with an Indian company known as Hindustan Construction Company Limited. The bid offered by the respondent was accepted by Chennai Port Trust and the contract was awarded in their favour. For the purpose of execution of the project, the respondent opened a project office in India with the permission of the Reserve Bank of India dated 23.01.1998. The entire contractual work was completed during the year 2000 and the profit derived thereof have been shared by the respondent with their business partner as per the agreement and receipt of such payment is protected under Section 195 of the Income Tax Act, 1961 (in short, "the Act"). Subsequ....
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.... the Act on 28.03.2002 and the Assessing Officer also accepted the return of income disclosed by the respondent. However, the Assessing Officer concluded that for non-payment of advance tax and deferred advance tax, interest has to be paid under Section 234B and 234C of the Act to the tune of Rs.23,55,882/- and Rs.12,17,545/-. On such demand, the respondent submitted an application for waiver of the interest on 26.02.2003 before the appellant. However, the appellant, without appreciating the background facts of the case, passed an order dated 09.02.2009, rejecting the application of waiver of interest and directed the Assessing Officer to collect interest from the respondent. Aggrieved by the same, the respondent filed this writ petition to quash the order dated 09.02.2009 passed by the appellant herein and consequently direct the appellant to waive the interest under Sections 234B and 234C of the Act. 4. A counter affidavit was filed by the appellant, inter alia stating that the non-payment of advance tax, especially when most of the contract receipts, after tax deduction, were received by the respondent well before 31.03.2000, would liable them to pay interest. According to th....
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....dated 05.02.2008 accepting the additional income offered by the respondent herein under Section 245D(4) of the Act. However, while passing the order dated 05.02.2008, the Commission directed the respondent to pay interest under Section 234B on the excess of the assessed tax over and above the advance tax for all the assessment years. 5.3. On receipt of the said order, the respondent filed a Miscellaneous Petition on 31.12.2008 praying to modify the order dated 05.02.2008, stating that he is not liable to pay interest under Section 234B of the Act. The Commission, by order dated 06.07.2009, rejected the said Miscellaneous Petition. Challenging the same, the respondent filed this writ petition, to quash the order dated 06.07.2009 passed by the Settlement Commission and consequently direct the first appellant to delete the levy of interest under Section 234B of the Act for the block period in question. 6. Opposing the writ petition, the appellants filed a counter affidavit stating that the additional income offered by the respondent before the Settlement Commission has never suffered tax, either by way of TDS or by way of advance tax. The respondent is fully aware of the liabili....
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....er the smoke screen of confusion and conflict to escape from the consequences of default and from payment of interest. The liability of payment of interest under Section 234B of the Act by the tax payer is towards delay in paying the advance tax. The respondent was fully aware of their obligations to pay advance tax, but they have not chosen to pay. The respondent / assessee was also aware that TDS was not deducted on their total income and therefore, they are liable to pay advance tax. Besides this, they were also aware of the fact that Chennai Port Trust has been deducting tax only to the extent of 2% on payments made to it. However, they deliberately did not make payment of advance tax with an intention to conceal income and evade payment of tax. When Chennai Port Trust had made it clear that it had deducted tax at source only at 2%, much before the due date for payment of advance tax, it was the duty of the respondent-assessee to have paid appropriate amount towards advance tax. In such circumstances, the respondent company is not liable to get immunity from their liability to pay interest under Section 234B of the Act, which is mandatory in nature and ascertained on the basis ....
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....nts in W.A.No.2811 of 2021, submitted that the respondent/assessee is an employee in India earning income from India and also from abroad. The respondent did not disclose the income earned in foreign countries for the block period in question. Ultimately, he filed an application before the Income Tax Settlement Commission and disclosed his income for the assessment years from 1996-1997 to 2005-2006 and the Settlement Commission directed him to pay the tax together with interest. The respondent/assessee filed a miscellaneous application to modify the order relating to interest under Section 234B. The said application was rejected by the Settlement Commission on the ground that the Settlement Commission can only rectify a mistake, which is apparent on the face of record and cannot adjudicate on debatable issues after discussing the provisions and recording its interpretations. When the order passed by the Settlement Commission was challenged before the learned Judge, reliance was placed on the decision of Hindustan Coca Cola Beverage (P) Limited vs. Commissioner of Income Tax [2017 (293) ITR 226 (SC)] as well as various other judgments. However, the learned Judge, placed reliance on ....
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....t source at the rates in force from such payments excluding those incomes which are chargeable under the head 'salaries'. Therefore, the entire tax is to be deducted at source which is payable on such payments made by the payee to the non-resident. Section 201 of the Act lays down the consequences of failure to deduct or pay. These consequences include not only the liability to pay the amount which such a person was required to deduct at source from the payments made to a non-resident but also penalties etc., Once it is found that the liability was that of the payer and the said payer has defaulted in deducting the tax at source, the Department is not remedy-less and, therefore, can take action against the payer under the provisions of Section 201 of the Income-tax Act and compute the amount accordingly. No doubt, if the person (payer) who had to make payments to the non-resident had defaulted in deducting the tax at source from such payments, the nonresident is not absolved from payment of taxes thereupon. However, in such a case, the non-resident is liable to pay tax and the question of payment of advance tax would not arise. This would be clear from the reading of Sectio....
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....tax at source, but has subsequently paid the tax with interest and whether the assessee/payee can be charged with interest?. The Learned Judge has colossally considered the Judgments in (i) Hindustan Coca Cola Beverage (P) Ltd v. Commissioner of Income Tax, [(2007) 293 ITR 226 (SC)], (ii) Commissioner of Income Tax v. Emilio Ruiz Berdejo & Ors [(2010) 320 ITR 0190 (Bombay)], (iii) Director of Income Tax v. Jacabs Civil Incorporated [(2011) 330 ITR 0578 (Delhi)], (iv) Chennai Port Trust v. Income Tax Officer [(2012) 25 taxmann.com 261 (Mad)] (v) CIT v. Sedco Forex International Drilling Company Ltd [(2003) 264 ITR 320 (Uttaranchal)] and referred to the judgments in (vi) DIT (International Taxation) v. NGC Network Asia [(2009) 18 DTR 203 (Bom)] and ultimately held that no interest is chargeable under Section 234B. The point that the interest under Sections 201 and 234B operate under different circumstances and on different persons, has also been considered and held in favour of the assessee. The judgment of the Division Bench of the Delhi High Court in Director of Income Tax, International Taxation v. GE Packaged Power Inc. [(2....
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....visions in the Finance Bill, 2012 are as under: "Liability to pay advance tax in case of non- deduction of tax Under the existing provisions of section 209 of the Income-tax Act, the amount of advance tax payable is computed by reducing the amount of income-tax which would be deductible or collectible during the financial year from income- tax on estimated income. Therefore, in cases where the assessee receives or pays any amount (on which the tax was deductible or collectible) without deduction or collection of tax, it has been held by courts that he is not liable to pay advance tax to the extent the tax is deductible or collectible from such amount. In order to make an assessee liable for payment of advance tax in respect of income which has been received or paid without deduction or collection of tax, it is proposed to amend the aforesaid section to provide that where a person has received any income without deduction or collection of tax, he shall be liable to pay advance tax in respect of such income. This amendment will take effect from the 1st April, 2012 and would, accordingly, apply in relation to advance tax payable for the financial year 2012- ....
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....e 1991 amendment to Section 80-HHC thus conclusively demonstrates that the words "minerals and ores" must be construed widely and in an unrestricted manner. As has been held in Municipal Committee v. Manilal [(1967) 2 SCR 100 : AIR 1967 SC 1201] and Pappu Sweets and Biscuits v. Commr. of Trade Tax [(1998) 7 SCC 228] subsequent legislation may be looked into to fix the proper interpretation to be put on the statutory provisions as they stood earlier. The benefit of Section 80-HHC has been extended by the amendment to a specific kind of mineral and was introduced for the first time in 1991. If we were to hold that the word "minerals" in sub-section (2)(b) never included processed minerals then the 1991 amendment excepting processed minerals from the exclusionary effect of the sub-section would be rendered meaningless and an exercise in futility. 19. The dispute relating to the interpretation of the words "would be deductible or collectible" in Section 209 (1) (d) of the Act can be resolved by referring to the proviso to Section 209 (1) (d), which was inserted by the Finance Act, 2012. The proviso makes it clear that the assessee cannot reduce the amounts of income-tax paid t....
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....d against the payer who has defaulted in deducting tax at source. There is no doubt that the position has changed since the financial year 2012-13, in view of the proviso to Section 209 (1) (d), pursuant to which if the assessee receives any amount, including the tax deductible at source on such amount, the assessee cannot reduce such tax while computing its advance tax liability. 21. As we have dealt with the submissions relating to Section 209 and Section 234B of the Act, we do not deem it necessary to deal with other contentions that have been raised on behalf of the Revenue. We have not dealt with the facts of each case before us, in view of our interpretation of the provisions of the Act germane to the question of law herein. 22. Accordingly, the Appeals filed by the Revenue are dismissed." After dismissing the appeal filed by the revenue, the appeals of the Assessees on the same issue were allowed referring to the above judgment. Therefore, this is no longer res integra and the claim of the assessees thus stands vindicated. 13. Insofar as the contention regarding maintainability of the miscellaneous petition is concerned, as rightly held by the learned Judge, n....
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....pecified in paragraph 2 of the order for the period and to the extent the Chief Commissioner of Income tax/Director General of Income Tax deems fit. The relevant clause that has been relied upon by the assessee is clause 2 (e), which reads as follows: "(e) Where a return of income could not be filed by the assessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee or his legal heirs without detection by the Assessing Officer." 16. A clarification was issued by way order in F.NO400/234/95-IT(B) dated 30.01.1997, wherein, paragraph No.2 of the order dated 23-05-1996 has been clarified as follows:- "2. In partial modification of this para of the Order, the Central Board of Direct Taxes has decided that there shall be no condition that the decision of the High Court or the Supreme Court, as referred to therein, must be given in the assessee's own case. Also the condition that any retrospective amendment of law or the decision of the Supreme Court or the jurisdictional High Court must have been made after the end of the relevant year stands withdrawn." 17. During the pendency of the application for waiver, a new Notif....
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....id, in time, by the Managing Partner, even though, he had made a declaration as required, since, he was diagnosed with blood cancer, and to which, he succumbed shortly thereafter. 12.3. Furthermore, what is not evident upon a perusal of the said judgment as to the what were the contents of the order of the Chief Commissioner, whereby, the request for waiver/reduction of interest was rejected. It appears that the order was perfunctory, which is why, the Division Bench in paragraph 7 observed that the impugned order of the Chief Commissioner merely observed that the condition prescribed in Notification dated 23.05.1996 was not satisfied. 12.4. We may indicate herein that the notification/circular dated 23.05.1996 precedes the circular in issue, i.e., Circular dated 26.06.2006. Circular dated 26.06.2006 supersedes the earlier circular dated 23.05.1996. We are, thus, concerned only with Circular dated 26.06.2006. 12.5. For all these reasons, we are of the view that the judgment in the matter of : N.Haridas & Co. (cited supra) cannot help the cause of the respondent in this case. Therefore, the appeal will have to be allowed." 18. On the other hand, the res....
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....ion was superseded by the notification dated 26-06-2006, whereby the reason of "unavoidable circumstances" was excluded from applicability, when waiver is sought under Sections 234B and 234C, which, in the view of this Court, is not clarificatory as it introduces a new condition taking away a vested right under the earlier notification. In fact, the notifications are beneficial legislations. Hence, it can be applied only to cases, where an application is filed after 26.06.2006. Though the notification claims to be superseding the earlier notifications, the fact that it states in paragraph 4 that if an application has been rejected earlier, it can be reopened to grant any relief and if any relief granted cannot be undone by this notification, fortifies our view that a right once vested, cannot be undone by subsequent replacement of the provision. The right to reopen is also restricted only to grant a benefit. Further, it contains no express provisions relating to applicability to pending cases. Under these circumstances, Section 6 of the General Clauses Act, 1897, which saves the substantive rights of the parties and the applicability of the law in force when such right accrued or p....
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....the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later. 30. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Govt. of India v. Indian Tobacco Assn.[(2005) 7 SCC 396], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in Vijay v. State of Maharashtra [(2006) 6 SCC 289]. It was held that where a law is enacted for the benefit of community as....
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....d".' But the use of the words 'it is declared' is not conclusive that the Act is declaratory for these words may, at times, be used to introduced new rules of law and the Act in the latter case will only be amending the law and will not necessarily be retrospective. In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language 'shall be deemed always to have meant' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have r....
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....s English courts is that 'all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.'" (emphasis supplied) 36. In CIT v. Scindia Steam Navigation Co. Ltd. [AIR 1961 SC 1633 : (1962) 1 SCR 788], this Court held that as the liability to pay tax is computed according to the law in force at the beginning of the assessment year i.e. the first day of April, any change in law affecting tax liability after that date though made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. Answer to the reference 37. When we examine the insertion of the proviso in Section 113 of the Act, keeping in view the aforesaid principles,....
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.... Act, 1897: '6. Effect of repeal.-Where this Act, or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.' 25. The opening words of Section 6 specify the field ov....
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....e said to be granting a privilege to the landlord to seek intervention of the Controller for eviction of the tenant under the statute. Such a privilege is not a benefit vested in general but is a benefit granted and may be enforced by approaching the Controller in the manner prescribed under the statute. On filing the petition of eviction of the tenant the privilege accrued with the landlord is not effected by repeal of the Act in view of Section 6(c) and the pending proceeding is saved under Section 6(e) of the Act. *** 34. Thus we find Section 6 of the General Clauses Act covers a wider filed and saves a wide range or proceedings referred to in its various clauses. We find two sets of cases, one where Section 6 of the General Clauses Act is applicable and the other where it is not applicable. 35. In cases where Section 6 is not applicable, the courts have to scrutinise and find, whether a person under a repealed statute had any vested right. In case he had, then pending proceedings would be saved. However, in cases where Section 6 is applicable, it is not merely a vested right but all those covered under various clauses from (a) to (e) of Section 6. We ....
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....n is understandable, from a perusal of the unamended and amended Section 15-Z of the SEBI Act. Under the unamended Section 15-Z, the appellate remedy to the High Court, against an order passed by the Securities Appellate Tribunal, was circumscribed by the words "... on any question of fact or law arising out of such order". The amended Section 15-Z, while altering the appellate forum from the High Court to the Supreme Court, curtailed and restricted the scope of the appeal, against an order passed by the Securities Appellate Tribunal, by expressing that the remedy could be availed of "... on any question of law arising out of such order". It is, therefore apparent, that the right to appeal, is available in different packages, and that, the amendment to Section 15-Z, varied the scope of the second appeal provided under the SEBI Act. 39. As illustrated above, an appellate remedy is available in different packages. What falls within the parameters of the package at the initial stage of the lis or dispute, constitutes the vested substantive right of the litigant concerned. An aggrieved party, is entitled to pursue such a vested substantive right, as and when, an adverse judgme....
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..... That being the position, it is not possible for us to accept the contention advanced at the hands of the learned counsel for the appellant, that the amendment to Section 15-Z of the SEBI Act, envisages only an amendment of the forum, where the second appeal would lie. In our considered view, the amendment to Section 15-Z of the SEBI Act, having reduced the appellate package, adversely affected the vested appellate right of the litigant concerned. The right of appeal being a vested right, the appellate package, as was available at the commencement of the proceedings, would continue to vest in the parties engaged in a lis, till the eventual culmination of the proceedings. Obviously, that would be subject to an amendment expressly or impliedly, providing to the contrary. Section 32 of the Securities and Exchange Board of India (Amendment) Act, 2002, which has been extracted in para 13 hereinabove reveals, that the "repeal and saving" clause, neither expressly nor impliedly, so provides. Thus viewed, we are constrained to conclude, that the assertion advanced at the hands of the learned counsel for the appellant, that the instant amendment to Section 15-Z of the SEBI Act, does not af....
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....hough made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. Answer to the reference 37. When we examine the insertion of the proviso in Section 113 of the Act, keeping in view the aforesaid principles, our irresistible conclusion is that the intention of the legislature was to make it prospective in nature. This proviso cannot be treated as declaratory/statutory or curative in nature. *** Reasons in support 39. The first and foremost poser is as to whether it was possible to make the block assessment with the addition of levy of surcharge, in the absence of proviso to Section 113? In Suresh N. Gupta [CIT v. Suresh N. Gupta, (2008) 4 SCC 362] itself, it was acknowledged and admitted that the position prior to the amendment of Section 113 of the Act whereby the proviso was added, whether surcharge was payable in respect of block assessment or not, was totally ambiguous and unclear. The Court pointed out that some assessing officers had taken the view that no surcharge is leviable. Others were at a loss to apply a particular rate of surcharge as they were not....
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....nless there are clear indication to the same. Reliance has been placed on the judgment of this Court in State of Jharkhand v. Shiv KarampalSahu [State of Jharkhand v. Shiv KarampalSahu, (2009) 11 SCC 453 : (2009) 2 SCC (L&S) 640] . In para 17, following has been stated: (SCC pp. 459-60) "17. Ordinarily, a subordinate legislation should not be construed to be retrospective in operation. The Circular Letter dated 7-5-2003 was given a prospective effect. The father of the respondent died on 19-5-2000. There is nothing to show that even the Circular dated 9-8-2000 had been given retrospective effect. In any view of the matter, as the State of Jharkhand in the Circular Letter dated 7-5-2003 adopted the earlier circular letters issued by the State of Bihar only in respect of cases where death had occurred after 15-10-2000 i.e. the date from which the State of Jharkhand came into being, the High Court [Shiv KampalSahu v. State of Jharkhand, 2005 SCC OnLineJhar 507 : (2006) 2 AIR Jhar R 148] , in our opinion, committed a serious error in giving retrospective effect thereto indirectly which it could not do directly. Reasons assigned by the High Court, for the reasons aforementioned....
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....ght which has accrued on the date of the institution of the consumer complaint under the 1986 Act (the repealing law) is preserved; and second, the enforcement of the right through the instrument of a legal proceeding or remedy will not be affected by the repeal. 83. Having stated the above position, we need to harmonise it with the principle that the right to a forum is not an accrued right, as discussed in Part C of this judgment. Simply put, while Section 6(e) of the General Clauses Act protects the pending legal proceedings for the enforcement of an accrued right from the effect of a repeal, this does not mean that the legal proceedings at a particular forum are saved from the effects from the repeal. The question whether the pending legal proceedings are required to be transferred to the newly created forum by virtue of the repeal would still persist. As discussed, this Court in New India Assurance [New India Assurance Co. Ltd. v. Shanti Misra, (1975) 2 SCC 840] and Maria Cristina [Maria Cristina De Souza Sodder v. AmriaZurana Pereira Pinto, (1979) 1 SCC 92] has held that forum is a matter pertaining to procedural law and therefore the litigant has to pursue the legal....
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....t and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation. Ironically, the objection which has been raised in the present case to the continued exercise of jurisdiction by Ncdrc in regard to the consumer complaint filed by the appellant is by the developer who is the respondent herein. It is a developer who opposed the continuation of the proceedings before Ncdrc on the ground that under the new consumer legislation the pecuniary limits of the jurisdiction exercisable by Ncdrc have been enhanced and the complaint filed by the appellant which was validly instituted under the erstwhile law should be transferred to Scdrc. Such a course of action will result in thousands of cases being transferred across the country, from Ncdrc to Scdrcs and from Scdrcs to the District Commission. F. Summation 91. For the above reasons, we have come to the conclusion that proceedings instituted before the commencement of the 2019 Act on 20-7-2020 would continue before the fora corresponding to those under the 1986 Act (the National Commission, State Commissions and District Commissions) and not be transf....