TaxTMI 
TaxTMI 
2023 (5) TMI 708
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....6 of 2020, 3720 of 2020, 3790 of 2020, 3797 of 2020, 4796 of 2020, 4977 of 2020, 5027 of 2020, 5065 of 2020, 5275 of 2020, 5295 of 2020, 6041 of 2020, 15459 of 2021, 15554 of 2021 Appearance : (In Civil Writ Jurisdiction Case No. 20926 of 2019) For the Petitioner/s : Mr. D.V. Pathy, Advocate Mrs. Manju Jha, Advocate For the Respondent/s : Dr. K.N. Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate (In Civil Writ Jurisdiction Case No. 1774 of 2020) For the Petitioner/s : Mr. D.V. Pathy, Advocate Mrs. Manju Jha, Advocate For the Respondent/s : Dr. K.N. Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate Mr. Rajesh Kumar Verma, Advocate Mr. Shyam Bihari Singh, Advocate (In Civil Writ Jurisdiction Case No. 2565 of 2020) For the Petitioner/s : Mr.D.V.Pathy, Advocate Mrs. Manju Jha, Advocate For the Respondent/s : Dr. K.N. Singh, A.S.G. Mrs. Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate Mr. Rajesh Kumar Verma, Advocate Mr. Shyam Bihari Singh, Advocate (In Civil Writ Jurisdiction Case No. 2662 of 2020) For the Petitioner/s : Mr. D.V. Pathy, Advocate Mrs. Manju Jha, Advocate For th....
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....ate (In Civil Writ Jurisdiction Case No. 4796 of 2020) For the Petitioner/s : Mr.D.V.Pathy, Advocate Mr. Sadashiv Tiwari, Advocate Mr. Chaitnya Krishna, Advocate For the Respondent/s : Dr. K.N.Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate Mr. Shyam Bihari Singh, Advocate (In Civil Writ Jurisdiction Case No. 4977 of 2020) For the Petitioner/s : Mr.Bimlesh Kumar Jha, Advocate Mr. Sanjay Singh, Advocate For the Respondent/s : Dr. K.N.Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate (In Civil Writ Jurisdiction Case No. 5027 of 2020) For the Petitioner/s : Mr.Bimlesh Kumar Jha, Advocate For the Respondent/s : Dr. K.N.Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate (In Civil Writ Jurisdiction Case No. 5065 of 2020) For the Petitioner/s : Mr.Bimlesh Kumar Jha, Advocate Mr. Sanjay Singh, Advocate For the Respondent/s : Dr. K.N.Singh, A.S.G. Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Rishi Raj Sinha, Advocate Mr. Rajesh Kumar Verma, Advocate (In Civil Writ Jurisdiction Case No. 5275 of 2020) For the Petitioner/s : Mr.D.V.Pathy, Advocate Mrs. Manju Jha,....
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....oint reading of Sections 2(47)(v), 45 & 48. In such circumstances, the same should be considered as retrospective, despite the recitals in the Finance Act indicating it to be prospective. Insofar as the orders passed, which were also challenged in some of the writ petitions, the challenge made is to the very jurisdiction exercised by the Assessing Officer; relying on the judgment of the Hon'ble Supreme Court in Commissioner of Income Tax vs. Balbir Singh Maini; (2018) 12 SCC 354. 3. We heard Shri D.V.Pathy, learned counsel for the writ petitioners and Dr. K.N.Singh, learned Additional Solicitor General, instructed by Smt. Archana Sinha, learned senior standing counsel for the Income Tax Department. 4. In the case of Balbir Singh Maini (supra) at paragraph-3 the following questions of law were framed, which are extracted hereinbelow: "i) Whether the transactions in hand envisage a "transfer" exigible to tax by reference to Section 2(47)(v) of the Income Tax Act, 1961 read with Section 53-A of the Transfer of Property Act, 1882? ii) Whether the Income Tax Appellate Tribunal, has ignored rights emanating from the JDA, legal effect of non-registration of JDA, its alleged repudiat....
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....ng Officer would necessarily have to follow the said decision under Article 141 of the Constitution of India. Insofar as the orders passed under Section 144 read with Section 147 of the Act, there is an appeal provided, to which remedy the petitioners would have to be relegated. 7. Be that as it may, we are called upon to answer the question regarding the retrospectivity claimed of an amendment brought into the Income Tax Act by the Finance Act, 2017 which inserted sub-section (5A) under Section 45 after subsection (5) and the explanation thereto; which was specifically stated to be inserted with effect from 1st day of April, 2018, making the amendment prospective in operation. 8. In support of the challenge raised, the petitioners have relied on a decision of the Bombay High Court in Godrej & Boyce MFG Co. Ltd v. Deputy Commissioner of Income Tax; (2010) 43 DTR 177 (Bombay), the principle in which stood affirmed by the Hon'ble Supreme Court in Allied Motors(P) Ltd. Etc v. Commissioner of Income Tax; (1997) 224 ITR 0677. Commissioner of Income Tax v. M/s Alom Extrusions Limited; 2009 319 ITR 306 (SC) and Commissioner of Income Tax v. Essar Teleholdings Ltd.; (2018) 401 ITR 445(SC....
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....ificatory or substantive; (ii) An amendment which is clarificatory is regarded as being retrospective in nature and would date back to the original statutory provision which it seeks to amend. A clarificatory amendment is an expression of intent which the legislature has always intended to hold the field. A clarificatory amendment may be introduced in certain cases to set at rest divergent views expressed in decided cases on the true effect of a statutory provision wherein legislature clarifies its intent, it is regarded as being declaratory of the law as it always stood and is therefore, construed to be retrospective; (iii) Where on the other hand, an amendment seeks to bring about a substantive change in legal rights and obligations, the Court would not readily accept an interpretation of the amendment that would render it retrospective in character. Clear words will be necessary in order to enable the Court to reach to such a conclusion; (iv) Where the amendment is curative or where it is intended to remedy unintended consequences or to render a statutory provision workable, the amendment may be construed to relate back to the provision in respect of which it supplies a r....
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....ndue hardship to the assessee and which made the provision unworkable or unjust in a specific situation. Looking to the curative nature of the amendment made by the Finance Act of 1987 it had been submitted before us that the proviso which is inserted by the amending Finance Act of 1987 should be given retrospective effect and be read as forming a part of S. 43B from its inception. This submission had taken support from decisions of a number of High Courts before whom this question came up for consideration. The High Courts of Calcutta, Gujarat, Karnataka, Orissa, Gauhati, Rajasthan, Andhra Pradesh, Patna and Kerala appear to have taken the view that the proviso must be given retrospective effect. Some of these High Courts have held that 'sum payable under S. 43B(a) refers only to the sum payable in the same accounting year, thus excluding salestax payable in the next accounting year from the ambit of S.43B(a) The Delhi High Court has taken a contrary view holding that the first proviso to S. 43B operates only prospectively. We will refer only to some of these judgments". 12. The purport of the above declarations is that, in examining the question whether an amendment is pro....
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.... consideration received or accruing as a result of such transfer. Explanation.- For the purposes of this subsection, the expression- (i) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force; (ii) "specified agreement" means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash; (iii) "stamp duty value" means the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of an immovable property being land or building or both." 15. The petitioners' contention essentially is that Section 45(1) read with Section 2(47)(v) of the Income Tax Act enables inclusion of the capital gains in the total income of the assessee, in the previous year in which possession of an immovable property has been handed over, by the owners to the developer as envisaged under Section 53A of the Tran....
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....tuated, seems to be the argument. 18. The argument that in the computation of total income, there cannot be a distinction between a company and an individual, at the outset has to be rejected. The claim also is only insofar as the amendment being retrospective and it is not the contention that the amendment should be made applicable to every entity entering into a JDA and not confined to an individual or a joint Hindu family. The amendment, it is urged, was brought in, to mitigate unintended consequences of an assessee being obliged to compute in his total income, the capital gains on the basis of its accrual, merely for reason of a transfer having been effected as available under Section 53A of the Transfer of Property Act. 19. We are unable to countenance the said argument especially since the amendment to Section 45 by insertion of a sub-section was expressly stated to be, with effect from the 1st day of April, 2018. There is no question of any discrimination between persons who entered into a JDA before and after the amendment, insofar as the JDA entered into by an individual or a Hindu undivided family, prior to 01.04.2018 being governed by the law on the subject as it exist....
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....d in clear language or implied, without any scope for doubt, then the amendment would only be prospective. An amendment can be taken as impliedly retrospective only when it is intended at removing an obvious anomaly or correcting a blatant error or obliterating an absurdity or bringing it in consonance with any other law or the Constitution. In fact, in such cases the legislature brings in the amendment by way of a substitution and even when a provision is substituted, it would be retrospective only if it is so expressed or follows from necessary intendment, as is implicit from the language implied. In the present case, the amendment made effective from 01.04.2018 is expressly stated to be prospective from that date and there can be no intendment ferreted out since the above noted deficiencies are totally absent. We find no discrimination having been visited on individuals or Hindu undivided families, for whom there was a change made in the manner, or the previous year in which the computation of total income is made, which was effective only insofar as the agreements entered into after 01.04.2018. 23. Insofar as unintended consequences, it would be fruitful to refer to the Hon'b....
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.... law or an established principle of interpretation of statutes." 24. We also garner support from Shyam Sundar & Others v. Ram Kumar & Another, reported in (2001) 8 SCC 24, wherein it was held that '... there is a presumption against the retrospective operation of a statute and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending Act which affects the procedure is presumed to be retrospective, unless amending Act provides otherwise' (sic). Going by the above precedents, we are of the opinion that sub-section (5A) inserted by way of an amendment in the Finance Act, 2017, expressly stated to be effective from 01.04.2018 cannot be treated as retrospective, for reason of the express words employed and there can be no intendment ferreted out, so as to deem it impliedly retrospective. The consequences as per Section 45, for a person who transfers a capital asset as contemplated under Section 2(47)(v) insofar as having to compute the total income by including the capital gains accrued in the previous year in which a transfer was affected, when the JDA was entered into prior to 01.04.2018 was not an unintend....