TaxTMI 
TaxTMI 
2023 (9) TMI 950
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.... March 2019 passed by Respondent No. 1, Commissioner of Income Tax (International Taxation)-3 whereby his Petition under Section 264 of the Income Tax Act, 1961 ("the Act") was rejected. The issue that arises is: "whether, in the facts and circumstances of the case, the benefits of Section 54(F) of the Act are available to Petitioner having transferred his residential house in India and purchased another house property in the United States of America, in view of the Amendment in Sections 54 and 54(F) of the Act by the Finance (No. 2) Act of 2014? 3. Petitioner is a Non-Resident Indian working in the USA. Petitioner filed return of income for Assessment Year ("AY") 2014-15 declaring NIL taxable income, under the assumption that being NRI ....
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....n but rejected his claim on the ground that Petitioner was not eligible for deduction under Section 54 of the Act as the investment was made in a house property situated outside India. Respondent No. 1 relied upon an amendment in Section 54(1) of the Act by the Finance (No. 2) Act, 2014 which inserted the words 'in India' in the said provision. It is this rejection order which is assailed in the present Petition. 5. At the very outset, Mr. Devendra Jain learned Counsel appearing for Petitioner fairly concedes that the Commissioner, though rightly assumed jurisdiction over Petitioner's Revision Application, however, failed to consider the position of law settled by various binding precedents. He also relied upon the provision of S....
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....nal return of income under Section 139(1) of the Act was 31st July 2014 and the due date for filing belated return under Section 139(4) of the Act was 31st March 2016 which is beyond the due date and hence, Petitioner was ineligible to revise his return under Section 139(5) of the Act. Thus, Mr. Sharma says that the revised return filed by Petitioner is non-est. Secondly, the cost of the new asset as declared by Petitioner has also been doubted by Respondent No. 1. According to Respondent No. 1, it is impossible that the cost of the new asset will be the same as capital gains and hence it is presumed that Petitioner has withheld the purchase consideration of a new house. Mr. Sharma also submitted that the application of Section 54 of the Ac....
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....ale of the property in India, within the specified period. Petitioner has thus satisfied the conditions stipulated in Section 54(F) of the Act as it stood and was applicable to the relevant Assessment Year. The language of Section 54(F) of the Act before its Amendment was that the assessee should invest capital gain in a residential house. It did not mention any boundary. It is only after the amendment to Section 54(F) of the Act, which amendment came into effect from 1st April 2015, that the condition that the assessee should invest the sale proceeds arising out of a sale of capital asset in a residential situated "in India" within the stipulated period was imposed. Thus, a plain reading of the pre-amended Section 54(F) of the Act, leaves ....
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.... force with effect from 1st April 2015 and therefore, would apply to future periods only and not prior to the date of amendment. It is well settled position of law that an amendment can be considered to be declaratory and clarificatory only if the statute itself expressly and unequivocally states that it is declaratory and clarificatory provision. If there is no such clear statement, the amendment is not merely a clarification, but a substantive amendment, which shall apply prospectively. In the matter of Virtual Soft Systems Limited v. CIT (2007) 289 ITR 83 (SC), the Apex Court has gone further and held that 'even if the statute does contain such a statement, the Court will not regard itself as being bound by the statement, but will pr....
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....ction, which was neither the intention nor the object of the amendment. Leena Jugalkishore Shah (supra) and Anurag Pandit (supra) support the contention of Petitioner. 11. We find that the language of Section 54(F) of the Act prior to the amendment is neither ambiguous nor vague. The intention of the legislature to insert the words 'in India' with effect from 1st April 2015 is not uncertain or confusing and hence the applicability of the amendment cannot but be prospective. 12. It is also clear that Petitioner has not filed the revised returns under Section 139(5) of the Act but he has admitted to an inadvertent error in declaring total income as Nil vide a rectification application. Admittedly, he is entitled to a refund of Rs. 72,37....