TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1002
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....la Gunaranjan, learned counsel for the respondent. 3. The following substantial question of law is framed in the present appeal: Whether the finding of the Tribunal that the Assessee is entitled to claim exemption in regard to capital gains in question in terms of Section 10(23G) of the Income Tax Act without due consideration of detailed reasoning given by the Assessing Officer and the related facts on record, is sustainable in law? 4. The learned counsel for the appellant submitted that the appellant rightly sustained the order of the Assessing Officer in bringing long-term capital gains of Rs.31,43,80,590/- earned by the Appellant on the sale of 26,80,000 shares of Andhra Pradesh Gas Power Corporation Ltd., to tax while computing the income under normal provisions of the Act and also under the Special provisions of section 115JB of the Act stating that the provision of section 10(23G) do not apply to the respondent as the investment was made by the respondent prior to 01.04.1998. 5. The learned counsel for the Appellant further submitted that the appellant rightly did not take into consideration the explanation 2 to clause (23G) of Section 10 of the Act, which says that in....
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....(23G). 7. The learned counsel for the appellant brought to the notice of this Court that Section 10(23G) how many times it was amended and also it is require to reproduce the same for the benefit of to settle the present case . I Finance (No.2)Act, 1996 , introduced Sec .10(23G) which reads as follows: "(23G) any income by way dividends, interest or long term capital gains of an infrastructure capital fund or an infrastructure capital company from investments made by way of shares of long-term finance in any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility, which fulfils the conditions specified in sub-section (4A) of section 80-IA. Explanation. For the purposes of this clause, (a) "infrastructure capital company" means such company as has made investments by way of acquiring shares or providing long-term finance to an enterprise carrying on the business of developing, maintaining and operating infrastructure facility; (b) "infrastructure capital fund" means such fund operating under a deed, registered under the provisions of the Registration Act, 1908(16) of 1908), established to raise monies by the trustees for ....
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....ning and operating infrastructure facility ; (b) "infrastructure capital fund" means such fund operating under a trust deed, registered under the provisions of the registration Act ,1908(16 of 1908) established to raise monies by the trustees for investment by way of acquiring shares or providing long-term finance to an enterprise wholly engaged in the business of developing ,maintaining and operating infrastructure facility. (c) "infrastructure facility: means (i) a road, highway, bridge, airport , port, rail system, a water supply project, irrigation project, sanitation and sewerage system or any other public facility of a similar nature as may be notified by the Board in this behalf lin the official Gazette and which fulfils the conditions specified in sub section (4A of section 80-1A (ii) a project for generation or generation and distribution of electricity or any other form of power where such project starts generating power on or after the 1st day of April,1993, (iii) a project for providing telecommunication services in or after the 1st day of April,1995; (iv) a project for housing which fulfils the conditions specified in sub section(4F) of section 80- IA; (d....
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....tation quoting Craies stated thus: "For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a preamble, and also the word "declared" as well as the word "enacted". 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 introduce 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 ....
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....Revenue: (a) That the gain in question is a long-term capital gain (b) That the company, Andhra Pradesh Gas Power Corporation Ltd., is an infrastructure facility within the meaning of sub clause (H) of clause (b) of Explanation to Sec.10(23G), as Central Government had notified that undertaking as an infrastructure facility and as it had started generation of power after 1 April 1993. (c) That the company falls within the definition of "Infrastructure Capital Company" envisaged in sec. 10(23G), 17. It is further observed by the Tribunal that section 10(23G) as it existed immediately before amendment by Finance (No.2) Act, 1998, clearly states that any income by way of long-term capital gain of an infrastructure capital fund is exempt under sec. 10(23G). That the capital gain in question is exempted from tax under section 10(23G) as per the provisions of the statute existing in 1997 read with Explanation 2 mandates that income by way of long-term capital gain of an infrastructure capital Company from investments made before 01.06.1998, by way of shares in any enterprise which is an infrastructure facility, shall not be included in the total income i.e. it shall not form part ....
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....ase law, the Apex Court discussed the terms "mandatory" and "directory" in relation to furnishing the declaration to the Assessing Officer, which must be submitted before the due date for filing the original return of income under section 139(1).However, in the present case ,the question of the declaration does not arise due to the amendment, as the assessee is only seeking exemption. Therefore ,the above case law is not applicable to the present case on this ground as well. In another case law relied upon by the appellant is that in Sree Sankaracharya University of Sanskrit & Others V. Dr. Manu & Another (4th supra) with regard to explanation/clarification may not expand or alter the scope of the original provision is explained as follows : iv) Merely because a provision described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyse the nature of the amendment and then conclude whether it is reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively. 19. In the present case there is no expansion of expla....
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....romulgated. The second concept, which will be referred to as "quasi-retroactivity", occurs when a new rule of law is applied to an act or transaction in the process of completion.... The foundation of these concepts is the distinction between completed and pending transactions...." [T.C. Hartley, The Foundations of European Community Law 129 (1981).] 102. Many decisions of this Court define "retroactivity" to mean laws which destroy or impair vested rights. In real terms, this is the definition of "retrospectivity" or "true retroactivity". "Quasi-retroactivity" or simply "retroactivity" on the other hand is a law which is applicable to an act or transaction that is still underway. Such an act or transaction has not been completed and is in the process of completion. Retroactive laws also apply where the status or character of a thing or situation arose prior to the passage of the law. Merely because a law operates on certain circumstances which are antecedent to its passing does not mean that it is retrospective. The main issue involved in the above - discussed case is that the retroactive laws also apply where the status or character of a thing or situation arose prior to the ....