TaxTMI 
TaxTMI 
2026 (6) TMI 371
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.... on the tax. 1.1. Also assailed is the Assessment Order dated 21.12.2019, passed by Respondent No. 4 (the Assessing Officer) qua financial year 2016-17. The petitioner has already preferred an appeal against the said assessment before the Commissioner of Income Tax (Appeals) as stated in ground 'E' of the petition. In the premise, we deem it appropriate to confine ourselves to examine the challenge to the retrospectivity validity of the notification/amendment dated 15.12.2016 vis-à-vis its effective date of coming into operation. 1.2. Sections 115BBE and 271AAC are intertwined, as the discussion in latter part will demonstrate. Section 271AAC cannot operate in isolation on its own. It is entirely dependent upon and triggered by a prior determination to be made for applicability of Section 115BBE. 1.3. The question herein is whether the amended as well as newly-inserted sections, ibid, are applicable with retrospective effect from 01.04.2016 i.e. the date of commencement of the financial year or with immediate effect 15.12.2016 the date when it was notified or prospectively with effect from 01.04.2017 i.e. the date of commencement of forthcoming next financial year? ....
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....section (1)." 2. FACTS OF THE CASE/PETITION 2.1. By a Notification dated 8th November 2016, the Government of India demonetized currency notes of Rs. 500/- and Rs. 1000/denominations i.e. specified bank notes- SBN for short. Members of the public were to deposit old currency (SBN) in their bank accounts on or before 30th December 2016. 2.2. During the financial year 2016-17, stating it to be cash proceeds in course of his routine business (jewellery and bullion), a cash sum of Rs.66,17,500/- (including SBN) was deposited by the petitioner in his bank accounts during November/December,2016 i.e. demonetization period. 2.3. The Taxation Laws (Second Amendment) Act, 2016 (Act No. 48 of 2016), was notified on 15.12.2016. By virtue of this, Section 115BBE of the Income Tax Act, 1961 was amended w.e.f. 01.04.2017, enhancing the rate of tax on income falling under Sections 68 to 69D from 30% to 60%, with an additional surcharge of 25% on such tax, resulting in an effective rate of 75% plus 10% of tax as penalty with cess, and thus an aggregate liability of 83.25% (inclusive of cess). 2.4. Petitioner herein is engaged in the business of jewellery and bullion. He filed his ret....
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....Section 115BBE of the Act. 3. STAND TAKEN IN THE REPLY BY THE RESPONDENTS 3.1. Reply has been filed opposing the petition and seeking dismissal thereof, stating inter alia that Parliament has the power to amend fiscal laws retrospectively. 3.2. It is also pleaded that in any case the amendment under challenge received assent from Honourable the President of India on 15.12.2016 before the financial year 2016-17 ended and, therefore, is applicable qua the assessments for that financial year. Thus it cannot be termed retrospective and challenge to the same on that ground is misconceived. 3.3. Stand taken on merits of assessment is that during the demonetization period, the assessee deposited cash of Rs.66,17,500/(inclusive of Specified Bank Notes) in his bank accounts. On examination of the books of account, a striking and unexplained disparity was found between the two financial years. The average monthly cash sales in FY 2016-17 stood at Rs.6,97,271/-, as against Rs.97,046/- in FY 2015-16 i.e. an increase of approximately seven times. Similarly, the average closing cash in hand rose from Rs.3,26,623/- to Rs.25,71,552/-, nearly eight times higher. 3.4. Furthermore, the....
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.... otherwise would be to give the amendment a retrospective operation that the legislature did not intend and that the law does not permit. 4.4. Such retrospective levy of an enhanced rate of tax, together with the penalty and applicable surcharge, results in an effective tax liability of 83.25%. The retrospective invocation of Section 115BBE has accordingly been challenged on the ground that its retrospective application is unreasonable, arbitrary and violative of the settled principles of taxation law, as well as the constitutional guarantee against arbitrary State action. 4.5. On merits of the impugned Assessment Order, he would argue that it is wholly arbitrary, illegal, and contrary to settled law, and is liable to be quashed and set aside on the following grounds: (i) The assessing officer has gravely erred in law in failing to appreciate that the cash deposits made by the petitioner were duly explained and supported by adequate material. The assessing officer could not, in law, treat such deposits as unexplained under section 68 of the Act. (ii) Even assuming, arguendo, that such deposits were liable to be treated as unexplained cash credits, the assess....
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.... legislature, by enacting the amendment, obtaining the Presidential assent and notifying the enactment on 15th December, 2016 i.e. well before the close of Financial Year 2016-17 on 31st March, 2017, manifested a clear intention that the enhanced rate of tax should apply to income arising on and after 1st April, 2016, being the commencement of the financial year relevant to Assessment Year 2017-18. 5.5. Accordingly, it is submitted that any income falling within the purview of Section 115BBE, that is, income determined under Sections 68, 69, 69A, 69B, 69C, and 69D of the Act, and arising during Financial Year 2016-17, is liable to be taxed at the enhanced rate of 60% as prescribed by the amended provision. The amendment was notified before the close of the financial year to which the assessee's income relates, its application to income of that year cannot be characterised as retrospective. Seen from that angle, there is thus no retrospective applicability, is the submission. 5.6. On merits of the assessment, Mr. Bissa would submit that on a perusal of the material on record, it was observed that there was an abnormal and unexplained increase in the sales declared by the asses....
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....n agricultural income". It is in exercise of this constituent power that Parliament enacted the Income Tax Act, 1961, which is the principal legislation governing the levy and collection of direct taxes on income in India. 6.4. Section 4 of the Income Tax Act, 1961 is the principal charging section of the Act. It reads as under: "4. Charge of income-tax. (1). Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions (including provisions for the levy of additional income-tax) of, this Act in respect of the total income of the previous year of every person: Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. (2). In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act." Section 4 thus makes it unequivocall....
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....). The law governing the assessment of income for a given financial year is the law as it stands on 01st April of that calendar year. (ii). An amendment introduced after 01st April of a financial year does not apply to the assessments for that year (unless it so specifically states otherwise). 6.8. In the context of controversy in hand, Part-D of Chapter III and Chapter IV of The Income Tax Act, 1961 draws out a fundamental and legally distinct two broad heads/categories of income, insofar as the basis and rate of levy are concerned, viz.: (i) Part-D of Chapter III (Normal slab):- Income from Business or Profession which is governed by Sections 28 to 44 of the Act; Sections 28 to 44 of the Act constitute the statutory framework for the computation and levy of tax on income, at the rate of normal slab for income from business or profession. Section 28 is the charging provision under this head, and it brings to tax profits and gains of any business or profession carried on by the assessee at any time during the previous year. The categories of income chargeable under Section 28 include Profits and gains of any business or profession; An....
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....pplication of Section 115BBE. 6.11. As is borne out, income from business or profession falling under Sections 28 to 44 of the Act is taxed at the normal slab rates under section 115 BAC applicable to the assessee, as prescribed by the relevant annual Finance Act for the assessment year. The assessee is entitled to claim all permissible deductions, set-offs, and carry-forward of losses against such income. 6.12. Whereas, income determined under Sections 68 to 69D, prior to the amendment by the Taxation Laws (Second Amendment) Act-2016, was taxed at a flat rate of 30% under Section 115BBE. Following the amendment, with effect from 01.04.2017, the rate of tax was enhanced to 60%, with an additional surcharge of 25% on such tax, resulting in an effective rate of 75%, and inclusive of cess, an aggregate liability of 83.25%. Further, as per amendment no deduction for expenditure, allowance, or set-off of any loss is permissible against such income. 6.13. It is to be noted that Section 115BBE has no application to business income chargeable to tax under Sections 28 to 44 of the Act. Its operation is confined exclusively to income falling within the residuary categories (section ....
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....en taxed within the framework of Section 115BBE. It does not constitute an independent or free-standing penal charge. In the absence of a valid determination under Section 115BBE, no penalty under Section 271AAC can be sustained. 6.17. Sections 115BBE and 271AAC are intertwined, though not symmetrically so. Section 115BBE operates independently as it stands alone on its own legs and applies regardless of whether or not Section 271AAC is invoked. Section 271AAC, however, cannot operate in isolation on its own; it is entirely dependent upon and triggered by a prior determination made for applicability of Section 115BBE. In other words, Section 115BBE can exist and operate without Section 271AAC, but Section 271AAC cannot be invoked without Section 115BBE first coming into play. LEGISLATIVE HISTORY OF SECTION 115BBE PART-I 6.18. With the above understanding in place, it may be useful to briefly trace the legislative evolution of Section 115BBE, from its original insertion in the Income Tax Act to its subsequent amendments. 6.19. Section 115BBE was first introduced into the Income Tax Act by the Finance Act, 2012, with effect from 01.04.2013. Pertinently, the rate of inc....
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....r sections 68, 69, 69A, 69B, 69C and 69D of the Act. It is proposed to amend section 115BBE of the Act to provide that tax in respect of such income shall be charged at the rate of sixty per cent. with a surcharge of twenty-five per cent. of tax (i.e., fifteen per cent. of such income). No deduction or allowance in respect of any expenditure or set-off of any loss shall be allowed to the assessee in computing such income. Therefore, an alternative scheme namely, the 'Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) is proposed to be provided in the Bill. The Bill seeks to achieve the above objectives. -Arun Jaitley, New Delhi, 26th November, 2016" 6.22. Deployment of the language in the Bill, i.e., "proposes to amend" and "to ensure that defaulting assessees are subjected," is prospective in character. It addresses future conduct and not concluded transactions. Under settled canons of statutory construction, when a taxing statute creates a new liability or enhances an enhanced liability, it must express the retrospective intent in clear and unambiguous terms. No such expression is to be found in Objects and R....
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.... (b). No deduction in respect of any expenditure, allowance, or setoff of any loss was to be permitted against income so determined. 7. CASE LAW Having examined the statutory provisions, as above, let us now turn to the relevant case law to aid in their interpretation (starting from year 1966 right up to 2025). 7.1. Karimtharuvi Tea Estate Vs. State of Kerala [(1966) 60 ITR 262: 1965 SCC OnLine SC 233] (1966-SC- Three Judges Bench) Hon'ble Supreme Court was dealing with the case where a provision imposing tax came in force on September 1st, 1957, i.e. after the commencement of F.Y. 1957-58. The issue was whether it could be applicable retrospectively so as to be treated as law in force for assessment of that F.Y. from 01.04.1957 to 31.03.1958. Relevant portion of the judgment is as below: "8. Now, it is well settled that the Income Tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amen....
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.... a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 29. The obvious basis of the principle against retrospectivity is the principle of "fairness", which must be the basis of every legal rule as was observed in L' Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus, legislations which modified accrued rights or which impose ....
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....at no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. Dogmatically framed, the rule is no more than a presumption, and thus could be displaced by outweighing factors." 7.4. Maruthi Babu Rao vs. ACIT [WA. No.984/2019, Kerala High Court] (2019-Kerala High Court - Division Bench) "10. x-x-x-x The well established position as argued by the learned Standing Counsel, as is clearly discernible from the precedents too; is that the rate prescribed by a Finance Act brought into effect from the 1st of April of an year would apply to the assessments made in that year relating to the previous year. The precedents would also indicate that there cannot be disturbance caused to accrued rights or obligations imposed, unless the legislative intent clearly indicates a retrospective effect as has been declared by another Constitution Bench in Vatika Township Pvt. Ltd.This is the legal aspect on which the facts in the present case has to be applied. Before we look at the amendments carried out, on facts, there were two seizures of cash m....
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.... no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that year. The enhanced rate applies from the commencement of the assessment year, which relates to the previous financial year. 14. Likewise it was by Chapter II with heading 'Rates of Income Tax', as provided in the Finance Act 2016, that a surcharge was introduced by way of the 3rd proviso of Section 2(9) of that Finance Act. This comes into effect from the Financial Year 2016-2017; which is the year in which the subject seizures were occasioned. The proviso refers to various provisions where the advance tax computed under the first proviso stands increased by a surcharge for the purpose of the Union. Section 115BBE is one of the provisions referred to in the 3rd proviso and in the case of individuals the surcharge was @15% where the total income exceeds one crore, as on 01.04.2016. By the 2nd Amendment Act Section 2 of the Finance Act, 2016 stood amended by which 115BBE was omitted from the 3rd proviso. After the 6th proviso yet another proviso was inserted which provided for the 'advance tax' computed under the first proviso, in resp....
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.... Act deals with levy of tax on income as mentioned in Section 68, 69, and 69A to 69D of the Act. If a case comes under Section 115BBE sub-section (1) of the Act, the rate of income tax shall be at 60%. 15. The object of this provision is to fill up the loopholes and to make sure-unaccounted money either generated or used, more so in the nature of Black Money, is penalized. When this provision was introduced in the year 2012, the rate of tax was fixed at the rate of 30%. The Bill also speaks about the objective behind not allowing any deduction to the assessee in computing deemed income under Section 68, 69 and 69A to 69D of the Act. That was the reason why a decision was made to impose greater tax burden. The rate of tax was increased by a subsequent amendment to 60%. 16. Sub-section (2) of Section 115BBE starts with a non-obstante clause. It will have precedence over any other provision contained in the Act, while dealing with a deduction in respect of any expenditure or allowance or set off of any loss. In other words, no such deduction would be allowed under any provision of the Act in computing an assessee's income under subsection (1). An amendment has be....
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....he revenue is empowered to impose only 30% rate of tax." 8. CASE IN HAND 8.1 Against this backdrop, the core question that falls for adjudication is as below :- Whether the amendment to Section 115BBE, which enhanced the rate of tax from 30% to 60%, can lawfully be applied to income arising from transactions completed during Financial Year 2016-17 w.e.f. 01.04.2016 to 31.03.2017, and/or more specifically, whether such enhanced rate operates from 15.12.2016, being the date of notification/Presidential assent to the amending Act, or only from 01.04.2017, being the effective date expressly specified in the amending provision itself ? 8.2. The amendment assumes particular significance in the context of Section 4 of the Income Tax Act. Under Section 4, income earned during a previous year is assessed to tax in the immediately following assessment year, at the rates prescribed for that (previous) year. The amendment to Section 115BBE is expressly stated to take effect from 01.04.2017, it thus directly bears upon income earned during FY 201718 which falls for assessment in AY 2018-19. Thus, in ordinary course, rate of tax applicable to the income of FY 2016-17 is therefo....
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.... Amendment of section 115BBE- In section 115BBE of the Income-tax Act, in sub-section (2), after the word "allowance", the words "or set off of any loss" shall be inserted with effect from the 1st day of April, 2017. x-x-x-x Perusal of the above shows that while it is stated in Section 2 that the Act will come in force w.e.f. 01.04.2016, but as per Section 53, amendment in 115 BBE shall come in force w.e.f. 01.04.2017. 8.5. The text and legislative intent qua the Section 115BBE amendment being prospective w.e.f. 01.04.2017 is also very clear from the plain language used in the Finance Act, 2016 [as well as the language used in Taxation Law (Second Amendment) Act, 2016-dealt with in the succeeding paragraph]. 8.6. Let us now examine the effective date of amendment in section 115BBE as per The Taxation Laws (Second Amendment) Act, 2016" (Act No. 48 of 2016) which came into operation w.e.f 15.12.016. Relevant extract thereof is as below:- "THE TAXATION LAWS (SECOND AMENDMENT) ACT, 2016 (No. 48 OF 2016) [15th December, 2016] An Act further to amend the Income-tax Act, 1961 and the Finance Act, 2016. BE it enacted by Parliament in th....
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.... (c) "Pradhan Mantri Garib Kalyan Deposit Scheme, 2016" (hereinafter in this Chapter referred to as "the Deposit Scheme") means a scheme notified by the Central Government in consultation with the Reserve Bank of India in the Official Gazette; and (d) all other words and expressions used in this Scheme but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act. 199C. Declaration of undisclosed income. (1) Subject to the provisions of this Scheme, any person may make, on or after the date of commencement of this Scheme but on or before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any income, in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017. (2) No deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed against the income in respect of which a declaration under sub-section (1) is made. Explanation. For the purposes of this section,....
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..... 8.6.4. Even Statement of Objects and Reasons of the above Act, as already discussed in the preceding part, reveals that it discloses no legislative intent to tax transactions completed prior to 01.04.2017 at the enhanced rate. 8.7. INCOME DISCLOSURE SCHEME, 2016 Prior to demonetization, the Income Disclosure Scheme (IDS), 2016 was promulgated, operative from June 1, 2016 to September 30, 2016. The effective tax rate under the IDS was 45% of undisclosed income, inclusive of surcharge and penalty. 8.8. THE DEMONETIZATION CONTEXT By Notification S.O. 3408(E) dated 08.11.2016 issued by the Ministry of Economic Affairs, the Central Government declared that existing bank notes of denominations of Rs. 500/- and Rs. 1,000/- (Specified Bank Notes) would cease to be legal tender with effect from 09.11.2016. Members of the public were called upon to deposit their old currency in bank accounts on or before 30.12.2016. 8.9. PRADHAN MANTRI GARIB KALYAN YOJANA, 2016 8.9.1. Aside above, the Government's simultaneous introduction of the PMGKY is itself an admission that there existed a class of assessees who had deposited undisclosed income during demonetization and requi....
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.... Sections having immediate effect Effective From Sections 1 April 2017 2, 3 (except 3(a), 6, 15(a), 20, 21, 29, 41, 47, 49, 52, 53, 54, 56, 60, 65, 66, 67, 70, 71, 72, 73, 74, 75, 77, 78, 79, 80, 81, 82, 83, 84, 85, 87, 88 Sections having prospective effect Effective From Sections 1 June 2017 70, 64 1 April 2018 3(a), 6(b), 6(c)(ii), 6(e), 6(f), 7, 8, 9, 10, 11, 12, 13, 14, 15(b), 16, 17, 18, 19, 22, 23, 24, 25(a) to 25(e), 26, 27, 28, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 42, 43, 44, 45, 46, 48, 55, 57, 58, 59, 61, 62, 63, 68(a), 69, 76, 86 THE FINANCE ACT, 2018 8.11. Likewise, position gets even clearer qua the legislative intent when one sees Finance Act, 2018 which is not only instructive, but also conveys the Legislature's conscious approach where it has to make laws retrospectively and/or prospectively. Reference may be had to such an illustration of Finance Act, 2018, which for ready reference is a below: "THE FINANCE ACT, 2018 No. 13 OF 2018 [28th March, 2018.] An Act to give effect to the financial proposals of the Central Government for the financial year 2018-2019. BE it enacted by Parl....
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....orate it further. The Finance Act, 2018 was enacted w.e.f. 28.03.2018, but it clearly states that the amendments in Section 115AD shall be w.e.f. 01.04.2019 i.e. prospective in nature, whereas it is clearly stated that amendment in Section 115BA and amendment in Section 115BBE in its Sub-section 2 shall come into effect from 1st day of April, 2017 i.e. retrospective. No such language has been deployed qua the amendment carried out vide Taxation Law (Second Amendment) Act, 2016, wherein not only it is borne out that is prospective in nature, but a clear cut-off date has been given i.e. 01.04.2017 for section 2 to come into force. 8.16. Thus, The Finance Act, 2018 which is a subsequent Legislation also buttresses our above view. The Finance Act, 2018 amended Section 115BBE(2) so as to bring clause (b) of Sub-section (1) expressly within its ambit, and specifically assigned retrospective effect from 01.04.2017 to that amendment. The other provisions of the Finance Act, 2018 were to come into force on the 1st day of April, 2018, without any retrospective declaration. This deliberate contrast conclusively demonstrates that where the legislature intends retrospectivity, it says so in ....
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.... consistent approach is adopted by the Assessing Officers while applying provision of section 115BBE in assessments for period prior to the assessment year 2017-18. 3. The Board has examined the matter. The Circular No. 3/2017 of the Board dated 20th January, 2017 which contains Explanatory notes to the provisions of the Finance Act, 2016, at para 46.2, regarding amendment made in section 115BBE(2) of the Act mentions that currently there is uncertainty on the issue of set-off of losses against income referred to in section 115BBE. It also further mentions that the pre-amended provision of section 115BBE of the Act did not convey the intention that losses shall not be allowed to be set-off against income referred to in section 115BBE of the Act and hence, the amendment was made vide the Finance Act, 2016. 4. Thus keeping the legislative intent behind amendment in section 115BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is of the view that since the term 'or set off of any loss' was specifically inserted only vide the Finance Act 2016, w.e.f. 01.04.2017, an assessee is entitled to claim set-off of loss against income....
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....m 01.04.2017 and cannot be applied retrospectively to any transaction which has taken place prior there to. 13. The respondents' contention is that since the amending Act-received Presidential assent on 15.12.2016 i.e. before the commencement of Assessment Year 2017-18 on 01.04.2017, therefore, the amendment is applicable w.e.f. 01.04.2016 or in the alternative w.e.f. 15.12.2016. This contention conflates two distinct questions: (i) when the assessment is made, and (ii) when the transactions giving rise to the income occurred. In terms of Karimtharuvi, (supra), the Income Tax Act, as it stands on first day of April of any financial year must apply to assessment of that year. Applying an enhanced rate, introduced during the course of a financial year that had already commenced, to transactions already completed weeks and months before the amendment was even introduced in Parliament, that too, in the absence of any express text for retrospective effect of the legislation or even it's implied retrospectivity, amounts to a retroactive enhancement of tax liability on completed transactions, which as is borne out not permissible. Therefore, such an interpretation ....
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....nts in the Act which come into force after the first day of April of a financial year would not apply to the assessment for that year, even if the assessment is actually made after the amendments have come into force. 14.2. Learned Division Bench of Kerala High Court also observed that there cannot be disturbance caused to accrued rights or obligations. It then proceeded on the premise that the rate prescribed by a Finance Act brought into effect from the 1st of April of an year would apply to the assessments made in that year relating to the previous year, unless the legislative intent clearly indicates a retrospective effect. The terms 'assessment of that year' is different from the term 'assessment made in that year'. The distinction may be demonstrated thus- the assessment of income of financial year 2015-2016 would be made in next following year 2016-2017 (which would be corresponding assessment year for the income of the financial year 2015-2016) and similarly, the assessment of income of financial year 2016-2017 would be made in next following year 2017-2018(which would be corresponding assessment year for the income of financial year 20162017). 14.3. To carry the disc....
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....s and circumstances in present case to warrant an adverse view of the petitioner's conduct. 14.5. In the case in hand, assessee had voluntarily disclosed that the relevant sum of Rs.66,17,500/- deposited in his bank accounts during November/December,2016 was part of his business income for financial year 2016-2017. True, the assessing officer was not satisfied the explanation of the assessee about this income. But the fact remains that there was no absolutely no concealment of income by the assesse in this case, unlike the case of in Maruthi Babu Rao (supra), in which the assessee had dishonestly concealed his income and it was unearthed by two seizures. Perusal of the judgment ibid shows that the fact of dishonest concealment of income and it's having been unearthed by two seizures were treated by the learned Division Bench as acts of major misdemeanor by the assessee and his misconduct had considerably weighed with the Division Bench while upholding the dismissal of his writ petition by the learned single judge of the court in exercise of it's extraordinary writ jurisdiction under Article 226/227 of the Constitution of India. Other than stating that there was no new liability ....
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....ges Bench of the Apex Court in Karimtharuvi Tea Estate and by the Constitution Bench in Vatika Township. We are bound by the law laid down by a Three Judges Bench of the Apex Court Karimtharuvi Tea Estate Ltd. vs. State of Kerala (which holds the field till date) that "The Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year would not apply to the assessment for that year, even if the assessment is actually made after the amendments have come into force." 14.10. We are also bound to follow the law laid down in the Constitution Bench of the Apex Court in in Vatika supra, while dealing with the proviso added to Section 113 of the Income Tax Act, and observing/holding that "the addition of the said proviso, is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule....