2020 (1) TMI 134 - HC - Income Tax

Notifying the petitioner u/s 10(46) - Benefit of exemption - Board in respect of filing specified income arising to that Board - Board under Section 10(46) of the Act with retrospective effect from 01.06.2011 - HELD THAT - There is no legal impediment for respondent No.1 CBDT to consider/reconsider the application dated 30.11.2018 to extend the benefit of the Notification dated 09.04.2019 retrospectively with effect from 01.06.2011 since the nature of the petitioner Board remains the same even for the earlier years. Hence, respondent No.1 is directed to reconsider the application dated 30.11.2018 (Annexure J) submitted by the petitioner and take a decision in accordance with law by passing a speaking order inasmuch as extending the benefit of the Notification dated 09.04.2019 retrospectively with effect from 01.06.2011. Such compliance shall be made in an expedite manner, in any event, not later than eight weeks from the date of receipt of certified copy of the order.

Summary

Issues:
1. Application for Notification under Section 10(46) of the Income Tax Act, 1961 with retrospective effect.
2. Consideration of the application by the Central Board of Direct Taxes (CBDT).
3. Legal validity of restricting the Notification prospectively.
4. Direction to reconsider the application retrospectively.

Analysis:

Issue 1: The petitioner, claiming to be a Board constituted under the Mysore Palace Acquisition Act, sought Notification under Section 10(46) of the Income Tax Act, 1961, with retrospective effect from 01.06.2011. The petitioner argued that the nature of income received remained consistent for earlier periods, justifying the retrospective application.

Issue 2: The Central Board of Direct Taxes (CBDT) issued a Notification dated 09.04.2019, restricting the exemption to specific assessment years, despite the petitioner's request for retrospective effect. The petitioner urged for reconsideration of their application to extend the benefit of the Notification retrospectively.

Issue 3: The revenue contended that the Notification was issued prospectively after considering the petitioner's request, implying no further consideration was necessary. However, the petitioner insisted on the retrospective extension of the Notification, emphasizing the similarity in the nature of income over the years.

Issue 4: The High Court, after hearing arguments from both sides, held that there was no legal impediment for the CBDT to reconsider the application dated 30.11.2018 and extend the benefit of the Notification dated 09.04.2019 retrospectively from 01.06.2011. Consequently, the Court directed the CBDT to reevaluate the application and make a decision promptly, not exceeding eight weeks from the date of receiving the order's certified copy.

In conclusion, the High Court disposed of the writ petition by instructing the CBDT to review the petitioner's application for Notification under Section 10(46) of the Income Tax Act, 1961, with retrospective effect, emphasizing the need for a prompt decision within the specified timeframe.