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TMI Blog2014 (4) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... y the company - No new levy is imposed - The tax-base stands widened by the amendment in as much as the amount or amounts set aside as provision for diminution in the value of any asset and debited to the profit and loss account shall be added to the book profit - the amendment does not provide for any new levy of income tax, there is no question of it being struck down on the ground of retrospectivity – the order of the CIT(A) set aside – Decided in favour of Revenue. - ITA No.4722/Mum/2005 - - - Dated:- 7-3-2014 - SHRI SANJAY ARORA AND SHRI VIJAY PAL RAO, JJ. For the Appellant : Sanjeev Jain ORDER Per: Vijay Pal Rao: This appeal by the revenue is directed against the order of CIT(A) dated 20th March 2005, for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Commissioner of Income-Tax versus HCL Comnet Systems Services Ltd., (2008) 305 ITR 409(SC). However in view of clause (g) of Explanation (2) to section 115JA, which has been introduced with retrospective effect from 01.04.1998 of the Finance No.2 Act, 2009, the matter would have to be considered afresh by the Income Tax Appellate Tribunal (ITAT) 2. The appeal is therefore, disposed of by setting aside the order of the ITAT dated 09.09.2008 on this issue alone and with a request to the Tribunal to re-consider this ground. 3. Now as per the direction of the Hon ble High Court this appeal has been placed before us for hearing and to decide the issue in the light of amendment in clause (g) of Explanation (2) to section 115JA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of such companies. Parliament was widening its revenue collection and it can hardly be suggested that it was granting any benefit to those companies. On the contrary, whatever benefits such companies were earlier enjoying were sought to be withdrawn or severely curtailed by the introduction of Chapter XII B and the Minimum Alternate Tax provisions. It would be erroneous and inaccurate to consider any deduction allowed while computing the book profit of the company as a WP(C)3125/2010 Page 39 of 61 benefit or relief granted to it in the same manner in which section 80J conferred a benefit upon an assessee who set up an industrial undertaking in a notified backward area. The scheme and purpose are so different that a comparison of both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and immovable - so as to neutralise or reduce the hook profit. The amendment is thus an attempt to prevent companies from making use of the absence of any provision in Section 115JB permitting the adding back of a provision made for diminution in the value of any asset in order to offset or reduce the hook profit. The amendment must he visualized in the larger perspective i e. that the legislature thought it inequitable that companies earning huge profits and even declaring dividends were not paying any income tax. The basis of computing the total income of such companies was changed They were no longer entitled to compute their total income in accordance with the other provisions of the income Tax Act, which are normally applicable. They w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessment years. It is pointed that the amended provision could not even be applied in the ordinary course in respect of the assessment years 2001-02 and 2002-03 for the reason that the time limit for reopening these assessments ended on 31.3.2008 and 31.3.2009 respectively. It is further pointed out that the amendment was introduced after these dates and only affects assessees in whose case some reassessment or appellate proceedings were pending at the time of introduction of the Bill. On this basis, it is argued that the sole reason for the amendment appears to arm some assessing officers with a tool to support a prima face erroneous action of adding the provision for bad and doubtful debts to the book profit without any statutory s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 357. That is not the case here. These observations are a recognition of the consequence that is inevitable in the case of all retrospective amendments, which by their very nature, can be lawfully applied only to assessments that are open and pending WP(C) 3126/2010 Page 57 of 61 either before the Assessing Officer or in appeal proceedings. In the case of completed assessments the amendment can be invoked only if reopening of the assessments under Section 147 of the Act or modification of the assessments under any other provision of the Act is permissible. The provisions relating to limitation and finality of assessments cannot be disturbed, as they are also the result of legislation by Parliament as the Supreme Court itself has reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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