9911796707
TMI Blog2017 (5) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... asak, J. For the Petitioners : Mr. J. P. Khaitan, Sr. Advocate Mr. Somak Basu, Advocate For the Respondents : Md. Nizamuddin, Advocate ORDER Debangsu Basak, J. The petitioners challenges the vires of clause (i) of explanation 1 to Section 115JB(2) of the Income Tax Act, 1961 in its prospective and retrospective operation. Learner Senior Advocate for the petitioners submits that, such clause was inserted by the Finance (No.2) Act, 2009 with retrospective effect from April 1, 2001. It provides that, the net profit as shown in the Profit and Loss Account for the relevant previous year must be increased by amount or amounts set aside as provision for diminution in the value of any asset. Learned Senior Advocate for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Advocate for the petitioners submits that, the first petitioner is a non-banking financial company. In terms of the directions and prudential norms issued by the Reserve Bank of India under the Reserve Bank of India Act, 1934, the first petitioner is obliged to make a provision for diminution in the value of investment if the decline is not temporary. It is also mandatory for the first petitioner to make a provision in respect of a non-performing asset. The first petitioner is obliged to show such provision separately in its accounts. The amendments introduced impact the first petitioner the most. Learned Senior Advocate for the petitioners submits that, basic reason for introduction of tax on book profit or minimum alternate tax was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added back to the net profit as the amendment stands. This requirement is contrary to the directions and prudential norms of the Reserve Bank of India. Learned Senior Advocate for the petitioners contends that, no reason has been given as to why the amendment was necessary and that with retrospective effect. HCL Comnet Systems and Services Ltd. (supra) did not point out any lacuna or defect in the law which the legislature is seeking to cure by retrospective amendment. The amendment is a transgression by the legislature. After HCL Comnet Systems and Services Ltd. (supra) the legislature cannot be permitted to nullify and override the effect of such judgment. Learned Senior Advocate for the petitioners contends that, with the retrospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot have retrospective effect. He relies upon 2013 (355) Income Tax Reports page 51 (Delhi) (Whirlpool of India Limited Anr. v. Union of India Ors.) and submits that, the statement of objects and reasons did not contain any justification or reason for making an amendment. He refers to the affidavit-in-opposition filed before this Court and submits that, no justification is put forward. In such circumstances, he submits that the impugned clause is illegal, invalid and ultra vires the Constitution offending Articles 14, 19(1)(g) and 265 both in its retrospective and prospective operation. Learned Advocate for the revenue submits that, the contentions raised on behalf of the petitioners are covered by the decision of the Hon ble divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake a view contrary to that expressed therein. HCL Comnet Systems and Services Ltd. (supra) was considered in Whirlpool of India Limited Anr. (supra). Exide Industries Ltd. Anr. (supra) is in relation to a different provision of law. Jayam Co. (supra) concerns challenges to the constitutional validity of the Tamil Nadu Value Added Tax Act, 2006. While upholding the vires of Section 19(20), the Amendment Act, 2010 whereby amendment was given retrospective effect from January 1, 2007, was struck down. It finds that, the amendment fails to meet the tests laid down by the Court in testing the validity of retrospective operation of fiscal laws. It further finds that, the amendment makes a provision for the first time to the detriment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
