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TMI Blog2005 (12) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Patna High Court in Ranchi Club Ltd. v. CIT [1996] 217 ITR 72, which is confirmed by the Supreme Court in the decision in CIT v. Ranchi Club Ltd. [2001] 247 ITR 209. The above two decisions are rendered in the context of interest levied under section 234A of the Act and based on Explanation 4 to the said section which now stands omitted by the Finance Act, 2001, with retrospective effect from April 1, 1989. Even though the interest levied on the petitioners is not consistent with the law as stated by the Patna High Court confirmed by the Supreme Court in the decisions above referred to the demand of interest based on assessed income is perfectly in order by virtue of the amendment to the Act by the Finance Act, 2001, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtue of the decision of the Supreme Court in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [2003] 260 ITR 548 upholding the validity of retrospective amendment to section 80P of the Act, the impugned amendments are valid. The specific case of the respondents is that the amendment is only clarificatory and it is not intended to reverse any decision of the Patna High Court confirmed by the Supreme Court. Counsel for the respondents also has relied on the decision of the Punjab and Haryana High Court in Raj Kumar Singal v. Union of India [2002] 255 ITR 561 wherein the High Court has upheld the constitutional validity of the amendment impugned by the petitioners in these original petitions. In orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. Explanation 4.- Omitted with retrospective effect from April 1, 1989, by Finance Act, 2001 was as follows: 'Explanation 4.- In this sub-section 'tax on the total income as determined under sub-section (1) of section 143 or on regular assessment' shall, for the purposes of computing the interest payable under section 140A, be deemed to be tax on total income as declared in the return..... 234B.(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section; (b) in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income'." From the main clause of sub-section (1) to section 234A itself it is clear that interest is to be charged with reference to the income determined under sub-section (1) of section 143 or on regular assessment as reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion to be considered is whether the retrospectivity of the legislation leads to a new levy causing an unforeseen financial burden on the affected persons. Similarly in R.C. Tobacco (P.) Ltd.'s case [2005] 5 RC 481; [2005] 7 SCC 725 also the Supreme Court has held that what the court has to consider while considering the validity of retrospectivity of the legislation is whether it is ex facie discriminatory, or so unreasonable or confiscatory that it happens to be violative of articles 14 and 19 of the Constitution of India. In this context the court held that the factors generally considered relevant are the context in which retrospectivity was contemplated, the period of such retrospectivity and the degree of any unforeseen or unforeseea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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