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TMI Blog2025 (1) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... Governments for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force where such schemes were to be notified by the CBDT in this behalf. The benefit to such notified schemes for reconstruction or redevelopment of existing buildings in areas declared to be slum areas was introduced only with effect from 1 April 2005 and not earlier. The proviso to clauses (a) and (b) of sub-section (10) of Section 80IB of the IT Act entered force on 1 April 2005. The principal notification, however, had notified the scheme with which the Petitioners are concerned only with effect from 3 August 2010. Therefore, to align the principal notification with the date of coming into force of the proviso, the impugned corrigendum dated 5 January 2011 came to be issued. The effect of the principal notification dated 3 August 2010, as corrected by the impugned notification dated 5 January 2011, is only to align the CBDT s notification with the proviso to Section 80IB (10), which was brought into force by legislature prospectively, i.e. with effect from 1 April 2005. The provisions of 80IB (10), as they obtained before 1 April 2005, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for claim of deduction u/s 80IB(10) of the Act before the Respondent No. 3 and Respondent No. 4 and direct to grant of refund as per law arising due to eligibility of the claim without raising the issue of limitation or other technical issue." 5. Mr Naresh Jain submits that the impugned notification dated 5 January 2011, which is a purported "corrigendum" to the notification dated 3 August 2010, is plainly ultra vires Section 80IB (10) of the Income Tax Act, 1961 (IT Act). He submits that the impugned notification travels way beyond the principal section and purports to add restrictions not even found in the principal Section, i.e., Section 80IB (10) of the IT Act. 6. Mr Jain referred to the provisions of Section 80IB (10), including the proviso to the said principal Section. He submitted that the same applied to all housing projects notified by the Central Board of Direct Taxes (CBDT), irrespective of whether such project had been approved before 1 April 2004. He submitted that the CBDT, by the impugned notification, now styled as a corrigendum, could not have restricted the benefit of the proviso to Section 80IB (10) only to projects approved on or after 1 April 2004 and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of an undertaking developing and building housing projects approved before the 31st day of March, [2008] buy a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008, (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1sday of April, 2004 [but not later than the 31st day of March, 2005], within the housing project is approved by the local authority; [(iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.] Explanation.- For the purposes of this clause,- (i) in a case where the approval in respect of the housing proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstituted by the Finance (2) Act, 2004, with effect from 1 April 2005. Before its substitution, sub-section (10), as amended by the Finance Act, 2000, with effect from w.e.f. 1 April 2001 and Finance Act, 2003, w.e.f. 1 April 2002, read as follows: "(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 14. Thus, on a comparison of the present and the earlier provisions in Section 80IB(10), it is apparent that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [F. No. 178/37/2006-ITA-I] PADAM SINGH, Under Secy. 17. The proviso to clauses (a) and (b) of sub-section (10) of Section 80IB of the IT Act entered force on 1 April 2005. The principal notification, however, had notified the scheme with which the Petitioners are concerned only with effect from 3 August 2010. Therefore, to align the principal notification with the date of coming into force of the proviso, the impugned corrigendum dated 5 January 2011 came to be issued. 18. The impugned notification dated 5 January 2011 is transcribed below for the convenience of reference:- MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) CORRIGENDUM Notification No. 02/2011-Income-tax New Delhi, the 5th January, 2011 (INCOME-TAX). S.O. 13(E)-In the notification of the Government of India in the Ministry of Finance, Department of Revenue, (Central Board of Direct Taxes) number S.O. 1898 (E), dated the 3rd August, 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 3rd August, 2010, in paragraph 2 for "This notification shall come into force with effect from the date of its publication", read "This notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication dated 3 August 2010, as corrected by the impugned notification dated 5 January 2011, is only to align the CBDT's notification with the proviso to Section 80IB (10), which was brought into force by legislature prospectively, i.e. with effect from 1 April 2005. The provisions of 80IB (10), as they obtained before 1 April 2005, had made no special provisions regarding any slum redevelopment schemes. There is nothing in the Finance Act, 2004 or the provisions introduced by the said act to suggest or imply legislative intention to grant any retrospective effect. Therefore, the argument that the impugned notification is ultra vires cannot be sustained. 22. The Proviso to sub-clauses (a) and (b) of Section 80-IB (10) is not declaratory or clarificatory. The Proviso (upon its coming into force with effect from 01 April 2005) makes special provisions concerning Slum Redevelopment Projects. The conditions prescribed under sub-clauses (a) and (b), which apply to other housing projects, are made inapplicable to Slum Redevelopment Projects. If the legislature intended to grant these benefits retrospectively, the legislature would have said so clearly. The legislature would not have re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amended provisions of Section 80-IB (10). But for the impugned notification, an argument was possible that the principal notification was vulnerable. The unamended principal notification sought to extend the benefit of the amended provisions of Section 80-IB (10) only from 3 August 2010, when the legislature had granted this benefit from 01 April 2005. The explanatory note appended to the impugned notification also clarifies this aspect. 27. Reliance Jute and Industries Limited (supra) holds that it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. There cannot be any quarrel with this proposition. However, Mr. Jain could not elaborate or explain how this principle was attracted in the present matter and, further, how, based on this principle, the impugned notification could be held to be ultra-vires. In any case this very argument canvassed was rejected by the Supreme Court in case of Sarkar Builders (supra) and Brahma Associates (supra). 28. Mother Superior Adoration Covent (supra) explains the distinction between exemption provisions generally and thos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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