Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2013 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (3) TMI 416 - HC - Income TaxExplanation inserted in sub-section (4) of section 80IA by Finance Act No.2 of 2009 challenged - Sub-section (4) of section 80IA provides for certain deduction of income from the eligible business and primarily pertains to infrastructure development & by adding the impugned explanation it is provided that that nothing contained in the section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person and executed by an undertaking or enterprise - petitioner contested against retrospective effect of such amendment - Held that:- It is true that with effect from 1.4.2002 some significant changes were made in the said provisions. As already noticed three of these changes which are material such were (i) that sub-section (4) of section 80IA now required the enterprise to carry on the business of developing or operating and maintaining or developing, operating and maintaining any infrastructure facility. This was in contrast to the previous requirement of all three conditions being cumulatively satisfied (ii) that the explanation of the term 'infrastructure facility' was changed to besides others, a road including toll road instead of hitherto existing expression 'road' and (iii) that the requirement of transferring the infrastructural facilities developed by the enterprise to the Central or the State Government or the local authority within the time stipulated in the agreement was done away with. Thus to conclude these changes, however, would not alter the situation vis-a-vis the impugned amendment. These legislative changes did enlarge the scope of the deduction and in a sense, made it available to certain assessees who would not have been, but for the changes eligible for such deduction. Nevertheless, the basic requirement of the enterprise carrying on the business of developing or operating and maintaining or developing, operating and maintaining infrastructure facility was not done away with. In other words, even the amended section 80IA(4) with effect from 1.4.2002 could be construed as not including execution of works contract as one of the eligible activities for claiming deduction. The explanation attempts to clarify that deduction under section 80-IA(4) would not be available in case of execution of works contract. The fact that such interpretation of the existing provisions of sub-section (4) of section 80IA of the Act, even without the aid of the explanation was possible is not disputable. Even without the aid of the explanation, it was possible to contend that such expression did not include an enterprise executing a works contract. The impugned explanation was purely explanatory in nature and did not a mend the existing statutory provisions, the question of levying any tax with retrospective effect would not arise. The explanation did not restrict or aim to restrict the provisions of deduction. If it did so, certainly a question of reasonableness in the context of retrospective operation would arise. In the present case, the explanation only supplied clarity where, at best confusion was possible in the unamended provision. In the result, petition dismissed.
|