TMI Blog2017 (4) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... ought in section 72A(2)(ii) of the Act had shifted from stringent measures to be complied with to the relaxation scheme for the benefit of the assessee. Hence the same is a beneficial provision intended to cure the genuine hardship that had been hitherto created to the assessee. Hence the same would have to be held retrospective in operation. We have already held the purpose of the amendment brought in section 72A(2)(ii) of the Act hereinabove and the amendment brought in thereon is only procedural in nature and hence respectfully following the aforesaid Hon’ble Supreme Court and Hon’ble Jurisdictional High Court decisions supra, we hold that the procedural amendment would have to be retrospective in nature and hence the same is applicable for the Asst. Year 1996-97 in the hands of the amalgamated company and accordingly the loss of the amalgamating company shall be eligible to be carried forward in the hands of the amalgamated company. We hold that the ld CIT(A) had rightly granted relief to the assessee by allowing the benefit of carry forward of losses pertaining to the amalgamating company in the hands of the amalgamated company (assessee herein). Accordingly, the grounds ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the ld AO vide assessee letter dated 9.12.1998. The ld AO without calling for further queries or details disallowed the property expenses amounting to ₹ 1,62,747/- on the contention that the same is not related to the business of the assessee. The ld CIT(A) held that the ld AO had not given specific finding as to how expenses are not related to business. Since expenditure incurred was not in the nature of capital expenditure and same was related to business of the assessee, the ld CIT(A) deleted the disallowance. Aggrieved, the revenue is in appeal before us on the following ground:- 2.That the Ld. CIT(Appeals) was not justified in deleting disallowance of ₹ 1,62,747/- on account of property expenses as the same is capital in nature. 4.2. We have heard the rival submissions. We find that the ld DR did not advance any argument on the subject mentioned deletion of disallowance. On the contrary, the ld AR relied on the order of the ld CIT(A). We find that the assessee had submitted that the expenses were incurred towards maintenance of property located at King s Court, Calcutta which is situated just adjacent to the registered office of the assessee and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 72A(2)(ii) of the Act and has replied to all the queries as raised by the revenue in this regard. Hence there is no failure on the part of the assessee to fulfill its obligation. c) The assessee has duly fulfilled all the conditions as required by press note dated 23.2.1981 for obtaining approval for carry forward of losses in case of amalgamation. d) Amendment made u/s 72A of the Act with respect to removal of requirement of obtaining certificate being procedural in nature will have retrospective application. e) The assessee had fulfilled all the condition relating to the amended provision for it being eligible for carry forward of brought forward losses of the erstwhile amalgamating company and hence the said brought forward losses as claimed by the assessee on account of amalgamation needs to be allowed in the interest of justice. 5.2.1. With these observations, the ld CIT(A) allowed the assessee company to have the benefit of adjustment of brought forward losses of PSL in the sum of ₹ 9,93,82,438/-. Aggrieved, the revenue is in appeal before us on the following ground :- 3.That the Ld. CIT(Appeals) was not justified in allowing the carry forward of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g company in the hands of the amalgamated company (i.e. the assessee herein). He further argued that the approval of the scheme of amalgamation by the Hon ble High Court is relevant only for the purpose of Companies Act and the same is absolutely not relevant for the provisions of the Act as the set off and brought forward of losses in such case is governed by the exclusive provisions of section 72A of the Act, which is not complied with by the assessee. He further argued that even as on date, the assessee was not able to produce the certificate from the specified authority in terms of erstwhile provisions of section 72A(2)(ii) of the Act proving its bonafide. Hence the assessee cannot plead that he had not committed any default in the instant case warranting any relief. 5.4. In response to this, the ld AR reiterated the arguments made before the ld CITA and stated that the ld CIT(A) had passed an elaborate order in this regard for non-interference in the said order. He stated that the assessee had duly applied for obtaining the certificate from the Specified Authority and no orders have been passed in that regard by the Specified Authority. In such a scenario, there was no defa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming part of the paper book filed before us. If the specified authority had not passed any order on the application preferred by the assessee, the assessee cannot be faulted upon. In this regard , the reliance placed on the decision of the Mumbai Tribunal by the ld AR in the case of DCIT vs Famy Care Ltd reported in (2014) 41 CCH 562 (Mum) is well founded , wherein it was held that where assessee had complied with the requirements of section 35(2AB) of the Act, deduction could not be denied merely on the ground that the prescribed authority does not submit Form No. 3CL in time to the Income Tax Department as it was beyond the control of the assessee to direct the authority to submit such form to the Department. The assessee, in such a case, cannot be penalized for the fault, if any, of the Department. We find that the decision rendered by the Mumbai Tribunal supra is squarely applicable to the facts of the instant case. 5.5.2. We find that the main purpose of the amendment with effect from 1.4.2000 was the legislature thought that both the process of obtaining the sanction of the court order and parallel process of obtaining certificate from specified authority was a time consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Government for the purposes of this clause. Therefore, unless the Central Government approved the company or corporation, such company or corporation was not entitled to claim deduction. In the instant case, admittedly the assessee filed an application for approval on 28.03.2000. Even on this date, the approval is not granted. However, the said provision was deleted with effect from 01.04.2000. As on today, no approval is required. Further, the assessee claimed the benefit of deduction, which was refused solely on the ground that the Central Government has not approved the said corporation. It is in this context, the Tribunal has pointed out that , when once such approval is deleted, the approval of the Central Government is not necessary. The said provision was only procedural in nature. Even till today, the CBDT has not rejected the application of the assessee. Having regard to the object with which such provision is enacted and subsequently whereby this technicality of obtaining prior approval is given a go by, it was of the view that the assessee is entitled to the benefit of deduction. If we take the substance of the said section and not the form in which it is shown, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Apex Court in the case of CWT vs Sharvan Kumar Swarup Sons reported in (1994) 210 ITR 886 (SC) held that laws which fix duties, established rights and responsibilities among and for persons, natural or otherwise, are Substantive Laws in character, while those which merely prescribe the manner in which such rights and responsibilities may be exercised and enforced in a Court are Procedural Laws . b) Hon ble Supreme Court in the case of CIT vs Vatika Township P Ltd reported in (2014) 367 ITR 466 (SC) had held as below:- 33. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Government of India v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allied Motors P ltd and also in the case of Alom Extrusions Ltd has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well . 5.5.4. In our considered opinion, the amendment brought in section 72A(2)(ii) of the Act had shifted from stringent measures to be complied with to the relaxation scheme for the benefit of the assessee. Hence the same is a beneficial provision intended to cure the genuine hardship that had been hitherto created to the assessee. Hence the same would have to be held retrospective in operation. We have already held the purpose of the amendment brought in section 72A(2)(ii) of the Act hereinabove and the amendment brought in thereon is only procedural in nature and hence respectfully following the aforesaid Hon ble Supreme Court and Hon ble Jurisdictional High Court decisions supra, we hold that the procedural amendment would have to be retrospective in nature and hence the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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