2014 (8) TMI 808 - HC - Income Tax

Effect of amendment to section 40(a)(ia) - Whether amendment to Section 40(a)(ia) of the Income Tax Act brought out by Finance Act 2010 with effect from 01/04/2010 is having retrospective effect or not Held that - Following the decision in COMMISSIONER OF INCOME TAX Versus OMPRAKASH R CHAUDHARY 2014 (2) TMI 120 - GUJARAT HIGH COURT - in Amendment under Section 40(1)(ia) of the Income Tax Act brought out by Finance Act 2010 with effect from 01/04/2010 is having retrospective effect thus no question of law arises for consideration Decided against Revenue.

Summary

Issues:
1. Whether the amendment to Section 40(a)(ia) of the Income Tax Act by the Finance Act, 2010, with effect from 01/04/2010, is retrospective or not.

Analysis:
The High Court addressed the single issue of whether the amendment to Section 40(a)(ia) of the Income Tax Act, introduced by the Finance Act, 2010, with effect from 01/04/2010, should be considered retrospective. The Court noted that a similar issue was previously decided in a group of Tax Appeals, including Tax Appeal No. 412/2013, where the Division Bench held that the said amendment indeed has retrospective effect. Consequently, the Court found that the present Tax Appeal lacked any substantial question of law and was bound by the previous decision.

Therefore, based on the precedent set by the earlier decision, the High Court concluded that the amendment to Section 40(a)(ia) of the Income Tax Act by the Finance Act, 2010, is retrospective in nature. As a result, the Court dismissed the present Tax Appeal, stating that no question of law, let alone a substantial one, arose in this case. The appeal was accordingly dismissed by the Court.