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2023 (10) TMI 280 - HC - Income TaxConstitutionality of Explanation to Section 10AA(1) - Exemption to SEZ unit / Developer - Contention of the petitioner that the Explanation to Section 10AA(1) is unconstitutional as violative of Articles 14, 19(1)(g) and 265 of the Constitution of India - HELD THAT:- The Explanation does not introduce any new method of computation of the tax thereby curtailing the rights of the assessee in any way, it merely clarifies the vagueness around the deduction that crept in due to the deliberate misapplication of the decision in Yokogawa [2016 (12) TMI 881 - SUPREME COURT] by the assessee to the facts and circumstances of this case. The assessee does not have a vested right to claim deduction since such deduction is only allowable in terms of the provisions of Section 10AA of the Act, and the Explanation inserted merely clarifies the intention of the legislature and does not alter the position of law as contained in the parent provision. Respondent submit that in any case, the decision in Yokogawa (supra) is not applicable in the instant case since that decision dealt with Section 10A of the Act, and not Section 10AA of the Act. Sections 10A and 10AA of the Act are not in pari materia and thus it cannot be said that the decision in Yokogawa (supra) was in any manner applicable to this instant case, and thus there was no need for the legislature to insert the aforesaid Explanation to circumvent the decision in Yokogawa (supra). Therefore, the contention of the petitioner that the Explanation to Section 10AA(1) of the Act is unconstitutional is without merits. As principle of legitimate expectation is not applicable to the case of the petitioner and Explanation after Sub-section (1) of Section 10AA of the Income Tax Act, 1961, inserted by amendment with prospective from 1st April, 2018, applicable in respect of the assessment year 2018-19 and subsequent years is constitutional and is a valid piece of legislation and is not arbitrary, discriminatory and is not violative of Articles 14, 19 & 265 of the Constitution of India. WP dismissed.
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