TMI Blog2018 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... of Assessee - I. T. A. No. 28 of 2016. - - - Dated:- 22-8-2017 - Sudhir Agarwal And Ravindra Nath Mishra-II JJ. For the Appellant : Ghan Shyam Chaudhary and Alok Mathur For the Respondent : Pradeep Agrawal JUDGMENT 1. Heard Sri Alok Mathur, learned counsel for appellant and Sri Pradeep Agrawal, learned counsel for respondent. 2. This appeal has been filed by Principal Commissioner of Income Tax, Lucknow under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act 1961 ) arising from judgment and order dated 16.10.2015 passed in ITA No. 260/LKW/2014 relating to Assessment Year 200910. 3. It was admitted on 15.03.2016 on following substantial questions of law: Whether Under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal erred in law while setting aside the order of CIT (A) and restoring the issue of disallowance u/s 40(a)(ia) of the I.T.Act by retrospective application of second proviso to Section 40(a)(ia) of the Act, which amendment in fact was not curative but prospective w.e.f 01.04.2013. Whether under the facts and circumstances of the case, the Learned Income Tax Appellate Tribunal failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years and also the period of the current previous year up to the date of the search, i.e., form April 1, 2000, to January 17, 2001, in this case. The essence of this new procedure, therefore, is a separate single assessment of the undisclosed income , detected as a result of search and this separate assessment has to be in addition to the normal assessment covering the same period. Therefore, a separate return covering the years of the block period is a prerequisite for making block assessment. Under the said procedure, the Explanation is inserted in Section 158BB, which is the computation section, explaining the method of computation of undisclosed income of the block period. It is now well accepted that this Chapter is a complete code in itself providing for selfcontained machinery for assessment of undisclosed income for the block period of 10 years or 6 years, as the case may be. In case of regular assessments for which returns are filed on yearly basis, Section 4 of the Act is the charging section. However, at what rate the income is to be taxed is specified every year by the Parliament in the Finance Act. In contradistinction, when it comes to payment of tax on the undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le analyzing the scheme of Chapter XIVB, such Chapter is a complete code in respect of assessments of 'undisclosed income'. Not only it defines what is undisclosed income, it also lays down the block period for which undisclosed income can be taxed. Further, it also lays down the procedure for taxing that income. It is very pertinent to note at this stage that for this purpose, specificeprovision in the form of Section 158BA(2) is inserted making it a charging section. Thus, a diagnostic of Chapter XIVB of the Act leads to irresistible conclusion that it contains all the provisions starting from charging section till completion of assessment, by prescribing special procedure in relation thereto, making it a complete Code by itself. Looking it from this angle, the character and nature of 'undisclosed income' referred to in Chapter XIVB becomes quite distinct from 'total income' referred to in Section 5. It is of some significance to observe that when a separate charging section is introduced specifically, to assess the undisclosed income, notwithstanding a provision in the nature of Section 4 already on the statute book, this move of the legislature has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Eyre (1870) LR 6 QB 1, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 29. The obvious basis of the principle against retrospectivity is the principle of 'fairness', which must be the basis of every legal rule as was observed in the decision reported in L'Office Cherifien des Phosphates v. YamashitaShinnihon Steamship Co. Ltd. (1994) 1 AC 486. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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