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TMI Blog2020 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal bad by holding that the prospective amendment to provisions Section 50C for the assessment year 2017-18 is applicable retrospectively to assessment year 2014-15 without appreciating the fact that unless explicity stated a piece of legislation is presumed not to be intended to have retrospective operation based on the principle ''lex prospicit non respicit'' meaning that the law look forward and not backwards? 2. The facts which are necessary for answering the questions raised before us are set out hereunder. The respondent/assessee is an individual filed its original return of income on 28.09.2014, admitting a total income of Rs. 7,40,50,990/-. The case was selected for scrutiny and Notice under Section 143(2) of the Act dated 28.08.2015 was issued. Subsequently since there was a change in the Officer, Notice under Section 142(1) read with Section 129 of the Act was issued. The assessee was represented by his authorized representative before the Assessing Officer and submitted details called for. The assessee had owned 44,462 sq.ft of land in Neelankarai Village and the property was sold by the Sale Deed dated 02.05.2013 registered on the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entered into. Accordingly, the assessment was completed under Section 143(3) of the Act vide order dated 29.12.2016 by adopting the full value of consideration at Rs. 27 Crores and the Capital Gain was recomputed and tax was demanded. The assessee filed an appeal before the Commissioner of Income Tax (Appeals)-6, Chennai [CIT(A)]. The appeal was allowed by order dated 25.07.2019. The Revenue preferred an appeal before the Tribunal which was dismissed vide order dated 27.02.2020, which is impugned in this appeal. 4. We have elaborately heard Mr.T.Ravikumar, learned Senior Standing Counsel for the Revenue. 5. It is the submission of Mr.T.Ravikumar, learned Senior Standing counsel that the amendment to Section 50(C) of the Act introduced by the Finance Act 2016 is effective only from 01.04.2017, prospectively. In this regard, the learned Senior Counsel referred to the legal maxim 'lex prospicit non respicit' which means law look forward and not backwards. The learned Senior Counsel referred to the Circular issued by the Central Board of Direct Taxes ('CBDT') in Circular No.3/2017 dated 20.01.2017 and has drawn the attention of this Court to the paragraph no.29 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds to be noted is that amendment seeks to relieve the assessee from undue hardship caused on account of the computation of higher rate of capital gains. 7. Before we proceed to consider as to whether proviso inserted in Section 50C of the Act has to be read retrospective or prospective, we need to point out that the Assessing Officer did not doubt the bonafides of the transaction done by the assessee, since the Assessing Officer accepted the fact that the assessee had entered into an Agreement for Sale of the property in question vide Agreement for Sale dated 04.08.2012, wherein agreed sale consideration was Rs. 19 Crores and the assessee had received Rs. 6 Crores by way of account payee cheque on the date of signing the Agreement. This fact was noted by the CIT(A) and held that the Agreement cannot be treated to be ante-dated as the assessee had received Rs. 6 crores as advance on the date of Agreement through banking channel. The only reason for the Assessing Officer to adopt higher value is based upon the guideline value fixed by the State Government. The question would be as to what is the effect of the guideline value fixed by the Government and the purpose behind fixing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and draft. 9. Therefore, in our considered view the Assessing Officer could not have based his finding solely relying upon the guideline value especially when the Assessing Officer is not a person who is computing stamp duty under the provisions of Indian Stamp Act on the Deed of conveyance. Having observed so we need to take note of the next issue would be as to whether the proviso to Section 50C could be read to be prospective or retrospective. Section 50C(1) proviso reads as follows: ''Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capita asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer.'' 10. Reading of the above proviso would show that the legislature took note of the fact that there are several occasions where the Agreements are entered into between a willing vendor and willing purchaser on an agreed sale consideration, the Agreement is reduced into writing and in many a cases a substantive portion of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in 2010 is not given retrospective operation i.e., from the date of substitution of the provision. Thus, the amendment made by the Finance Act 2010 being curative in nature was held to be retrospective in operation. In the above decision, the Hon'ble Supreme Court took note of the fact that the statutory amendment was being made to remove undue hardship to the assessee or held to be retrospective. 12. The Honble Supreme Court in Kolkata Export Company took note of the earlier decisions on the same issue in the case of Allied Motors Private Limited Vs. CIT [1997 (224) ITR 677 (SC)], Whirlpool of India Limited Vs. CIT, New Delhi [2000 (245) ITR 3], CIT Vs. Amrid Banaspati Company Limited [2002 (255) ITR 114] and CIT vs. Alom Enterprises [2009 (319) ITR 306] and held that the new proviso should be given retrospective effect from the insertion on the ground that the proviso was added to remedy unintended consequences and supply an obvious omission. The proviso ensured reasonable interpretation and retrospective effect would serve the object behind the enactment. Thus by taking note of the above decisions, we have no hesitation to hold that the proviso to Section 50C(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of computing the full value of consideration. It is further proposed to provide that this provision shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.'' 15. Taking note of the above Memorandum, it was pointed out that once a statutory amendment is being made to remove an undue hardship to the assessee or to remove an apparent incongruity, such an amendment has to be treated as effective from the date on which the law, containing such an undue hardship or incongruity, was introduced. The report also referred to the decision in the case of Alom Enterprises [2009 (319) ITR 306]. 16. Reverting back to the decisions re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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