TMI Blog2022 (3) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012 . The amendment in Section 149(1), introduced with effect from 1st July 2012, is thus expressly stated to be retrospective in nature, and there is, in our humble understanding, there is no bar on the validity of the retrospectivity of the taxing statute as long as it is clearly specified to be so. there is no bar on the retrospectivity of a statute, though, in the absence of any express intention to that effect, it is presumed to be only prospective. The validity of a statute being retrospective in effect cannot, as such, be questioned in principle. In any event, it is not open to a forum like this Appellate Tribunal-much less a Commissioner (Appeals), to contest validity of a retrospective amendment in law. Once the statute clearly provides that the amended section 153(1) and (3), as amended by the Finance Act 2012, shall also be applicable to any assessment year beginning on or before 1st day of April 2012, it cannot be open to us to hold otherwise. To suggest that this amendment was intended to be prospective in effect would mean that the legislature, which undisputedly h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand of the Assessing Officer is that the time limit for reopening the assessments involving income escaping assessment in relation of any asset outside India is sixteen years from the end of the assessment year which is being sought to be reopened, as is said to be the unambiguous position of law under section 149(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act), the assessee s contention, which has found favour with the learned Commissioner (Appeals) by her reading down the law, is that such an extended time limit of sixteen years, as against the limit of six years prevailing as on 1st July 2012 when section 149(1)(c) came into force, will come into play only in respect of the cases which could have been reopened on 1st July 2012 anyway. Effectively, thus, the reopening of assessments, in respect of income relating to assets located outside India, within sixteen years from the end of the relevant assessment year has been held to be effective, in a full-fledged manner, only with effect from 1st April 2022. 2. It is in this backdrop the appellant Assessing Officer has challenged the correctness of the order dated 26th November 2019 passed by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed outside India that the assessment for the assessment year 1990-2000 was reopened on 27th March 2015. When the challenge to the validity of reassessment came up for adjudication before the learned Commissioner (Appeals), she noted that, as on 1st July 2012, i.e. when enhancement in time limit for reopening assessment from six to sixteen years was introduced in section 149, the assessment had reached finality. This amendment, therefore, could not come to the rescue of the Assessing Officer. In other words, according to the learned Commissioner (Appeals) even though the period for reopening the assessments in case of income from assets located outside India stood increased to 16 years with effect from 1st July 2012, it could only take prospective effect and the assessments having already reached finality will remain unaffected by this amendment. In other words, so far as the assessment years which have become final as on 1st July 2012 in the pre-amendment law, i.e. up to the assessment years 2005-06, could not have been revisited by the Assessing Officer even under the post amendment provision enabling the Assessing Officer to reopen cases up to sixteen years from the end of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment . Therefore, as long as sixteen years from the end of the relevant assessment year have not expired, the reassessment notice is in a case involving income from assets located outside India. As for the retrospective application of this provision, Explanation to Section 149 unambiguously provides that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012 . The amendment in Section 149(1), introduced with effect from 1st July 2012, is thus expressly stated to be retrospective in nature, and there is, in our humble understanding, there is no bar on the validity of the retrospectivity of the taxing statute as long as it is clearly specified to be so. As noted, after referring to numerous judicial precedents, by Justice G P Singh in his oft-quoted treatise Principles of Statutory Interpretation (14th Edition- 2021 reprint- ISBN 978-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dutt Vs ACIT [(2018) 100 taxmann.com 324 (Del)], it is important to bear in mind that Their Lordships have construed and inferred the amendment in law to be only prospective in effect, on the ground that the law was not explicitly stated to be retrospective in effect. A careful reading of the judgment does not leave any doubt about this fundamental legal position. It was not the case that Their Lordships noted that the law is retrospective in effect and read down the law on the ground that such a retrospectivity is ultra vires or unconstitutional. Quite to the contrary, Their Lordships have proceeded on the basis that there is no specific mention about the amendment being retrospective in effect, and this fact is evident from several observations made by Their Lordships again and again- such as (a) In this case, the interpretation proposed by the revenue has the potential of arming its authorities to re-open settled matters, in respect of issues where the citizen could genuinely be sanguine and had no obligation of the kind which the Revenue seeks to impose by the present amendment. All the more significant is the fact that absent a clear indication, every statute is presumed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court held that as the liability to pay tax is computed according to the law in force at the beginning of the assessment year, i.e., the first day of April, any change in law affecting tax liability after that date though made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year We humbly bow to these well-settled legal propositions. What essentially follows as a corollary to these propositions is that when it is expressly stated to be retrospective, there is no bar on retrospective application of the said provision either. If that be so, and as Explanation below Section 149(3) specifically states the provision to be retrospective in effect, there cannot be any good reasons to hold the section 149(1)(c) to be only prospective in effect. It must be given full effect as visualized and stated by the law itself. 8. In Braham Dutt s case (supra), however, there was no occasion to refer to, or take note of, the Explanation below Section 149(3), introduced with effect from 1st April 2012, which categorically made the amendment retrospective by stating that (f)or the removal of doubts, it is at this moment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is the principle implicit in the Hon'ble Supreme Court's judgment in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322/305 ITR 227 wherein Their Lordships have upheld the plea that non-consideration of a decision of Jurisdictional Court or of the Supreme Court can be said to be a mistake apparent from the record . The decisions of Hon'ble non-jurisdictional High Courts are thus placed at a level certainly below the Hon'ble High Court, and it's a conscious call that is required to be taken concerning the question whether, on the facts of a particular situation, the non-jurisdictional High Court is required to be followed. Therefore, the decisions of non-jurisdictional High Courts do not constitute a binding judicial precedent in all cases. To a forum like us, following a jurisdictional High Court decision is a compulsion of law and sacrosanct that way, but following a non-jurisdictional High Court is a call of judicial propriety which is never absolute, as it is inherently required to be blended with many other important considerations within the framework of law, or something which cannot be, in deserving cases, deviated f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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