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TMI Blog2025 (1) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... rit in the nature of Certiorari or any other appropriate writ under Article 226 of the Constitution of India, calling for records pertaining to the impugned notification dated 05.01.2011 issued by the Respondent No. 2 (being Exhibit 'H' hereto) and after going into the validity and legality thereof to quash and aside the same. (b) that this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Certiorari or any other appropriate writ under Article 226 of the Constitution of India, permit the petitioner to file appropriate claim under the Act for claim of deduction u/s 80IB(10) of the Act before the Respondent No. 3 and Respondent No. 4 and direct to grant of refund as per law arising due to eligibility of the claim without raising the issue of limitation or other technical issue." 5. Mr Naresh Jain submits that the impugned notification dated 5 January 2011, which is a purported "corrigendum" to the notification dated 3 August 2010, is plainly ultra vires Section 80IB (10) of the Income Tax Act, 1961 (IT Act). He submits that the impugned notification travels way beyond the principal section and purports to add restrictions not even found in the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 August 2010 aligns with the proviso to Section 80IB (10) of the IT Act. He submitted that the impugned corrigendum is entirely intra vires and the CBDT has, in no manner, exceeded the powers vested in it. He submitted that the decisions relied upon by Mr Jain are mostly irrelevant and do not apply to the facts of the present case. 11. The rival contentions now fall for our determination. 12. To appreciate the challenge raised in these Petitions, we refer to the provisions of Section 80IB (10) as they presently obtain:- "[(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, [2008] buy a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008, (ii) in a case where a hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta.] [Explanation.- For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government).]" (emphasis supplied) 13. The above provision was substituted by the Finance (2) Act, 2004, with effect from 1 April 2005. Before its substitution, sub-section (10), as amended by the Finance Act, 2000, with effect from w.e.f. 1 April 2001 and Finance Act, 2003, w.e.f. 1 April 2002, read as follows: "(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing conditions,- (i) slum development falling in Category VII mentioned in notification No. TPB-4391/ 4080(A)/UD-11(RDP) dated 3rd June, 1992 shall be excluded from the Scheme; (ii) slum development falling within clause 7.7 of the Appendix IV of regulation 33(10) which provides for joint development of slum and non-slum areas shall be excluded from the Scheme; and (iii) any amendment in the Scheme hereby notified shall be required to be re-notified by the Board. 2. This notification shall come into force with effect from the date of its publication. [F. No. 178/37/2006-ITA-I] PADAM SINGH, Under Secy. 17. The proviso to clauses (a) and (b) of sub-section (10) of Section 80IB of the IT Act entered force on 1 April 2005. The principal notification, however, had notified the scheme with which the Petitioners are concerned only with effect from 3 August 2010. Therefore, to align the principal notification with the date of coming into force of the proviso, the impugned corrigendum dated 5 January 2011 came to be issued. 18. The impugned notification dated 5 January 2011 is transcribed below for the convenience of reference:- MINISTRY OF FINANCE (Department of Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead to the inference that the benefit of the proviso, which was introduced only with effect from 1 April 2005, would apply to the slum redevelopment projects approved before 1 April 2004. If that were so, the legislature would have said so by giving the proviso a suitable retrospective effect. Since the legislature has not chosen to provide the proviso any retrospective effect, the CBDT, which, even according to Mr Jain, is only a delegate, was not competent to give the proviso any retrospective effect by issuing any notification 21. The effect of the principal notification dated 3 August 2010, as corrected by the impugned notification dated 5 January 2011, is only to align the CBDT's notification with the proviso to Section 80IB (10), which was brought into force by legislature prospectively, i.e. with effect from 1 April 2005. The provisions of 80IB (10), as they obtained before 1 April 2005, had made no special provisions regarding any slum redevelopment schemes. There is nothing in the Finance Act, 2004 or the provisions introduced by the said act to suggest or imply legislative intention to grant any retrospective effect. Therefore, the argument that the impugned notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 26. Therefore, if the proviso to sub-clause (a) and (b) of Section 80-IB (10) is prospective, such proviso cannot be given a retrospective effect based on a CBDT notification. However, the impugned notification restricts its scope to the period from which the proviso came into force. In other words, the impugned notification corrects the principal notification so that the principal notification, as corrected, aligns with the provisions of Section 80-IB (10), which came into force on 01 April 2005. The impugned notification accords with the letter and the spirit of the amended provisions of Section 80-IB (10). But for the impugned notification, an argument was possible that the principal notification was vulnerable. The unamended principal notification sought to extend the benefit of the amended provisions of Section 80-IB (10) only from 3 August 2010, when the legislature had granted this benefit from 01 April 2005. The explanatory note appended to the impugned notification also clarifies this aspect. 27. Reliance Jute and Industries Limited (supra) holds that it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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