Kuber Tobacco vs. DCIT (ITAT Delhi – Special Bench)
S. 292 BB held to be prospective and applicable only w.e.f 1.4.2008
(1) S. 292BB, inserted by the F.A. 2008 w.e.f. 01.04.2008, creates a legal fiction and takes away the right of an assessee to claim that in case of invalid notice the whole proceedings taken pursuant to that notice would be void ab initio and will have no legal consequences;
(2) However, the rule of interpretation of statutes is that a provision creating a new disability or obligation and imposing a new duty in respect of completed transactions cannot be construed to be retrospective;
(3) Though the issue and service of notice relates to procedural law S. 292-BB takes away the valuable right of an assessee to challenge the validity of assessment during the course of appellate proceedings and creates a new disability on the assessee by debarring him from challenging the validity of the same;
(4) Consequently, s. 292-BB cannot be construed to be retrospective and has to be applied prospectively in respect of AY 2008-09 and subsequent years.
Note: ITO vs. Varia Pratik (ITAT A’bad) is impliedly overruled.
See Also: Zeus Air Services vs. DCIT (ITAT Mumbai)
