Sec. 234D – Applies to A.Y. commencing before 01.06.2003 if Assessment is not completed on that date

SUPREME COURT OF INDIA

Petition(s) for Special Leave to Appeal (Civil) No(s). 14013/2013

(From the judgement and order dated 19/07/2012 in ITA No. 2193/2009 of The HIGH COURT OF BOMBAY)

COMMISSIONER OF INCOME TAX-I

VERSUS

M/S. RELIANCE ENERGY LTD.
(With prayer for interim relief and office report )

Date: 30/09/20 13 This Petition was called on for hearing today. CORAM :

HON’BLE MR. JUSTICE R.M. LODHA HON’BLE MR. JUSTICE SHIVA KIRTI SINGH

For Petitioner(s) Mr. Arijit Prasad, Adv.

Mr. D.L. Chidananda, Adv. Mr. Sahil Tagotra, Adv. Mrs Anil Katiyar,Adv.

For Respondent(s) Mr. G.C. Srivastava, Adv. Ms. Preeti Bhardwaj, Adv. Mr. Aditya Parda, Adv. Mr. Shiv Kumar Suri,Adv.

UPON hearing counsel the Court made the following O R D E R

Heard learned counsel for the parties.

Learned counsel for the Revenue submits that the question involved in the present special leave petition is in respect of retrospectivity of Section 234D of the Income Tax Act, 1961 (for short, ‘Act’) and, therefore, the decision of the Bombay High Court in Director of Income Tax (International Taxation)-I Vs. M/s Delta Air Lines Inc. has no application and the High Court erred in dismissing the appeal preferred by the Revenue while keeping the question of retrospectivity of Section 234D open.

Learned counsel for the assessee places reliance on Explanation (2) inserted in Section 234D of the Act by the Finance Act, 2012 with effect from 01.06.2003.

Explanation (2) which has been inserted in Section 234D of the Act reads as under:-

“Explanation 2. – For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date.”

The High Court was concerned with the appeal relating to the assessment year 1998-99. It is admitted case that the assessment of that year was completed prior to 01.06.2003.

Having regard to the legal position which has been clarified by the Parliament by insertion of Explanation (2) in Section 234D of the Act, in the present case, retrospectivity of Section 234D does not arise.

Having regard to above position, the view of the High Court in relying upon the decision of the Bombay High Court in M/s Delta Air Lines Inc. (supra) cannot be said to be erroneous.

Special Leave Petition is dismissed.

(Rajesh Dham)                        (Renu Diwan)

Court Master                          Court Master

This Order is modified/corrected by Speaking to Minutes Order

NF