Insertion of first and second proviso to section 50C(1) being curative in nature has retrospective effect

Shri Prakash Sadashiv Vs ITO (ITAT Pune)

ITAT Pune held that first and second proviso(es) to section 50C(1), inserted by the Finance Act 2016 w.e.f. 01.04.2017 being curative in nature inserted for removing hardships to the taxpayers and, therefore, it carries retrospective effect.

Facts- The assessee’s sole substantive grievance herein challenges correctness of both the lower authorities action making long term capital gains addition of 55,70,021/- in the course of sec. 143(3) r.w.s. 147 re­assessment dated 27.12.2016 as upheld in the NFAC’s order under challenge.

Conclusion- This is for the precise reason that although the CIT(A) has refused to apply sec.50C(1) first and second proviso(es), inserted by the Finance Act 2016 w.e.f. 01.04.2017 on the ground that the same do not carry retrospective effect, the fact remains that this tribunal’s coordinate bench’s order in Dharamshibhai Sonani vs. ACIT [2016] 161 ITD 627 (Ahd.) has already decided the issue against the department by holding that this statutory amendment is curative in nature inserted for removing hardships to the taxpayers and, therefore, it carries retrospective effect.

The fact also remains that there is no concrete finding either in re-assessment or in the NFAC’s order as to whether the assessee had received whole or part of the consideration by way of the specified mode(s) or not so as to attract sec.50C(1) first and second proviso. This is indeed coupled with the fact that both the lower authorities have also not sought the DVO’s report held as mandatory even in absence of the assessee’s request as per Sunil Kumar Agarwal, vs. CIT [2014] 372 ITR 83 (Kol.). We accordingly restore the assessee’s instant sole substantive ground back to the Assessing Officer to decide afresh as per sec.50C(1) first and second proviso r.w.s. 50C(2) of the Act preferably within three effective opportunities of hearing. Ordered accordingly.

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