Safe Harbour Limit of 5% Under Section 50C(1) Deemed Retrospective

Rajpal Mehra (HUF) Vs ACIT (ITAT Mumbai) Introduction: The Income Tax Appellate Tribunal (ITAT) Mumbai, in a recent ruling involving Rajpal Mehra (HUF) vs. ACIT, underscored the anti-avoidance intent of Section 50C(1) of the Income Tax Act, 1961. The provision, aimed at curbing tax evasion through the undervaluation of property sales, was analyzed for its retrospective applicability, especially concerning the “safe harbour limit of 5%” introduced by the 3rd proviso. The ruling, dated January 17, 2024, delved into whether this amendment, deemed curative of unintended consequences, s...