Case Law Details
A.Y. Garment International Private Ltd. Vs DCIT (Karnatka High Court)
Whether the Tribunal was justified in law in holding that the amendment made by Finance Act, 2010 in the provisions of Section 40(a)(ia) of the Income-tax Act, 1961 is not retrospective in operation on the facts and circumstances of the case?
The issue whether the aforesaid amendment being curative in nature has retrospective operation was considered by the Supreme Court in the case of CALCUTTA EXPORT COMPANY supra and it was held that the purpose of amendment made by Finance Act, 2010 is to solve the anomalies and proviso was inserted to remedy unintended consequences and to make the provision workable. It was further held that a proviso which supplies an obvious omission in the Section is required to be read into the Section to give the Section a reasonable interpretation and requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the Section as a whole. Thus, it was held that amendment made by Finance Act, 2010 in Section 40(a)(ia) being curative in nature is required to be given retrospective operation. The aforesaid decision was followed by a division bench of this Court in the case of SANTOSH KUMAR SHETTY supra. The issue with regard to retrospectivity of Section 40(a)(ia) is no longer res integra and is answered in favour of the assessee by the Supreme Court.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2005-06. The appeal was admitted by a bench of this Court vide order dated 26.06.2013 on the following substantial questions of law:
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