Concept of Retrospective Taxation

Retrospective taxation means bringing changes in the legislation which impact the tax consequences of certain actions undertaken before the enactment of such legislation.

The policy of the Government in respect of retrospective taxation has been spelt out in the speech of the Finance Minister while present the Finance (No.2) Bill, 2014 in the Lok Sabha on 10.7.2014 wherein it was stated that:

• The Government will not ordinarily bring about any change retrospectively which creates a fresh liability;

• Cases which have come up in various courts and other legal fora consequent upon certain retrospective amendments to the Income-tax Act, 1961 undertaken through the Finance Act, 2012 are at different stages of pendency and will naturally reach their logical conclusion; and

• All fresh cases arising out of the retrospective amendments of 2012 in respect of indirect transfers and coming to the notice of the Assessing Officers will be scrutinized by a High Level Committee to be constituted by the CBDT before any action is initiated in such cases.

Government has constituted a three member Committee of officers by order dated 28.8.2014 under Section 119 of the Income-tax Act, 1961 for approval of the action to eb initiated by the Assessing Officer in fresh cases arising out of retrospective amendments of 2012 in respect of indirect transfer of assets.

The Committee is required to submit its first report in respect of references decided by it for the period ending 31.12.2014.

This information was given by the Minister of State of Finance, Shri Jayant Sinha in written reply to a question in Lok Sabha today.

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Category : Income Tax (25362)
Type : News (12705)
Tags : CBDT (677) Government Policy (1843)

0 responses to “Govt not to change tax law retrospectively if it creates a fresh liability”

  1. adv. dr.g.balakrishnan says:

    MR KANOI, WHAT I SAID ONLY NEED TO AFFECT ONLY SOME BLACK SHEEP NOT OTHERS IN ANY PROFESSION, I SURVEYED IN INDIA.

    SORRY DO NOT MISUNDERSTAND, YOU MIGHT BE A VERY GOOD AND LIKE A FEW MORE OR SO BUT EVEN A FEW BAD APPLES CREATE SERIOUS PROBLEMS LIKE ONE ADVOCATE AT BOMBAY TOOK FOR GRANTED A CLIENT BY CONNING HIM TO DEPOSIT ONE CRORE WITH HIM AND HE HAS LANDED IN POLICE CUSTODY… SO I AGREE WITH YOU EVEN ADVOCATES I MEAN REAL LAW PRACTICING PROFESSIONALS PER REPORT FILED IN TIMES OF INDIA TODAY. SO DEAD WOOD IS THERE IN EVERY WALK F LIFE PLEASE BUT PEOPLE LIKE YOU NEED TO WEED THEM OUT IN THE INTEREST OF THE PROFESSIONS’ VIRGIN STATUS!

    • CA Sandeep Kanoi says:

      Thank you for your clarification. I agree every profession have some black sheep and to save the Virginity of the same we needs to weed such black sheeps out from the profession.

  2. adv. dr.g.balakrishnan says:

    i can understand CAs may not appreciate, so too taxguru , i cannot blame them as their knowledge of law is limited to some course material but certainly not legal practice as their main practice is taxation accounting;

    that way hon S C rightly held in Madras Bar Association v NTT,that respected CA/CSs cannot handle legal interpretation or interpretation of statutes which is different cup of tea.

    Further the hon constitutional courts are answerable to petitioners or respondents not just to advocates after all they are some people to place the right facts to the courts but legal luminaries alone can rightly interpret the statutes or the constitution and that way they are really to assist the courts.

    Law is a unruly horse!

    • CA Sandeep Kanoi says:

      What I meant to say is that please do not genralise the things. If all CAs are not competent so is true about all Advocates.

  3. adv. dr.g.balakrishnan says:

    Good.
    I have to quote here Earl Halsbury in QUINN V LEATHAM, 1901, AC 495 – (INCIDENTALLY INDIAN SUPREME COURT ALSO FOLLOWS – for the benefit of our finance minster supposed to be a senior advocate at hon SC) – ‘A decision is ONLY an AUTHORITY for what it actually decides – what is the ESSENCE of decision – is the ‘ratio’ – and not every observation found therein nor what logically follow from various what Earl Halbury said…. and that view the hon Supreme court of India also holds.

    so his statement in his speech ..’logically’ has no logical meaning is my observation but his fellow Lok sabha members may admire his statement but not legal community.

    That view was view in Allen v Feud (1898)AC 1 – WHAT WAS DECIDED therein – there are two observations of general character which I (Judge) wish to make and – one is to repeat what I have often said before ,that every judgement must be read as applicable to the particular fact(s) proved or assumed to be proved, since the generality of the expressions which may be found there (they )are not intended to the exposition of which law , but governed and qualified by the ‘particular fact (s)’ of the case in which such expressions are to be found.’

    The Other is that a case is only an authority for what it actually decides.

    I entirely deny that it can be quoted for a proposition that seem logically. Such a mode of reasoning assumes that law is necessary,a logical code WHEREAS every lawyer must ACKNOWLEDGE that the law is NOT always logical’ observed the judges.

    That view is accepted by hon SC of India!

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