Telangana High Court
Ctrrailone Jv, vs Commissioner Of Income Taxiii on 23 June, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
INCOME TAX TRIBUNAL APPEAL No.496 of 2013
JUDGMENT:
(per the Hon'ble Sri Justice P.Sam Koshy)
Heard Mr. Dundu Manmohan, learned counsel, representing Mr. G.V.N.
Hari, learned counsel for the appellant, and Ms. Bokaro Sapna Reddy, learned
Senior Standing Counsel for Income Tax Department for the respondent.
2. The instant appeal was admitted on the following substantial questions of
law, viz.,
"(A) Whether on the facts and in the circumstances of the case, the
Appellate Tribunal is justified in holding that the amendment made by
Finance Act, 2010 to S.40(a)(ia) of the Income Tax Act, 1961 is neither
remedial nor curative in nature and is, therefore, prospective in its
operation?
(B) Whether on the facts and in the circumstances of the case, the
Appellate Tribunal erred in not adhering to the principles of Judicial
Discipline by not following the later judgment of hon'ble Calcutta High
Court which is a higher forum and following the decision rendered by the
Special Bench of the Appellate Tribunal that was rendered prior to the
judgment of the hon'ble Calcutta High Court?"
3. The dispute raised in the instant appeal is whether the amendment
brought by way of the Finance Act, 2010 to Section 40(a)(ia) of the Income Tax
Act, 1961, would have a retrospective effect or it would have a prospective
effect.
4. Today, when the matter is taken up for hearing, the learned counsel for
the appellant submits that the issue has already been decided by the Hon'ble
Supreme Court in the case of Commissioner of Income-tax, Kolkata vs.
Calcutta Export Company 1 wherein this very substantial question of law has
been answered by the Hon'ble Supreme Court holding that the said amendment
is curative in nature and it would have a retrospective effect. For ready
reference, paragraph No.30 of the said judgment is being reproduced hereunder,
viz.,
"30. Hence, in light of the forgoing discussion and the binding effect of
the judgment given in Allied Moters (P.) Ltd. case (supra), we are of the
view that the amended provision of Sec 40(a)(ia) of the IT Act should be
interpreted liberally and equitable and applies retrospectively from the
date when Sec 40(a)(ia) was inserted i.e., with effect from the Assessment
Year 2005-2006 so that an assessee should not suffer unintended and
deleterious consequences beyond what the object and purpose of the
provision mandates. As the developments with regard to the Section
recorded above shows that the amendment was curative in nature, it
should be given retrospective operation as if the amended provision
existed even at the time of its insertion. Since the assessee has filed its
returns on 01.08.2005 i.e., in accordance with the due date under the
provisions of Section 139 IT Act, hence is allowed to claim the benefit of
[2018] 404 ITR 654 (SC)
the amendment made by Finance Act, 2010 to the provisions of Section
40(a)(ia) of the IT Act."
5. In view of the aforesaid authoritative decision rendered by the Hon'ble
Supreme Court quoted above, the question of law framed by the appellant in the
instant case stands decided in their favour holding that the said amendment to
Section 40(A)(ia) would have a retrospective effect.
6. The instant appeal therefore deserves to be and is accordingly allowed.
The impugned order dated 31.12.2012, in ITA.No.1122/HYD/2012, passed by
the Income Tax Appellate Tribunal, Hyderabad Bench 'A', Hyderabad, is set
aside holding that the amendment to Section 40(A)(ia) has a retrospective
effect.
7. As a sequel, miscellaneous petitions pending if any, shall stand closed.
However, there shall be no order as to costs.
________________
P.SAM KOSHY, J
_______________________________
NARSING RAO NANDIKONDA, J
Date: 23.06.2025
GSD
