January 2013
Export profit: Deduction u/s. 80HHC: Retrospective amendment to section 80HHC(3) by Taxation Laws(Second Amendment) Act, 2005 to get over decision of Tribunal is not valid: Amendment prospective:
By K. B. Bhujle, Advocate
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[Vijaya Silk House (Bangalore) Ltd. Vs. UOI; 349 ITR 566 (Bom):]
Dealing with the validity of the retrospective amendment to section 80HHC(3) of the Income-tax Act, 1961 the Bombay High Court held as under:
“i) The amendment made by the Taxation Laws (Amendment) Act, 2005, in order to overcome the decision of the Tribunal by insertion of the third and fourth provisos to section 80HHC(3) of the Income-tax Act, 1961, is violative for its retrospective operation and for depriving the benefit earlier granted to a class of assessees whose assessments were still pending, although such benefit will be available to assessees whose assessments have already been concluded. In this type of substantive amendment, retrospective operation can be given only if it is for the benefit of assessees and not in a case where it affects even a small section of assessees.
ii) Accordingly, the amendment could be given effect from the date of the amendment and not in respect of earlier assessment years in case of assessees whose export turnover is above Rs. 10 crore. In other words, the retrospective amendment should not be detrimental to any of the assessees.”
