Happy 75th Independence Day
to all esteemed professional colleagues
It is an achievement for our country to traverse the challenging journey of 74 years as a Democratic Republic of India. When we look around in our neighborhood one realises that founding fathers of our Constitution have given us a Constitution and handed over institutions to protect and uphold constitutional values. We should not only cherish them, but, conduct ourselves in such a manner as not to undermine the same. Hope this wisdom prevails among the Parliamentarians also cutting across all political parties.
The Hon’ble Finance Minister in the abruptly concluded Monsoon Session of the Parliament moved Bill No. 120 of 2021 to reverse the retrospective amendments made through the Finance Act, 2012 to section 9 of the Income tax Act, 1961. The Statement of Objects and Reasons para 4 reads as “The said clarificatory amendments made by the Finance Act, 2012 invited criticism from stakeholders mainly with respect to retrospective effect given to the amendments. It is argued that such retrospective amendments militate against the principle of tax certainty and damage India’s reputation as an attractive destination. In the past few years, major reforms have been initiated in the financial and infrastructure sector which has created a positive environment for investment in the country. However, this retrospective clarificatory amendment and consequent demand created in a few cases continues to be a sore point with potential investors. The country today stands at a juncture when quick recovery of the economy after the COVID-19 pandemic is the need of the hour and foreign investment has an important role to play in promoting faster economic growth and employment.”
The potential investors are hailing this bold decision of the government. We professionals also join them as it is never too late to correct once mistake. We will be over joyed if few more corrections to such mistakes pointed out by we professionals are also accepted. Especially the insertion of Explanation-5 to section 43B of the Income tax Act, 1961 through Finance Act, 2021 to overcome decisions which were in favour of the assesses who had paid the employees contribution to the exchequer prior to the filing of return under section 139 of the Act. If this amendment is also reversed then it will be in the spirit of the observations made by the Hon’ble Supreme Court in the case State of Karnataka vs. Karnataka Pawn Brokers Association, dated 15th March, 2018. The Hon’ble court observed in para 23 that “However, the Legislature cannot set at naught the judgments which have been pronounced by amending the law not for the purpose of making corrections or removing anomalies but to bring in new provisions which did not exist earlier. The Legislature may have the power to remove the basis or foundation of the judicial pronouncement but the Legislature cannot overturn or set aside the judgment, that too retrospectively by introducing a new provision. The legislature is bound by the mandamus issued by the Court. A judicial pronouncement is always binding unless the very fundamentals on which it is based are altered and the decision could not have been given in the altered circumstances. The Legislature cannot, by way of introducing an amendment, overturn a judicial pronouncement and declare it to be wrong or a nullity. What the Legislature can do is to amend the provisions of the statute to remove the basis of the judgment.”
Friends, in this issue we are starting a new series of articles to celebrate “Azadi ki Amrut Mahatsav”. Justice R.V. Easver and Justice S.C. Dharmadhikari have obliged us by accepting our request to contribute. I thank all the professionals who have taken out time to bring out the present issue of the AIFTP-Journal. Wishing you all once again wishing a very happy Independence Day. Please continue following the COVID-19 appropriate behavior as the threat is not yet over. Please motivate as many people as possible to get vaccinated.