Sec. 14A amendments with wording ‘for removal of doubts’ cannot be presumed to have retrospective effect: HC

Case Details: PCIT (Central) v. Era Infrastructure (India) Ltd. - [2022] 141 taxmann.com 289 (Delhi)

Judiciary and Counsel Details

• • Manmohan & Ms Manmeet Pritam Singh Arora, JJ.
  • Sanjay Kumar, Sr. Standing Counsel & Ms Easha Kadian, Adv. for the Appellant.

Facts of the Case

The Delhi High Court, relying upon the Apex Court ruling in the case of M.M. Aqua Technologies Ltd. [2021] 129 taxmann.com 145 (SC) has ruled that the amendment made by the Finance Act, 2022 to section 14A by inserting a non-obstante clause cannot be presumed to have retrospective effects.

High Court Held

The Court held was of the view that the amendment of section 14A, which is “for removal of doubts” cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood.

List of Cases Reviewed

• • Order passed by ITAT, Delhi in ACIT v. Era Infrastructure (India) Ltd. [IT Appeal No. 798/Del/2018, dated 10-3-2021] (para 8) affirmed.
  • Cheminvest Ltd. v. CIT [2015] 61 taxmann.com 118/234 Taxman 761/378 ITR 33 (Delhi) (para 9)
  • Pr. CIT v. IL&FS Energy Development Co. Ltd. [2017] 84 taxmann.com 186/250 Taxman 174/399 ITR 483 (Delhi) (para 10) followed.

List of Cases Referred to

• • ACIT v. Era Infrastructure (India) Ltd. [IT Appeal No. 798 (Delhi) of 2018, dated 10-3-2021] (para 1)
  • Pr. CIT v. IL&FS Energy Development Co. Ltd. [2017] 84 taxmann.com 186/250 Taxman 174 (Delhi) (para 3)
  • Sedco Forex International Drill. Inc. v. CIT [2005] 149 Taxman 352/279 ITR 310 (SC) (para 6)
  • M.M. Aqua Technologies Ltd. v. CIT [2021] 129 taxmann.com 145/282 Taxman 281/436 ITR 582 (SC) (para 7)
  • Kunhayammed v. State of Kerala [2000] 113 Taxman 470/245 ITR 360 (SC) (para 9)
  • Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association [1992] 3 SCC 1 (para 9)
  • Cheminvest Ltd. v. CIT [2015] 61 taxmann.com 118/234 Taxman 761/378 ITR 33 (Delhi) (para 9).