Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2165 OF 2012
COMMISSIONER OF INCOME TAX 5 MUMBAI … APPELLANT(S)
VERSUS
M/S. ESSAR TELEHOLDINGS LTD.
THROUGH ITS MANAGER … RESPONDENT(S)
WITH
C.A.No.1429 of 2018 @ SLP(C) No. 36560 of 2012, C.A. No. 117
of 2015, C.A. No. 5101 of 2012, C.A. No. 118 of 2015, C.A.
No. 6727 of 2015, C.A. No. 119 of 2015, C.A. No. 116 of
2015, C.A. No. 194 of 2015, C.A. No. 114 of 2015, C.A. No.
120 of 2015, C.A. No. 7395 of 2012, C.A. No. 7394 of 2012,
C.A. No. 121 of 2015, C.A. No. 122 of 2015, C.A.
Nos.14301432 of 2018 @ SLP(C) No. 8507 8509 of 2012, C.A. No.
128 of 2015, C.A.No.1433 of 2018 @ SLP(C) No. 21294 of 2012
C.A. No. 113 of 20151, C.A. No. 7797 of 2012, C.A. No. 381 of
2013 , C.A. No. 7426 of 2012, C.A. No. 8195 of 2012, C.A. No. 126
of 2015, C.A. No. 8800 of 2012, C.A. No. 3273 of 2013,
C.A.No.1434 of 2018 @ SLP(C) No. 10986 of 2013, C.A. No. 124 of
2015, C.A. No. 1101 of 2013, C.A. No. 129 of 2015, C.A. No. 125
of 2015, C.A. No. 127 of 2015, C.A.No.1435 of 2018 @ SLP(C) No.
21845 of 2013, C.A. No. 6313 of 2013, C.A. No. 6733 of 2013,
C.A. No. 6191 of 2013, C.A. No. 8921 of 2013, C.A. No. 6192 of
2013, C.A. No. 3355 of 2015, C.A. No. 7167 of 2013, C.A. No.
8376 of 2013, C.A. No. 7172 of 2013, C.A. No. 7170 of 2013, C.A.
No. 9183 of 2013, C.A. No. 8341 of 2013, C.A. No. 7168 of 2013,
C.A. No.8256 of 2013, C.A. No. 7171 of 2013, C.A. No. 7974 of
2013, C.A. No. 8342 of 2013, C.A. No. 7173 of 2013, C.A. No.
8343 of 2013, C.A. No. 8933 of 2013, C.A. No. 8909 of 2013, C.A.
No. 9832 of 2013, C.A. No. 9833 of 2013, C.A. No. 9184 of 2013,
C.A. No. 3359 of 2015, C.A.No. 1436 of 2018 @ SLP(C) No. 36388 of
2014, C.A. No. 3781 of 2015, C.A. No. 3358 of 2015, C.A.No. 1437
Signature Not Verified
Digitally signed by
ASHWANI KUMAR
Date: 2018.04.03
10:10:41 IST
Reason:
2
of 2018 @ SLP(C) No. 18398 of 2015, C.A. No. 6294 of 2015,
C.A.No.1438 of 2018 @ SLP(C) No. 19303 of 2015, C.A.No.1439 of
2018 @ SLP(C) No. 20478 of 2015, C.A. No. 7892 of 2015, C.A. No.
9251 of 2015, C.A. No. 9252 of 2015, C.A. No. 14525 of 2015, C.A.
No. 8178 of 2016, C.A. No. 8177 of 2016, C.A. No. 3279 of 2016,
C.A.No.1440 of 2018 @ SLP(C) No. 23624 of 2016, C.A.No.1441 of
2018 @ SLP(C) No. 16185 of 2016, C.A. No. 5044 of 2016, C.A. No.
5417 of 2016, C.A. No. 6019 of 2016, C.A.No.1442 of 2018 @
SLP(C)No.26278 of 2016, C.A.No.1443 of 2018 @ SLP(C)No. 4243 of
2017, C.A. No. 4539 of 2017, C.A.No.1444 of 2018 @ SLP(C) No.
19098 of 2017, C.A.No.1445 of 2018 @ SLP(C) No. 17499 of 2017,
C.A.No.1446 of 2018 @ SLP(C) No. 25337 of 2017, C.A.No.1460 of
2018 @ SLP(C)No. 3447of 2018 (Diary No. 19735 of 2017), C.A.No.1462
of 2018 @ SLP(C)No.3450 of 2018 (Diary No. 24346 of 2017),
C.A.No.1461 of 2018 @ SLP(C)No. 3448 of 2018,(Diary No. 36596 of
2017).
J U D G M E N T
ASHOK BHUSHAN, J.
Delay Condoned. Leave granted.
2. This appeal when alongwith several appeals were heard on
16.11.2016, this Court noticed that in batch of cases, four
questions have arisen. The present batch of cases of which
Civil Appeal No. 2165 is a leading case relates only to
Question No.2, which is to the following effect:
“Whether subsection (2) and subsection (3) of
Section 14A inserted with effect from 01.04.2007
will apply to all pending assessments?
Whether Rule 8D is retrospectively applicable?”
3. All these appeals raising only above question of law have
3
been heard together and are being decided by this common
judgment. For deciding all these appeals, it shall be
sufficient to refer facts and proceedings in Civil Appeal No.
2165 of 2012.
FACTS
Civil Appeal No. 2165 of 2012
4. This appeal has been filed against the judgment of Bombay
High Court dated 12.09.2011 in Income Tax Appeal (L) No. 947
of 2011 by which judgment the High Court has dismissed the
appeal filed by the Commissioner of Income Tax following an
earlier judgment of the Bombay High Court dated 12.08.2010 in
the case of Godrej Boyce and Manufacturing Company Limited
Vs. Deputy Commissioner of Income Tax, Mumbai & Anr.,
reported in (2010) 328 ITR 81(Bom.). The assessment year in
issue is 20032004. The assessee (respondent in appeal) filed
his return of income on 01.12.2003 declaring a loss of
Rs.69,92,67,527/. A notice under Section 143(2) was issued
to the assessee. The Assessing Officer vide its order dated
27.03.2006 held that during the year under consideration, the
assessee company was in receipt of both taxable and
nontaxable dividend income. Accordingly, the dividend on
investment exempt under Section 10(23G) was considered by the
A.O. for the purpose of disallowance U/S.14A. Hence,
4
proportionate interest relating to investment on which
exemption u/s.10(23G) is available as per the working
amounting to Rs.26 crores was disallowed U/S.14A r.w.s.
10(23G) of the I.T. Act.
5. The assessee filed an appeal, which was partly allowed by
order dated 05.03.2009. The assessee filed an appeal before
the ITAT. The ITAT allowed the assessee’s appeal relying on
the Bombay High Court’s judgment in
Godrej and Boyce
Manufacturing Company Limited versus Deputy Commissioner of
Income Tax, Mumabi & Another., reported in (2010) 328 ITR
81(Bom.). The ITAT held that Rule 8D is only prospective and
in the year under consideration Rule 8D was not applicable.
ITAT set aside the order of CIT(A) and restored the issue back
to the file of the Assessing Officer for de novo adjudication
without invoking the provisions of Rule 8D. Against the order
of ITAT, the revenue filed an appeal before the High Court.
The High Court following its earlier judgment of Godrej and
Boyce Manufacturing Company Limited Vs. Deputy Commissioner
of Income Tax, Mumbai & Anr. (supra) dismissed the appeal.
The Commissioner of Income Tax aggrieved by the judgment of
the High Court has come up in this appeal.
6. In the appeal, the only question, which has been pressed
5
for our consideration is the first question, which was raised
before the High Court, which is to the following effect:
“Whether on the facts and circumstance of the case
and in law, the Hon’ble ITAT is right in holding
that applicability of Rule 8D is only prospective
in operation and for the year under assessment it
was not applicable?”
7. Thus, in this batch of appeals, the only question to be
considered and answered is as to whether Rule 8D of Income Tax
Rules is prospective in operation as held by the High Court or
it is retrospective in operation and shall also be applicable
in the assessment year in question as contended by learned
counsel for the revenue.
8. We have heard Shri Yashank Adhyaru, learned senior
counsel, Shri Arijit Prasad, learned counsel for the appellant
Shri S.K. Bagaria, learned senior counsel, Shri Ajay Vohra,
learned senior counsel and other learned counsel have been
heard for different assessees in this batch of appeals.
“ SUBMISSIONS ”
9. Learned counsel for the appellant (revenue) submit that
provisions of Section 14A being clarificatory in nature and
Rule 8D is a procedural provision which provided only a
machinery for the implementation of subsections (2) and (3),
Rule 8D is retrospective in nature. The machinery provisions
6
by which the charging section is to be implemented or workable
are to be given retrospective effect, which is coterminus
with the period of operation of the main charging provision.
The charging section i.e. Section 14A admittedly being
retrospective, the machinery provision, i.e. Rule 8D has also
to be retrospective.
10. Learned counsel for the revenue has placed reliance on
judgments of this Court, i.e., Commissioner of Wealth Tax,
Meerut Vs. Sharvan Kumar Swarup & Sons, (1994) 6 SCC 623;
Commissioner of Income Tax I, Ahmedabad Vs. Gold Coin Health
Food Private Limited, (2008) 9 SCC 622 and Commissioner of
Income Tax – III Vs. Calcutta Knitwears, Ludhiana, (2014) 6
SCC 444.
11. Shri S.K. Bagaria, learned senior counsel appearing for
the assessee refuting the submission of learned counsel for
the revenue contends that provisions of Rule 8D are only
prospective in nature. He submits that when a new liability
is imposed by a statutory provision then the same cannot be
retrospective. He submits that provisions inserted by Rule 8D
are new provision for computing the expenditure which can in
no manner be retrospective. He submits that Rule 8D was made
applicable by Fifth Amendment Rules, 2008 providing in Clause
2 i.e. “they shall come into force from the date of their
7
publication in the official gazette”. He submits that the
Central Board of Direct Taxes vide its circular dated
28.12.2006 while explaining the substance of the provision of
subsections (2) and (3) of Section 14A clearly mention that
the aforesaid provisions were to be applicable from assessment
year 20072008 onwards. Hence, Rule 8D, which is framed to
give effect to the provisions of subsections (2) and (3)
cannot operate from any date prior to assessment year
20072008.
12. Shri Ajay Vohra, learned senior counsel appearing for
assessee submits that Rule 8D has been amended by Income Tax
th
(14 Amendment Rules, 2016) w.e.f. 02.06.2016 by which a new
methodology of computing the expenditure in relation to income
which does not form part of the total income has been brought
in place. In event, the argument is accepted that Rule 8D is
retrospective, which rule shall hold the field, whether Rule
8D as inserted w.e.f. 24.03.2008 or one which has been
substituted w.e.f. 02.06.2016? The amendment made w.e.f.
02.06.2016 reinforces that the methodology of computing the
expenditure in relation to income which does not form part of
the total income is prospective and has been change w.e.f.
02.06.2016, no other interpretation is permissible. He
further submits that subordinate legislation is ordinarily
8
prospective and Rule 8D being subordinate legislation can have
no retrospective effect. Learned counsel for the assessees
have also placed reliance on various decisions of this Court,
which shall be referred to while considering the submissions
in detail.
13. Shri S.S.H. Rizvi, learned counsel appearing for the
assessee in Civil Appeal arising out of SLP (C) 16185 of 2016
submits that Revenue has already agreed before the ITAT that
matter be remitted to Assessing Officer for fresh decision in
light of judgment of the Bombay High Court in Godrej and
Boyce Manufacturing Company (supra) , hence, it had no
jurisdiction to file an appeal before the High Court. He
submits that High Court has rightly dismissed the appeal of
the Revenue, relying on the judgment of the Bomabay High Court
in Godrej and Boyce Manufacturing Company (supra) after
noticing the fact that no interim order was passed by this
Court in Special Leave Petition filed against the said
judgment. It has been submitted by Shri Rizvi that no other
question arose in the appeal before the High Court hence the
Revenue has approached this Court by filing this Special Leave
Petition without any basis.
Relevant Statutory Provisions
14. Rule 8D has been framed to give effect to the provisions
9
of Section 14A subsection (2) and (3) of the Income Tax Act,
1961 (hereinafter referred to as “the Act”). The statutory
scheme as delineated by Section 14A has to be understood
before correctly appreciating the nature and purport of Rule
8D. Section 14A was first inserted by Finance Act, 2001 with
retrospective effect w.e.f. 01.04.1962. Section 14A as
originally inserted reads as under:
“14A. Expenditure incurred in relation to income
not includible in total income. – For the
purposes of computing the total income under this
Chapter, no deduction shall be allowed in respect
of expenditure incurred by the assessee in
relation to income which does not form part of the
total income under this Act.”
15. The purpose for which Section 14A was introduced was
given in the explanatory memorandum issued with the Finance
Bill, 2001, which reads a sunder:
“Certain incomes are not includible while
computing the total income as these are exempt
under various provisions of the Act. There have
been cases where deductions have been claimed in
respect of such exempt income. This in effect
means that the tax incentive given by way of
exemptions to certain categories of income is
being used to reduce also the tax payable on the
nonexempt income by debiting the expenses
incurred to earn the exempt income against taxable
income. This is against the basic principles of
taxation whereby only the net income, i.e., gross
income minus the expenditure, is taxed. On the
same analogy, the exemption is also in respect of
the net income. Expenses incurred can be allowed
only to the extent they are relatable to the
earning of taxable income. It is proposed to
insert a new section 14A so as to clarify the
10
intention of the Legislature since the inception
of the Incometax Act, 1961, that no deduction
shall be made in respect of any expenditure
incurred by the assessee in relation to income
which does not form part of the total income under
the Incometax Act. The proposed amendment will
take effect retrospectively from 1st April, 1962
and will accordingly, apply in relation to the
assessment year 19621963 and subsequent
assessment years.”
16. Section 14A being retrospective in operation w.e.f.
01.04.1962, was being used by the Assessing Officers for
reopening the assessments, the Central Board of Direct Taxes
came with a clarification vide Circular No. 11 of 2001 dated
23.07.2001. Para 4 of the Circular stated as follows:
“The Board have considered this matter and hereby
directs that the assessments where the proceedings
have become final before the first day of April,
2001 should not be reopened under section 147 of
the Act to disallow expenditure incurred to earn
exempt income by applying the provisions of newly
inserted section 14A of the Act.”
17. By Finance Act, 2002, a statutory provision was also
inserted by way of proviso to Section 14A. What was clarified
by the Circular have been statutorily engrafted in the proviso
to the following effect:
“Provided that nothing contained in this section
shall empower the assessing officer either to
reassess under section 147 or pass an order
enhancing the assessment or reducing a refund
already made or otherwise increasing the liability
of the assessee under section 154, for any
assessment year beginning on or before the Ist day
of April, 2001.”
11
18. By Finance Act, 2006, Section 14A was numbered as
subsection (1) and after subsection (1) subsections (2) and
(3) were inserted w.e.f. 01.04.2007 to the following effect:
"(2) The Assessing Officer shall determine the
amount of expenditure incurred in relation to such
income which does not form part of the total
income under this Act in accordance with such
method as may be prescribed, if the Assessing
Officer, having regard to the accounts of the
assessee, is not satisfied with the correctness of
the claim of the assessee in respect of such
expenditure in relation to income which does not
form part of the total income under this Act.
(3) The provisions of subsection (2) shall also
apply in relation to a case where an assessee
claims that no expenditure has been incurred by
him in relation to income which does not form part
of the total income under this Act.”
19. Memorandum explaining the provisions in Finance Bill,
2006 in reference to the method for allocating expenditure in
relation to exempt income mentioned following:
“Under the existing provisions of the said
section, it has been provided that for the
purposes of computing the total income, no
deduction shall be allowed in respect of
expenditure incurred by the assessee in relation
to income which does not form part of the total
income under the Incometax Act.
It is proposed to number the said section as
subsection (1) thereof and to insert a new
subsection (2) in the said section so as to
provide that the Assessing Officer shall determine
the amount of expenditure incurred in relation to
such income which does not form part of the total
12
income, in accordance with such method as may be
laid down by the Central Board of Direct Taxes by
rules, if the Assessing Officer having regard to
the accounts of the assessee, is not satisfied
with the correctness of the claim of the assessee
in respect of expenditure in relation to income
which does not form part of the total income. It
is also proposed to provide that provisions of
subsection (2) shall also apply in relation to a
case where an assessee claims that no expenditure
has been incurred by him in relation to income
which does not form part of the total income.
This amendment will take effect from 1st April,
2007 and will, accordingly, apply in relation to
the assessment year 200708 and subsequent years.”
20. After the changes made in Section 14A by the Finance Act,
2006, a Circular No.14/2006 dated 28.12.2006 was issued, in
which Para 11 of the Circular gave following explanation:
“11.1 Section 14A of the Incometax Act, 1961,
provides that for the purposes of computing the
total income under ChapterIV of the said Act, no
deduction shall be allowed in respect of
expenditure incurred by the assessee in relation
to income which does not form part of the total
income under the Incometax Act. In the existing
provisions of section 14A, however, no method of
computing the expenditure incurred in relation to
income which does not form part of the total
income has been provided for. Consequently, there
is considerable dispute between the taxpayers and
the Department on the method of determining such
expenditure.
11.2 In view of the above, a new subsection (2)
has been inserted in section 14A so as to provide
that it would be mandatory for the Assessing
Officer to determine the amount of expenditure
incurred in relation to such income which does not
form part of the total income in accordance with
such method as may be prescribed. However, the
13
Assessing Officer shall follow the prescribed
method if, having regard to the accounts of the
assessee, he is not satisfied with the correctness
of the claim of the assessee in respect of
expenditure in relation to income which does not
form part of the total income. Provisions of
subsection (2), will also be applicable in
relation to a case where an assessee claims that
no expenditure has been incurred by him in
relation to income which does not form part of the
total income.
11.3 Applicability From assessment year 200708
onwards.”
21. Income Tax Rules, 1962 were amended by notification dated
24.03.2008 by which Rule 8D was inserted to the following
effect:
“ Method for determining amount of expenditure in
relation to income not includible in total income.
8D (1) Where the Assessing Officer, having regard
to the accounts of the assessee of a previous
year, is not satisfied with –
( a ) the correctness of the claim of
expenditure made by the assessee; or
( b ) the claim made by the assessee that no
expenditure has been incurred
in relation to income which does not form part
of the total income under the Act for such
previous year, he shall determine the amount of
expenditure in relation to such income in
accordance with the provisions of subrule (2).
(2) The expenditure in relation to income which
does not form part of the total income shall be
the aggregate of following amounts, namely :—
( i ) the amount of expenditure directly
relating to income which does not form part of
total income;
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( ii ) in a case where the assessee has incurred
expenditure by way of interest during the
previous year which is not directly
attributable to any particular income or
receipt, an amount computed in accordance with
the following formula, namely :—
| A X | B |
|---|---|
| C |
Where A= amount of expenditure by way of
interest other than the amount of
interest included in clause ( i )
incurred during the previous year;
B= the average of value of investment,
income from which does not or shall
not form part of the total income, as
appearing in the balance sheet of the
assessee, on the first day and the
last day of the previous year ;
C= the average of total assets as
appearing in the balance sheet of the
assessee, on the first day and the
last day of the previous year;
( iii ) an amount equal to onehalf per cent of
the average of the value of investment, income
from which does not or shall not form part of
the total income, as appearing in the balance
sheet of the assessee, on the first day and
the last day of the previous year."
3. For the purposes of this rule, the 'total
assets' shall mean, total assets as appearing
in the balance sheet excluding the increase on
account of revaluation of assets but including
the decrease on account of revaluation of
assets.”
22. After setting out the legislative scheme of Section 14A
and Rule 8D, now, we proceed to consider the submissions
raised by learned counsel for the parties on the question in
15
issue.
Important Principles of Statutory Interpretation
23. The legislature has plenary power of legislation within
the fields assigned to them, it may legislate prospectively as
well as retrospectively. It is a settled principle of
statutory construction that every statute is prima facie
prospective unless it is expressly or by necessary
implications made to have retrospective operations. Legal
Maxim “nova constitutio futuris formam imponere debet non
praeteritis “, i.e. ‘a new law ought to regulate what is to
follow, not the past’, contain a principle of presumption of
prospectivity of a statute.
24. Justice G.P. Singh in “Principles of Statutory
th
Interpretation” (14 Edition, in Chapter 6) while dealing
with operation of fiscal statute elaborates the principles of
statutory interpretation in the following words:
“Fiscal legislation imposing liability is
generally governed by the normal presumption that
it is not retrospective and it is a cardinal
principle of the tax law that the law to be
applied is that in force in the assessment year
unless otherwise provided expressly or by
necessary implication. The above rule applies to
the charging section and other substantive
provisions such as a provision imposing penalty
and does not apply to machinery or procedural
provisions of a taxing Act which are generally
16
retrospective and apply even to pending
proceedings. But a procedural provision, as far as
possible, will not be so construed as to affect
finality of tax assessment or to open up liability
which had become barred. Assessment creates a
vested right and an assessee cannot be subjected
to reassessment unless a provision to that effect
inserted by amendment is either is either
expressly or by necessary implication
retrospective. A provision which in terms is
retrospective and has the effect of opening up
liability which had become barred by lapse of
time, will be subject to the rule of strict
construction. In the absence of a clear
implication such a legislation will not be given a
greater retrospectivity than is expressly
mentioned; nor will it be construed to authorize
the Incometax Authorities to commence proceedings
which, before the new Act came into force, had by
the expiry of the period then provided become
barred. But unambiguous language must be given
effect to, even if it results in reopening of
assessments which had become final after expiry of
the period earlier provided for reopening them.
There is no fixed formula for the expression of
legislative intent to give retrospectivity to a
taxation enactment......”
25. A threeJudge Bench of this court in 1976 (1) SCC 906,
Govind Das and others Versus the Income Tax officer and
another, noticing the settled rules of interpretation laid
down following in paragraph 11:
“11. Now it is a well settled rule of
interpretation hallowed by time and sanctified by
judicial decisions that, unless the terms of a
statute expressly so provide or necessarily
require it, retrospective operation should not be
given to a statute so as to take away or impair an
existing right or create a new obligation or
impose a new liability otherwise than as regards
matters of procedure. The general rule as stated
17
by Halsbury in Vol. 36 of the Laws of England (3rd
Edn.) and reiterated in several decisions of this
Court as well as English courts is that
“all statutes other than those which
are merely declaratory or which relate
only to matters of procedure or of
evidence are prima facie prospective”
and retrospective operation should not
be given to a statute so as to affect,
alter or destroy an existing right or
create a new liability or obligation
unless that effect cannot be avoided
without doing violence to the language
of the enactment. If the enactment is
expressed in language which is fairly
capable of either interpretation, it
ought to be construed as prospective
only. If we apply this principle of
interpretation, it is clear that
subsection (6) of Section 171 applies
only to a situation where the assessment
of a Hindu undivided family is completed
under Section 143 or Section 144 of the
new Act. It can have no application
where the assessment of a Hindu
undivided family is completed under the
corresponding provisions of the old Act.
Such a case would be governed by Section
25A of the old Act which does not
impose any personal liability on the
members in case of partial partition and
to construe subsection (6) of Section
171 as applicable in such a case with
consequential effect of casting of the
members personal liability which did not
exist under Section 25A, would be to
give retrospective operation to
subsection (6) of Section 171 which is
not warranted either by the express
language of that provision or by
necessary implication. Subsection (6)
of Section 171 can be given full effect
by interpreting it as applicable only in
a case where the assessment of a Hindu
18
undivided family is made under Section
143 or Section 144 of the new Act. We
cannot, therefore, consistently with the
rule of interpretation which denies
retrospective operation to a statute
which has the effect of creating or
imposing a new obligation or liability,
construe subsection (6) of Section 171
as embracing a case where assessment of
a Hindu undivided family is made under
the provisions of the old Act. Here in
the present case, the assessments of the
Hindu undivided family for Assessment
Years 195051 to 195657 were completed
in accordance with the provisions of the
old Act which included Section 25A and
the Income Tax Officer was, therefore,
not entitled to avail of the provision
enacted in subsection (6) read with
subsection (7) of Section 171 of the
new Act for the purpose of recovering
the tax or any part thereof personally
from any members of the joint family
including the petitioners.”
26. A Constitution Bench of this court speaking through one
of us, Dr. Justice A.K.Sikri, in the case of The Commissioner
of Income Tax(Central – 1 New Delhi) Vs. Vatika Township Pvt.
Ltd., 2015 (1) SCC 1, while considering as to whether Proviso
inserted in Section 113 of Income Tax Act w.e.f. 01.06.2002 is
prospective or clarificatory /retrospective noticed the
general principles concerning retrospectivity. Following was
laid down by the Constitution Bench in Paras 28, 29 and 33:
“28. Of the various rules guiding how legislation
has to be interpreted, one established rule is
that unless a contrary intention appears, a
legislation is presumed not to be intended to have
19
a retrospective operation. The idea behind the
rule is that a current law should govern current
activities. Law passed today cannot apply to the
events of the past. If we do something today, we
do it keeping in view the law of today and in
force and not tomorrow’s backward adjustment of
it. Our belief in the nature of the law is founded
on the bedrock that every human being is entitled
to arrange his affairs by relying on the existing
law and should not find that his plans have been
retrospectively upset. This principle of law is
known as lex prospicit non respicit: law looks
forward not backward. As was observed in Phillips
6
v. Eyre , a retrospective legislation is contrary
to the general principle that legislation by which
the conduct of mankind is to be regulated when
introduced for the first time to deal with future
acts ought not to change the character of past
transactions carried on upon the faith of the then
existing law.
29. The obvious basis of the principle against
retrospectivity is the principle of “fairness”,
which must be the basis of every legal rule as was
observed in L’Office Cherifien des Phosphates v.
7
YamashitaShinnihon Steamship Co. Ltd. Thus,
legislations which modified accrued rights or
which impose obligations or impose new duties or
attach a new disability have to be treated as
prospective unless the legislative intent is
clearly to give the enactment a retrospective
effect; unless the legislation is for purpose of
supplying an obvious omission in a former
legislation or to explain a former legislation. We
need not note the cornucopia of case law available
on the subject because aforesaid legal position
clearly emerges from the various decisions and
this legal position was conceded by the counsel
for the parties. In any case, we shall refer to
few judgments containing this dicta, a little
later.
33. A Constitution Bench of this Court in
Keshavlal Jethalal Shah v. Mohanlal Bhagwandas,
while considering the nature of amendment to
20
Section 29(2) of the Bombay Rents, Hotel and
Lodging House Rates Control Act as amended by
Gujarat Act 18 of 1965, observed as follows: (AIR
p. 1339, para 8)
“8. … The amending clause does not seek
to explain any preexisting legislation
which was ambiguous or defective. The
power of the High Court to entertain a
petition for exercising revisional
jurisdiction was before the amendment
derived from Section 115 of the Code of
Civil Procedure, and the legislature has
by the amending Act not attempted to
explain the meaning of that provision.
An explanatory Act is generally passed
to supply an obvious omission or to
clear up doubts as to the meaning of the
previous Act.”
27. A twoJudge Bench, speaking through one of us, Dr.
Justice A. K. Sikri in Jayam and company Vs. Assistant
Commissioner & Ors., (2016) 15 SCC 125, again reiterated the
broad legal principles while testing a retrospective statute
in Paragraphs 14 and 18 which is to the following effect:
“14. With this, let us advert to the issue on
retrospectivity. No doubt, when it comes to fiscal
legislation, the legislature has power to make the
provision retrospectively. In R.C. Tobacco (P)
Ltd. v. Union of India, this Court stated broad
legal principles while testing a retrospective
statute, in the following manner: (SCC pp. 73738
& 740, paras 2122 & 28)
“(i) A law cannot be held to be
unreasonable merely because it operates
retrospectively;
(ii) The unreasonability must lie in
some other additional factors;
(iii) The retrospective operation of a
fiscal statute would have to be found to
21
be unduly oppressive and confiscatory
before it can be held to be unreasonable
as to violate constitutional norms;
(iv) Where taxing statute is plainly
discriminatory or provides no procedural
machinery for assessment and levy of tax
or that is confiscatory, courts will be
justified in striking down the impugned
statute as unconstitutional;
(v) The other factors being period of
retrospectivity and degree of unforeseen
or unforeseeable financial burden imposed
for the past period;
(vi) Length of time is not by itself
decisive to affect retrospectivity.”
1
(Jayam and Co. case , SCC Online Mad para
85)
The entire gamut of retrospective operation of
18.
fiscal statutes was revisited by this Court in a
Constitution Bench judgment in CIT v. Vatika
Township (P) Ltd. in the following manner: (SCC p.
24, paras 3335)
“33. A Constitution Bench of this Court
in Keshavlal Jethalal Shah v. Mohanlal
Bhagwandas, while considering the nature
of amendment to Section 29(2) of the
Bombay Rents, Hotel and Lodging House
Rates Control Act as amended by Gujarat
Act 18 of 1965, observed as follows: (AIR
p. 1339, para 8)
‘8. … The amending clause does not
seek to explain any preexisting
legislation which was ambiguous or
defective. The power of the High
Court to entertain a petition for
exercising revisional jurisdiction
was before the amendment derived
from Section 115 of the Code of
Civil Procedure, and the legislature
has by the amending Act not
attempted to explain the meaning of
that provision. An explanatory Act
is generally passed to supply an
obvious omission or to clear up
22
doubts as to the meaning of the
previous Act.’
34. It would also be pertinent to
mention that assessment creates a vested
right and an assessee cannot be
subjected to reassessment unless a
provision to that effect inserted by
amendment is either expressly or by
necessary implication retrospective.
(See CED v. M.A. Merchant.)
35. We would also like to reproduce
hereunder the following observations made
by this Court in Govind Das v. ITO, while
holding Section 171(6) of the Income Tax
Act to be prospective and inapplicable
for any assessment year prior to
141962, the date on which the Income
Tax Act came into force: (SCC p. 914,
para 11)
‘11. Now it is a wellsettled rule
of interpretation hallowed by time
and sanctified by judicial decisions
that, unless the terms of a statute
expressly so provide or necessarily
require it, retrospective operation
should not be given to a statute so
as to take away or impair an
existing right or create a new
obligation or impose a new liability
otherwise than as regards matters of
procedure. The general rule as
stated by Halsbury in Vol. 36 of the
Laws of England (3rd Edn.) and
reiterated in several decisions of
this Court as well as English courts
is that
“all statutes other than those which
are merely declaratory or which
relate only to matters of procedure
or of evidence are prima facie
prospective and retrospective
23
operation should not be given to a
statute so as to affect, alter or
destroy an existing right or create
a new liability or obligation unless
that effect cannot be avoided
without doing violence to the
language of the enactment. If the
enactment is expressed in language
which is fairly capable of either
interpretation, it ought to be
construed as prospective only.”’”
28. The subsection (2) and subsection (3) were inserted in
Section 14A by Finance Act, 2006. The memorandum explaining
the provision in Finance Bill, 2006, in reference to the
methods for allocating expenditure in relation to exempt
income as extracted above clearly mentions that amendments
brought by Finance Bill, 2006 will take effect from
01.04.2007. The last paragraph of memorandum was to the
following effect:
“this amendment will take effect from 01.04.2007
and will accordingly, apply in relation to the
assessment year 200708 and subsequent years”
29. The Constitution Bench of this court in the Commissioner
of Income Tax and ors. Vs. Vatika Township Pvt. Ltd., (Supra) ,
has taken into consideration the notes of clause appended to
the Finance Bill to decipher the nature of the legislative
scheme. In paragraph 42.1, Constitution Bench stated as
follows:
24
“42.1. “Notes on Clauses” appended to the Finance
Bill, 2002 while proposing insertion of proviso
categorically states that “this amendment will
take effect from 162002”. These become
epigraphic words, when seen in contradistinction
to other amendments specifically stating those to
be clarificatory or retrospective depicting clear
intention of the legislature. It can be seen from
the same Notes that a few other amendments in the
Income Tax Act were made by the same Finance Act
specifically making those amendments
retrospective. For example, Clause 40 seeks to
amend Section 92F. Clause (iiia) of Section 92F
is amended “so as to clarify that the activities
mentioned in the said clause include the carrying
out of any work in pursuance of a contract”
(emphasis supplied). This amendment takes effect
retrospectively from 142002. Various other
amendments also take place retrospectively. The
Notes on Clauses show that the legislature is
fully aware of three concepts:
(i) prospective amendment with effect
from a fixed date;
(ii) retrospective amendment with effect
from a fixed anterior date; and
(iii) clarificatory amendments which are
retrospective in nature.”
30. It is also relevant to know as to how the statutory
provisions of Section 14A subsection (2) and subsection (3),
Rule 8D was understood by the Income Tax department itself.
After insertion of subsection (2) and subsection (3) in
Section 14A by Finance Bill, 2006, circular dated 28.12.2006
was issued by the department wherein paragraph 11.3, following
was stated:
“11.3. Applicability from assessment year
20072008 onwards.”
25
31. The methodology for determining amount of the expenditure
in addition to income not includable in total income was for
the first time prescribed by Rule 8D as was envisaged in
Section 14A subsection (2) and subsection (3). It is also
relevant to notice that Constitution Bench in the
Commissioner of Income Tax Vs. Vatika Township Pvt. Ltd., has
also referred to and relied the CBDT circular to find out the
understanding of the Central Board of Direct Tax itself in
context of Provision which was in issue in the above case.
32. Explanatory memorandum issued with the Finance Bill, 2006
and the CBDT circular dated 28.12.2006, thus, clearly
indicates that department understood that subsection (2) and
subsection (3) was to be implemented with effect from
assessment year 20072008. The Rule 8D prescribing the method
was brought into statute book with effect from 24.03.2008 to
implement subsection (2) and subsection (3) with effect from
assessment year 20082009, is clear indicator of the fact that
a new method for computing the expenditure was brought in by
the rules which was to be utilized for computing expenditure
for the Assessment Year 20082009 and onwards.
33. When Section 14A was inserted by Finance Act, 2001, it
26
was with retrospective effect with effect from 01.04.1962
where as Finance Act, 2006, by which subsection (2) and
subsection (3) to Section 14A were inserted, it was with
effect from 01.04.2006 which was mentioned in clause 1(2) of
Finance Act, 2006 which was to the following effect:
“1(2). Save as otherwise provided in this Act,
Sections 2 to 57 shall be deemed to have come into
st
force on the 1 day of April, 2006.”
Rule 8D which was inserted by notification dated
24.03.2008. Rule 1 subrule (2) provides as under:
“1. (1) These rules may be called the Incometax
(Fifth Amendment) Rules, 2008.
(2). They shall come into force from date of their
publication in the Official Gazette.”
It is, however, well settled that the mere date of
enforcement of statutory provisions does not conclude that the
statute is prospective in nature. The nature and content of
statute have to be looked into to find out the legislative
scheme and the nature, effect and consequence of the statute.
34. The submissions which have been much pressed by the
counsel for revenue is that the Section 14A of the Act being
clarificatory in nature having retrospective operation, Rule
8D, which is a machinery provisions have also to be held to be
retrospective to make machinery provisions workable.
27
35. It is to be noted that Section 14A was inserted by
Finance Act, 2001 and the provisions were fully workable
without their being any mechanism provided for computing the
expenditure. Although Section 14A was made effective from
01.04.1962 but Proviso was immediately inserted by Finance
Act, 2002, providing that Section 14A shall not empower
assessing officer either to reassess under Section 147 or pass
an order enhancing the assessment or reducing a refund already
made or otherwise increasing the liability of the assessees
under Section 154, for any assessment year beginning on or
before 01.04.2001. Thus, all concluded transactions prior to
01.04.2001 were made final and not allowed to be reopened.
36. The memorandum of explanation explaining the provisions
of Finance Act, 2006 has clearly mentioned that Section 14
subsection (2) and subsection (3) shall be effective with
effect from the assessment year 200607 alone which is another
indicator that provision was intended to operate
prospectively.
37. Learned counsel for the appellant have placed heavy
reliance on a threeJudge Bench Judgment of this Court in
Commissioner of Wealth Tax, Meerut versus Sharvan Kumar
Swarup & Sons, (1994) 6 SCC 623 . This Court in the above case
28
had to interpret Rule 1BB, inserted in Wealth Tax, 1957
w.e.f. 01.04.1979. For Assessment Year 197778 and 197879
assessment order was passed on 08.02.1983 by which time Rule 1
BB had been introduced in the Rule. The assessee contended
that properties to be valued applying the Rule 1BB. The
claim was rejected and Assessing Officer had valued the
immovable property independently of Rule 1BB.
38. Appeal preferred by assessee was allowed. Appeal by the
Revenue before the Income Tax Appellate Tribunal was also
dismissed. High Court also answered the question against the
Revenue, which was taken in appeal before this Court. This
Court, after noticing the various principles of “statutory
interpretation” held that “procedural law” generally speaking
is applicable to pending cases. Interpreting Rule 1BB
following was held in para 23 and 25:
“23. We may now turn to the scope and content of
Rule 1BB. The said rule merely provides a choice
amongst wellknown and wellsettled modes of
valuation. Even in the absence of Rule 1BB it
would not have have been objectionable, nor would
there be any legal impediment, to adopt the mode
of valuation embodied in Rule 1BB, namely, the
method of capitalisation of income on a number of
years' purchase value. The rule was intended to
impart uniformity in valuations and to avoid
vagaries and disparities resulting from
application of different modes of valuation in
different cases where the nature of the property
is similar.”
25. On a consideration of the matter we are
29
persuaded to the view that Rule 1BB is
essentially a rule of evidence as to the choice
of one of the well accepted methods of valuation
in respect of certain kinds of properties with a
view to achieving uniformity in valuation and
avoiding disparate valuations resulting from
application of different methods of valuation
respecting properties of a similar nature and
character. The view taken by the High Courts, in
our opinion, cannot be said to be erroneous.”
39. This Court in the above case held that Rule 1BB shall be
applicable even prior to the enforcement of the rule holding
that the said rule merely provides a choice amongst wellknown
and wellsettled modes of valuation. It was held that even in
the absence of Rule 1BB, it would not have been objectionable
to adopt the mode of valuation embodied in Rule 1BB, namely,
the mode of capitalisation of income on a number of years
purchased value. The said judgment is, clearly,
distinguishable in context of issue which has arisen before
us. In the present case, methodology as provided under Rule 8D
was neither a wellknown nor wellsettled mode of computation.
The new mode of computation was brought in place by Rule 8D.
No Assessing Officer, even in his imagination could have
applied the methodology, which was brought in place by Rule
8D. Thus, retrospective operation of Rule 8D cannot be
accepted on the strength of law laid down by this Court in the
above case.
30
40. The next judgment relied by the Revenue is Commissioner
of Income Tax I, Ahmedabad versus Gold Coin Health Food
. In the above case, this
Private Limited, (2008) 9 SCC 622
Court considered the amendments made by the Finance Act, 2002
to Section 271(1)(c)(iii) of the Act. This Court held that the
Parliament clarified the position by changing the expression
“any” by “if any”, which was not a substantive amendment
creating penalty for the first time. The amendment as
specifically noted in the notes of “Clauses” was clarificatory
in nature. In para 5 following was laid down:
“5. It is pointed out that prior to the
amendment, Section 271(1) (c)(iii) read as
follows:
"271.(1)(c)(iii) in the cases referred to
in clause (c), in addition to any tax
payable by him, a sum which shall not be
less than, but which shall not exceed
twice, the amount of the income in
respect of which the particulars have
been concealed or inaccurate particulars
have been furnished. "
It was submitted that bare reading of
the provision made the position clear
that it was not necessary that income tax
must be payable by the assessee as sine
qua non for imposition of penalty. The
word “any” made the position clear that
the penalty was in addition to any tax
which may be paid by the assessee.
31
Therefore, even if no tax was payable,
the penalty was leviable. It is in that
context submitted that even prior to the
amendment it could not be read to mean
that if no tax was payable by the
assessee because of filing a return
disclosing loss, the assessee is not
liable to pay penalty even if the
assessee concealed and/or furnished
inaccurate particulars. Because some High
Courts took the contradictory view,
Parliament clarified the position by
changing the expression "any' by "if
any". This was not a substantive
amendment which created a penalty for the
first time. The amendment by the Finance
Act as specifically noted in the Notes on
Clauses makes the position clear that the
amendment was clarificatory in nature and
would apply to all assessments even prior
to Assessment Year 200304. ”
41. The threeJudge Bench also referred to Departmental
Circular dated 24.07.1976, which was found relevant for
interpreting for finding out the nature of the amended
provision. The threeJudge Bench, further held in Para 16 to
the following effect:
"16. The law is well settled that the applicable
provision would be the law as it existed on the
date of the filing of the return. It is of
relevance to note that when any loss is returned
in any return it need not necessarily be the loss
of the previous year concerned. It may also
include carriedforward loss which is required to
be set up against future income under Section 72
32
of the Act. Therefore, the applicable law on the
date of filing of the return cannot be confined
only to the losses of the previous accounting
years.”
The threeJudge Bench, after noticing the earlier cases
and principles of the statutory interpretation recorded
following conclusion in para 21:
“21. Above being the position, the inevitable
conclusion is that Explanation 4 to Section
271(1)(c) is clarificatory and not substantive.
The view expressed to the contrary in Virtual
case, (2007) 9 SCC 665 is not correct. ”
The above case is also clearly distinguishable and not
applicable in the facts of the present case. It was held that
amendments were clarificatory in nature, hence shall operate
retrospectively.
42. The Revenue has also relied on the judgment of this Court
in Commissioner of Income TaxIII versus Calcutta Knitwears,
Ludhiana, (2014) 6 SCC 444 . The above judgment has been
relied by the Revenue for the preposition that it is the duty
of the Court, while interpreting machinery provisions of a
taxing statute to give effect to its manifest purpose. In para
34 following was laid down:
“ 34. It is the duty of the court while interpreting
the machinery provisions of a taxing statute to
give effect to its manifest purpose. Wherever the
intention to impose liability is clear, the courts
33
ought not be hesitant in espousing a commonsense
interpretation to the machinery provisions so that
the charge does not fail. The machinery provisions
must, no doubt, be so construed as would
effectuate the object and purpose of the statute
and not defeat the same (Whitney v. IRC, 1926 AC
37 (HL), CIT v. Mahaliram Ramjidas , (1940) 8 ITR
442, Indian United Mills Ltd. v. Commr. of Excess
Profits Tax, (1955) 27 ITR 20(SC), and Gursahai
Saigal v. CIT,(1963) 48 ITR 1(SC); CWT v. Sharvan
Kumar Swarup & Sons, (1994) 6 SCC 623; CIT v.
National Taj Traders, (1980) 1 SCC 370; Associated
Cement Co. Ltd. v. CTO, (1981) 4 SCC 578. Francis
Bennion in Bennion on Statutory Interpretation,
5th Edn., Lexis Nexis in support of the aforesaid
proposition put forth as an illustration that
since charge made by the legislator in procedural
provisions is excepted to be for the general
benefit of litigants and others, it is presumed
that it applies to pending as well as future
proceedings.”
43. There cannot be any dispute to the preposition that
machinery provision of taxing statute has to give effect to
its manifest purposes. But the applicability of the machinery
provision whether it is prospective or retrospective depends
on the content and nature of the Statutory Scheme. In the
above case, the Court was not considering the question of
prospectivity or retrospectivity of the machinery provision,
hence the above case also does not help the appellant in the
present case.
44. The Constitution Bench in Commissioner of Income Tax
(Central)I, New Delhi versus Vatika Township (supra) , after
noticing the principle of Statutory Interpretation, as noted
34
above, has laid down the following in para 36, 37 and 39:
“36. In CIT v. Scindia Steam Navigation Co. Ltd .,
AIR 1961 SC 1633, this Court held that as the
liability to pay tax is computed according to the
law in force at the beginning of the assessment
year i.e. the first day of April, any change in
law affecting tax liability after that date though
made during the currency of the assessment year,
unless specifically made retrospective, does not
apply to the assessment for that year.
Answer to the reference
37. When we examine the insertion of proviso in
Section 113 of the Act, keeping in view the
aforesaid principles, our irresistible conclusion
is that the intention of the legislature was to
make it prospective in nature. This proviso cannot
be treated as declaratory/statutory or curative in
nature.”
Reasons in support
“39. The first and foremost poser is as to whether
it was possible to make the block assessment with
the addition of levy of surcharge, in the absence
of proviso to Section 113 ? In Suresh N. Gupta
itself, it was acknowledged and admitted that the
position prior to the amendment of Section 113 of
the Act whereby the proviso was added, whether
surcharge was payable in respect of block
assessment or not, was totally ambiguous and
unclear. The Court pointed out that some assessing
officers had taken the view that no surcharge is
leviable. Others were at a loss to apply a
particular rate of surcharge as they were not
clear as to which Finance Act , prescribing such
35
rates, was applicable. It is a matter of common
knowledge and is also pointed out that the
surcharge varies from year to year. However, the
assessing officers were indeterminative about the
date with reference to which rates provided for in
the Finance Act were to be made applicable. They
had four dates before them viz.:(Suresh N. Gupta
case, (2008) 4 SCC 362, SCC p. 379, para 35)
(i) Whether surcharge was leviable with
reference to the rates provided for in
the Finance Act of the year in which the
search was initiated; or
(ii) the year in which the search was
concluded; or
(iii) the year in which the block
assessment proceedings under Section
158BC of the Act were initiated; or
(iv) the year in which block assessment
order was passed. ”
45. As noted above, that Rule 8D has again been amended by
Income Tax (Fourteenth Amendment) Rules, 2016 w.e.f.
02.06.2016, by which Rule 8D subrule (2) has been substituted
by a new provision which is to the following effect:
[(2) The expenditure in relation to income which
does not form part of the total income shall be
the aggregate of following amounts, namely:
(i) the amount of expenditure directly
relating to income which does not form
part of total income; and
36
(ii) an amount equal to one per cent of
the annual average of the monthly
averages of the opening and closing
balances of the value of investment,
income from which does not or shall not
form part of total income:
that the amount referred to in clause (i)
Provided
and clause (ii) shall not exceed the total
expenditure claimed by the assessee.]
46. The method for determining the amount of expenditure
brought in force w.e.f. 24.03.2008 has been given a gobye and
a new method has been brought into force w.e.f. 02.06.2016, by
interpreting the Rule 8D retrospective, there will be a
th th
conflict in applicability of 5 & 14 Amendment Rules which
clearly indicates that the Rule has a prospective operation,
which has been prospectively changed by adopting another
methodology.
47 . One of the submissions raised by the learned counsel for
the assessee also needs to be noticed. Learned counsel for the
assessee submits that it is wellsettled that subordinate
legislation ordinarily is not retrospective unless there are
clear indication to the same. Reliance has been placed on
judgment of this Court in State of Jharkhand & Ors. Vs. Shiv
Karampal Sahu, (2009) 11 SCC 453 . In para 17 following has
been stated:
37
“17. Ordinarily, a subordinate legislation should
not be construed to be retrospective in operation.
The Circular Letter dated 752003 was given a
prospective effect. The father of the respondent
died on 1952000. There is nothing to show that
even Circular dated 982000 had been given
retrospective effect. In any view of the matter,
as the State of Jharkhand in the Circular Letter
dated 752003 adopted the earlier circular
letters issued by the State of Bihar only in
respect of cases where death had occurred after
15102000 i.e. the date from which the State of
Jharkhand came into being, the High Court, in our
opinion, committed a serious error in giving
retrospective effect thereto indirectly which it
could not do directly. Reasons assigned by the
High Court, for the reasons aforementioned, are
unacceptable. ”
There is no indication in Rule 8D to the effect that Rule
8D intended to apply retrospectively.
48. Applying the principles of statutory interpretation for
interpreting retrospectivity of a fiscal statute and looking
into the nature and purpose of subsection (2) and
subsection (3) of Section 14A as well as purpose and intent
of Rule 8D coupled with the explanatory notes in the Finance
Bill, 2006 and the departmental understanding as reflected by
Circular dated 28.12.2006, we are of the considered opinion
that Rule 8D was intended to operate prospectively.
49. It is relevant to note that impugned judgment in this
appeal relies on earlier judgment of Bombay High Court in
38
Godrej and Boyce Manufacturing Company Limited versus Deputy
Commissioner of Income Tax, Mumbai and Another, (2010) 328
ITR 81(Bom.) , where the Division Bench of the Bombay High
court after elaborately considering the principles to
determine the prospectivity or retrospectivity of the
amendment has concluded that Rule 8D is prospective in nature.
Against the aforesaid judgment of the Bombay High court dated
12.08.2010 an appeal was filed in this court which has been
decided vide its judgment reported in Godrej and Boyce
Manufacturing Company Limited Vs. Deputy Commissioner of
Income Tax, Mumbai & Anr. (2017) 7 SCC 421 . This Court, while
deciding the above appeal repelled the challenge raised by the
assessee regarding vires of Section 14A. In para 36 of the
judgment, this Court noticed that with regard to
retrospectivity of provisions Revenue had filed appeal, hence
the said question was not gone into the aforesaid appeal. In
the above case, this Court specifically left the question of
retrospectivity to be decided in other appeals filed by the
Revenue. We thus have proceeded to decide the question of
retrospectivity of Rule 8D in these appeals.
50. In view of our opinion as expressed above, dismissal of
the appeal by the Bombay High Court is fully sustainable. As
held above, the Rule 8D is prospective in operation and could
39
not have been applied to any assessment year prior to
Assessment Year 200809.
51. In result, all the appeals filed by the Revenue are
dismissed.
..........................J.
( A.K. SIKRI )
..........................J.
( ASHOK BHUSHAN )
NEW DELHI,
JANUARY 31,2018.