Commissioner of Income Tax vs Reliance Energy Ltd.

Heard Learned Counsel for the parties. Learned Counsel for the Revenue submits that the question involved in the present SLP is in respect of retrospectivity of Section 234D of the IT Act, 1961 (for short, 'Act') and, therefore, the decision of the Bombay High Court in Director of Income Tax (International Taxation) Vs. Delta Air Lines Inc., has no application and the High Court erred in dismissing the appeal preferred by the Revenue while keeping the question of retrospectivity of Section 234D open.

Learned Counsel for the Assessee places reliance on Expln. 2 inserted in Section 234D of the Act by the Finance Act, 2012 w.e.f. 1st June, 2003.

Explanation 2 which has been inserted in Section 234D of the Act reads as under:

Explanation 2.--For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date.

The High Court was concerned with the appeal relating to the asst. yr. 1998-99. It is admitted case that the assessment of that year was completed prior to 1st June, 2003.

Having regard to the legal position which has been clarified by the Parliament by insertion of Expln. 2 in Section 234D of the Act, in the present case, retrospectivity of Section 234D does not arise.

Having regard to above position, the view of the High Court in relying upon the decision of the Bombay High Court in Delta Air Lines Inc. (supra) cannot be said to be erroneous.

SLP is dismissed.