Commissioner of Income-Tax vs Reliance Energy Ltd.

Heard learned counsel for the parties.

Learned counsel for the Revenue submits the that question involved in the present special leave petition is in respect of retrospectivity of section 234D of the Income-tax Act, 1961 (for short, "Act") and, therefore, the decision of the Bombay High Court in Director of Income-tax (International Taxation) v. Delta Air Lines Inc. [2013] 358 ITR 367 (Bom) has no application and the High Court erred in dismissing appeal the preferred by the Revenue while keeping the question of retrospectivity of section 234D open.

Learned counsel for the assessee places reliance on Explanation 2 inserted in section 234D of the Act by the Finance Act, 2012, with effect from June 1, 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 the that 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 appeal the relating to the assessment year 1998-99. It is admitted case the that assessment of that year was completed prior to June 1, 2003.

Having regard to the legal position which has been clarified by Parliament by insertion of Explanation 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.

Special leave petition is dismissed.