Amendment to Section 80 HHC of the Income Tax Act is Prospective: Supreme Court [Read Judgment]

Revised Return - Share Application Money - Supreme Court of India - Taxscan

In a recent decision, the Supreme Court clarified that the amendment made to s. 80HHC  in the year 2005 does not have retrospective effect.

Earlier, the Amendment to Section 80HHC (3) of the Income Tax Act, 1961 was made by the Taxation Laws (Second Amendment) Act, 2005 with retrospective effect i.e. with effect from Ist April, 1992. By this amendment certain benefits were in fact extended to the exporters who are entitled to claim according to Sec.80HHC of the Act.

The amendment was challenged before the Gujarat High Court in which the High Court had observed that the conditions specified in the third and fourth proviso to s. 80HH would not operate retrospectively.

When he matter was brought before the Apex Court, the two-judge bench comprising of Justice Kurian Joseph and Justice R F Nariman, vide order dated 30.03.2015, had clarified that “Having seen the twin conditions and since 80HHC benefit is not available after 1.4.05, we are satisfied that cases of exporters having a turnover below and those above 10 cr. Should be treated similarly. This order is in substitution of the judgment in Appeal.”

In an order dated 02.12.2016, the Apex Court reiterated that it is a settled position that the amendment is prospective only. It was further observed that “As far as issue relating to turnover below 10 crores and above 10 crores is concerned, the same has already been answered by this Court in the recent order dated 30.03.2015 in SLP(C) No.9273 of 2013 (C.I.T. -5 & ANR. VS. M/S. AVANI EXPORTS & ANR.)making it clear that it applied to both categories. In terms of the said order, these appeals are also disposed of. Order dated 30.03.2015, as mentioned above, shall form part of this judgment.”

Read the full text of the order below.