Amendment to S. 2(15) of Income Tax Act has No Retrospective Effect: Orissa HC [Read Order]

The Orissa High Court has held that the amendment in the Finance Act, 2009 amending section 2(15) of the Income Tax Act, 1961 for the definition of “charitable activities” has no retrospective effect.

Indeed, the Court finds that the Assessee filed returns for each of the AYs in question and provided the justification for claiming exemption on a case-to-case basis. In other words, there was no claim for automatic exemption from income tax on the basis of the registration under Section 12A of the Income Tax Act. Consequently, the Court declines to frame such a question for consideration.

The division bench of the High Court was considering a petition filed by Paradeep Port Trust wherein it was contended that the amendment to Section 2 (15) of the Income Tax Act by the Finance Act, 2008 should be considered to be retrospective.

Chief Justice S Muralidhar and Justice M.S. Raman disregarded the plea and observed that “The Court is unable to agree. The very text of the Finance Act, 2008 and in particular Section 3 thereof which inserts the amended Section 2(15) clearly states that “the following clause shall be substituted with effect from the 1st day of April, 2009.” Clearly, therefore, the amendment is prospective. Consequently, the Court declines to frame this question either.”

With regard to the requirement of resolution, the division bench held that “A perusal of Form No.10 reveals that the requirement of the resolution, referred to in the statement therein, having to be enclosed with the said Form, has not been indicated. In other words, there is nothing in either Section 11(2) of the Income Tax Act or Rule 17(2) of the Rules that mandates the furnishing of such resolution by the Assessee in order for the statement in Form No.10 to be acted upon by the AO. Consequently, the Revenue cannot insist on a copy of the resolution being furnished. The Court therefore concurs with the view expressed by the ITAT in the impugned order and declines to frame the question in this regard.”

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