Government Amends Black Money Act to give it effect from 1st July 2015 - Can Govt amend an Act passed by Parliament?
THE Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) received the assent of the President on 26th May, 2015.
Sub-section (3) of section 1 of the Act provides that save as otherwise provided in the Act, the Act shall come into force on the 1st day of April, 2016.
Now, the Government has amended the Act to make the Act effective from 1.7.2015 instead of 1.4.2016.
When about 800 Members of Parliament and the President of India have passed an Act and declared it to be effective from 1.4.2016, can some Under Secretary sitting in North Block or for that matter the Finance Minister change the date to 1.7.2015, instead of 1.4.2016, as passed by Parliament?
Section 86 (1) of the Act reads as: If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty.
It is under the powers conferred by the above Section that the Government has amended the effective date. The Section stipulates:
1. A difficulty should arise,
2. The difficulty can be removed,
3. The removal should not be inconsistent with the provisions of the Act.
When Parliament says the Act is effective from 1.4.2016, is it not inconsistent with the provisions of the Act to say that it will be effective from 1.7.2015.
What is the difficulty?
According to the Government:
1. The Act provides for charging of tax on undisclosed foreign income and asset for every assessment year beginning on or after the 1st day of April, 2016;
2. As per sub-section (1) of section 3 of the Act, undisclosed foreign income and asset of the previous year relevant to the assessment year commencing on or after the 1st day of April, 2016 is chargeable under the Act;
3. The ‘previous year' as defined in clause (9) of section 2 of the Act means a period of twelve months immediately preceding the assessment year;
4. Section 59 provides for making declaration by any person, on or after the date of commencement of the Act but on or before a date to be notified by the Central Government in the Official Gazette, in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income-tax Act, for any assessment year prior to the assessment year commencing on the 1st day of April, 2016;
5. Section 60 of the Act provides for charging of tax on undisclosed foreign asset declared under section 59 on the value of such asset on the date of commencement of the Act;
6. The Act passed by the Parliament received the assent of the President on the 26th day of May, 2015 and therefore the provisions of this Act cannot be given effect prior to the 26th day of May, 2015 irrespective of the fact that the assessment year beginning on the 1 st day of April, 2016 relates to the previous year commencing on the 1st day of April, 2015;
And difficulty has arisen in interpreting the expression 'date of commencement of the Act' and giving effect to the provisions of section 59 and section 60 which may be construed as 1st day of April, 2016, whereas the chargeability of tax under the Act is for assessment year commencing on or after the 1st day of April, 2016 relevant to the previous year commencing on or after the 1st day of April, 2015.
This is perhaps the first time in history that there is difficulty in understanding what date of commencement means!
So, the Government has removed the difficulty by substituting "the 1st day of April, 2016", with "the 1st day of July, 2015" in Section 1(3) of the Act.
Who created the difficulty? Obviously, the government itself. When they prepared the law, didn't the wise babus know of a concept called, "previous year"? Isn't the Finance Minister being taken for a ride, by drafting defective laws and then getting them corrected by an executive order? If the babus are the ultimate repositories of all wisdom, knowledge and law, why do we need a Parliament to legislate? As such, all modern laws are babu-made laws with hardly any legislative scrutiny; should Parliament be further insulted with the babu amending an Act passed by the Supreme legislature?
CBDT Notification No. 56/2015, Dated: July 1, 2015