Income Tax -Omission of second proviso to Sec 43B, not Curative and amendment cannot be treated as retrospective
Pardon me for a little self patting. The other day, I met an Income Tax practitioner, who told me, "I don't know about indirect taxes, but as far as Income Tax is concerned, your site is very good" I was rather flattered and embarrassed.
While the CBEC is slow to react to Court orders, here is a CIT who immediately took note of a case we reported and circulated the printed copies of the order.
On October 15th, we carried a High Court judgement on the subject of Section 43B and commented,
THE general perception is that our Income Tax Act is highly litigation-prone. If one talks of Sec 43B, it is widely regarded as more dispute-prone than the Act itself. Vide Finance Act 1983, it was inserted to curb the mischief of deliberate delays in payment of statutory liabilities. Then came two provisos which were added to the section by Finance Act 1987. The second proviso was quickly substituted by Finance Act, 1989. And, finally, vide Finance Act 2003, the second proviso was deleted. And this is the subject matter of dispute in this case in which the Bombay HC has held that the omission of the second proviso was not curative, and it cannot be said that the amendment is retrospective.
On 16th October, the CIT(J) of Mumbai circulated the judgement with the observation that, As this decision of Bombay High Court has far reaching ramifications and has been reported in taxindiaonline.com only yesterday, a copy of the printout taken from the aforesaid website, is being circulated to you for necessary action in relevant cases at your end.
See and Commissioner's letter No.CIT(J)/High Court Orders/2007-08 Dated : October 16, 2007