Bombay High Court Dismisses Petition Challenging CBDT Notification Restricting Section 80IB (10) Benefit Only To Housing Projects Approved After 1 April 2004 And Before 31 March 2008

Date:

The Bombay High Court has dismissed a petition challenging CBDT notification restricting section 80IB (10) benefit only to housing projects approved on or after 1 April 2004 and before 31 march 2008.

The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that if the proviso to sub-clause (a) and (b) of Section 80-IB (10) is prospective, such proviso cannot be given a retrospective effect based on a CBDT notification. However, the impugned notification restricts its scope to the period from which the proviso came into force. In other words, the impugned notification corrects the principal notification so that the principal notification, as corrected, aligns with the provisions of Section 80-IB (10), which came into force on 01 April 2005. 

The bench noted that the notification accords with the letter and the spirit of the amended provisions of Section 80-IB (10). But for the notification, an argument was possible that the principal notification was vulnerable. The unamended principal notification sought to extend the benefit of the amended provisions of Section 80-IB (10) only from 3 August 2010, when the legislature had granted this benefit from 01 April 2005. The explanatory note appended to the notification also clarifies this aspect.

The petitioners have challenged the notification dated 5 January 2011, which is a purported “corrigendum” to the notification dated 3 August 2010, is plainly ultra vires Section 80IB (10) of the Income Tax Act, 1961. The notification travels way beyond the principal section and purports to add restrictions not even found in the principal Section, i.e., Section 80IB (10) of the  Income Tax Act, 1961.

The petitioner contended that provisions of Section 80IB (10) applied to all housing projects notified by the Central Board of Direct Taxes (CBDT), irrespective of whether such project had been approved before 1 April 2004. He submitted that the CBDT, by the notification, now styled as a corrigendum, could not have restricted the benefit of the proviso to Section 80IB (10) only to projects approved on or after 1 April 2004 and before 31 March 2008.

The department contended that Section 80IB (10), in its present form, was substituted by the Finance Act, 2004, effective 1 April 2005. He submitted that before such substitution, there was no proviso excluding the application of Clauses (a) or (b) to housing projects carried out in accordance with the schemes framed by the Central or State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas. Accordingly, he submitted that the benefit of the proviso to Section 80IB (10) was granted prospectively with effect from 1 April 2005 and not retrospectively.

The court held that no case is made to declare the impugned notification ultra-vires or strike it down.

Read More: Rates Charged By SEB For Supply Of Power Is An Appropriate External CUP For Determining Market Value Of Electricity: Delhi High Court

Case Details

Case Title: Kiran Harsukhlal Hemani Versus UOI

Case No.: Writ Petition No.2940 Of 2021

Date: 20 January 2025

Counsel For Petitioner: Naresh Jain 

Counsel For Respondent: Suresh Kumar

Mariya Paliwala
Mariya Paliwalahttps://jurishour.in/
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.

Share post:

Popular

More like this
Related

Supreme Court Stays Arrest of YouTuber Ranveer Allahbadia 

In a significant legal development, the Supreme Court of...

Input Tax Credit Under GST: Understand And Save Money

Goods and Services Tax (GST) has significantly transformed the...

Delhi Customs Arrests Man For Smuggling Diamond Necklace Worth Rs 6.08 Crores At IGI Airport

The Delhi Customs arrested a man for smuggling diamond...

Hindustan Zinc Not Entitled To ITC On Goods/Services Received For Increasing Tailing-Dam Height: AAR

The Rajasthan Authority of Advance Ruling (AAR) has held...