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Retrospective amendment to Section 28 and 80HHC of Income Tax Act, not valid, High Court of Delhi.

January 11, 2018



Amendment to SEction 28 and 80hhc with retrospective effect not valid

A Bench of Delhi High Court Judges, Justice S. Ravindra Bhat and Justice A.K. Chawla disposed of a batch of Writ Petitions filed challenging amendment of Section 28 and Section 80HHC of the Income Tax Act with Retrospective effect.


In Sarita Handa v. Union of India & Ors, Writ Petition (Civil) No. 3768 of 2006 the petitioners sought quashing order against the CBDT circular. The High Court of Delhi had issued Rule and admitted these petitions to hearing. In the meanwhile, the Gujarat High Court vide its judgment in 'Avani Exports and others vs. Commissioner of Income-tax and others, (2012) 348 ITR (Guj) held that the amendments were unconstitutional. That judgment became the subject matter of the appeal to the Supreme Court in 'Commissioner of Income-tax vs. Avani Exports', (2015) 58 100 (SC), which affirmed the declaration and held that the retrospectively ascribed to the amendments, was unconstitutional. Consequently, the amendments became, in effect, prospective in nature.



The court observed that in the meanwhile, a Division Bench of High Court of Delhi in 'Pawan Kumar Jain vs. Union of India', had also concluded that the amendment could not be treated as retrospective and directed further relief. In the light of these developments, the Court is of the opinion that the provisions are to be treated as prospective and not retrospective; the reliefs in these proceedings are therefore, to be granted. Writ petitions are allowed in terms of the declaration of law in Avani Exports; any demands made or benefits sought to be curtailed or withdrawn, are declared as illegal.

While disposing of the petition the court allowed the petition and made the rule absolute




Read the order of High Court of Delhi in Sarita Handa v. Union of India & Ors dated 10.1.2018



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