“retrospective amendment”
The decision most relied on for retrospective amendment is Kourani v. Union OF India (83 Taxmann.com 137), cited in 1,708 judgments on BharatTax.
Leading authorities on retrospective amendment
The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.
Taxing statutes are presumed to operate prospectively unless a clear contrary intention for retrospective application is evident. The law applicable for determining tax liability is that which stands on the first day of the assessment year, following the principle that law looks forward, not backward (lex prospicit non respicit).
A proviso inserted into a section to remedy unintended consequences, make the section workable, or supply an obvious omission must be read retrospectively in operation to give effect to the section as a whole.
A fee under Section 234E cannot be levied or adjusted in an intimation under Section 200A for TDS statements pertaining to periods prior to June 1, 2015, as the enabling amendment to Section 200A(1)(c) came into effect only from that date.
Amendments to the Income-tax Act that are curative, clarificatory, or beneficial in nature apply retrospectively from the date the original statutory provision was introduced, even if not explicitly stated.
The second proviso to Section 40(a)(ia), introduced by the Finance Act, 2012, is curative and applies retrospectively from April 1, 2005. Consequently, if the recipient of a payment has filed their return and paid taxes on the amount from which tax was not deducted at source, the payer's expenditure cannot be disallowed under Section 40(a)(ia).
Amendments to tax law that impose new obligations or change existing legal positions apply prospectively, even if stated to be "for the removal of doubts." The judgment also clarifies that deductions under Section 43B are allowed only on actual payment, overriding the mercantile system of accounting.
Legislation is ordinarily presumed not to have retrospective operation, especially for taxing statutes unless explicitly stated or when intended to remove hardship for the assessee. The decision clarifies the principles for determining whether an amendment to a taxing statute applies prospectively or retrospectively, distinguishing between clarificatory and substantive amendments.
