Bombay High Court
Bombay Slum Redevelopment Corporation … vs Union Of India And 3 Ors on 20 January, 2025
Author: M. S. Sonak
Bench: M.S. Sonak
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
2025:BHC-OS:853-DB
Amol
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2940 OF 2021
KIRAN HARSUKHLAL HEMANI ]
Aged 61years, of Mumbai, Indian Inhabitant, ]
Residing at A/2101, Zenith CHSL ]
P. K. Road, Mulund (West) ]
Mumbai - 400 080 ]....Petitioner.
Versus
1] UNION OF INDIA ]
Through the Secretary, ]
Ministry of Finance, ]
Department of Revenue ]
North Block, New Delhi - 110 001 ]
]
2] CENTRAL BOARD OF DIRECT TAX ]
Through the Secretary ]
Department of Revenue ]
Ministry of Finance, ]
Government of India ]
North Block, New Delhi - 110001 ]
]
3] PR. CIT CENTRAL CIRCLE 4(1) ]
Air India Building ]
Nariman Point, Mumbai - 400021 ]
]
4] INCOME TAX OFFICER ]
Central Circle 4(1) ]
Air India Building, Nariman Point, ]
Mumbai - 400021 ].Respondents.
WITH
1
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
WRIT PETITION NO.3004 OF 2021
BOMBAY SLUM REDEVELOPMENT ]
CORPORATION PRIVATE LIMITED ]
a company incorporated under the Companies]
Act, 1956 and having its registered office ]
605, Trade Centre, Bandra Kurla Complex, ]
Bandra (E), Mumbai - 400 051 ]....Petitioner.
Versus
1] UNION OF INDIA ]
Through the Secretary, ]
Ministry of Finance, ]
Department of Revenue, ]
North Block, New Delhi - 110 001 ]
]
2] CENTRAL BOARD OF DIRECT TAX ]
Through the Secretary ]
Department of Revenue ]
Ministry of Finance, ]
Government of India ]
North Block, New Delhi - 110001 ]
]
3] PR. CIT CENTRAL CIRCLE 4(1) ]
Air India Building ]
Nariman Point, Mumbai - 400021 ]
]
4] INCOME TAX OFFICER ]
Central Circle 4(1) ]
Air India Building, Nariman Point, ]
Mumbai - 400021 ].Respondents.
______________________________________________________
2
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
Mr. Naresh Jain and Mr. Mahaveer Jain a/w Mr. Shobhit
Mishra for the Petitioners.
Mr Suresh Kumar, for the Respondents.
______________________________________________________
CORAM M.S. Sonak &
Jitendra Jain, JJ.
Reserved on : 14 January 2025
Pronounced on : 20 January 2025
JUDGMENT :
(Per M. S. Sonak, J.)
1. Heard learned Counsel for the parties.
2. The learned Counsel for the parties submit that common
issues of law and fact arise in both these Petitions, and
therefore, both a common order could dispose of these
Petitions. They submit that the Writ Petition No. 2940 of 2021
may be treated as a lead Petition.
3. Rule in both the Petitions. The Rule is made returnable
immediately at the request and with the consent of the
learned Counsel for the parties.
4. The Petitioner seeks the following substantive reliefs:
“(a) that this Hon’ble Court be pleased to issue a writ of
Certiorari or a writ in the nature of Certiorari or any other
appropriate writ under Article 226 of the Constitution of
India, calling for records pertaining to the impugned
notification dated 05.01.2011 issued by the Respondent No. 2
(being Exhibit ‘H’ hereto) and after going into the validity and
legality thereof to quash and aside the same.
(b) that this Hon’ble Court be pleased to issue a writ of
Mandamus or a writ in the nature of Certiorari or any other
appropriate writ under Article 226 of the Constitution of
India, permit the petitioner to file appropriate claim under the
Act for claim of deduction u/s 80IB(10) of the Act before the3
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCXRespondent No. 3 and Respondent No. 4 and direct to grant of
refund as per law arising due to eligibility of the claim without
raising the issue of limitation or other technical issue.”
5. Mr Naresh Jain submits that the impugned 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 (IT Act). He
submits that the impugned 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 IT
Act.
6. Mr Jain referred to the provisions of Section 80IB (10),
including the proviso to the said principal Section. He
submitted that the same 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 impugned
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.
7. Mr Jain submitted that the CBDT, which is only a
delegate and, in any event, which was only authorised to
notify the scheme or schemes under the proviso, could not
have, in the exercise of its powers, restricted the scope of the
principal section and the proviso by stating that the proviso
will apply only to projects approved between the window
period set out in the impugned notification. He submitted that
such an exercise is beyond the CBDT’s competence and
4
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
entirely ultra vires. Accordingly, he submitted that the
impugned notification is liable to be struck down.
8. Mr Naresh Jain relied on the following decisions to
support his contentions: –
(i) Reliance Jute and Industries Limited Vs. Commissioner of
Income-Tax, West Bengal1
(ii) Government of Kerala & Anr. Vs. Mother Superior
Adoration Convent2
9. Mr Suresh Kumar, the learned Counsel for the
Respondents, submitted 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.
10. Mr Suresh Kumar submitted that the CBDT’s principal
notification dated 3 August 2010 had incorrectly notified the
scheme only with effect from 3 August 2010. He submitted
that the impugned corrigendum was issued to correct this
obvious error and ensure that the CBDT notification dated 3
August 2010 aligns with the proviso to Section 80IB (10) of
the IT Act. He submitted that the impugned corrigendum is
1
1979 (10) TMI 2 (SC)
2
2021 (3) TMI 93 SC
5
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
entirely intra vires and the CBDT has, in no manner, exceeded
the powers vested in it. He submitted that the decisions relied
upon by Mr Jain are mostly irrelevant and do not apply to the
facts of the present case.
11. The rival contentions now fall for our determination.
12. To appreciate the challenge raised in these Petitions, we
refer to the provisions of Section 80IB (10) as they presently
obtain: –
“[(10) The amount of deduction in the case of an undertaking
developing and building housing projects approved before the 31st
day of March, [2008] buy a local authority shall be hundred per cent
of the profits derived in the previous year relevant to any assessment
year from such housing project if-
(a) such undertaking has commenced or commences development
and construction of the housing project on or after the 1st day of
October, 1998 and completes such construction,-
(i) in a case where a housing project has been approved by the
local authority before the 1st day of April, 2004, on or before
the 31st day of March, 2008,
(ii) in a case where a housing project has been, or, is approved
by the local authority on or after the 1sday of April, 2004 [but
not later than the 31st day of March, 2005], within the
housing project is approved by the local authority;
[(iii) in a case where a housing project has been approved by
the local authority on or after the 1st day of April, 2005,
within five years from the end of the financial year in which
the housing project is approved by the local authority.]
Explanation.- For the purposes of this clause,-
(i) in a case where the approval in respect of the housing
project is obtained more than once, such housing project shall
be deemed to have been approved on the date on which the6
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCXbuilding plan of such housing project is first approved by the
local authority;
(ii) the date of completion of construction of the housing
project shall be taken to be the date on which the completion
certificate in respect of such housing project is issued by the
local authority;
(b) the project is on the size of a plot of land which has a
minimum area of one acre:
Provided that nothing contained in clause (a) or clause (b) shall
apply to a housing project carried out in accordance with a
scheme framed by the Central Government or a State Government
for reconstruction or redevelopment of existing buildings in areas
declared to be slum areas under any law for the time being in
force and such scheme is notified by the Board in this behalf:
(c) the residential unit has a maximum built-up area of one
thousand square feet where such residential unit is situated within
the city of Delhi or Mumbai or within twenty-five kilometres from
the municipal limits of these cities and one thousand and five
hundred square feet at any other place;
(d) the built-up area of the shops and other commercial
establishments included in the housing project does not exceed
[three] per cent of the aggregate built-up area of the housing
project or [five thousand square feet, whichever is higher];][(e) not more than one residential unit in the housing project is
allotted to any person not being an individual; and
(f) in a case where a residential unit in the housing project is
allotted to a person being an individual, no other residential unit
in such housing project is allotted to any of the following persons,
namely:-
(i) the individual or the spouse or the minor children of
such individual,
(ii) the Hindu undivided family in which such individual is
the karta,7
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
(iii) any person representing such individual, the spouse or
the minor children of such individual or the Hindu
undivided family in which such individual is the karta.][Explanation.- For the removal of doubts, it is hereby declared
that nothing contained in this sub-section shall apply to any
undertaking which executes the housing project as a works
contract awarded by any person (including the Central or State
Government).]”
(emphasis supplied)
13. The above provision was substituted by the Finance (2)
Act, 2004, with effect from 1 April 2005. Before its substitution,
sub-section (10), as amended by the Finance Act, 2000, with
effect from w.e.f. 1 April 2001 and Finance Act, 2003, w.e.f. 1
April 2002, read as follows:
“(10) The amount of profits in case of an undertaking
developing and building housing projects approved before the
31st day of March, 2005 by a local authority, shall be hundred
per cent of the profits derived in any previous year relevant to
any assessment year from such housing project if,-
(a) such undertaking has commenced or commences
development and construction of the housing project on or after
the 1st day of October, 1998;
(b) the project is on the size of a plot of land which has a
minimum area of one acre; and
(c) the residential unit has a maximum built-up area of one
thousand square feet where such residential unit is situated
within the cities of Delhi or Mumbai or within twenty-five
kilometres from the municipal limits of these cities and one
thousand and five hundred square feet at any other place.”
14. Thus, on a comparison of the present and the earlier
provisions in Section 80IB(10), it is apparent that there was no
special benefit to housing projects carried out in accordance
8
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
with the scheme framed by the Central or State Governments
for reconstruction or redevelopment of existing buildings in
areas declared to be slum areas under any law for the time
being in force where such schemes were to be notified by the
CBDT in this behalf. The benefit to such notified schemes for
reconstruction or redevelopment of existing buildings in areas
declared to be slum areas was introduced only with effect from
1 April 2005 and not earlier.
15. In exercise of powers conferred by the proviso to clause
(a) and (b) of sub-section (10) of Section 80IB of the IT Act,
the CBDT issued Notification No.67/2010-Income-Tax dated 3
August 2010 notifying the scheme contained in Regulation
33(10) of the Development Control Regulation for Greater
Mumbai 1991 read with the provisions of Notification dated 3
June 1992 as a scheme for the purposes of the said Section
subject to certain conditions. This notification was to come into
force with effect from the date of its publication i.e. 3 August
2010.
16. The text of the notification dated 3 August 2010
(principal notification) is transcribed below for the convenience
of reference: –
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
9
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCXNew Delhi, the 3rd August, 2010
No. 67/2010-Income-Tax
S.O. 1898(E). In exercise of the powers conferred by
the proviso to clause (a) and (b) of sub-section (10) of Section
801B of the Income-tax Act, 1961 (43 of 1961), the Board
hereby notifies the Scheme contained in Regulation 33(10) of
Development Control Regulation for Greater Mumbai 1991 read
with the provisions of notification No. TPB-4391/4080(A)/UD-
11(RDP) dated 3rd June, 1992, as a scheme for the purposes of
the said Section subject to the following conditions,-
(i) slum development falling in Category VII mentioned
in notification No. TPB-4391/ 4080(A)/UD-11(RDP)
dated 3rd June, 1992 shall be excluded from the
Scheme;
(ii) slum development falling within clause 7.7 of the
Appendix IV of regulation 33(10) which provides for
joint development of slum and non-slum areas shall be
excluded from the Scheme; and
(iii) any amendment in the Scheme hereby notified shall
be required to be re-notified by the Board.
2. This notification shall come into force with effect from the
date of its publication.
[F. No. 178/37/2006-ITA-I]
PADAM SINGH, Under Secy.
17. The proviso to clauses (a) and (b) of sub-section (10) of
Section 80IB of the IT Act entered force on 1 April 2005. The
principal notification, however, had notified the scheme with
which the Petitioners are concerned only with effect from 3
August 2010. Therefore, to align the principal notification with
the date of coming into force of the proviso, the impugned
corrigendum dated 5 January 2011 came to be issued.
10
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
18. The impugned notification dated 5 January 2011 is
transcribed below for the convenience of reference: –
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
CORRIGENDUM
Notification No. 02/2011-Income-tax
New Delhi, the 5th January, 2011
(INCOME-TAX).
S.O. 13(E)-In the notification of the Government of India in the
Ministry of Finance, Department of Revenue, (Central Board of Direct
Taxes) number S.O. 1898 (E), dated the 3rd August, 2010, published in
the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii),
dated the 3rd August, 2010, in paragraph 2 for “This notification shall
come into force with effect from the date of its publication”, read “This
notification shall be deemed to apply to projects approved by a local
authority under the aforesaid scheme on or after the 1st day of April,
2004 and before 31st day of March, 2008 thereby making the incomes
arising from such projects eligible for deduction under sub- section (10)
of Section 80-IB from the Assessment Year 2005-06 onwards.”
[F. No. 178/37/2006-ITA-1]
RAMAN CHOPRA, Director (ITA-1)
Explanatory Memorandum: As the provisions of Section 80-IB(10) apply
only to housing projects approved before 31-3-2008 the above
notification would also be deemed to apply to housing projects approved
by a local authority under the aforesaid scheme on or after the 1st day
of April, 2004 and before 31st day of March, 2008.
19. Mr Jain, the learned counsel for the Petitioners,
contended that Section 80IB(a)(i) makes it clear that the same
applies to housing projects approved by the local authority
11
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
before 1 April 2004. The only requirement was that the
construction of the housing project must be completed on or
before 31 March 2008. It was also pointed out that the proviso
had made inapplicable the provisions of Clauses (a) and (b) to
housing projects carried out in accordance with the scheme
framed by the Central or the State Government for
reconstruction or redevelopment of existing buildings in areas
declared to be slum areas under any law for the time being
enforce where the board notified such scheme in this behalf. He
submitted that the CBDT was authorised only to notify the
scheme and not provide additional qualifications or criteria for
the inapplicability of Clauses (a) and (b). On this ground, he
maintained that the impugned notification was ultra vires.
20. The circumstance that Section 80IB (10)(a)(i) refers to
housing projects approved by the local authority before 1 April
2004 cannot lead to the inference that the benefit of the
proviso, which was introduced only with effect from 1 April
2005, would apply to the slum redevelopment projects
approved before 1 April 2004. If that were so, the legislature
would have said so by giving the proviso a suitable
retrospective effect. Since the legislature has not chosen to
provide the proviso any retrospective effect, the CBDT, which,
even according to Mr Jain, is only a delegate, was not
competent to give the proviso any retrospective effect by
issuing any notification
12
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
21. The effect of the principal notification dated 3 August
2010, as corrected by the impugned notification dated 5
January 2011, is only to align the CBDT’s notification with the
proviso to Section 80IB (10), which was brought into force by
legislature prospectively, i.e. with effect from 1 April 2005. The
provisions of 80IB (10), as they obtained before 1 April 2005,
had made no special provisions regarding any slum
redevelopment schemes. There is nothing in the Finance Act,
2004 or the provisions introduced by the said act to suggest or
imply legislative intention to grant any retrospective effect.
Therefore, the argument that the impugned notification is ultra
vires cannot be sustained.
22. The Proviso to sub-clauses (a) and (b) of Section 80-IB
(10) is not declaratory or clarificatory. The Proviso (upon its
coming into force with effect from 01 April 2005) makes special
provisions concerning Slum Redevelopment Projects. The
conditions prescribed under sub-clauses (a) and (b), which
apply to other housing projects, are made inapplicable to Slum
Redevelopment Projects. If the legislature intended to grant
these benefits retrospectively, the legislature would have said so
clearly. The legislature would not have rest content by bringing
the amended provisions of Section 80 IB (10) in force from 1
April 2005.
23. Generally, all statutes other than those that are merely
declaratory or relate only to matters of procedure or evidence
are prima facie prospective. The general rule is that
13
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
retrospective operation should not be given to a statute to
affect, alter or destroy an existing right or create a new liability
or obligation unless that effect cannot be avoided without
doing violence to the language of the enactment. Even if an
enactment is expressed in language reasonably capable of
either interpretation, it ought to be construed as prospective
only. In this case, the legislature has expressly stated that the
substituted Section 80-IB (10) would come into force from 01
April 2005.
24. Because some of the clauses encompass or refer to past
events, that is not sufficient to hold that the amendment is
retrospective. Mere reference to projects approved before 1
March 2004 in sub-clause (a) of Section 80 IB (10) cannot lead
to the inference that the amendment is retrospective.
25. In CIT Vs Brahma Associates3, this Court has held
explicitly that the amendments made in Section 80-IB (10)(d)
of the IT Act are prospective and not retrospective. Similarly,
the Hon’ble Supreme Court, in the case of CIT Vs Sarkar
Builders4, has held that the amendment to Section 80-IB (10)
by Finance (No.2) Act, 2004, which came into force from 01
April 2005, is prospective and neither applicable retrospectively
nor retroactively. Once this position is accepted, the impugned
notification, which only ensures that the principal notification
dated 03 August 2010 falls in line with the benefits granted by
3
(2011) 333 ITR 289
4
(2015) 7 SCC 579
14
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
the Proviso to sub-clauses (a) and (b) in Section 80-IB (10)
cannot be struck down as ultra-vires.
26. Therefore, 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 impugned notification accords with the letter
and the spirit of the amended provisions of Section 80-IB (10).
But for the impugned 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 impugned
notification also clarifies this aspect.
27. Reliance Jute and Industries Limited (supra) holds that
it is a cardinal principle of the tax law that the law to be
applied is that in force in the assessment year unless otherwise
provided expressly or by necessary implication. There cannot be
any quarrel with this proposition. However, Mr. Jain could not
elaborate or explain how this principle was attracted in the
present matter and, further, how, based on this principle, the
15
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
impugned notification could be held to be ultra-vires. In any
case this very argument canvassed was rejected by the Supreme
Court in case of Sarkar Builders (supra) and Brahma Associates
(supra).
28. Mother Superior Adoration Covent (supra) explains the
distinction between exemption provisions generally and those
with a beneficial purpose. The Court held that a literal
formalistic interpretation of the statute is to be eschewed. The
object sought to be achieved by the provision must be
considered, and the statute should be construed in accord with
such object. If any ambiguity arises in such constructions, such
ambiguity must be resolved in favour of that which is
exempted.
29. Again, we cannot see how the above principle applies to
the facts of the present case or how, based on it, a case can be
made for quashing the impugned notification as ultra-vires.
30. Accordingly, Mr Jain’s contention about the impugned
notification being ultra-vires or beyond the CBDT’s competence
cannot be accepted in the present case.
31. The relief in prayer clause (b) was predicated on this
court granting relief in terms of prayer clause (a). Since no
relief can be granted in terms of prayer clause (a), relief in
terms of prayer clause (b) also cannot be granted.
32. Mr. Suresh Kumar submitted that in Writ Petition
No.2940 of 2021, the relevant Assessment Year for claiming
16
WP-2940.21&WP-3004.21-J-F-AT 9.55 AM.DOCX
benefits under Section 80-IB(10) would have been 2015-16,
and in Writ Petition No.3004 of 2021, the relevant Assessment
Year would have been 2013-14. He submitted that these
Petitions were instituted in 2021 after inordinate and
unexplained delay. Accordingly, he submitted that the Petitions
should be dismissed for delay and laches.
33. In the context of delay and laches, Mr Jain submitted
that the petitioner had a continuing right to claim the benefits
under Section 80-IB(10); he relied on M. R Gupta Vs. Union of
India (UOI) and Ors5 and Lohia Machines Limited, and Another
Vs Union of India, and Others6 in support of his contentions.
34. Though we are satisfied that both decisions Mr. Jain
relied on are irrelevant, we do not propose to examine the issue
of delay and laches. This is because, on the merits, we are
satisfied that no case is made to declare the impugned
notification ultra-vires or strike it down.
35. For all the above reasons, we see no merit in either of
these Petitions.
36. Accordingly, we dismiss these Petitions without any cost
orders.
(Jitendra Jain, J) (M.S. Sonak, J) 5 AIR 1996 SC 669 6 1985 (1) TMI 1 - (SC) Signed by: Shri. Amol P. Jadhav Designation: PA To Honourable Judge 17 Date: 21/01/2025 11:04:16
[ad_1]
Source link