An in-depth examination of ITA No. 1367/Del/2021 in which ICMC Projects Pvt. Ltd. challenges the late fee imposition by ITD, CPC, Bengaluru for the first quarter of fiscal year 2014-15 for non-salary transactions.
This case revolves around the retroactive imposition of late fees under Section 234E, prior to the formal introduction of these fees by the Finance Act 2015, effective June 1, 2015.
ICMC Projects argued against the applicability of Section 234E to periods before its enactment, asserting that such retrospective application contradicts established legal norms effective during their tax filings.
The tribunal addressed the inconsistent decisions from various high courts concerning the retrospective application of fiscal amendments. Aligning with the Supreme Court’s principle that ambiguities in tax law should favor the taxpayer, the tribunal favored ICMC Projects.
This tribunal decision underscored the judiciary’s role in safeguarding taxpayers from retroactive tax measures and stressed the need for legislative clarity when imposing fiscal obligations. The ruling, delivered on February 25, 2022, provided relief to the appellant and established a precedent for similar future cases.
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