Analysis of ITA No. 1366/Del/2021, in which ICMC Projects Pvt. Ltd. challenges the late fee imposition by ITD, CPC, Bengaluru for the fourth quarter of the fiscal year 2013-14 on non-salary transactions.
The dispute centers on the retrospective imposition of late fees under Section 234E, prior to the formal establishment of these fees by the Finance Act 2015, effective from June 1, 2015.
ICMC Projects contended that the retroactive application of late fees was inconsistent with the legal norms in force at the time of their tax filings, arguing against the applicability of Section 234E to the periods before its enactment.
The tribunal noted conflicting decisions from various high courts regarding the retrospective application of fiscal amendments. However, the tribunal leaned towards interpreting ambiguities in tax law in favor of the taxpayer, a principle upheld by the Supreme Court, ultimately siding with ICMC Projects.
This case highlights the judiciary’s critical role in protecting taxpayers against retroactive tax measures, emphasizing the need for clarity in legislative enactments when imposing fiscal obligations. Delivered on February 25, 2022, the decision provided relief to the appellant and set a precedent for similar cases.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform