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Finace Bill 2022

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Kallol Sarkar

Accountant

126 Points Posted on 22 October 2022

Finance Bill 2022 as introduced on 01.02.22 reads at the face page 'Finance Bill 2022, A Bill to give effect to the financial proposals of the Central Government for the financial year 2022-2023.'

But many clauses of that bill are effective for FY 2019-20/ 2020-21/ 2021-22 and even before.

Then why the finance bill writes the above captioned statement ?

Replies (3)

Quick Summary

The Finance Bill 2022, introduced to enact the Central Government's financial proposals for FY 2022-23, contains clauses effective from earlier financial years. This discussion explores the concept of retrospective effect, where changes are applied to periods before the bill's introduction. It specifically examines clauses related to EPF employee contribution disallowance, questioning why a change declared in the Finance Bill 2021, effective from FY 2020-21, is being applied retrospectively, leading to IT demands for a previous year. The post also references a favourable case law for appellants facing similar retrospective disallowances.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 22 October 2022

Some times FM proposes some clause to be effective from earlier period than the usually proposed Ass. Year. The them is called retrospective effect. The specific clause which are implemented with retrospective effect are very few as compared to the aggregate proposal, and are specifically mentioned in the bill.

Kallol Sarkar

Accountant

126 Points Posted on 22 October 2022

Finance bill 2021 is relating to changes in financial proposal for FY 2021-22. Clause 8 & 9 of this finance bill is towards amendment of section 36 & 43B of income tax act regarding dis allowance of EPF employee contribution which is effective from AY 2021-22. i.e FY 2020-21.Many court verdicts/ experts say that this change is prospective.

The bill is for FY 2021-22 but this change is from FY 2020-21. Is it not retrospective?

Moreover, we have received IT demand for FY 2020-21 towards this dis allowance. When this change is declared in finance bill 2021, asking to deposit demand money for previous year is not justified. There was no fault at our end. Can we go for appeal?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 23 October 2022

For your reference hereby enclosed a caselaw favoring appellant on such issue...

Case Name : Suman Solanki Vs DCIT (ITAT Jaipur) Appeal Number : ITA No. 124/JP/2022 Date of Judgement/Order : 12/05/2022 Related Assessment Year : 2018-19 Courts : All ITAT ITAT Jaipur