Amendment made in section 80-IB(9) by adding an Explanation was not clarificatory, declaratory, curative or made "small repair" in the Act, but on the contrary takes away the accrued and vested right of the Petitioner which had matured after the judgments of ITAT. Therefore, the Explanation added by Finance (No.2) 2009 was a substantive law. Explanation added to Section 80-IB(9) by Finance Act (No.2) of 2009 is clearly unconstitutional, violative of Article 14 of the Constitution of India and is liable to be struck down
The disputed question was as to whether the benefits of tax holiday of seven years was available on each undertaking which has now been taken away by the amendment made in section 80-IB(9) by adding on Explanation that provides that all blocks licensed under a single contract shall be treated as a single undertaking
ITAT had found in favour of petitioner-assessee that each well/cluster of wells was a separate undertaking entitled to seven years tax holiday.
The Revenue had challenged the decision of the ITAT before the High Court and thereafter, they have a remedy before the Apex Court.
But, arbitrarily, the 100% tax deduction benefit could not be withdrawn by the Finance Minister or the legislature by amending Section 80-IB(9) of the Act retrospectively from an anterior date.
The amendment in such cases where already tax benefit had accrued and vested in the assessee could not be taken away by giving retrospective amendment to Section 80-IB(9) which is nothing but a substantive provision inserted by amendment and it can only operate prospectively and not retrospectively.
Explanation added to Section 80-IB(9) by Finance Act (No.2) of 2009 is clearly unconstitutional, violative of Article 14 of the Constitution of India and is liable to be struck down.