Explanation to Section 80-IA
On the face of it, the Explanation looks innocuous and a routine one. However, if it is considered in the background of legal provision, where it proposes to remove doubts, it becomes clear that there are no doubts, which are proposed to be removed and in effect the Explanation is meant to enable the tax department to detract from a position, which it had consciously taken in the year 1999 and now wants to go back from that position from retrospective effect ie, from the date the relevant law was enacted.
This is nothing less but a breach of faith of taxpayers, who acted on the basis of law as laid down by the Finance Act, 1999 and took benefit but which the tax department now intends to withdraw without any ostensible grounds.
To understand the nature of the amendment, it is necessary to give a background as to what the law is, which is proposed to be changed and why the Explanation has been made operative from April 1, 2000 and see the legal provisions, which were operative before April 1, 2000 and those operative