Amendments to the anti-abuse
legislations such as transfer pricing provisions can only be given prospective
effect. Therefore, Explanation to
Section 92B inserted by Finance Act, 2012, though stated to be clarificatory
and effective from 1st April 2002, has to be necessarily treated as effective
from the Assessment Year 2013-14
Issue
“Whether amendments to
transfer pricing provisions can only be prospective and not retrospective?”
The
Mumbai ITAT held as under-
1)
Transfer pricing provision is in the nature
of a SAAR (specific anti-abuse rule), and that every anti-abuse legislation,
whether SAAR (specific anti abuse rule) or GAAR (general anti-abuse rule), is a
legislation seeking the taxpayers to organize their affairs in a manner
compliant with the norms set out in such anti-abuse legislation.
2)
An anti-abuse legislation does not trigger
the levy of taxes; it only tells you what behaviour is acceptable or what is
not acceptable.
