Law:

Section:

Section 54E of the Income-tax Act, 1961, read with article 14 of the Constitution of India - Capital gains - Not to be charged in certain cases - Amendment made by Finance Act, 1992 in section 54E(1) withdrew exemption of capital gains tax prospectively with effect from 1-4-1992 - Said withdrawal was made public in Budget speech on 29-2-1992 - Legislature inserted sub-section (1C) to section 54E vide Finance Minister's speech on 30-4-1992 restricting benefit of investments and deposits made prior to 29-2-1992 - Assessee contended that by such insertion two classes of assessees were created in same assessment year 1992-93 : (i) those who had receive advance against sale of capital assets and invested/deposited same in specified assets before 29-2-1992, and (ii) those who had done so during period 1-3-1992 to 31-3-1992 - He alleged that second type of assessees was discriminated by not allowing them exemption and, hence, sub-section (1C) is unconstitutional - Whether, it could be said that newly inserted sub-section (1C) made unreasonable classification and discriminated any class of assessees as alleged - Held, no Circulars and Notifications - CBDT Circular No. 359, dated 10-3-1983 and Circular No. 636, dated 31-8-1992 Interpretation of statutes - Rule of promissory estoppel FACTS The petitioner submitted that he had received advance on 26-3-1992 towards sale consideration of certain properties, which he deposited in a specified asset with Unit Trust of India on 28-3-1992. On account of the insertion of sub-section (1C) of section 54E, the petitioner could avail exemption from capital gains tax on the advance, if he had received the advance and invested or deposited the same in specified asset before 29-2-1992. Any advance or earnest money received and invested or deposited between 1-3-1992 and 31-3-1992 was not exempted. The petitioner contended that by restricting the benefit of exemption of capital gains tax to the assessee who received the advance and invested or deposited the same in specified asset up to 29-2-1992 the Legislature had discriminated the assessees who received and invested or deposited such advance in specified asset during the period…

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