In Brief
The Supreme Court decided whether the Central Board of Direct Taxes can issue circulars with retrospective effect. The Court held that CBDT circulars dated 9 February 2011 cannot operate retrospectively and apply only to cases filed after their issuance, not before. Accordingly, the Court allowed the appeals, set aside the High Court's impugned order, and remitted the matters for re-adjudication on merits. The decision affirmed that tax circulars and instructions from the CBDT have prospective operation only.
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