An important issue which needs further clarification is whether the clarification will have any retroactive effect in order to provide protection to the investors in cases where the proceedings are already initiated or under process in relation to prior years.

This case will probably initiate closer examination in similar disputes, such as the case of Blackstone Capital Partners v. ACIT (Blackstone) before the Delhi High Court, and Sanofi Pasteur Holding v. Department of Revenue (Sanofi) case before Andhra Pradesh High Court.

The proposed amendment to Sections 72A and 72AA of ITA reflects government’s intent to curb tax avoidance through evergreening of losses.