India's Supreme Court has declared retrospective tax penalties unconstitutional, ruling that sanctions imposed under the Income Tax Ordinance 2001 cannot be enforced on assessments already governed by repealed legislation. This landmark decision resolves longstanding judicial disagreement and provides significant relief to taxpayers facing retrospective penalty applications. The ruling establishes important precedent regarding the retroactive application of tax laws and ensures compliance with constitutional principles of fairness and legal certainty in tax administration.

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