TMI Blog1955 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... family for 1947-48 was found to be ₹ 21,659 instead of ₹ 6,000 which was the sum included in the assessment of the joint family by the assessment order dated 18th March, 1948. On 15th February, 1954, the Incometax Officer gave the assessees notice to state their objections why the previous assessment dated 18th March, 1948, should not be rectified under section 35 of the Income-tax Act (hereinafter referred to as the Act) as amended by the Income-tax (Amendment) Act, 1953 (hereinafter referred to as the Amending Act). The assessees objected to the rectification on the ground, among others, that the said Act was not retrospective and would not affect the assessment completed prior to 1st April, 1952. The Income-tax Officer rejected the objections and called upon the assessees to pay the additional tax before 10th May, 1954. Learned counsel for the assessees contends that the Amending Act of 1953 is not retrospective and therefore it cannot be invoked to reopen an assessment completed before 1st April, 1952, whereas the learned Advocate-General argues that the amendment is only declaratory of the pre-existing law and therefore on the basis of the amendment even a compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e section made by them rectify any mistake apparent from the record. But under the amendment inserted by Act XXV of 1953, if on assessment or reassessment of a firm any reduction or enhancement is made in the income of the firm and it is found that the share of the partner in the profit or loss of the firm has not been included in the assessment of the partner or though included it was not correct, the assessment can be reopened and corrected on the basis of the assessment of the firm within four years from the date of the final order passed in the case of the firm. The section further says that the inclusion of the share of the partner in the assessment or the correction thereof shall be deemed to be a rectification of a mistake apparent from the record within the meaning of the section. To put it differently, section 19 of the Amending Act introduces a fiction to enable the Income-tax authorities to invoke the provisions of section 35 for amending the completed assessment for including the income falling to the share of the partner as ascertained from the final assessment of the firm. Under section 1(2) the amendment came into operation from the 1st April, 1952. Before attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, A statute is not to be construed to have a greater retrospective operation than its language renders necessary. Bowen, L. J., in Reid v. Reid (1886) 31 Ch. D. 402) states the scope of the rules of construction in clear terms at page 408 as follows : Now the particular rule of construction which has been referred to, but which is valuable only when the words of an Act of Parliament are not plain, is embodied in the well-known trite maxim omnis nova constitutio futuris formam imponere debit non praeteritis, that is, that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights. It seems to me that even in construing an Act which is to a certain extent retrospective, and in construing a section which is to a certain extent retrospective, we ought nevertheless to bear in mind that maxim as applicable whenever we reach the line at which the words of the section cease to be plain. That is a necessary and logical corollary of the general proposition that you ought not to give a larger retrospective power to a section, even in an Act which is to some extent intended to be retrospective, than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifest that before the amendment came into force, the assessment on the assessees had become final and it could not have been rectified on the ground of a mistake apparent from the record, and therefore the assessees have acquired a vested right against any interference with the finality of the assessment made on them. The Income-tax authorities, therefore, had to rely only on the Amending Act, which must be deemed to have come into force on 1st April, 1952, for amending the assessment. Sub-section (5) inserted by the new Act clearly indicates that Parliament did not consider that the inclusion of the correct figure on the basis of the final assessment of the firm was an error apparent from the record of the earlier assessment, for it designedly used the words shall be deemed to be a rectification of a mistake apparent from the record indicating thereby that a fiction was introduced to treat a rectification which is not in terms a mistake apparent from the record as one of that category. Further sub-section (5) introduces a fresh point for computing the period of limitation. While under section 35(1) four years is computed from the date of the final order of assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the 31st day of March, 1952, whether made before or after the commencement of this Act and where any such assessment has been made before such commencement the Income-tax Officer concerned shall revise it whereever necessary to give effect to this amendment. Under section 30(2) the amendments made by sub-section (1) shall be deemed to be operative in relation to any assessment subsequent to the assessment for the year ending on the 31st day of March, 1951, whether such assessment has or has not been made before the commencement of this Act and where any such assessment has been made before such commencement it shall be lawful for the Income-tax Officer to revise it, wherever necessary to give effect to such amendments. The aforesaid specific provisions for reopening the assessments already made prior to the coming into force of the Act is a sure indication that in other cases, the Legislature did not intend to give power to reopen assessments made prior to the coming into force of the Act. Reliance is placed upon the proviso to section 35(1) of the Act which says that no rectification shall be made of any mistake in any order passed more than one year before the commencement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s including the new section as a part thereof and if it is to be so read, the further effect of the express language of the section is that so far as cases coming within clause (a) of sub-section (1) are concerned, all assessment years ending within 8 years from 30th March, 1948, and from subsequent dates, are within its purview and it will apply to them, provided the notice contemplated is given within such eight years. We regret our inability to accept the reasoning of the learned Chief Justice. Section 1(2) of Act XLVIII of 1948 gave a limited retrospective operation to the Act. Though the Act itself came into force on 8th September, 1948, for certain purposes, it was deemed to have come into force on 30th March, 1948. The effect was that to that extent the Act must be deemed to have come into force on that date. Unless retrospective operation was given to the amended section, the assessment which became final before 30th March, 1948, could not be reopened. Though the learned Chief Justice stated that the question was not one of retrospective operation at all, in effect the construction adopted by him gave retrospective operation to the amending Act in that it enabled the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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