TMI Blog1997 (9) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 41,83,875 and claimed the same to be capital receipt not liable to tax. It was based on the Special Bench decision of the Tribunal in the case of Gedore Tools (India) (P) Ltd. vs. IAC (1988) 31 TTJ (Del) (SB) 260 : (1988) 25 ITD 193 (Del) (SB). The return was filed on 28th December, 1989. 4. The Finance Bill, 1990, was introduced in the Parliament on 19th March, 1990, making the CCS taxable as revenue income with retrospective effect. It became an Act on the assent given by the President of India on 31st May, 1990. 5. The AO took up the return on 19th July, 1990 and proceeding on the basis of the retrospective amendment brought in by the Finance Act, 1990, added the CCS received to the income of the assessee and sent an intimation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome or loss declared in the return, namely : (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed : Provided further that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 983) 142 ITR 448 (Cal), is in favour of the Revenue. But in view of the retrospective amendment the law is to be assumed to be in force when the assessee filed the return and on the date from which it is given effect to. In this connection, the Supreme Court decision in the case of M. K. Venkatachalam, ITO Anr. vs. Bombay Dyeing Manufacturing Co. Ltd. (1958) 34 ITR 143 (SC) may be referred to wherein the rectification of the order pursuant to the retrospective amendment was held to be valid. Their Lordships of the Supreme Court observed that prima facie, it may appear somewhat strange that an order which was good and valid when it was made should be treated as patently invalid and wrong by virtue of the retrospective operation of the Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Modern Fibotex India Ltd. Anr. vs. Dy. CIT Ors. (1995) 212 ITR 476 (Cal) read two limitations on the power of the AO under s. 143(1)(a) to make an adjustment. The first limitation, the Court found, is prescribed in the proviso itself. The prima facie adjustment contemplated is with regard to the claim of carried forward loss, deduction, allowance or relief. The Court noted the deductions which are dealt with in Chapter VI, ss. 30, 31 et sequitur. The word allowance has been used interchangeably with the word deduction and is referred to in s. 33A and sections following. Chapter VIII, IX and XVIII deal with relief. The Revenues claim in that case was the addition of CCS which fell within the category of loss carried forward or relief. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory support taxable. Therefore, the Court held : An assessee cannot be imputed with clairvoyance. When the return was filed, the assessee could not possibly have known that the decision on the basis of which cash compensatory support had been claimed as not amounting to the assessees income ceased to be operative by reasons of retrospective legislation. 10. The object, the Court stated, as appeared to be from the Circulars No. 549 and 581 is to put the assessee on guard against filing incorrect returns. The Allahabad High Court in Indo Gulf Fertilisers Chemicals Corpn. Ltd. vs. Union of India (1992) 195 ITR 485 (All) held the additional tax to be a charge by way of penalty, but the Calcutta High Court, without referring to this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the obligation on the assessees part to file a correct return corresponds with the power of the AO under s. 143(1)(a) to determine the correctness of the return as and when filed. 11. It is trite law that the legislature cannot provide for impossibility. In Asstt. CIT vs. Jindal Irrigation Systems Ltd. (1996) 56 ITD 164 (Hyd) dealing with a somewhat similar situation, the Tribunal observed : Lex non Cogit ad impossibilia is the principle which is fully applicable in this case. This means that the law does not compel a man to do that which he cannot possibly perform ...... 6. When the law creates a duty or charge and the party is disabled to perform it, without there being any default on his part, and there is no remedy for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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