TMI Blog1958 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessment. Subsequently when the assessment was finalised on 31st March, 1953, the second respondent did not charge any penalty interest under section 18A(6). However, on 21st September, 1956, he informed the petitioner that he had made a mistake is not charging penalty interest and as he wanted to rectify the mistake he called upon the petitioner to show cause why he should not do so. Ultimately, he issued a notice of demand for ₹ 14,929-10-0. In that order it was stated that penal interest was being charged under section 18A(6). The original assessment order was made on 31st March, 1953, and the order of rectification made by the Income-tax Officer under section 35 was made on 4th October, 1956. In the meantime, proviso 5 was added to section 18A(6) and retrospective operation was given by the Legislature to the proviso and it came into operation respectively from 1st April, 1952. On 5th December, 1956, the petitioner went in revision to the Commissioner of Income-tax and on 1st February, 1958, the Commissioner of Income-tax substantially dismissed the revision application, but he modified the order and directed that penal interest should be charged for a shorter period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reached was that the Income-tax Officer had vested in him a discretion to reduce or waive the interest payable by the assessee and that notwithstanding the fact that the proviso was not there on the statute book when the assessment order was made. In our judgment in the case we referred to the decision of the Supreme Court in State of Bombay v. Pandurang Vinayak, where their Lordships of the Supreme Court pointed out the effect of a deeming provision being inserted in any statute and being given respective operation. We also referred to a passage from the judgment of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council in which the learned Law Lord very forcibly brought out the full effect of the legal fiction. The view which we ultimately took of the matter was that the Income-tax Officer had no jurisdiction to pass the order of rectification. By operation of the deeming provision, which was retrospective in its operation, it was to be assumed and taken that on the date on which he made the assessment order he had jurisdiction and power to reduce or waive the amount of interest payable by the assessee. The Income-tax Officer not having done so and not having s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax set aside before he can hope to get any relief at our hands, and it is hardly necessary to stress the principle that this court would decline to pass an order which would not be an effective order. In our judgment, the present contention of Mr. Palkhivala must be negatived. 7. It is next argued by learned counsel that even assuming that the petitioner was bound on this petition to challenge both the orders, that is, the order of the Income-tax Officer rectifying the assessment order and the order of the Commissioner of Income-tax modifying that order, he has fully made out a case for adequate relief. The argument has been that the order of the Income-tax Officer rectifying the original assessment order was without jurisdiction. In support of that, learned counsel relied on the decision of this court in the case of Shantilal Rawji, to which we have already made reference. In that case, as we have already mentioned, the view was taken that the order of the Income-tax Officer in a case of this nature would be without jurisdiction. The next step of the argument of learned counsel is that the Commissioner of Income-tax should have held that the Income-tax Officer had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the order passed by the Income-tax Officer to the case of Shantilal Rawji but that is in a different context. Originally, the writ petition in that matter had been summarily rejected by the trial court and the learned Chief Justice and I in appeal set aside that order summarily rejecting that petition and directed that the petition should be heard on merits. Therefore, Mr. Joshi is right when he says that the Commissioner of Income-tax did not have before him the decision of this court in the case of Shantilal Rawji. The argument has proceeded that it cannot be said that the law was settled when the Commissioner of Income-tax decided the matter. There was no decision of the court to the effect that an order passed by the Income-tax Officer of the nature before us would be without jurisdiction. The argument is not tenable and for this reason. When the court decides a matter it does not make the law in any sense but all it does is that it interprets the law and states what the law has always been and must be understood to have been. A question of error of law apparent on the face of the record does arise on this petition and what we have to see is whether at the date of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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