1. The appeal of the assessee relates to the assessment year 1980-81.
The question is whether the assessment which allowed 30 per cent depreciation on motor vehicles used for the purposes of transport business should be rectified to allow 40 per cent depreciation.
2. The return was furnished on 30-7-1980. On 1-4-1980 depreciation rules as it stood provided only for 30 per cent depreciation. So when the assessment was completed on 31-12-1980, the IAC provided only 30 per cent. But in the meanwhile the Income-tax (Fifth Amendment) Rules, 1980, with 40 per cent depreciation had come into force on 24-7-1980.
The rules expressly provided that it shall come into force at once. So the assessee requested the IAC to rectify the assessment. But the officer said that the amended rule is not operative for the assessment year 1980-81. In appeal, the Commissioner (Appeals) held that in regular assessment appeals he had been holding that the amended rules applied even for the assessment year 1980-81, but that the matter being a rectification matter and the issue debatable, the assessee is not entitled to the enhanced rate of depreciation by the process of rectification.
3. The departmental representative argued that apart from being debatable the amended rule is not applicable for the assessment year 1980-81. We disagree. We agree with the Commissioner (Appeals) to that limited extent. The principle,that the law as on 1-4-1980 alone is applicable to the assessment year 1980-81 is not absolute but subject to qualification. Where any provision expressly states the date from which it is effective, it must be given effect to accordingly. If the intention of the rule making body was to make it applicable only from 1-4-1981 relevant to the assessment year 1981-82 and not to make it applicable to the assessment year 1980-81, then there was no necessity to put into force from 24-7-1980 onwards. They could have said that it will take effect only from 1-4-1981. So the fact that the Board expressly provided that it will take effect from 24-7-1980 shows that they wanted to apply it to all assessments pending on 24-7-1980. So the amended rules apply to an assessment like the one on hand completed after 24-7-1980. So had the matter been agitated in a regular assessment appeal, the assessee would have been certainly entitled to 40 per cent depreciation.
4. Then does it make any difference because the assessee, instead of an appeal required only a rectification We are not suggesting that the defence of the debatability is open only to the assessees and not to the executive or statutory authority or that it is only a defence against the actions of the executive against the citizens. What we are saying is that there is no scope for any reasonable, genuine, bonafide or honest debate. The Board had! drafted the rules and published it with express provision that it shall come into force at once. The author of the rule can never have any doubt about the avowed intention that the rule should come into force on 24-7-1980. Doubt generates only in the minds of the assessees who try to read and understand it. Under such circumstances we fail to see how the issue becomes debatable at least as far as the income-tax authorities are concerned. For them there is no scope for debate. The Board is very clear that it should take effect from 24-7-1980. The fact that the ITO or the IAC somehow or other believe that rule applies only from the assessment year 1981-82 will not make the issue debatable. The statutory authorities should not also take refuge under such technical arguments and refuse to set right such patent mistake committed, the type of which they should not have ever committed. So relief cannot be denied on pretentions of debate.
Appeal allowed. The assessment should be rectified according to the provisions of the Income-tax (Fifth Amendment) Rules.