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NuruddIn and Brothers Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 536 of 1975
Judge
Reported in[1979]116ITR704(Cal)
ActsIncome Tax Act, 1961 - Sections 154(1), 154(3), 271(1) and 274(2); ;Direct Taxes (Amendment) Act, 1964
AppellantNuruddIn and Brothers
RespondentCommissioner of Income-tax
Appellant AdvocateMeghnad Banerji, ;Gopal Chandra Sinha and ;Manas Banerjee, Advs.
Respondent AdvocateAjit Sengupta and ;Prabir Majumdar, Advs.
Excerpt:
- .....issued a notice under section 154(3) of the i.t. act, 1961, to the assessee to show cause why the aforesaid mistake in his order dated 4th march, 1970, should not be rectified.3. in response to the said notice the assessee's representative appeared and filed a written submission by taking only a preliminary objection as to jurisdiction of the iac to rectify the said mistake. in support of that objection it was argued that section 154(1)(bb) which came into force on 6th october, 1964, was not applicable to the assessment year 1963-64 and, therefore, the iac had no power to rectify the said mistake. the iac rejected the argument and held that as section 154(1)(bb) came into effect before the penalty order was passed he had jurisdiction to rectify the mistake and, accordingly, he rectified.....
Judgment:

Deb, J.

1. This is a reference under Section 256(1) oi the I.T. Act, 1961. The question before us is as follows :

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that Section 154(1)(bb) of the I.T. Act, 1961, which was inserted during the financial year 1964-65, could be applied for the assessment year 1963-64 and the IAC had jurisdiction under , Section 154(1)(bb) to rectify the mistake in the penalty order dated March 4, 1970, for the assessment year 1963-64 ?'

2. The assessment year is 1963-64. The IAC by his order dated 4th March, 1970, imposed a penalty of Rs. 12,000 under Section 271(1)(c) read with Section 274(2) of the I.T. Act, 1961, for the assessment year 1963-64. Subsequently, he noticed that there was a mistake in calculating the penalty which should be Rs. 61,000 instead of Rs. 12,000. Hence, he issued a notice under Section 154(3) of the I.T. Act, 1961, to the assessee to show cause why the aforesaid mistake in his order dated 4th March, 1970, should not be rectified.

3. In response to the said notice the assessee's representative appeared and filed a written submission by taking only a preliminary objection as to jurisdiction of the IAC to rectify the said mistake. In support of that objection it was argued that Section 154(1)(bb) which came into force on 6th October, 1964, was not applicable to the assessment year 1963-64 and, therefore, the IAC had no power to rectify the said mistake. The IAC rejected the argument and held that as Section 154(1)(bb) came into effect before the penalty order was passed he had jurisdiction to rectify the mistake and, accordingly, he rectified the aforesaid mistake.

4. The Tribunal has dismissed the appeal filed by the assessee and has referred the aforesaid question to us at the instance of the assessee.

5. Mr. Meghnad Banerjee, learned counsel for the assessee, argues before us that Section 154(1)(bb) is not a retrospective provision and, therefore, it cannot apply to the penalty proceedings relating to the assessment year 1963-64.

6. Now, Section 154(1)(bb) provides that with a view to rectify any mistake apparent from the record the IAC may amend any order passed by him inany proceeding under Sub-section (2) of Section 274 of the Act. This provision was introduced by the Direct Taxes (Amendment) Act, 1964, with effect from 6th October, 1964. The penalty order was passed by the JAC on 4th March, 1970. Therefore, the aforesaid argument of Mr. Banerjee is not tenable in view of the facts and the circumstances of the case.

7. That apart, Section 154 is a procedural provision. It is settled law that an amendment of a procedural law is normally regarded as retrospective in operation because no one has any vested right in a procedural law.

8. In the premises, we answer the question in the affirmative and against the assessee. There will be no order as to costs.

Sudhindra Mohan Guha, J.

9. I agree.


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