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TMI Blog1954 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... en certain depreciation allowances under section 12(5) of the said Act. Now for the year 1951-52 assessable under the Indian Income-tax Act, 1922, which was made applicable under section 13 of the Indian Finance Act, 1950, read with para- graph 5 of the Part B States (Taxation Concessions) Order 1950, the written down value is sought to be computed by the Income-tax authorities on the basis of the assessment for 1359F. The assessee contended before the Income-tax authorities that by reason of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, he was entitled to depreciation not on the written down value as computed in 1359 F. but upon the actual cost minus the depreciation allowance. In other words, he contends that the written down value should be taken to be the actual cost to the assessee minus the depreciation allowance admissible under the Hyderabad Income-tax Act. The Income-tax Department, on the other hand, urges that only such written down value as is computed under the Hyderabad Income-tax Act for the 1359 F. assessment should be taken as the value of the asset for the purposes of depreciation under the Indian Income-tax Act for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In our view, the Tribunal in so holding was correct. Section 10(5) (b) of the Indian Income-tax Act defines "written down value" as meaning "in the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Act or any Act repealed thereby or under executive orders issued when the Income-tax Act, 1886, was in force." According to this provision the assessee would have been entitled ordinarily to claim depreciation on the actual cost of the asset where the asset was in existence before the previ- ous year less the depreciation actually allowed to him under the Act. But, as the Indian Income-tax Act was not in force, no depreciation was actually allowed nor could depreciation under the Hyderabad Income-tax Act, which was repealed not by that Act but by the Finance Act 1950, could be taken into account, as would be seen presently. Consequently, depreciation for the year of assessment would have been ordinarily allowed on the cost of the asset. The Central Government, in exercise of the powers vested in it under section 12 of the Finance Act, issued the Taxation Laws (Part B States) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (2) of section 66. Where, however, neither the assessee nor the Commissioner has chosen to move the Tribunal to refer a case on any point of law arising out of the order of the Tribunal within the period prescribed, he cannot raise it before the High Court nor move the High Court to refer a question not raised before the Tribunal. The reason is that the refusal to refer a question by the Tribunal is a sine qua non, a condition precedent, for moving the High Court to direct the Tribunal to state a case thereon. If no question has been raised by the assessee before the Tribunal challenging the validity of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, issued under section 12 of the Indian Finance Act, 1950, he cannot be permitted to raise it in this reference, nor can the Income-tax Department be allowed to raise any new question or ask for a reference thereon. The only question that is open to us is to determine whether under paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, the assessee is entitled to depreciation on the actual cost of the asset minus the depreciation actually allowed under the Hyderabad Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authority vested with the power to make orders under any statute can, without specific power or necessary intendment, make orders having retrospective effect. In order to enable us to ascertain whether an authority has been vested with the power to make orders with retrospective effect, it is necessary to look into the content of the power in section 60A of the Indian Income-tax Act which is in the following words: "If the Central Government considers it necessary or expedient, so to do for avoiding any hardship or anomaly, or removing any difficulty, that may arise as a result of the extension of this Act to the merged territories or to any Part B State the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income-tax in favour of any class of income, or in regard to the whole or any part of the income of any person or class of persons." Then follows a proviso with which we need not concern ourselves. A cursory examination of the language of section 60A might show that there is nothing in its content from which an intention to authorise the Central Government to make retrospective orders can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing to warrant the Central Government to exercise its power under the said section to the disadvantage of an assessee on the ground that a difficulty has arisen. The difficulty envisaged by the section is not the difficulty to the Income- tax Department in not being able to collect more tax or in not being able to allow less depreciation allowance, but a difficulty which comes in the way of an assessee not having some advantage which is deemed to be equitable. According to section 10(2)(vi) of the Indian Income-tax in computing profits or gains, an allowance is made in respect of depreciation on plant, machinery, etc., of a sum equivalent to such percentage on the written down value thereof to the assessee as may for any asset or class of assets be prescribed. The manner in which written down value for the purposes of the above provision is to be computed is laid down in section 10(5)(b) of the Indian Income-tax Act, that is, in the case of assets acquired in any year before the accounting year, actual cost less the aggregate of all the amounts actually allowed under that Act and not merely allowable by way of depreciation to the assessee in the preceding year or years. Depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter. The depreciation for the purposes of working out the written down value up to the date of the enforcement of the Act for the purposes of giving an allowance on account of depreciation in the year of assessment on the coming into force of the Act is one thing and depreciation actually allowed on that written down value is another thing. In our view, there can be no doubt that the depreciation which has been actually allowed by the assessing authority under the provisions of the Hyderabad Income-tax Act are to be deducted from the actual cost of the assets after which the depreciation for the assessment year will have to be worked out under section 10(5)(b) of the Indian Income-tax Act, 1922, on the written down value so computed. This is clear from the language. It will thus be seen that the explanation added to paragraph 2 of the said Taxation Laws (Removal of Difficulties) Order, 1950, was not made to secure an advantage to the assessee nor had it been made to avoid any hardship or anomaly or for removing any difficulty that may arise as a result of the extension of the Indian Income-tax Act to the merged territories or Part B States. As we have pointed out there is no hard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merged territory of Cooch-Behar except for the purposes of levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous years for the purposes of assessment under the Indian Income- tax Act, 1922 (XI of 1922), for the year ending on 31st day of March, 1951, or for any subsequent year, or as the case may be, the levy, assessment and collection of the tax on profits of business for any chargeable accounting period ending on or before 31st day of March, 1949. This sec- tion fell for consideration in the case of Union of India v. Madangopal ([1954] 25 I.T.R. 58), in which Patanjali Sastri, C.J., observed at p. 67: "A close reading of that provision (section 13) will show that it saves the operation of the State law only in respect of 1948-49 or any earlier period which is the period not included in the previous year (1949-50) for the purposes of assessment for the year 1950-51. In other words, there remained no State law of income-tax in operation in any Part B State in the year 1949-50." Dealing with the argument that the words "or for any subsequent year" immediately following the words "for the year endi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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