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TMI Blog1955 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,000 which was the sum included in the assessment of the joint family by the assessment order dated March 18, 1948. On February 15, 1954, the Income Tax Officer gave the assessees notice to state their objections why the previous assessment dated March 18, 1948, should not be rectified under section 35 of the Income Tax Act (hereinafter referred to as the Act) as amended by the Income Tax (Amended) Act, 1953 (hereinafter referred to as the Amending Act). The assessees objected prior to April 1, 1952. The Income Tax officer rejected the objections and called upon the assessees to pay the additional tax before May 10, 1955. 2. Learned counsel for the assessees contends that the Amending Act of 1953 is not retrospective and therefore it cannot be invoked to reopen an assessment completed before April 1, 1952, whereas the learned Advocate-General argues that the amendment is only declaratory of the pre-existing law and therefore on the basis of the amendment even a completed assessment can be reopened. 3. The relevant provision of the Act may usefully be extracted at this stage : Section 35 (before amendment) : The Commissioner or Appellate Assistant Commissioner may, at an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the share of the partner in the profit or loss the firm has not been included in the assessment of the partner or though included it was not correct, the assessment can be reopened and corrected on the basis of the assessment of the firm within four year from the date of the final order passed in the case of the firm. The section further says that the inclusion of the share of the partner in the assessment or the correction thereof shall be deemed to be rectification of a mistake apparent from the record within the meaning of the section. To put it differently, section 19 of the Amending Act introduces a fiction to enable the Income Tax authorities to invoke the provisions of section 35 for amending the completed assessment for including the income falling to the share of the partner as ascertained from the final assessment of the firm. Under section I(2) the amendment came into operation from April 1, 1953. 7. Before attempting to answer the question raised, it will be convenient at this stage to notice briefly the well-settled rule of statutory construction in regard to the retrospective operation of Amending Acts. Craies on Statute laws (5th edition) says about retros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to, but which is valuable only when the words of an Act of parliament are not plain, is embodied in the well-know trite maxim omnis nova Constitutio futuris formam imponere debet non praeteritis that is, that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights. It seems to me that even in construing an Act which is to a certain extent retrospective, we ought nevertheless to bear in mind that maxim as applicable whenever we reach the line at which the words of the section cease to be plain. That is necessary and logical corollary of the general proposition that you ought not to give a larger retrospective power to a section, even in an Act which is to some extent intended to be retrospective, than you can plainly see the legislature meant. 12. It is, therefore, clear from the statement of law made by recognised authorities that a statute affecting vested is prima facie prospective unless the statute affecting expressly or by necessary implication indicates to the contrary. Even where it is retrospective in operation, courts should confine its operation only to the extent the language renders it necessary. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mending Act, which must be deemed to have come into force on April 1, 1952, for amending the assessment. Sub-section (5) inserted by the new Act clearly indicates that parliament did not consider that the inclusion of the correct figure on the basis of the final assessment of the firm was an error apparent from the record of the earlier assessment, for it designedly used the word shall be deemed to be a rectification of a mistake apparent from the record indicating thereby that a fiction was introduce to treat a rectification which is not in terms a mistake apparent from the record as one of that category, Further sub-section (5) introduces a fresh point for computing the period of limitation. While under section 35(I) four point for computing the period of limitation. While under section 35(I) four year is computed from the date of the final order of assessment, under sub-section (5), four year would be computed from the date of the final order passed in the case of a firm. This will enable the Income Tax authorities to correct an assessment long after the expiry of four years from the date of the final assessment. Therefore sub-section (5) is not declaratory of a pre-existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 951, whether such assessment has or has not been made before the commencement of this Act and where any such assessment has been made before such commencement it shall be lawful for the Income Tax Officer to revise it, wherever necessary to give effect to such amendments. The aforesaid specific provision for reopening the assessments already made prior to the coming into force of the Act is a sure indication that in other cases, the Legislature did not intend to give power to reopen assessments made prior to the coming into force of the Act. Reliance is placed upon the proviso to section 35(I) of the Act which says that no rectification shall be made of any mistake in our order passed more than one year before the commencement of the Indian Income Tax (Amendment) Act, 1939 and it is contended that the absence of any such section (5) in section 35 has unlimited retrospective activity. The said omission does not lead to any such irresistible conclusion. It may be that the provision to section 35 was added expressly to give a Limited retrospective operation to the amendment introduced by the Income Tax (Amendment) Act, 1939. 17. Learned Advocate-General strongly relied upon the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Though the Act itself came into force on September 8, 1948, for certain purpose, it was deemed to have come into force on March 30, 1948. The effect was that to the extent the Act must be deemed to have come into force on that date. Unless retrospective operation was given to the amended section, the assessment which become final before March 30, 1948, could not be reopened. Though the learned chief Justice stated that the question was not one of retrospective operation at all, in effect the construction adopted by him gave retrospective operation to the amending Act in that it enabled the reopening of the assessment made prior to March 30, 1948. It is not necessary to express our view whether the conclusion of the learned Judge was correct and whether it could be sustained on their reasoning. 19. Equally strong reliance is placed by the counsel for the assessees on the Judgement of a Division Bench of the Bombay High Court in Bombay Dyeing and Manufacturing Company Limited v. M. K. Venkatachalam, Income Tax Officer, Company Circle I, Bombay. In that case the assessment on the petitioners for the year 1952-53 was completed on October 9, 1952, credit for the sum of ₹ ..... 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