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TMI Blog2006 (5) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer issued notice to rectify the said order to disallow a sum of Rs. 10,99,552 on account of provision for bad and doubtful debts and loans and advances which was claimed by the assessee while filing the return and allowed by the Assessing Officer in the proceedings under section 143(3) by its orders dated 29-3-1996. For this notice, the assessee gave a reply inter alia contending that the provision for doubtful debts claimed by the assessee is allowable deduction and accordingly it was allowed and the attempt of the Assessing Officer to disallow the same by invoking powers under section 154 of the Act, is not sustainable in as much as the scope of section 154 does not comprehend such an action proposed by the Assessing Officer. But, the learned Assessing Officer after hearing the assessee and considering the material on record, passed the order rectifying the assessment by making an addition of Rs. 10,99,552, which was allowed as deduction claimed by the assessee. 4. Aggrieved by this order, the assessee went in appeal before the CIT(A) and the learned CIT(A) after hearing the assessee has passed the impugned order wherein it was held that the provision for bad and doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e record. The same proposition' was laid down by the jurisdictional High Court of Bombay also rendered in the case of Sidhramappa Andannappa Manvi v. CIT [1952] 21 ITR 333 wherein it was held that the power of the Officers mentioned under section 154 of the Income-tax Act, 1961 is only to correct "any mistake apparent from the record". Similarly, the Hon'ble Madras High Court in the case of CIT v. O. Rm. M. Sm. Sv. Sevugan [1948] 16 ITR 59 has considered the scope of section 35 of the Income-tax Act 1922, which is nothing, but, section 154 in 1961 Income-tax Act, wherein it was observed by the Hon'ble Madras High Court that the powers of the authorities under the said section does not enable an order to be reversed, revised or reviewed, but, permits only such an error which is on the face of the record to be corrected. This position of the Law was held by the Hon'ble jurisdictional High Court of Bombay as undisputable. In the said decision, the Hon'ble jurisdictional High Court of Bombay, stated supra, has considered the facts that a date was stated to have been taken as falling within the period under consideration by the authorities, whereas, it was not actually so. Such a correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted by the Finance Act, 2001 though with retrospective effect from 1-4-1989. Thus, it is evident that this Explanation is not available for the period under consideration as well as on the date of passing of order under section 154. It was held by the Hon'ble Supreme Court that the assessment is to be completed in accordance with the law available on the date of filing of the return. This proposition was laid down by the Hon'ble Apex Court in the case of CIT v. Hindustan Electro Graphites Ltd [2000] 243 ITR 481. Applying these two principles of the Hon'ble Jurisdictional High Court as well as Hon'ble Supreme Court, we find that the original assessment order passed by the Assessing Officer on 29-3-1996 allowing the claim of provision for bad and doubtful debt made by the assessee is not in accordance with the law available on the date of filing of the return. However, the order dated 17-6-1996 of the Assessing Officer passed under section 154 basing on the explanation attached to section 36, sub-section (1), Clause (7) of the Income-tax Act is not in accordance with the principle laid down by the Hon'ble High Court and Hon'ble Supreme Court stated supra, in as much as the explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y place on record my views in the matter. 2. At the outset, I shall first point out certain observations, both factual and legal, made by my learned Brother with which I am not in agreement. These observations go to the root of the matter and hence they deserve to be highlighted for proper appreciation of the case. They are as under: "(i) The learned Judicial Member has proceeded (para 3 of his order) on the assumption that the notice under section 154 was issued by the Assessing Officer to rectify the assessment order by disallowing "... a sum of Rs. 10,99,552 on account of provision for bad and doubtful debts and loans and advances....". The learned Judicial Member has carried that assumption further and observed in para 4 of his order that the "... learned CIT(A) after hearing the assessee passed the impugned order wherein it was held that the provision for bad and doubtful debts is not allowable deduction ....". In para 6 of his order, the learned Judicial Member has further observed: "...it is clear that the provision for bad and doubtful debts/loans and advances is allowable or not is to be decided....". It was not even submitted by the assessee at any stage of the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a scheduled bank, a bank or a public financial institution. The learned CIT(A) has made a pointed reference to this aspect in para 6 of his order. He has observed: "... Provision for bad and doubtful debts are admissible only in the case of banking companies as per section 36(1)(viia). It is true that the appellant company is not a banking company. Since as per the claim made in the profit and loss account the amount has been shown as 'Provision for doubtful debts' the question of considering it as 'bad debts' does not arise...." The aforesaid distinction made by law and pointedly referred to by the learned CIT(A), which was not even controverted by the assessee at the time of hearing before us, has somehow gone unnoticed in the order proposed by the learned Judicial Member. (iii) The learned Brother has proceeded on the assumption that the issue under consideration was not a mistake apparent from record within the meaning of section 154 and hence was not amenable to the rectificatory jurisdiction of the Assessing Officer under section 154 without due evaluation of the facts available on record and the provisions of section 36(1)(vii) as amended from 1-4-1989. This is amply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the observations made in Hindustan Electro Graphites Ltd.'s case has since been doubted by a larger Bench of the Supreme Court in Asstt. CIT v. J.K. Synthetics Ltd. [2001] 251 ITR 2002. Thus, the order proposed by the learned Judicial Member proceeds on the basis of a few observations made in Hindustan Electro Graphites Ltd.'s case without considering the context in which they were made as also the fact that the correctness of those observations has since been doubted by a larger Bench of the Hon'ble Supreme Court. He has also ignored the binding decisions of the larger Benches of the Supreme Court. (v) Reference to Explanation inserted in clause (vii) of sub-section (1) of section 36 by the Finance Act, 2001 with retrospective effect from 1-4-1989 has been made in the order proposed by the learned Judicial Member for the proposition that the said Explanation was not available at the relevant point of time as also on the date of passing the order under section 154 and hence the Revenue could not press the same to provide validity to the rectification order. In other words, the exercise of jurisdiction under section 154 by the Assessing Officer cannot be considered, according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be judged on the basis of retrospective legislation as if it was in existence otherwise the underlying purpose of enacting retrospective legislation would be completely frustrated." 3. It is because of non-consideration of the relevant factual and legal aspects of the case in the order proposed by the learned Judicial Member that I now proceed to record my views. Starting with a positive note, I am in complete agreement with my learned Brother that the jurisdiction of the Assessing Officer under section 154 is restricted to rectifying the mistakes which are apparent from the record. In other words, the Assessing Officer has no jurisdiction to rectify the mistakes which are of debatable nature or which require to be established by a long drawn process of reasoning or which require investigation into facts. Contentious or debatable issues are thus plainly outside the scope of section 154 of the Income-tax Act. What is however required to be seen, on the facts and in the circumstances of the case before us, is whether there is any genuine debate or controversy either with regard to the facts or with regard to law being applied to those facts. A matter does not become debatable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 can be passed to disallow the Provision for Doubtful Debts amounting to Rs. 10,99,552 for assessment year 1993-94 because there is no apparent mistake which can be rectified and hence section 154 has no application. This issue is controversial in the sense that the matter has gone to the High Courts in other cases and three High Courts have decided in favour of the assessee in the following cases:- (i) Jwala Prasad Tiwari's case 24 ITR 537 (Bom.) (ii) Vithaldas Jayant 130 ITR 95 (Guj.) (iii) Sarangpur Cotton Mfg. Co. Ltd. 143 ITR 166 (Guj.) (iv) Sriniyaga Pictures 161 ITR 65 (Mad.) Since our client-company has debited an amount of Rs. 10,99,552 as Provision for Doubtful Debts in the Profit Loss Account, it constitutes write off of debt and this satisfies the requirements laid down in section 36(2). The courts have taken the view in the above cases that the debt can be said to be written off if the amount thereof is debited to Profit Loss Account and credited to Provision for Doubtful Debts Account. Since the jurisdictional High Court has held in favour of the assessee, it is binding on you and you cannot resort to section 154 as there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erable as separate and distinct from the provision for doubtful debts/advances amounting to Rs. 10,99,552. (ii) The objection raised by the assessee before the Assessing Officer to the rectification proposed by him was with reference to the pre-amended provisions of section 36(2) and not with reference to the amended provisions of section 36(1)(vii) which required the Assessing Officer to grant allowance only if a bad debt was actually written off as irrecoverable in the accounts of the assessee for the relevant previous year. (iii) It was not even the case of the assessee before the Assessing Officer that the provision for doubtful debts was irrecoverable. The objection filed by the assessee before the Assessing Officer and reproduced above was silent on this crucial point. (iv) Perusal of the assessment order shows that the Assessing Officer overlooked the statutory provisions of section 36(1)(vii) while completing the assessment under section 143(3) and thereby allowed the claim of the assessee under section 36(1)(vii) amounting to Rs. 10,99,552 (Provision for Doubtful Debts, Loans and Advances) over and above the amount of bad debt actually written off as irrecoverable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that clause. "Explanation: For the purposes of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful debts made in the accounts of the assessee;" "Explanation was inserted by the Finance Act, 2001 with retrospective effect from 1-4-1989. 11. At the time of hearing, the learned counsel for the assessee pointed out that the order under section 143(3) was passed by the Assessing Officer on 29-3-1996. The order of rectification, according to the learned counsel for the assessee, was passed by the Assessing Officer on 17-6-1996. According to him, Explanation to clause (vii) of sub-section (1) of section 36 was inserted by the Finance Act, 2001 with retrospective effect from 1-4-1989 to the effect that any debt or part thereof written off as irrecoverable in the accounts of the assessee, shall not include any provision for bad and doubtful debts in the accounts of the assessee. He pointed out that the said Explanation was not available on the statute book either on the day when the assessment order was passed or on the day when the order under section 154 was passed by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alone. The assessee cannot seek allowance of two distinct amounts, one for bad debts actually written off as irrecoverable in the accounts of the previous year and the other for 'provision for doubtful debts' which it has not written off as irrecoverable in its accounts. On the face of it, clause (vii) does not extend the allowance both for the bad debts actually written of as irrecoverable in the accounts for the previous year as also for the provision for doubtful debts. Since the allowance under section 36(1)(vii) is restricted to the amount of bad debt written off as irrecoverable in the accounts of the assessee, hence, the Assessing Officer is justified in restricting the allowance to that amount only. The Assessing Officer has no discretion or jurisdiction to enlarge the scope of allowance available under section 36(1)(vii). 14. Perusal and comparison of the provisions of sub-clauses (vii) and (viia) of sub-section (1) of section 36 shows that while clause (vii) deals with the allowance for bad debt written off as irrecoverable in the accounts of the assessee for the previous year, clause (viia) deals with the allowance in respect of 'provision for bad and doubtful debts'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere fact that a provision has been made does not by itself mean that the provision so made has been written off as irrecoverable. What is required by section 36(1)(vii) is not a provision or mere write off of a debt. It requires the assessee to satisfy that what is being claimed is nothing but a bad debt which has been written off as irrecoverable in the accounts. Thus, mere provision or write off is not sufficient for claiming allowance under section 36(1)(vii). In ITO v. Ashokkumar Lalitkumar [1995] 53 ITD 326 (Ahd.), cited with approval in ITO v. Anil H. Rastogi [2003] 86 ITD 193 (Bom.) (TM), the position has been explained as under: "... The conditions relating to grant of deduction as a bad debt and a trading loss has undergone a significant change by an amendment of section 36(1)(vii) and section 36(2) made by the Direct Tax Law (Amendment) Act, 1987 with effect from 1-4-1989 which is applicable from assessment year 1989-90. The old provision as it existed prior to 1-4-1989 provided that the debt must be established to have become bad in the previous year. This led to litigation on the question of year of allow ability of bad debt in the particular year. In order to elimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which allows no discretion to the taxing authorities is a mistake apparent from the record. In the present case, there is no doubt that the provisions of section 36(1)(vii) gave no discretion to the Assessing Officer to allow 'provision for doubtful debts' in addition to the bad debts written off as irrecoverable in the accounts of the assessee. The mistake in allowing the said claim at the assessment stage was self evident on the facts submitted by the assessee and on the plain language of section 36(1)(vii), as it stood then, and was therefore, in my humble view, rectifiable under section 154. On this ground alone, the appeal filed by the assessee is liable to be dismissed. I order accordingly. 18. Having held that the case of the assessee was squarely hit by the plain words of clause (vii), as it stood then, even in the absence of the Explanation, it may be relevant to mention that the Explanation inserted in clause (vii) has simply clarified/explained what was already inherent in clause (vii). Explanation in clause (vii) has now highlighted the position with clarity. It has not amended the law on the subject. The learned Counsel for the assessee was forthright in admitting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has altered the statutory basis or conditions for allowance under section 36(1)(vii). The case of the assessee was hit by section 36(1)(vii) as it existed at the material point of time when rectification was carried out. And it is now hit by the Explanation also which has since been inserted in section 36(1)(vii). 20. However, the learned Judicial Member is of the view that the Explanation should not be considered by the Tribunal at this stage as it was not originally available when the assessment was made or rectification order was passed. It may be clarified that the absence of Explanation in section 36(1)(vii) as it then stood will really not save the case of the assessee, for the reasons given above, from being hit by section 36(1)(vii) as it stood then. However, without prejudice to the aforesaid, it is difficult to accept the submission of the learned counsel that the Explanation inserted by the Finance Act, 2001 with retrospective effect from 1-4-1989 should not be considered at this stage only on the ground that it was enacted later. It has been authoritatively held by a three-judge Bench of the Hon'ble Supreme Court in M.K. Venkatachalam, ITO v. Bombay Dyeing Mfg. Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were not as specific as the retrospective amendment of sub-section (1A) of section 143 made them to be. The retrospective legislation was not available when the order was passed levying the additional tax. Retrospective legislation was inserted when the matter had already been decided by the High Court in favour of the assessee and had reached the Supreme Court. Nevertheless, the Hon'ble Supreme Court took note of the retrospective legislation and held the levy of additional tax as valid. It needs to be remembered that the issue in the case of J.K. Synthetics Ltd. related to levy of additional tax whereas, in the case of the present assessee, the issue is simply of disallowing the claim for bad debts in the light of the Explanation to clause (vii) of sub-section (1) of section 36 and thus the case of the assessee stands, on a factual spectrum, on a better footing than those in J.K. Synthetics Ltd's case. Respectfully following the same, I have no hesitation to hold that the said Explanation would always be deemed to have been on the statute book right from the date from which it has been made operative, i.e., with effect from 1-4-1989 and, in this view of the matter, I am unable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careful perusal. 24. In order to properly appreciate the judgment of the Hon'ble Supreme Court in Hindustan Electro Graphites Ltd.'s case, a brief reference to the facts involved in that case would be useful. In Hindustan Electro Graphites Ltd.'s case, the assessee had filed its return of income for assessment year 198990 on 29-12-1989. Clause (iiib) was inserted in section 28 of the Income-tax Act by the Finance Bill of 1990 which became the Finance Act on receiving the assent of the President of India on 31-5-1989. Clause (iiib) was given retrospective operation with effect from 1-4-1967. Clause (iiib) brought to tax "cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India." The Hon'ble Court observed that, before the insertion of clause (iiib), cash assistance received by any person on exports under any scheme of the Government of India could not be charged to income-tax under the head "Profits and gains of business or profession". The assessee did not disclose the cash assistance received by it for assessment year 1989-90 in the return of income filed on 29-12-1989 as the retrospective legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t retrospective legislation operates from the date from which it is made operative and not from the date on which it is enacted. Two, as regards levy of additional tax, the Hon'ble Court observed that additional tax had the imprint of penalty and hence the Revenue could not be heard to say that the levy of additional tax was automatic under section 143(1A). It is in this background that the Hon'ble Supreme Court held that the return was correct on the date on which the return was filed and hence additional tax was not leviable. It may, however, be relevant to mention that the correctness of the decision in Hindustan Electro Graphites Ltd.'s case has been doubted by a larger Bench of the Supreme Court in J.K. Synthetics Ltd.'s case with the following observations: "Learned counsel for the assessee, however, relied upon the judgment of a Bench of two learned Judges of this Court in CIT v. Hindustan Electro Graphites Ltd. [2000] 243 ITR 48. This was a case in which the return that the assessee had filed was correct by reason of the law as it stood when the return was filed. A retrospective amendment of section 28 of the Act rendered that return incorrect. An adjustment in the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under section 254(2) seeking amendment of the order passed by the Tribunalon 26-6-1996 on the ground that with the change in law retrospectively from 1-4-1989, the order dated 26-6-1989 needed rectification. Application filed by the Department was dismissed by the Tribunal on the ground that there was no apparent error on record as the Amending Act received the assent of the President nearly three months after the Tribunal had passed the order. Appeal against the order of the Tribunal was dismissed by the Hon'ble High Court. The said decision, in my view, does not assist the assessee in the case before us because of the substantial difference in the factual spectrum of the two cases. In the case before short issue is whether the omission on the part of the Assessing Officer in overlooking the provision of section 36(1)(vii) and thereby wrongly allowing the claim of the assessee which was in admissible in law as existing then is rectifiable. In the case before us, section 36(1)(vii) was very much in existence on the statute book when the assessment was made. The admitted facts on record did not make the assessee eligible for allowance of "provision for doubtful debts" a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw as amended. By failing to do it, it abdicated its duty...." 29. In view of the foregoing, I record my conclusions as under: (i) On the factual side of the case, the position admitted by the assessee was that the assessee was seeking allowance for "provision of doubtful debts, loans and advances" without any evidence on record to show that it was irrecoverable and hence written off as such in the accounts of the assessee for the relevant previous year. It was not even argued by the assessee that the provision in question had become irrecoverable and therefore written off in the accounts of the assessee for the previous year. On the contrary, the Assessing Officer has recorded a categorical finding that bad debt has been separately shown and written off as irrecoverable in the accounts of the assessee and hence he has held that the amount in question was simple provision for doubtful debts which was outside the purview of section 36(1)(vii). The finding of the Assessing Officer as upheld by the learned CIT(A) that the provision for doubtful debts was neither a bad debt nor was it shown to be irrecoverable nor written off as irrecoverable in the accounts of the assessee, is, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Explanation by the Finance Act 2001 with retrospective effect from 1-4-2001, the 'provision for doubtful debts' is not admissible for allowance with effect from 1-4-1989. The Tribunal is obliged to give full effect to the aforesaid retrospective legislation on the ground that it was always the law right from the date it was made retrospectively effective. I therefore hold the action of the Assessing Officer to be valid in view of the said Explanation also. 30. Having considered the matter in its entirety from all possible angles, the view is clear in that there is no debate or controversy either with regard to the factual aspects of the case or with regard to the statutory provisions of section 36(1)(vii). The claim of the assessee for allowance in respect of provision for doubtful. debts does not fall under section 36(1)(vii), as it stood at the relevant point of time. Omission to apply the statutory provisions about which there is no debate, and there is none after the amendment of clause (vii) with effect from 1-4-1989, to a clear set of undisputed facts, as in the present case, is surely a mistake apparent from the record capable of being rectified under section 154. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee and allowed under section 143(3) proceedings by the Assessing Officer, can be disallowed by invoking the provisions contained under section 154 of the Income-tax Act, 1961, and basing on the amendment made to section 36(1), clause (7), which was amended by Finance Act, 2001?" THIRD MEMBER ORDER Per G.E. Veerabhadrappa, Vice President. - There being a difference of opinion between the Members constituting the Division Bench, the Hon'ble President has referred, under section 255(4) of the Income-tax Act, 1961, the following point of difference to me as a Third Member to resolve the controversy: "Whether, under the facts and circumstances of the case, the provisions for bad and doubtful debts of Rs. 10,99,552 claimed by the assessee and allowed under section 143(3) proceedings by the Assessing Officer, can be disallowed by invoking the provisions contained under section 154 of the Income-tax Act, 1961, and basing on the amendment made to section 36(1), Clause (7), which was amended by Finance Act, 2001?" 2. The assessee is a limited company and for the assessment year 1993-94 it had debited its profit and loss account with a sum of Rs. 10,99,552 on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account and the crediting of the reserve for bad debts/provision for bad debts account, constituted sufficient compliance with the requirements of section 36(1)(vii) of the Act. According to the learned counsel for the assessee the following decisions support the above contention: CIT v. Jwala Prasad Tiwari [1953] 24 ITR 537 (Bom.), Vithaldas H Dhanjibhai Bardanwala v. CIT [1981] 130 ITR 95 (Guj.), Sarangpur Cotton Mfg. Co. Ltd. v. CIT [1983] 143 ITR 166 (Guj.), CIT v. Srivinayaga Pictures [1986] 161 ITR 654 (Mad.) In the light of the above, it was claimed that the Assessing Officer's order under section 154 of the Act was invalid and without jurisdiction. (iii) The issue is highly debatable and two opinions are possible in the matter and; therefore, the order passed by the Assessing Officer under section 154 of the Act was invalid and without jurisdiction as laid down by the Hon'ble Supreme Court in the case of T.S. Balram, ITO v. Volkart Bros. [1971] 82 ITR 50. The learned Judicial Member accepted the above submissions of the assessee. According to him the order passed under section 154 of the Act is not sustainable in law and accordingly set aside the same. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the law as it existed in the statute book on the date of the impugned order. As on 17-6-1996, the Explanation itself was not physically present in the statute book and, therefore, the order of the Assessing Officer passed on that date is clearly beyond his powers conferred under section 154 of the Act. This has been laid down by the jurisdictional High Court in CIT v. Sudhir S. Mehta [2004] 265 ITR 548 (Bom.). He pointed out that several orders in favour of the assessee were available on 29-3-1996 and on 17-6-1996 to the effect that debiting the profit and loss account and crediting the reserve for bad debts/provision for bad debts account, constitute a sufficient compliance with the requirement of section 36(1)(vii) of the Act. Apart from the decisions discussed in the proposed order of the learned Judicial Member, specific reference was made to the decision of the Bombay High Court in CIT v. General Insurance Corpn. of India (No. 2)[2002] 254 ITR 204. In the latter case the assessment year involved was 1989-90 to which the Explanation directly applies and the decision of the Bombay High Court is dated 28th September, 2000. The Hon'ble High Court has held that when the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Sheth v. N.D. Nirgudkar, Second ITO [1981] 128 ITR 87 that capital gains were not taxable under the Income-tax Act as they constituted agricultural income. There were amendments to section 2(14) clarifying that revenue derived from land shall not include and shall be deemed never to have included any income from the transfer of any land referred to item (a) or item (b) of sub-clause (iii) of clause (14) of section 2. The amendment was made by the Finance Act, 1989 with retrospective effect from 1-4-1970 when the provisions of section 2(14) themselves were introduced in the statute book. The amendment was not in existence at the time when the Tribunal decided not to refer the question under section 256(1) of the Act. However, at the stage of 256(2) proceedings before the High Court, the law was retrospectively amended. It was contended by the assessee that no referable question of law arises as the Tribunal applied the law that was existing when it decided the appeal. The question of law sought for reference by the revenue was resisted before the High Court. The Hon'ble High Court at pages 364 and 365 of the report held as under: "It is an accepted position that, when the law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground whatsoever, including any subsequent amendment in the law, and that it was bound to decide the case in conformity with the judgment of the High Court. The Supreme Court set aside the decision of the High Court, holding that the retrospective amendment clearly indicated the intention of the Legislature of restoring the assessments and orders made earlier and hence the Tribunal was entitled to take such retrospective amendment into account. The Supreme Court observed that, under the amending Act, assessments at the enhanced rate were invalid notwithstanding any judgment or order of any court. Hence the Tribunal was entitled to ignore the High Court's decision in the reference. The decision, therefore, turns on the special provisions of the amending Act. Nevertheless, it is clear that a court cannot ignore the retrospective operation of a law which is in existence when it decides a matter." The Hon'ble Bombay High Court went on to call for the reference having regard to the amended law. 6. The above decision was not brought to the notice of the Bombay High Court while dealing with the case of CIT v. Sudhir S. Mehta [2004] 265 ITR 548. The assessee remained absent and nobody ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raha [1980] 121 ITR 293 opined that the resultant effect of the amendment giving a particular provision a retrospective operation is to authorize or to make it obligatory on the authorities to revise their orders in the light of the retrospective amendment. Again the Hon'ble Supreme Court in M.K. Venkatachalam, ITO v. Bombay Dyeing Mfg. Co. Ltd. [1958] 34 ITR 143 held that for finding out whether there is a mistake apparent on the record, the authority has to look at the amended law and not the law that existed at the time of making the original record. If an order is plainly or obviously inconsistent with the specific and clear provision, as retrospectively amended, there is a mistake apparent from record, which would be rectifiable under section 154 of the Act. In a converse situation, the Supreme Court in S.A.L. Narayan Row v. Ishwarlal Bhagwandas [1965] 57 ITR 149 held that rectification is not possible if the order becomes in consonance with the retrospectively amended provisions. To the same effect is the decision of the Bombay High Court in Shantilal Rawji v. M.C. Nair, Fourth ITO [1958] 34 ITR 439. Again in CWT v. Kamla Ganapathy Subramaniam [1981] 127 ITR 175 and also i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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