K.T.M.S. Umma Salma vs Commissioner Of Income-Tax, Central ... on 10 December, 1981
ITO v. Bombay Dyeing and Mfg. Co. Ltd. . In that case, the ITo by this order dated October 9, 1952, assessed the respondent for the assessment year 1952-53, and gave him credit for Rs. 50,603-15-0 as representing inter on tax paid in advance under s. 18A(5) of the India I. T. Act, 1922. ON May 24, 1953, the Indian I. T. (Amendment) Act, 195 3, came into force adding a proviso to s. 18A(5) of th aCt to the effect that the assessee was entitled to interest not on e whole of the advance tax paiad by this but only on the difference between the payment made and the amount assessed. The Amendment Act provide that it shall be deemed to have come into fore on April 1, 1952, The ITO, acting under s, 35 of the Act, rectified the assessment order holding that the assessee was entitled to a credit of only Rs. 21,157-6 - 0 by way of interest on tax paid in advance as a result of the retrospective operation of th amendment in s. 18A(5) and issued a notice of demand against that assessee for the balance of Rs. 29,446-9-0. The assessee filed a petition in the High Court of Bombay under art,. 226 of the Constitution praying for a writ prohibiting the authorities from enforcing the rectified order and notice of demand. The High Court issued the writ holding that s. 35 was not applicable to the case as the mistake mentioned in s. 35 had to be apparent on the face4e of the order and the question could only be judged in e light of the as as it stood on the day when the order was passed. the REvenue took the matter in appeal to the Supreme Court. the question that was canvassed before the Supreme Court Court was "Whether, an order, which was proper and valid when it was made, can be said to disclose, a mistake apparent from the record if the said order would be erroneous in view of a subsequent amendment made by the Amendment Act when the Amendment Act is intended to operate retrospectively ? " In dealing with this question the Supreme Court observed as follows (p 146 of 34 ITR) :