Commissioner of Income Tax vs Motichand Virpal Shah

A.R. Dave, J.—At the instance of the Revenue, the following question has been referred to this court by the Income Tax Appellate Tribunal, Ahmedabad Bench "A", for its opinion under the provisions of Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act").

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the Income Tax Officer had no jurisdiction to pass an order of rectification u/s 154 read with Section 155(7A) of the Income Tax Act, 1961, in relation to the assessment year 1972-73 ?"

We have heard learned advocate Shri Akil Kureshi, for the applicant and learned advocate Shri Manish Kaji for the respondent-assesses.

Looking to the fact that the provisions of Section 155(7A) of the Act had been inserted by the Finance Act, 1978, with retrospective effect from April 1, 1974, in our opinion, the Income Tax Officer had no jurisdiction to invoke the provisions of the said Section for the assessment year 1972-73. In view of the said fact the Tribunal was justified in coining to the conclusion that- the Income Tax Officer had no jurisdiction to pass the order of rectification under the provisions of Section 154 read with Section 155(7A) of the Act.

For the above referred reasons, we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue.

The reference stands disposed of accordingly with no order as to costs.