COMMISSIONER OF INCOME TAX Vs. S PALANISWAMY

JUDGEMENT

(1.) IN this tax case under section 256(1) of the INcome-tax Act, 1961, preferred by the Revenue, the respondent/assessee remained unrepresented. So, we have heard learned counsel for the Revenue alone The question referred to this court is as follows"Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessee is entitled to depreciation at 40 per cent. in respect of the buses (on the basis of the notification dated July 24, 1980 (see [1980] 126 ITR(St) 1) for the assessment year 1980-81?" * IN other words, prior to the abovesaid notification dated July 24, 1980 (see [1980] 126 ITR(St) 1) (which brought about the INcome-tax (Fifth Amendment) Rules, 1980, which, inter alia, irserted item (1A) in GroupE under the heading III "Machinery and plant" in Part I of Appendix I to the INcome-tax Rules, 1962, the rate of depreciation for the assessee's buses was 30 per cent. and by the said notification, the said rate was 40 per cent. and is applicable to the assessment year in question, namely, 1980-81, though the said notification came into force only during the course of the said assessment year, i.e., on July 24, 1980. No doubt, the said INcome-tax (Fifth Amendment) Rules, 1980, says that the said rules shall come into force "at once". But the said rules cannot be given effect to, retrospectively from April 1, 1980, the first date of the assessment year. It is settled law that though the subject of the charge is the income of the previous year, the law to be applied is the law that is in force as on first April, of the assessment year in question, unless the said law is changed. If the intention is to change the law on the above point retrospectively from first April. of the abovesaid assessment year, it could have been expressly done since such power to amend the rules is given to the Central Board of Direct Taxes under section 295(4) of the Act which says that the power to make rules conferred by this section shall include the power to give retrospective effect, from a date not earlier than the date of commencement of this Act, to the rules or any of them. So, simply because the abovesaid expression "at once" issued in the abovesaid amending Rules, it cannot be said that the said rules have retrospective effect from first April, 1980The Tribunal has not considered the abovesaid well-settled legal position ind has only observed that the Appellate Assistant Commissioner was right in granting depreciation at the rate of 40 per cent. following the earlier order of the TribunalWe also find support for the above view taken by us in the decisions of CIT v. S. A. Wahab CIT v. Mirza Ataullaha Baig and S. P. Jaiswal Estates Pvt. Ltd. v. CIT (No. 2). Of the abovereferred to three decisions, the former two considered the very same notification as the present one, while the last of the three, dealt with a similar notification which came in laterThe net result is we answer the question referred to us in the negative and in favour of the Revenue. No costs.