Retrospective rectification powers cannot apply to an earlier assessment year unless the statute clearly permits it.

A rectification under section 154 read with section 155(7A) of the Income-tax Act, 1961 could not be sustained for assessment year 1972-73 because section 155(7A) was inserted later, with retrospective effect only from 1 April 1974. The provision was therefore unavailable for an earlier assessment year, and the Tribunal was correct in holding that the Income-tax Officer lacked jurisdiction to pass the rectification order on that basis. The governing principle is that a rectification provision brought in retrospectively from a specified date cannot be applied to an assessment year preceding that date unless the statute clearly authorises such application.

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Issues: Whether the Income-tax Officer had jurisdiction to pass an order of rectification under section 154 read with section 155(7A) of the Income-tax Act, 1961, for the assessment year 1972-73.

Analysis: Section 155(7A) was inserted by the Finance Act, 1978 with retrospective effect from 1 April 1974. As the assessment year in question was 1972-73, the provision was not available to sustain a rectification order for that year. The Tribunal was therefore right in holding that the rectification jurisdiction could not be exercised on the basis of section 155(7A) for the relevant assessment year.

Conclusion: The Income-tax Officer had no jurisdiction to pass the rectification order under section 154 read with section 155(7A) of the Income-tax Act, 1961, for assessment year 1972-73, and the answer was against the Revenue.

Ratio Decidendi: A rectification provision inserted with retrospective effect from a specified date cannot be invoked for an assessment year falling prior to that date unless the statute expressly so permits.

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