Assessment-year law governs depreciation rate; a later amendment does not apply merely because proceedings were pending.

The applicable law for an assessment year is the law in force on the first day of that year, so an amendment effective from 2 April 1983 could not apply to assessment year 1981-82 merely because the assessment was still pending. The pendency of assessment proceedings does not, by itself, extend an amended depreciation rate to an earlier year. The assessee was therefore not entitled to the amended rate for assessment year 1981-82, and the reference was answered in favour of the Revenue.

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Issues: Whether the amended depreciation rate introduced by the Income-tax (Fourth Amendment) Rules, 1983, applied to assessment year 1981-82 when the assessment proceedings were still pending.

Analysis: The applicable law for an assessment year is the law in force on the first day of that assessment year. An amendment coming into force on 2 April 1983 could not govern assessment year 1981-82 merely because the assessment proceedings were pending on the date of the amendment. The pending nature of proceedings does not by itself make the amended rule applicable to an earlier assessment year.

Conclusion: The assessee was not entitled to the amended depreciation rate for assessment year 1981-82, and the answer to the referred question was in the negative, in favour of the Revenue.

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