Assessment year law controls tax amendment application when no retrospective effect exists

An amendment affecting agricultural income-tax applied to assessment year 1992-93 because the relevant assessment is governed by the law in force on the first day of the assessment year, absent retrospective operation. The taxable subject is the income of the previous year, but the assessment is made with reference to the law then prevailing. Since the previous year ended before the amendment came into force, the Tribunal erred in excluding its application. The revision succeeded and the assessment made by the Assistant Commissioner was restored.

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Issues: Whether the amendment brought into force on 1 April 1992 applied to the assessment for the assessment year 1992-93 when the previous year had ended on 31 March 1992.

Analysis: The charge under agricultural income-tax is on the income of the previous year, and the assessment is made with reference to the law in force at the commencement of the assessment year. Since the previous year relevant to assessment year 1992-93 ended before the amendment came into force, the amendment could not be excluded merely because it was enacted during the course of the previous year. The Tribunal misapplied the earlier decision, which supported the Revenue's position that the law prevailing on the first day of the assessment year governs the assessment in the absence of retrospective operation.

Conclusion: The amendment applied to the assessee for assessment year 1992-93, and the Tribunal's contrary view was incorrect.

Final Conclusion: The revision succeeded, and the assessment made by the Assistant Commissioner was restored.

Ratio Decidendi: In the absence of retrospective operation, an amendment affecting tax liability applies to an assessment only if it is in force on the first day of the relevant assessment year, because the taxable subject is the income of the previous year.

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