Retrospective tax amendment required fresh examination of compulsory deposits' wealth-tax treatment and remand for reconsideration.

A retrospective insertion in section 7A of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 deemed compulsory deposits to be deposits with a banking company for exemption purposes under the Wealth-tax Act, 1957. Because the Tribunal had decided the includibility of the deposits in net wealth without considering that amendment, the appellate treatment of sections 5(1)(xxvi) and 5(1A) required fresh examination. The matter was therefore remitted for rehearing and disposal in accordance with law.

---

---

Issues: Whether, in view of the retrospective insertion of section 7A in the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974, the matter required remand to the Tribunal for fresh consideration of the includibility of compulsory deposits in the assessee's net wealth under the Wealth-tax Act, 1957.

Analysis: The retrospective amendment deemed compulsory deposits to be deposits with a banking company for the purpose of exemption under section 5 of the Wealth-tax Act, 1957. The relevant provisions of section 5(1)(xxvi) and section 5(1A) of the Wealth-tax Act, 1957 had to be applied to the deposits in question, and the Tribunal had decided the appeal without noticing the amendment. Since the amendment materially affected the treatment of the deposits and the underlying contentions had not been examined by the Tribunal, a fresh determination was necessary.

Conclusion: The matter was remitted to the Tribunal for rehearing and disposal in accordance with law.

Ratio Decidendi: A retrospective statutory amendment affecting the tax treatment of an asset must be applied by the appellate authority, and where the authority has decided the matter without considering such amendment, remand for fresh adjudication is warranted.

---