Retrospective tax amendment can justify rectification where jewellery value was omitted from wealth-tax assessment.

A retrospective amendment to the wealth-tax exemption for jewellery could be applied through rectification where the original assessment had excluded jewellery in line with then-prevailing judicial authority. Once the legal position changed retrospectively, the earlier omission no longer reflected the correct tax liability and became a mistake apparent from the record. The Wealth-tax Officer was therefore justified in invoking the rectification provision to include the jewellery value. The operative principle is that a retrospective amendment to a charging or exemption provision can support rectification of an assessment that is inconsistent with the amended law.

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Issues: Whether the Wealth-tax Officer could rectify the assessment under section 35 of the Wealth-tax Act, 1957 on account of the retrospective amendment to section 5(1)(viii) of the Wealth-tax Act, 1957, and whether the omission to include the value of jewellery constituted a mistake apparent from the record.

Analysis: The assessment had originally been made without including the jewellery value in the light of the then prevailing Supreme Court decision. The later retrospective amendment to section 5(1)(viii) altered the legal position from the specified date. The earlier Tribunal view, based on a Bombay High Court decision, could not stand after that decision had been reversed by the Supreme Court. In the circumstances, the omission in the assessment was a rectifiable mistake and the Wealth-tax Officer was justified in invoking section 35.

Conclusion: The rectification was valid. The question was answered in the negative, against the assessee and in favour of the Revenue.

Ratio Decidendi: A retrospective amendment to a charging or exemption provision can render an assessment omission a mistake apparent from the record and justify rectification under the statutory rectification provision.

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