Retrospective rectification under later income-tax law barred where earlier assessments remained governed by the repealed Act.

Section 155(4) of the Income-tax Act, 1961 could not be used to rectify assessments for years completed under the Indian Income-tax Act, 1922, because proceedings preserved under section 297(2)(a) had to continue under the repealed Act and within its limitation framework. The earlier rectification power under section 35 of the 1922 Act was also unavailable, as the attempted rectifications were made after the four-year period had expired and no other part of that provision covered consequential recomputation of carried forward loss. In the absence of express statutory authority, the 1961 Act could not retrospectively revive a remedy that had already lapsed under the earlier law.

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Issues: Whether rectification of the assessment years 1950-51 and 1951-52, originally completed under the Indian Income-tax Act, 1922, could be made under section 155(4) of the Income-tax Act, 1961, after reassessment of the earlier year had altered the carried forward loss position.

Analysis: Section 155(4) permits recomputation of succeeding years where, as a result of proceedings under section 147, loss or depreciation is recomputed and the earlier set-off becomes inconsistent with the revised figure. That provision operates within the scheme of the 1961 Act and cannot be applied to assessments governed by the 1922 Act when those proceedings are preserved to continue as if the new Act had not been passed under section 297(2)(a). The rectification power under section 35 of the 1922 Act was also unavailable because the impugned rectifications were made long after the expiry of the four-year period and no other part of that section covered this type of consequential recomputation. In the absence of an express statutory mandate, the 1961 Act could not retrospectively revive or extend a remedy lost under the earlier law.

Conclusion: The question was answered in the negative. Rectification under section 155(4) of the Income-tax Act, 1961, was not available for the assessments completed under the Indian Income-tax Act, 1922, and the answer was in favour of the assessee.

Final Conclusion: The reference succeeded for the assessee on the legal question referred, and the Department's position was rejected.

Ratio Decidendi: A later rectification provision cannot be applied retrospectively to completed assessments governed by the repealed Act unless the saving clause or the statute expressly authorises such application; proceedings preserved under the old Act must be dealt with under that Act and within its limitation framework.

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