Limited power to remove hardship cannot be used to amend tax orders against the assessee; the amendment was void in law.

Section 60A of the Indian Income-tax Act was construed as a limited power to remove hardship or anomaly arising from the Act's extension to Part B States and merged territories, and only in a manner favourable to the assessee. An amendment that operated to the assessee's disadvantage was held to exceed that power, so the attempted explanation to paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 was invalid. The argument that the amendment could instead be supported under section 12 of the Finance Act was also rejected because that was a distinct power and the Government could not recast an order made under section 60A as one under section 12. The amendment was therefore void in law.

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Issues: Whether the amendment to paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, purportedly made under section 60A of the Indian Income-tax Act, was valid in law.

Analysis: Section 60A was construed as a power intended to remove hardship or anomaly arising from the extension of the Act to Part B States and merged territories. The power was held to authorise exemptions, reductions, or other modifications only in a manner favourable to the assessee, and not to authorise an alteration that would operate to the assessee's disadvantage. The attempted explanation to paragraph 2 of the Order was therefore held to go beyond the scope of the enabling provision. The alternative suggestion that the impugned amendment could be sustained under section 12 of the Finance Act was also rejected, since the power under that section was distinct and the Government could not recast an order deliberately made under section 60A as one under section 12.

Conclusion: The amendment was invalid and void in law.

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