Section 80AB held declaratory of existing law; circulars on prospectivity were immaterial and reconsideration was refused.

Section 80AB of the Income-tax Act was treated as declaratory of the law and not as a provision requiring reconsideration by a larger Bench, because sections 80AA and 80AB were introduced together and section 80AA had already been held to state the law as it always stood. On that same reasoning, section 80AB was also regarded as merely clarifying the existing legal position. Any contrary implication suggested by Board circulars on prospectivity was held immaterial. The request to reopen the earlier ruling was rejected and the appeal failed.

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Issues: Whether the earlier decision holding section 80AB of the Income-tax Act, 1961 to be declaratory of the law and not open to reconsideration required reference to a larger Bench.

Analysis: Sections 80AA and 80AB were introduced at the same time, and section 80AA had been given retrospective effect from 1 April 1968. The earlier ruling had already held section 80AA to be declaratory of the law as it always stood, and on the same reasoning section 80AB was also treated as declaring the law as it always had been. The alleged contrary statement in Board circulars regarding prospectivity was held to be immaterial.

Conclusion: The request to reconsider the earlier ruling was rejected, and the appeal failed.

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