Retrospective tax amendment can justify rectification where an earlier assessment becomes inconsistent with the amended law.

A retrospective amendment to the income-tax statute is treated as part of the law from its stated effective date, so an assessment order that was valid when made may later become inconsistent with the amended Act. That inconsistency can constitute a mistake apparent from the record for rectification purposes under the relevant provision, because the rectification power extends to patent mistakes of law. The article also notes that this rectification power operates independently of separate revisional powers. On that basis, rectification of the earlier credit and the resulting demand were upheld as lawful.

---

---

Issues: Whether a completed assessment order, which was valid when made, could be rectified under section 35 on the ground that a subsequent retrospective amendment rendered the allowance erroneous, and whether such a retrospective amendment creates a mistake apparent from the record.

Analysis: Section 1(2) of the Indian Income-tax (Amendment) Act, 1953 gave the amendment retrospective effect from 1 April 1952, so the proviso inserted by section 13 was to be treated as part of the principal Act from that date. On that footing, the original credit allowed under section 18A(5) of the Income-tax Act was inconsistent with the statute as retrospectively amended. The expression "mistake apparent from the record" in section 35 is wide enough to include a patent mistake of law, and the power of rectification is distinct from the special revisional powers conferred by other provisions of the Amendment Act.

Conclusion: The rectification was valid and the subsequent demand based on the corrected credit was lawful. The challenge to the rectified order failed.

Final Conclusion: Retrospective amendment of the taxing statute could be given effect through rectification under section 35 where the earlier assessment became plainly inconsistent with the law as retrospectively amended.

Ratio Decidendi: A retrospective statutory amendment must be treated as part of the law from its declared effective date, and an assessment order inconsistent with that amended law discloses a mistake apparent from the record that can be rectified under the relevant rectification provision.

---