Retrospective rectification under income tax law limited where firm's assessment was already completed before the cutoff date

Section 35(5) of the Indian Income-tax Act, 1922 is described as a substantive provision affecting vested rights, not a merely procedural or declaratory change. The commentary notes that rectification of a partner's assessment was not available where the firm's original assessment had been completed before 1 April 1952, and that the provision could not operate retrospectively beyond its express scope. It also distinguishes a later reassessment of the firm from the earlier completed assessment, stating that the contrary view taken in another decision was not controlling on these facts.

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Issues: Whether the Income-tax Officer had jurisdiction under section 35(5) of the Indian Income-tax Act, 1922 to rectify the assessment of a partner where the firm's original assessment was completed before 1 April 1952 but a reassessment of the firm was made after that date.

Analysis: The provision in section 35(5) was treated as a substantive enactment affecting vested rights and not as a merely declaratory or procedural change. On the facts, the case fell within the principle that the power of rectification under that clause could not be exercised where the firm's assessment had been completed before the material date. The earlier decision extending the contrary view to a case based on reassessment was not accepted as controlling in the present factual setting, and the High Court's approach could not stand.

Conclusion: The rectification under section 35(5) was within jurisdiction and the challenge to the assessment failed.

Final Conclusion: The writ petition was liable to be dismissed and the Revenue's appeal succeeded.

Ratio Decidendi: Section 35(5) of the Indian Income-tax Act, 1922 did not authorise rectification of a partner's assessment where the firm's assessment had been completed before 1 April 1952, and the provision could not be applied retrospectively to affect vested rights beyond its express operation.

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