Immediate operation of a beneficial tax notification extends the enhanced depreciation rate to pending assessments.

An amended depreciation notification granting a 40% rate for lorries took immediate effect because it stated it would come into force "at once". That language was held to apply the beneficial rate to the assessee's pending assessment for assessment year 1980-81, rather than limiting it to a later year. The contrary argument, that only the law in force on the first day of the assessment year could govern, was rejected because it would defeat the express immediate-operation wording of the notification. The assessee's claim was upheld and the Revenue's challenge failed.

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Issues: Whether the enhanced depreciation rate of 40% for lorries, introduced by the Income-tax (Fifth Amendment) Rules, 1980 and stated to come into force "at once", applied to the assessee's assessment year 1980-81 and to assessments pending on the date of the notification.

Analysis: The enhanced rate was introduced by subordinate legislation with language indicating immediate commencement. The decisive factor was that the notification used the expression "at once", which was read as giving the amendment immediate effect for the transport industry. On that basis, the amended rate was treated as applicable not only from a later assessment year but also to the pending assessment for 1980-81. The contrary view, that the law as on the first day of the assessment year alone must govern, was rejected because it would nullify the express immediate-operation language of the notification.

Conclusion: The enhanced depreciation rate of 40% applied to the assessee for assessment year 1980-81. The assessee's claim was upheld and the Revenue's challenge failed.

Final Conclusion: The order in favour of the assessee was sustained on the basis that the amendment operated immediately and covered the relevant pending assessment.

Ratio Decidendi: Where a taxing notification expressly provides for immediate commencement, the amended beneficial rate applies to assessments pending on that date and cannot be confined only to a later assessment year.

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