Assessment-year rule in tax law: Section 8B applied from 01.04.2009 to the preceding agricultural income year.

In tax matters, the applicable law is ordinarily the law in force for the assessment year unless the statute indicates a different operation. Applying that principle, the amendment inserting Section 8B from 01.04.2009 was treated as operating for assessment year 2009-2010, so the charge extended to the agricultural income of the immediately preceding previous year 2008-2009. The commentary reconciles Supreme Court authorities and states that this approach was consistent with the earlier Division Bench view, making Section 8B applicable to that income for assessment year 2009-2010.

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Issues: Whether Section 8B of the Assam Agricultural Income Tax (Amendment) Act, 2009, which came into force on 01.04.2009, was intended to apply to and tax the agricultural income of the previous financial year 2008-2009.

Analysis: The governing principle is that, in tax matters, the law applicable is the law in force in the assessment year unless the statute otherwise states or implies a different operation. The judgment reconciles the Supreme Court authorities on the point and holds that the amendment brought into force on the first day of the financial year operates for the assessment year commencing on that date, so that the charge is attracted to the income of the immediately preceding previous year. On that basis, the insertion of Section 8B on 01.04.2009 did not create any inconsistency with the earlier Division Bench view and was to be applied for assessment year 2009-2010.

Conclusion: Section 8B was held to apply to the agricultural income of financial year 2008-2009 for assessment year 2009-2010, which is against the assessee and in favour of the Revenue.

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