TaxTMI 
TaxTMI 
2014 (12) TMI 980
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.... assessees like the Petitioner was a matter of controversy and there was lack of clarity on the subject. The Petitioner, in the premises, filed a revised return on 31 October 2004, reducing export incentives of DEPB by Rs. 30,09,163/- with the following reason and reservations: "Reason for filing Revised Return Due to latest Supreme Court decision and CBDT Circular, the Deduction u/s. 80 HHC claimed at Rs. 30,09,163/- in Original Return is now reduced from Deduction under Chapter VIII and tax on same is paid. However, the assessee request the Department to consider his appropriate claim u/s 80HHC in future as and when any favourable court decision/CBDT/ Finance Ministry's Notification Circular is announced. This Revised Return is filed voluntarily to co-operate with the Department." The Assessing officer completed the assessment under Section 143(3) on 21 October 2005, accepting the revised return of income, determining the income of Rs. 78,52,980/-. The Taxation Laws Amendment Act, 2005 brought an amendment in Sections 28 and 80HHC with retrospective effect from 1 April 1998. By this amendment, the profit derived on sale of DEPB licence was to be considered for propor....
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.... record under Section 264, the Commissioner is bound to consider only that record which is available at the time of passing of the original order, which is under consideration for revision. It is emphasised that in case there is an amendment to the law, with retrospective effect, the Commissioner in exercise of his powers under Section 263 of the Act can correct/rectify the same but not in the exercise of his powers under Section 264 of the Act. 5 Part E of Chapter XX of the Act providing for revision by the Commissioner, contains two provisions, Sections 263 and 264. Section 263 provides for revision of orders prejudicial to revenue, whilst Section 264 provides for revision of other orders. In case of any order other than an order to which Section 263 applies passed by an authority subordinate to him, the Commissioner is empowered to call for the record of any proceeding under the Act and "may make such inquiry or cause such inquiry to be made". Any order that the Commissioner may pass on such inquiry has to be "subject to the provisions of this Act" and cannot be "an order prejudicial to the assessee". Subject to these two restrictions he may pass such order as he thinks fit. ....
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....er, and the provisions of Section 264, which do not contain any such explanation. The distinction is of no consequence in the present facts for the reason that the retrospective amendment to the Act, makes the amended provisions a part of the record on the date when the order sought to be revised is passed. Therefore, if the applicable law has undergone any change with retrospective effect, then full effect must be given to the statutory fiction subject to limitation as found in the Act. The order passed does exhibit an error on the face of such record, when the order is examined. And this error, the Commissioner under Section 264 is certainly correct. 8 Our Court in Commissioner of Income-Tax vs. Kamla S. Asrani 1991 Income Tax Reports, Vol.189 Pg.359 clarified the position thus in the context of an application for reference by this Court under Sections 256(1) and 256(2) of the Act . " It is an accepted position that, when the law is amended with retrospective effect, the court, when it decides any proceeding, has to apply such retrospectively amended law as if it were in force at all material times. Therefore, for example, when a reference under section 256(1) is being deci....
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.... correctness of the Tribunal's decision will, therefore, have to be judged in the light of the law amended retrospectively by giving effect to the deeming provision. If, in the light of such retrospective amendment, a question of law does arise, and if the Tribunal's view that no such question arises is incorrect in the light of such retrospectively amended law, the court cannot refuse to direct the Tribunal to frame a question and refer the case merely because the Tribunal's decision on the question of law, as it stood when the Tribunal decided it, was correct when the law was unamended. In our view, this would be drawing an artificial distinction between section 256(1) and section 256(2). With all respect, therefore, to the Andhra Pradesh High Court, in our view, we cannot ignore any retrospective amendment in the law while considering an application under section 256(2)." The above discussion also applies to the powers of revision of the Commissioner under Section 264 of the Act. As in the case of Sections 256(1) and 256(2), the revenue is seeking to draw an artificial distinction between Sections 263 and 264, in relation to the applicability of the retrospectivel....