TaxTMI 
TaxTMI 
2019 (8) TMI 458
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....Act by the Taxation Law (Amendment) Act 1975 with effect from 1.4.1976, whereas the accounting year of the assessee(s) in the instant case(s) came to an end on 10.8.1975 and on 31.12.1975 in Taxation Case No. 126 of 1983 and Taxation Case No. 28 of 1986 respectively. 3. The authorities were of the opinion that the question was answered by a Division Bench decision rendered in the case of Badri Prasad & ors. vs. Commissioner of Income Tax (1990) Volume 185 ITR 307, which concluded the issue in the following terms:- "It is a cardinal principle of tax laws that the law to be applied is that which is in force at the commencement of the assessment year. (See Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC) and Maneklal Vallabhdas Parikh and Sons v. CIT [1969] 72 ITR 637 (Guj). In the instant case, the assessment year is 1976- 77. Therefore, the law in force on April 1, 1976, would govern the assessment for the assessment year in question. The Tribunal, in our opinion, was right in holding that the share income of the minor sons from the firm to which they were admitted as partners was assessable in the hands of their fathers by virtue ....
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....accounting year having closed prior to coming into force of Section 64(1)(iii) with effect from 1.4.1976, the Income Tax Tribunal added the share income of the minor sons from the partnership firm at the hands of the income of the assessee father under Section 64(1)(iii) of the Act. 10. Mr. D. V. Pathy has assisted the Court on behalf of the assessee in Tax Case No. 126 of 1982. In spite of valid service of notice upon the assessee in Tax Case No. 28 of 1986 none appeared on behalf of the assessee. In the circumstances, this Court has requested Mr. Pathy to appear as Amicus Curiae in Tax Case No. 28 of 1986 also. We have also heard Mr. Rishi Raj Sinha, learned Senior Standing Counsel on behalf of the department. 11. The issues in both the cases are one and the same. 12. Mr. Pathy appearing on behalf of the assessee in both the matters has submitted that the provisions of the Amending Act have come into force with effect from the date specified in the notification issued under Section 2 of the Amendment Act i.e. with effect from 1.4.1976. It is his submission that even if the share income of the minor accrued prior thereto, the same was liable to be added in the income of t....
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....t the Constitution Bench has settled is that if an amendment takes place on lst of April of any financial year, it would apply to the assessment held for that financial year but not if the amendment comes into force after the start of the financial year on lst of April in which case it would take effect on the next assessment year. By applying the said law to the facts of the two cases under reference, it is seen that the provisions of the Amending Act came into force on the first day of April of the financial year 1976-77. As per the legal position settled in para 8 of the judgment in the case of Karimtharuvi Tea Estate Ltd. (supra), the amendment would apply to the assessment to be held for the financial year 1976-77 i.e. the assessment year 1977-78. This is the irresistible conclusion reached by applying the law laid down by the Apex Court in para 8 of the Constitution Bench judgment in the case of Karimtharuvi Tea Estate Ltd (supra). 16. The earlier judgment of the Apex Court in the case of Kesoram Industries (supra) decided on 24.11.1965 is in line with the Constitution Bench judgment of the Supreme Court in Karimtharuvi Tea Estate Ltd (supra) decided on 15.12.1965. The rel....
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....eding year or the provision proposed in the Bill then before Parliament, whichever is more favourable to the assessee, was actually in force. This shows that the charging section is only Section 3 of the Income Tax Act; and that Section 2 of the Finance Act only gives the rate for quantifying the tax; for, this section gives an alternative for quantification in the contingency the of the Finance Act not having been made on the 1st day of April of that year. Even if such an Act was made, the charge under the Income Tax Act could be imposed and worked out only in terms of the provisions of the Income Tax Act. If that be the construction, the conclusion will flow that the tax liability at the latest will arise on the last day of the accounting year. 33. To summarize: A debt is a present obligation to pay an ascertainable sum of money, whether the amount is payable in praesenti or in futuro: debitum in praesenti, solvendum in futuro. But a sum payable upon a contingency does not become a debt until the said contingency has happened. A liability to pay income tax is a present liability though it becomes payable after it is quantified in accordance with ascertainable data. There....