LexRELIANCE JUTE & INDUSTRIES LTD. versus C.I.T., WEST BENGAL, CALCUTTA
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A • c D F 906 RELIANCE JUTE & INDUSTRIES LTD. v. C.I.T., WEST BENGAL, CALCUTTA October 10, 1979 (N. L. UNTWALIA AND R. S. PATHAK, JJ.] Indian Income Tax Act 1922-S. 24(2) (iii)-Assessee if could clabn vested' right under the law as it stood before amendment-Law to be applied is the law In relevant aJsessment year. Section 24(2)(iii) of the Indian Income-Tax Act, 1922 as it stood in 1955 provided· that a business loss which was not wholly set off should be carried' forward from year to year. Jn consequence of an amendment to the section made in 1957" the carry forward of unabsorbed loss could not be effected for more than eight years. After setting off unabsorbed losses for the assessment years 1949-50 and 195().51 the Income Tax Officer directed that the loss remaining unabsorbed ID the year 1950-51 be carried forward. The assessee's plea that the unabsorbed loss of the year 1950-51 should be set off against the business income of the assessment year 1960-61 was rejected by the Income-Tax Officer on the ground that the unabsorbed·,.,.. of the year 1950-51 could not be carried forward for more thao eight years. The asse~ee was unsuccessful in appeal before the Appellate Assistant Com- missioner and the Appellate Tribunal. The High Court answered the reference against the assessee. In appeal to this Court it was contended that by virtue of s. 24(2) (iii) of the Act, as it stood before its amendment in 1957, the assessee had acquired a vested right to have the unabsorbed loss carried forward from year to year until it was co1npletely set off and that the subsequent amendment limiting the period toieight years coUld not divest the as.sessee of the vested right already accrued to him. Dismissing the appeal, HELD : The unabsorbed loss of the assessment year 1950-51 could not be~ carried forward for more than eight years and consequently could not be set Q off against the business income of the assessment year 1960-61. [909 C] 1. (a) It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expre.ssly -or by necessary implication. A right claimed by an asses..c;ee· under the law in force In a particular assessment year is ordinarily available only in relation to a pro- ceeding pertaining to that years. [908 G, 909 BJ H Commission~r of Income-Tax, West Bengal v. lstJimlan Steamship Lines, (1951) 20 I.T.R. 572 and Karimtharuvi Tea Estate Ltd. v. State of Kerala (1965)·· 60 I.T.R. 262: referred to. l' • .. • RELIANCE INDUSTRIES v. C.!.T. (Pathak, J.) 907 (b) When an assessment for the assessment year 1960-61 was to be made and s. 24(2) \Vas invoked it was the section in force as in that assessment year which bad to be applied. There is no question of the assessee possessing any vested right. under the law as it stood before the amendment. [908 H, 909 A-B] 2. The directiorr oi the Appellate ·Assistant Commissioner that the unabsorbed loss should be carried forward have meaning only if tbe law in force in the relevant as~.essment year permits the unabsorbed loss to be carried forward into the assess1nent of that year. In the instant case the Appellate Assistant Com- missioner assumed that the law permitted the unabsorbed loss to be carried for- ward into fulurc years. But that was not the law in the relevant assessment year and therefore ~ assessee could derive no advantage from that direc- tion. [909 D-E] Comn1f:;sioner of Income Tax, Kera!a v. Helen Rubber Industries Ltd., (1962) 44 J.T.R. "• 14. distinguished. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2366 of 1972 . From the Judgment and Order dated 25-3-1971 of the Calcutta High Court in Income Tax Ref. No. 120/69. A B c V. S. Desai, S. R. Agarwal, Anil Sachthey, Praveen Kumar and D _ Miss Bl~a Gupta for the Appellant. T. A. Ramachandran and Miss A. Subhashini for the Respondent. The Judgment of the Coort was delivered by PATHAK, J: This appeal by .certificate under section 66-A(2) of the Indian Income Tax Act, 1922 .raises a question involving the interpretation of section 24(2) (iii) of that Act. The assessee is a company carrying on the business of manufac- turing jute good!;. The case relates to the assessment year 1960-61, for which the relevant accounting period is the financial year ending March 31, 1960. While making the assessment for the assessment year 1959-60, the Income Tax Officer set off the
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