Law: Income Tax Act, 1922

Section: 18A(6)

Income-tax Act (XI of 1922)----S. 18-A(6) [(as amended by Finance Act (L of 1973)]---Object and effect of amendment---Amendment remedial and curative in nature---Amending provision has to be given retrospective operation for extending benefit to the affected parties in pending cases, to give effect to the intent of the legislature. The effect of the amendment in section 18-A(6) of Income-tax Act, 1922 was that additional amount at the rate of 2 per cent per mensem upon the shortfall was payable for the period from 1st day of April in year in which the tax was paid upto the date of the regular assessment by an assessee whose case came ¬within the mischief of section 18-A of the Income Tax Act, 1922. However, the said amendment introduced through the Finance Act, 1973 restricted the period to a maximum of 15 months for which the aforesaid additional amount at 2 per cent per mensem was payable. The amending provision had been inserted in subsection (6) of section 18-A to remedy a wrong that was being done to the assessees, and the amending provision does not affect any vested right or create any new obligations, the amending provision is to be given restrospective operation for extending benefit to the affected parties in pending cases to give effect to the intent of the Legislature. A wrong was being done to assessees by providing for an indefinite period during which they were trade liable for payment of additional tax at the rate of 2 per cent per mensem and this wrong was sought to be remedied by the remedial and curative amendment brought about by the Finance Act, 1973. If the intention of the Legislature had been that this remedy should be available only in respect of assessments for the year 1973-74 and subsequent years, the Legislature would have used appropriate words to express such intention. No such appropriate words are mentioned in the amending provision. There is no reason why the remedial provision of the amending law should not be applied to pending proceedings. In fact, this appears to be the intent of Legislature. Commissioner of Income Tax v. Olympia 1987 PTD 739 fol. JUDGMENT MAMOON KAZI, J.---By this common judgment we propose to dispose of…

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