Ashim Kumar Banerjee, J. - (1.) NOTICE dated June 22, 1979, issued by the respondent authority under Section 263 of the Income-tax Act, 1961, served on the assessee, the petitioner abovenamed has been impugned before me in this writ petition. The said notice dated June 22, 1979, has been annexed to the writ petition and is appearing at page 54 therein. In the said notice, the Commissioner of Income-tax (Central-II), Calcutta, asked the assessee to show cause as to why the order passed by the Assessing Officer would not be revised under Section 263(1) of the Income-tax Act, 1961, for the assessment year 1974-75.
(2.) APPEARING for the petitioner, Dr. Debi Prasad Pal, learned senior counsel, submitted that the assessment order sought to be revised by the Commissioner has been passed under Section 145(3) read with Section 144B of the said Act of 1961. Under Section 144B, if the returned income exceeds Rs. 1,00,000 the matter should be referred by the Assessing Officer to the Inspecting Assistant Commissioner. In case any objection is received on the draft assessment made by the Assessing Officer, upon hearing the parties, the Inspecting Assistant Commissioner is empowered to pass an order under Section 144B(4) of the said Act and such order and/or direction of the Inspecting Assistant Commissioner is binding upon the Income-tax Officer by virtue of the provisions of Section 144B(5) of the said Act. Hence, the Commissioner of Income-tax has no power to revise the order passed by the Income-tax Officer in compliance with the direction of the Inspecting Assistant Commissioner under Section 144B(4) of the said Act. According to Dr. Pal, the direction of the Inspecting Assistant Commissioner in the said case is complied with by the Income-tax Officer by virtue of the provisions of Section 144B(5) of the said Act and the Commissioner of Income-tax has no power to revise such order which has been passed in compliance with the direction of the Inspecting Assistant Commissioner. Drpal further submitted that the Revenue authority has issued the said show-cause notice on the basis of the Explanation incorporated by the Taxation Laws (Amendment) Act, 1984, which reads as follows' : "Explanation.--For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,-- (a) an order passed on or before or after the 1st day of June, 1988, by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under Section 144A ; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under Section 120 ; (b) 'record' shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner ; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter of any appeal, filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal." According to Dr. Pal, since the said amendment has come into force with effect from October 1, 1984, the respondent authority is not entitled to take its benefit retrospectively.
(3.) RELYING on a decision reported in CIT v. Taj Mahal Hotel , Dr. Pal submitted that the expression "shall include" means that such amendment would have prospective effect. Drpal in this regard has also relied upon the case reported in CIT v. Patel Brothers and Co. Ltd. . Mr. Rupendra Nath Mitra, learned advocate appearing for the Revenue authority, submitted that the Explanation incorporated under Section 263(1) of the said Act of 1961, is clarificatory and, therefore, the question of application of such Explanation prospectively does not arise. The Revenue authority has relied on CIT v. Shri Arbuda Mills Ltd. [1998] 231 ITR 50 (SC) and CIT v. Mulchand Bagri. Relying on the said decisions it was contended on behalf of the Revenue authority that the Commissioner of Income-tax was well within his power to issue such notice under Section 263(1) of the said Act of 1961, and the writ petition is misconceived and is liable to be dismissed.;