C.N. Ramachandran Nair, J.
1. The question raised in the connected appeals filed by the revenue is whether the Income Tax Appellate Tribunal was justified in holding that retrospective amendment to the statute does not entitle the assessing officer to invoke the powers of rectification under Section 154 of the I.T. Act. We have heard senior standing counsel appearing for the revenue, and Sri T.M. Sreedharan, learned Counsel appearing for the respondent-assessee.
2. Two assessees in these cases are cashew exporters who have claimed deduction of income from export of cashew kernels under Section 80HHC of the Act. It is the admitted position that Taxation Law Amendment Act, 2005 introduced an amendment to Section 80HHC by introducing various provisos with retrospective effect from 1.4.1992. The original assessment completed in one case was under Section 143(3) read with Section 147 and in another case regular assessment completed under Section 143(1) was rectified under Section 154 to make the assessments in regard to grant of relief under Section 80HHC consistent with the amendments to the provisos with retrospective effect. The assessees contested the rectification orders issued under Section 154 on the ground that there is no mistake justifying rectification under Section 154 consequent upon retrospective amendment to the relevant provisions of the Act. Even though C.I.T. (Appeals) turned down the challenge against the validity of rectification orders issued, the Tribunal on second appeal by the assessees, following the decision of the Supreme Court in Volkart Brothers' case : 82 ITR 50 (SC) and C.I.T. v. Keshri Metal Pvt. Ltd. 277 ITR 165 (SC) allowed the appeals by holding that assessments could not be rectified based on retrospective amendment. It is against these orders that the revenue has filed these appeals.
3. Before us, senior standing counsel appearing for the revenue has relied on the decision of the Supreme Court in Venkitachalam v. Bombay Dyeing And . : (1958) 34 I.T.R. 143 and another decision of the Supreme Court in Maharana Mills (P) Ltd. v. I.T.O. : (1959) 36 I.T.R. 350 and contended that retrospective amendment to the statute is a ground justifying rectification under Section 154. Even though C.I.T. (Appeals) has relied on in his order later decision of the Supreme Court we find from the above two decisions the position is made very clear by the Supreme Court that once retrospective amendment to the statute is made, it is as if the provision was there as on the date with which retrospectivity is given to it. Applying this principle, the provisos introduced to Section 80HHC by Taxation Law Amendment Act, 2005 with retrospective effect from 1.4.1992 should be deemed to have been in the statute during the relevant years in question that is 1999-2000 and 2000-2001. When the regular assessments and reassessments were completed obviously the provisos were not actually there which were later brought with retrospective effect. So much so, the assessing officer while completing the assessments could not have taken into account the restrictions available under the provisions later introduced with retrospective effect. In our view, assessments completed have become mistaken orders because the provisos introduced with retrospective effect were not and could not have been taken into account while making regular assessments and re-assessments. Going by the decisions of the Supreme Court above referred, the assessing officer was perfectly justified in revising the assessments under Section 154. Consequently the appeals are liable to be allowed and we do so by reversing the orders of the Tribunal and by restoring the orders of the CIT (Appeals) confirming the assessments.
However, since the Tribunal has not considered other grounds on merits that is pertaining to computation of eligible deduction under Section 80HHC, liability for interest, etc., we remand the cases to the Tribunal for reconsideration of the appeals on other grounds.