In case of retrospective legislative amendment, rectification under section 154, as well as reopening of assessment under section 147 are permissible as they are not mutually exclusive.
The review petition had been filed by the assessee alleging that, so far as the issue regarding the constitutionality of the retrospective amendment was concerned, though the plea was rejected by the Court, but in doing so, the Court had wrongly placed reliance on Section 154 and under Section 147 and to this extent, the order was erroneous. Thus, it was contended that the scope of Section 154 and Section 147 was different and distinct.
The High Court dismissed the review petition with following observations:
1) The retrospective amendment constitutes tangible material permitting the reopening of the assessment. It can even permit action for rectification of the assessment on the ground of mistake apparent from record;
2) Just because action for rectification is permissible, it does not mean that no action can be taken for re-opening the assessment because the powers under section 147 and section 154 are not mutually exclusive and there can be some overlapping and so long as the conditions for the applicability of either of these sections are satisfied, the action taken thereunder has to be validated;
3) The assessee did not appear to have properly understood and appreciated the purport of observation. It was of the impression that the decision was rendered on the premise that if action under section 154 was permissible, action under section 147 to reopen the assessment was automatically impermissible;
4) There could be overlapping of jurisdiction and so long as the jurisdictional pre-conditions were satisfied, action could be taken by the Assessing Officer under the appropriate section. Thus, there was no merit in the review petition filed by assessee, which was, accordingly, to be dismissed - ESTER INDUSTRIES LTD. V. UNION OF INDIA (2013) 39taxman 107 (Delhi)
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