The main legal point established in the judgment is that the right of action under S.14 of the Companies (Profits) Surtax Act, 1964, was granted only from 1st April 1971 and could not be applied to orders passed prior to that date.

V.P. Gopalan Nambiyar, C. J.

1.The assessee, M/s Marikar Motors Limited, Trivandrum is a company registered under the Indian Companies Act. In respect of the assessment years 1964-65, 1966-67 and1967-68 it was assessed to income tax. The orders of assessment were carried up in appeal and in further appeal to the Income Tax Appellate Tribunal. In respect of the latter two years, viz., 1966-67 and 1967-68, the orders of the Appellate Tribunal were passed after 1st April 1971, viz., on 30th November 1971. (The significance of the date 1st April 1971 will presently appear). Bat, for the assessment year 1954-65, with which we are concerned in this reference, the order of the Tribunal was passed on 22nd August 1970. After the Tribunal passed the said order, the Surtax Officer, acting under the provisions of S.14 of the Companies (Profits) Surtax Act, 1964, read with S.13 thereof, proceeded to take action by way of recomputation of the assessment and amendment of the assessment order. S.13 and 14 of the said Tax Act are as follows:-

"13. (1) With a view to rectifying any mistake apparent from the record, the Commissioner, the Income Tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal may, of his, or its, own motion or on an application by the assessee in this behalf, amend any order passed by him or it in any proceeding under this Act within four years of the date on which such order was passed.

(2) An amendment which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee shall not be made under this section unless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard.

(3) Where an amendment is made under this section, the order shall be passed in writing by the authority concerned.

(4) Subject to the other provisions of this Act, where any such amendment has the effect of reducing the assessment, the Income Tax Officer shall make any refund which may be due to such assessee.

(5) Where any such amendment has the effect of enhancing the assessment or reducing the refund already made, the Income Tax Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable.

14. Where as a result of any order made under S.154, 153, 250, 254, 260, 262, 263 or 264 of the Income Tax Act, it is necessary to recompute the chargeable profits determined in any assessment under this Act, the Income Tax Officer may proceed to recompute the chargeable profits, and determine the surtax payable or refundable on the basis of such recomputation and make the necessary amendment and the provisions of S.13 shall, so far as may be, apply thereto, the period of four years specified in sub-s.(1) of that section being reckoned from the date of the order passed under the aforesaid sections of the Income Tax Act."

S.254 (and a few of the other sections which, it is unnecessary to notice) was introduced into S.14 by S.73 of the Taxation Laws Amendment Act, 1970, with effect from 1st April 1971. The question which, therefore, falls for determination in this reference is whether in respect of an order of the Income Tax Appellate Tribunal, passed prior to 1st April 1971, when alone an order of the Income Tax Appellate Tribunal under S.254 was brought within the purview of S.14, the right of action under that section and the consequential provision under S.13 of the Surtax Act, would be attracted on the ground that the period of 4 years from the date of the order for taking action had not expired when the Amendment Act came into force. The question of law referred for our determination is:

"Whether the Tribunal was right in holding that the Income Tax Officer cannot invoke S.14 of the Companies (Profits) Surtax Act, 1964 as amended with effect from 1st April 1971 by S.73 of Taxation Laws (Amendment) Act, 1970, to recompute chargeable profits in a case w