CASE NO.: Appeal (civil) 6543 of 1999 PETITIONER: <NAME> Vs. RESPONDENT: <NAME> AND ORS. DATE OF JUDGMENT: 10/10/2000 BENCH: <NAME>, K.G.Balakrishna JUDGMENT:

<NAME>, J.L.....I.........T.......T.......T.......T.......T.......T..J The appellant contested the election for the post of President of Vannavalkudi Village Panchayat, Pudukkottai District in Tamil Nadu. The respondent nos. 1, 2 & 3 were also the candidates for the same election. The polling took place on 12.10.96 and the votes were counted on 14.10.96. The 1st respondent, <NAME> secured 1011 votes and the appellant <NAME> secured 1010 votes and the 1st respondent was declared elected. The other respondents had secured only lesser number of votes. The appellant filed an Election Petition under Rule 122 of the Tamil Nadu Panchayats (Elections) Rules, 1995 before the District Judge, Pudukkottai, challenging the election of the 1st respondent. In the Election Petition, the appellant contended that certain irregularities were committed while the counting of votes was made. According to the appellant, the names of the dead persons were not deleted from the electoral roll and the first respondent took advantage of this, and despite the objection raised by the agents of the appellant, impersonation had taken place at the time of polling. The appellant also alleged that at the time of counting, a number of valid votes polled in favour of the appellant were treated as invalid by the Returning Officer and though the appellant's agents raised objection, the Returning Officer did not pay heed to it. The appellant further alleged that the counting officers had no knowledge as to which was valid vote and which was invalid one. The counting was done in a hasty manner and the agents of the appellant were not allowed to closely peruse the ballot papers. Certain ballot papers contained thumb impression, but they were rejected as invalid votes. The appellant filed a petition before the Returning Officer for recounting of votes, but that prayer was not allowed and on the above grounds, the appellant filed Election Petition for setting aside the election of the 1st respondent.

The 1st respondent filed counter affidavit denying the allegations in the Election Petition. The 1st respondent contended that the allegations in the Election Petition are vague and insufficient to set aside the election. He contended that no material particulars are furnished in the Election Petition and only bald allegations have been made and, therefore, the Election Petition was liable to be dismissed. The 1st respondent also alleged that the appellant had not given any particulars regarding inclusion of names of dead persons in the electoral roll. According to the 1st respondent, there was no irregularity or illegality in the counting of votes.

Four witnesses were examined on the side of the appellant. On the respondent's side, RW1 and RW2 were examined. <ORG> held that no details were available as to how many votes were secured by the appellant-Election Petitioner and the 1st respondent after the first round of counting and that the appellant had filed an application for recount before the Returning Officer. Therefore, <ORG> ordered re-count of votes and an Advocate-Commissioner was appointed for recounting of votes and he submitted a detailed commission report. On re-count made by the commissioner, the appellant had secured 1002 votes and the 1st respondent, <NAME>, had secured 975 votes. Based on the report of the Commissioner, <ORG> declared the appellant-<NAME> as the person elected as President of <ORG> and the Election Petition was accordingly allowed.

Aggrieved by the order of <ORG>, the 1st respondent, <NAME>, filed a Revision Petition before <ORG>, Madras under Article 227 of the Constitution of India. The learned Single Judge held that <ORG> was not justified in ordering the recount of votes as the appellant had not made out a prima facie ground for recounting. The learned Single Judge held that the Election Petition is bereft of any material facts and only vague allegations have been made and the appointment of the Commissioner for recounting of votes was illegal and incorrect and, therefore, without jurisdiction. The Revision was allowed and it was held that the Election Petition would stand dismissed with costs. Aggrieved by the above facts, the present appeal is filed.

We heard the appellant's Counsel Ms. <NAME> and the Counsel for the 1st respondent, Mr. <NAME>. The main contention urged by the appellant's Counsel is that the learned Single Judge seriously flawed in holding that the Election Petition did not contain the necessary pleadings for seeking recount of the votes. The appellant's Counsel also contended that the 1st Respondent had never raised any objection when the Commissioner was appointed by <ORG> and the Commissioner had correctly conducted the recounting of votes and declared the appellant elected. The Counsel for the 1st respondent contended that <ORG> should not have ordered re-count of votes and there was no foundation in the pleadings raised in the Election Petition. It was urged by the Counsel for the 1st respondent that the Election Petition itself was liable to be dismissed for want of necessary pleadings.

It was also argued by the counsel for the 1st respondent that the Commissioner, who conducted the recounting, wrongly rejected 31 ballot votes cast in favour of the 1st respondent and according to the Counsel, in view of the Proviso to Rule 63 of the Tamil Nadu Panchayat's (Election) Rules 1995, the Commissioner should have treated those votes as valid votes even though they did not contain the distinguishing mark of the polling station. Counsel for the 1st respondent further argued that the Election Petitioner had filed the application for recount before the Returning Officer after the declaration of the result of the election and the failure to file a proper application for recount before the Returning Officer would disentitle the Election Petitioner from making a similar prayer before <ORG>.

The main arguments of Counsel on either side centered round the question whether in the instant case <ORG> was justified in ordering a recount. The circumstances under which a recount could be ordered have been considered by this <ORG> in various decisions. A survey of at least some of the cases would be of much assistance to know how this <ORG> made pronouncements on this legal question in the settings of various factual background.

<CITATION> 1993 (Supp.) 2 SCC 8, it was held that the secrecy of the ballot papers cannot be permitted to be tinkered lightly and an order of recount cannot be granted as a matter of course. Only when <ORG> is satisfied on the basis of material facts pleaded in the petition and supported by the contemporaneous evidence, that the recount can be ordered. When there was no contemporaneous evidence to show any irregularity or illegality in the counting, ordinarily, it would not be proper to order re-count on the basis of bare allegations in the Election Petition.

<CITATION> , AIR 1970 SC 276, the election-petitioner, who claimed to be a counting agent filed Election Petition alleging that there was irregularity and illegality in the counting of votes. The learned Single Judge, who was trying the Election Petition permitted the petitioner to inspect the packets of the ballot papers containing the accepted as well as the rejected votes of the candidates. This Court, while allowing the appeal, held that the basic requirements to be satisfied before <ORG> can permit the inspection of ballot papers are that (1) the petition for setting aside the election must contain an adequate statement of material facts on which the petitioner relies in support of his case and (2) the <ORG> must be prima facie satisfied that in order to decide the dispute and to do complete justice between the parties, inspection of ballot papers is necessary. The material facts required to be stated are those facts, which can be considered as materials supporting the allegations made. In other words, they must be such facts as to afford a basis for the allegations made in the petition.

<CITATION> 1984 Supp. SCC 157, allegations were made in the Election Petition that there was discrepancy between the total number of ballot papers issued and ballot papers taken out and counted from the ballot boxes. This Court held that the discrepancies alleged in the statements prepared under Rule 45 and 56 of the Conduct of Election Rules, 1967 do not make out a case for directing a re-count of votes especially when the discrepancy is marginal and insignificant. In Para 4 of the said Judgment, it was held that in order to obtain re-count of votes, a proper foundation is required to be laid by the Election Petitioner indicating the precise material on the basis of which it could be urged by him with some substance that there has been either improper reception of invalid votes in favour of the elected candidate or improper rejection of valid votes in favour of the defeated candidate or wrong counting of votes in favour of the elected candidate, which had in reality been cast in favour of the defeated candidate.

<NAME> Vs. <NAME> and Others (1989) 1 SCC 526 is a case where the petitioner contested the election for the post of President of a <ORG> in Tamil Nadu. In the election, the 1st respondent was declared elected and the petitioner challenged the election on the ground that while counting, the Returning Officer had wrongly treated some valid votes cast in favour of the petitioner as invalid votes and certain invalid votes were treated as valid votes which were cast in favour of the 1st respondent and that the Returning Officer had not permitted the petitioner's agents to have scrutiny of the ballot papers at the time of counting. The <ORG> after recording the evidence of all candidates and the Assistant Returning Officer ordered re-count of votes. On recounting of votes, it was found that there was no difference in the number of votes secured by the petitioner but insofar as the 1st respondent was concerned he had secured only 528 votes as against 649 votes he was originally held to have secured. 121 votes cast in his favour had been found to be invalid votes. Based on the figures of the re-count, the Election Petitioner was declared duly elected as he had secured 28 votes more than the 1st respondent on recount. This order was challenged by the 1st respondent in Civil Revision Petition before <ORG>. The learned Single Judge allowed the Revision Petition and held that the <ORG> had erred in ordering a recount of the votes when the petitioner had not made out a prima facie case for an order of recount of votes cast. This Order was challenged before this Court. This Court held in para 13 of the said Judgment as under:-

"Thus the settled position of law is that the justification for an order for examination of ballot papers and recount of votes is not to be derived from hindsight and by the result of the recount of votes. On the contrary, the justification for an order of recount of votes should be provided by the material placed by an Election Petitioner on the threshold before an order for recount of votes is actually made. The reason for this salutary rule is that the preservation of the secrecy of the ballot is a sacrosanct principle which cannot be lightly or hastily broken unless there is prima facie genuine need for it. The right of a defeated candidate to assail the validity of an election result and seek recounting of votes has to be subject to the basic principle that the secrecy of the ballot is sacrosanct in a democracy and hence unless the affected candidate is able to allege and substantiate in acceptable measure by means of evidence that a prima facie case of a high degree of probability existed for the recount of votes being ordered by <ORG> in the interests of justice, a <ORG> or court should not order the recount of votes."

<CITATION> (1964) 6 SCR 238, this Court held that an order for inspection of ballot papers can be granted under the following circumstances:

"An order for inspection may not be granted as a matter of course : having regard to the insistence upon the secrecy of the ballot papers, the court would be justified in granting an order for inspection provided two conditions are fulfilled :

(i) that the petition for setting aside an election contains an adequate statement of the material facts on which the petitioner relies in support of his case; and

(ii)The <ORG> is prima facie satisfied that in order to decide the dispute and to do complete justice between the parties inspection of the ballot papers is necessary But an order for inspection of ballot papers cannot be granted to support vague pleas made in the petition not supported by material facts or to fish out evidence to support such pleas. The case of the petitioner must be set out with precision supported by averments of material facts. To establish a case so pleaded an order for inspection may undoubtedly, if the interests of justice require, be granted. But a mere allegation that the petitioner suspects or believes that there has been an improper reception, refusal or rejection of votes will not be sufficient to support an order for inspection."

<CITATION> . 1980 Supp. SCC 53, in paragraph 31 of the Judgment, it was held as under:

"True, re-count cannot be ordered just for the asking. A petition for re-count after inspection of the ballot papers must contain an adequate statement on material facts on which the petitioner relies in support of his case and secondly the <ORG> must be prima facie satisfied that in order to decide the dispute and to do complete justice between the parties an inspection of the ballot papers is necessary. The discretion conferred in this behalf should not be exercised in such a way so as to enable the applicant to indulge in a roving inquiry with a view to fishing out materials for declaring the election void."

<CITATION> , the Election Petitioner challenged the election on the ground that there were a number of errors in the counting of votes and that the electoral roll itself was inaccurate. The petitioner sought for re- count of votes. <ORG> ordered a re-count holding that although there was no clear evidence of any irregularity in counting in the first two rounds, there was a possibility of the counting staff being completely exhausted in the third round which may have led to erroneous sorting and counting of votes. In ordering a re-count <ORG> was also influenced by the fact that the margin of the "returned candidate" was only 19 votes. The Order of <ORG> was challenged before this Court. This Court reversed the order passed by <ORG> and after referring to various decisions on this point, it was held as under:-

"The court would be justified in ordering re-count of the ballot papers only where:

(1) The Election Petition contains an adequate statement of all the material facts on which the allegations of irregularity or illegality in counting are founded;

(2) On the basis of evidence adduced such allegations are prima facie established, affording a good ground for believing that there has been a mistake in counting; and (3) The court trying the petition is prima facie satisfied that the making of such an order is imperatively necessary to decide the dispute and to do complete and effectual justice between the parties."

<CITATION> 1995 Supp. (2) SCC 101, the Election Petitioner alleged that the counting was not done in a congenial atmosphere. The allegation was that counting was held in a small hall and there were several tables and chairs and counting agents of all the candidates along with other officials were present in the hall; therefore, it became very crowded and sorting out of the bundles of the ballot papers was done hastily and, therefore, it was not possible for the agents of the petitioner to carefully keep track of the process of sorting-out and it was alleged that the Returning Officer rejected many votes as invalid in spite of the protest made by the petitioner. On these allegations, the petitioner sought for re-count of votes. That prayer was rejected by <ORG> and the same was challenged before this Court. After referring to the various decisions, it was held that the demand of the defeated candidate for re-count of votes has to be considered keeping in view that secrecy of the ballot is sacrosanct in a democracy and, therefore, unless the Election Petitioner is able not only to plead and disclose the material facts but also substantiate the same by means of evidence of reliable character that there existed a prima facie case for re-count, no tribunal or court would be justified in directing a re-count.

The result of the analysis of the above cases would show that this <ORG> has consistently taken the view that re-count of votes could be ordered very rarely and on specific allegation in the pleadings in the election petition that illegality or irregularity was committed while counting. The petitioner who seeks re-count should allege and prove that there was improper acceptance of invalid votes or improper rejection of valid votes. If only the <ORG> is satisfied about the truthfulness of the above allegation, it can order re-count of votes. Secrecy of ballot has always been considered sacrosanct in a democratic process of election and it cannot be disturbed lightly by bare allegations of illegality or irregularity in counting. But if it is proved that purity of elections has been tarnished and it has materially affected the result of the election whereby the defeated candidate is seriously prejudiced, the <ORG> can resort to re-count of votes under such circumstances to do justice between the parties.

In the instant case, the appellant in his Election Petition alleged in paragraphs 5 and 6 of the Election Petition as under: "............. The wrong electoral roll was utilized by the Presiding Officer. The appellant and his agents strongly protested against the wrong electoral roll. The dead persons names were not deleted from the electoral roll, and other <ORG> names were in the electoral roll. The 1st respondent utilized the same. The appellant and his agent strongly objected but the Presiding Officer, has not taken any care about the electoral roll and impersonation. The said votes polled in favour of the 1st respondent are void and therefore has to be excluded.

While counting of votes, the appellants and his agents represented these facts and requested the counting officers and the Returning Officers both orally and in writing to reject these votes polled by these persons. But they refused to consider the said objections. Their such acts are illegal .......................................................... The Counting Officers wantonly put the appellant's valid votes to invalid vote box. The appellant's valid votes were added in the invalid votes. The appellant and his agents strongly objected but the Counting Officers and Returning Officers did not care about the objections. The Counting Officers counted the votes in favour of 1st Respondent. "Furthermore, the Counting Officers did not know which is valid vote and which is invalid vote. During the polling votes, the Booth Officers received the thumb impression from some voters and gave the ballot papers. The thumb impression ink marks available in the ballot papers. The same votes were rejected and put into the invalid votes. The Counting Officers were newly appointed. They were not properly counting the votes. The Counting Officers were counting the votes very fast and they had not shown the ballots to the agents, even when they raised objection. The Counting Officers threatened the Appellant's agent and told him that they are supreme authority for counting votes. ............................... Finally, the Returning Officer announced that the 1st Respondent had secured 1011 votes. Appellant secured 1010 votes. The difference is only one vote. More than 100 votes were added in the invalid votes by the Counting Officers. Some invalid votes were included to the 1st Respondent which were void and which ought to have been rejected. The Counting Officers and the Returning Officers had not seen the intention of the voters in the ballot."

From the above pleadings, it is evident that the appellant has not set forth material facts or particulars required for re-count of votes. To justify his contention that there was irregularity or illegality in the counting, except making some general and bald allegations, no other details are given. Though an allegation is made that electoral roll contained the names of dead persons, that the 1st respondent took advantage of the same, and that some persons had impersonated and cast votes in his favour, no details are given as to who committed such irregularity. The appellant has also not mentioned as to how many such votes had been cast in favour of the 1st respondent. So also, the appellant has not alleged the nature of the illegality or irregularity said to have been committed by the counting officers. How and in what manner there was improper acceptance of invalid votes and improper rejection of valid votes also is not explained by the appellant. In short, the Election Petition is bereft of all details and the appellant, while examined as PW 1, could not supplement anything by way of evidence.

The appellant has contended that an application for re-count was made by him before the Returning Officer. Rule 66 of the Tamil Nadu Panchayats (Elections) Rules, 1995 states that after the completion of counting and recording in Form 22 the total number of votes polled by each candidate under sub-rule (2) of rule 64, the Returning Officer shall announce the same. After such announcement, and before the declaration of the result of the election, a contesting candidate or in his absence, his election agent may apply in writing to the Returning Officer for a recount of all or any of the votes already counted stating the grounds on which he demands such recount. Sub-rule (2) of Rule 66 further says that on such application being made, the Returning Officer shall decide the matter and may allow the application in whole or in part, or may reject it in toto if it appears to him to be frivolous or unreasonable. Therefore, an application for recount shall be made before the declaration of the result of the election, but after the completion of the counting, when such result is entered in part II of Form 20. This form is to be signed by the Counting Supervisor and the Returning Officer.

The appellant-Election Petitioner in this case has not stated as to when did he file the application for re-count. He has stated that he had given an application to the Returning Officer for recounting of votes and the request for recounting was not accepted. At the time of the evidence also, the appellant has not stated as to when did he file the application. In cross-examination, he stated that at about 10.00 p.m. on 14.10.1996, it was announced through loud speaker that the 1st respondent was elected and he denied the allegation that the application for re-count was made at 11.45 p.m. The 1st respondent was examined as RW 1. He deposed that the result of the election was declared at 10.30 p.m. and in all probability, the appellant filed an application for re-count after the result of the election was declared. Therefore, the application for re-count was not filed in accordance with Rule 66 of the Tamil Nadu Panchayats (Elections) Rules, 1995.

It is all the more important to note that the appellant sought to set aside the election of the 1st respondent and in the Election Petition urged the grounds under Section 259(2)(d)(iii) & (iv) of the Tamil Nadu Panchayats Act, 1994 and the relevant provision is to the following effect:-

"259. Grounds for declaring elections to be void. (1) Subject to the provisions of sub-section (2), if the District Judge is of the opinion

(a) XXXXXX (b) XXXXXX (c) XXXXXX

(d) that the result of the election in so far as it concernes a returned candidate has been materially affected

(i)-(ii) XXXX

(iii) by the improper acceptance or refusal of any vote or reception of any vote which is void; or

(iv) by the non-compliance with the provisions of this Act or of any rules or orders made thereunder, the court shall declare the election of the returned candidate to be void."

But in the Election Petition, the appellant has not stated that by the alleged improper acceptance or refusal of any vote or reception of any vote, which is void, or by the alleged non-compliance with the provisions of the Act or of any rules or orders made thereunder, the result of the election of the 1st respondent had been materially affected. The appellant was examined as PW 1. At the time of the evidence also, he had not stated that because of the alleged illegality or irregularity, the result of the election had been materially affected. Grounds under Section 259(2) could successfully be urged only if it is proved that the election of the returned candidate had been materially affected.

The Counsel for the 1st respondent contended that the Commissioner while counting postal ballot papers illegally rejected 31 votes cast in favour of the 1st respondent on the ground that these ballot papers did not contain the signature of the Presiding Officer. Three votes cast in favour of the appellant also were rejected by the Commissioner on the same ground. The Commissioner held the view that Rule 63(1)(h) of the Tamil Nadu Panchayat(Election) Rules, 1995 requires that the postal ballot paper shall contain the signature of the Presiding Officer as well as the distinguishing mark of the polling station. The procedure for issuance of postal ballot papers is given under Rule 51, which says that before any ballot paper is delivered to an elector, the Presiding Officer shall sign his name in full on the back of each ballot paper and affix the distinguishing mark of the polling station.

The relevant portion of Rule 63 of Tamil Nadu Panchayat(Election) Rules, 1995 reads as follows:-

"63. Rejection of ballot papers. (1) A ballot paper shall be rejected.-

(a)-(g) XXXXXX

(h) if it does not bear both the distinguishing mark and/or the signature of the Presiding Officer which it should have borne under the provisions of sub-rule (1) of rule 51 or the words "elector on election duty" under sub-rule(1) of rule 52, or (i) XXXXXX Provided that where the Returning Officer is satisfied that any such defect as is mentioned in clause (g) or clause

(h) has been caused by any mistake or failure on the part of a Presiding Officer, the ballot paper shall not be rejected merely on the ground of such defect.

XXXXXX"

The rejected ballot paper did not contain the signature of the Presiding Officer, though it contained the distinguishing mark of the polling station. Rule 63(1)(h) dealing with rejection of ballot papers provides that in order to reject ballot papers it should be one not bearing "both the distinguishing mark and/or the signature of the Presiding Officer". Therefore, a harmonious construction of Rule 51 and 63 would show that in order to reject a postal ballot paper, the same should have lacked both the features, viz; the signature of the Presiding Officer as well as the distinguishing mark of the polling station. In the instant case, it is evident that due to some mistake or inadvertence, the Presiding Officer did not sign these ballot papers. The absence of signatures under the circumstances could not invalidate the ballot paper, which bore the distinguishing mark of the polling station. Therefore, the Commissioner went wrong in declaring these votes as invalid. That apart, it may be noted that had these votes been treated as valid by the Commissioner, even on re-count, the 1st respondent would have secured the highest number of votes.

The appellant-Election Petitioner could not make out a case for re- count of votes. He filed the application for re-count before the Returning Officer only after the declaration of result and that was rightly rejected by the Returning Officer. The appellant had no case that the illegality or irregularity, if any, committed had materially affected the result of the election. Taking all the aspects into consideration, we are of the view that the learned Single Judge was perfectly justified in holding that <ORG> erred in appointing a Commissioner and ordering the re-count of votes. The Counsel for the appellant contended that the powers of <ORG> are not as wide as the powers of <ORG> and, therefore, the learned Single Judge should not have set aside the order passed by <ORG>. We do not find any force in this contention. When there is error of jurisdiction or flagrant violation of the law laid down by this <ORG>, by exercising the revisional powers, the court can set aside the order passed by the <ORG> to do justice between the parties. The illegality committed by <ORG> has been corrected by the Revisional Order. We find no merit in the present appeal and the same is dismissed.

Having regard to the facts and circumstances, there will be no order as to costs.


PETITIONER: ESCORTS LIMITED AND ANR. ETC. ETC. Vs. RESPONDENT: UNION OF INDIA AND ORS. DATE OF JUDGMENT22/10/1992 BENCH: [S. RANGANATHAN, V. RAMASWAMI AND <NAME>, JJ.] ACT: Income Tax Act , 1922/ Income Tax Act , 1961: Sections 10 (2) (vi) and (xiv) /32 (1) (ii), 35 (1) (iv), 35 (2) (iv), 43 (1), Explanation-Depreciation-Scientific Research-Deductions in computing business income- Depreciation allowance in respect of the asset as also allowance in respect of expenditure incurred on the Scientific Research-Whether permissible-Retrospective amendment of Section 35(2) - Whether violative of Articles 14,19 (1) (g) and 300-A of the Constitution-Whether imposed unreasonable and oppressive burden on the assesse-Nature and effect of amendment-Position before and after the amendment- Explained. Constitution of India, 1950: Articles 14,19 (1) (g) and 300-A-Retrospective amendment of Section 35 (2) of the Income Tax Act , 1961-Whether violative of-completion of pending assessments and also reopening or rectification of completed assess ments of earlier years in cases where double benefit was granted-Whether unreasonable and imposed oppressive burden on assessee. Statute Law-Retrospective operation-Amended provision given retrospective effect-Whether open to challenge as imposing oppressive burden-Whether new obligation created under new provision. HEADNOTE: Section 32 (1) (ii) of the Income Tax Act , 1961 provided for depreciation, while computing business income for purpose of income tax. It was allowed at a percentage of the written down value of certain capital assets employed in the business. Section 35(1) provided for the deduction of four types of expenditure on scientific research and the deduction provided under 35 (1 ) (iv) was to the effect that in respect of any expenditure of a capital nature on scientific research related to the business carried on by the assessee, such deduction as may be admissible under the provisions of sub-section (2). Sub-Section (2) provided that, for the purposes of clause (iv) of sub-section (1), one-fifth of the capital expenditure incurred in any previous year should be deducted for that previous year; and the balance of the expenditure should be deducted in equal instalments in each of the four immediately succeeding previous years. It further provided in clauses (iv) and (v) that where a deduction was allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction should be allowed under clauses (i), (ii) and (iii) of sub-section (1) of section 32 for the same previous year in respect of that asset; and where the asset mentioned in clause (ii) was used in the business after it ceased to be used for scientific research related to that business, depreciation should be admissible under clauses (i), (ii) and (iii) of sub-section (1) of Section 32 . Explanation 1 to Section 43(1) also provided that where an asset was used in business after it ceased to be used for scientific research related to that business and a deduction had to be made under clause (i), clause (ii) or clause (iii) or sub-section (1) or sub-section (1A) of Section 32 in respect of that asset, the actual cost of the asset to the assessee, as reduced by the amount of any deduction allowed under clause (iv) of sub-section (1) of Section 35 . The provisions of Section 32(1) (ii) and Section 35(2) (1) (iv) and (v) read with Explanation 1 to Section 43(1) virtually repeated the provisions contained in Section 10(2) (vi) and 10(2) (xiv) of the 1922 Act. In 1968, there was an amendment in the provisions of Section 35(2) . The effect of the amendment was that the entire amount of capital expenditure incurred in relation to scientific research was allowed as a deduction in one year, instead of being spread over a period of five years as was the position earlier. Thereafter, the Finance Act , 1980 made an amendment with retrospective effect from 1.4.1962, i.e. from the date of commencement of Act of 1961 which provided under clause (iv) of Section 35(2) , that where a deduction was allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction should be allowed under clauses (i), (ii) and (iii) of sub-section (1) of Section 32 , for the same or any other previous year in respect of that asset. In the Writ Petitions filed before this <ORG> on behalf of the asses sees it was contended that the allowances in respect of depreciation on the one hand and of capital expenditure on scientific research on the other are two totally different and independent heads of allowances; one was a notional allowance to provide for the wear and tear of a capital asset employed in the business as the years rolled by; and the other was an allowance for actual expenditure of a capital nature granted to give fillip to new industrial innovations and development of indigenous know-how and techniques by proper planning on research and development by various business houses; and therefore there was nothing wrong in construing the statute as providing cumulatively for both types of deductions in respect of the same capital asset; that both the types of allowances were permissible under the statute except to the extent limited by clauses (iv) and (v) of Section 35 of the Act/Clauses (d) and (e) of the proviso to Section 10(2) (xiv) of the 1922 Act; that this interpretation of the statutory provisions was very clear. patent and unambiguous; that the retrospective amendment of the provision would impose unexpected and impossible burden on them over the years, jeopardise their solvency and lay them open to action by creditors and financial institutions and such an onerous burden was unreasonable and oppressive and the provision imposing such a burden violated the fundamental rights of the assessees under Articles 14 and 19(1) (g) of the Constitution that retrospective provisions may be permissible even in taxing statutes in certain special circumstances such as in the case of provisions clarifying the impact of a statute provision curing defective legislations in the light of the judicial decisions and the like but if the legislature chose to impose a totally new burden which was not at all in contemplation earlier and proceeded to give full retrospective effect thereto such an attempt should be struck down as unreasonable and discriminatory. that the amendment was not in the nature of a statutory clarification of an ambiguity but a totally new and fresh imposition sought to be unjustifiably given retrospective effect and that the statute did not intend one deduction to preclude other. On behalf of the <ORG> it was contended that the deduction provided by Section 35 (1) (iv) was in the alternative to the deduction provided by clauses (i) (ii) and (iii) of sub-section (1) and sub-section (1A) of Section 32 ; if one was availed of the other was not available not only during the year or years in which the deduction under Section 35(1) (iv) was availed of but permanently; for the reason that if both were allowed to be availed of; it amounted to grant of 200% deduction viz., 100% under Section 35(1) (iv) and another 100% under sub-sections (1) and (1A) of Section 32 , and this was totally outside the contemplation of the Act. Dismissing the writ petitions, this <ORG>, HELD: Per <NAME> (For himself and <NAME>, J.) 1.1. There is a fundamental, though unwritten, axiom that no legislature could have at all intended a double deduction in regard to the same business outgoing; if it is intended it will be clearly expressed. In other words, in the absence of clear statutory indication to the contrary, the statute should not be read so as to permit an assessee two deductions both under Section 10(2) (vi) and section 10(2) (xiv) under the 1922 Act or under Section 32 (i) (ii) and 35(2) (iv) of the 1961 Act - qua the same expenditure. The use of the words "in respect of the same previous year" in clause (d) of the proviso to Section 10(2) (xiv) of the 1922 Act and Section 35 (2) (iv) of the 1961 Act is not a contra-indication which permits a disallowance of depreciation only in the previous years in which the other allowance is actually allowed. The purpose of the words above referred to is totally different. That the two allowances cannot be and are not intended to be granted in respect of the same asset or expenditure, can be easily seen from the limitation imposed by these words. Where the capital asset is one of the nature specified, the assessee can get only one of the two allowances in question but not both. For determining which of the two allowances should be granted - that which the assessee chooses or that which the assessing officer might prefer, it is necessary for the statute to define this and this is what has been done by the rider in clause (d) of the proviso to Section 10(2) (xiv) of the 1922 Act Section 35(2) (iv) of the 1961 Act. It mandates that the asssessee should, in such a case, be granted the special allowance for scientific research and not the routine and annual one for depreciation. Clause (d) of the proviso to Section 10(2) (xiv) of the 1922 Act and Section 30(2)(iv) of the 1961 Act thus fall into place as an appropriate and necessary provision. The provision contained in clause (e) of the proviso to Section 10(2) (xiv) of the 1922 Act, re-enacted in Explanation to Section 43(1) of the 1961 Act, also reinforces this line of approach. Therefore, it is not correct to say that the allowances under the two provisions are by nature unconnected with, and indpendent of, each other. [171-D-H; 172-A-E] 1.2. Under the provisions of the statute as they stood earlier, the assessees could not have claimed continued grant of depreciation after the expiry of five previous years before the 1968 amendment and after the expiry of the first year after the 1968 amendment, even though the entire cost of the capital asset in question had been allowed to be written off completely against the business profits of those five previous years or one previous year as the case may be. It is impossible to conceive of the legislature having envisaged a double deduction in respect of the same expenditure even though it is true that the two heads of deduction do not completely overlap and there is some difference in the rationale of the two deductions under consideration. The last few words of the English statute, viz., "assets for any year of assessment during any part of which they were used by the person carrying on the trade for scientific research related to the trade" show that there is really no difference between the English and Indian Act s; the former also in terms prohibits depreciation only so long as the assets are used for scientific research. [169-F-H; 171-B, C] 1.3. In the circumstances, it is clear that, even before the 1980- amendment, the Act did not permit a deduction for depreciation in respect of the cost of a capital asset acquired for purposes of scientific research to the extent such cost has been written off under Section 10(2) (xiv) of the 1922 Act/35(1) & (2) of the 1961 Act. Prior to 1968, such assets qualified for an allowance of one-fifth of the cost of the asset in five previous years starting with that of its acquisition and during these years the assessee could not get any depreciation in relation thereto. In respect of assets acquired in previous year relevant to assessment year 1968-69 and thereafter, their cost was written off in the previous year of acquisition and no depreciation would be allowed in that year. This is clear from the statute. Equally, it is not envisaged, that depreciation could be allowed on them thereafter and also that it could be allowed starting with the original cost of the asset despite its user for scientific research and the allowances made under the 'scientific research' clause. There was no difficult at all in the interpretation of the provisions. The mere fact that a baseless claim was raised by some over-enthusiastic assessees who sought a double allowance or that such claim may perhaps have been accepted by some authorities is not sufficient to attribute any ambiguity or doubt as to the true scope of the provisions as they stood earlier. [173-E-H; 174- <CITATION> ., (1980) 126 I.T.R. 528 and <ORG>.T. v. <ORG>, (1991) 187 I.T.R. 517, overruled. <ORG> limited V. Union of India, (1985) 152 I.T.R. 308 S.C.; <CITATION> .l.T., (1986) 161 I.T.R. 820 Cal.; <ORG>.T v. <ORG>, (1992) 192 I.T.R. 144 Cal.; <CITATION> ., (1983) 144 I.T.R. 936 Kar. and <ORG> v. <ORG>.T., (1988) 171 I.T.R. 224 A.P., referred to. 1.4. The assessees may have some possible case only if the earlier statutory provisions can be said to have been unambiguously in favour of the assessee and the 1980 amendment had radically altered the provisions to cast a new and substantial burden on the assessee with retrospective effect but there is no ambiguity. The 1980 amendment has effected no change at all in the provisions except to set out more clearly and categorically what the provision said even earlier. Thus, even without the amendment, the assessees cannot claim the depreciation allowance in question. Even if it is assumed that there was an ambiguity or doubt as to interpretation, that was retrospectively clarified by the legislature. Therefore, the validity of the amendment cannot be challenged. This is indeed beyond all doubt. [174-C-G] Rai Ramkrishna v. <ORG> of Bihar,  1 S.C.R. 897;Asst. <CITATION> .,  1 S.C.R. 268; <CITATION> ,  2 S.C.R. 54; <CITATION> ., (1973) 31 S.T.C. 178 and <CITATION> , (1984) 148 I.T.R. 644, referred to. Per Jeevan, <NAME>, J. (Concurring) 1.1. A double deduction cannot be a matter of inference; it must be provided for in clear and express language, regard having to its serious impact on the revenues of the <ORG>. If the <ORG> wanted to provide for more than 100% deduction they would have said so, as they done in cases where they have provided for what is called "weighted deduction", vide Section 35(B) of the Act of 1961. It is not possible to agree that while introducing clause (xiv) in sub-section (2) of Section 10 of the 1922 Act consequent on the introduction of Section 20(4) in the U.K. finance Act, 1944, the Indian Legislature as also the <ORG> made a conscious departure from the English Amendment with the idea of providing an additional incentive over and above the deduction on account of depreciation, to induce the Indian assessees to invest more in scientific research. 1.2. The underlying reason in clause (iv) of Section 35(2) of Act of 1961 providing that during the years or year in which the assessee avails of the deduction under Section 35(1) (iv) he should not avail of the deduction on account of depreciation provided by clauses (i), (ii) and (iii) of sub- section (1) and sub-section (1A) of Section 32 is to ensure that the assessee does not get double deduction for example, where the asset was acquired prior to April 1, 1957, the deduction under Section 35(1) (iv) would be allowed in five consecutive years. If during the very five previous years, depreciation under the aforementioned provisions is also allowed, the assessee would obtain, at the end of five years, a double depreciation i.e., 100% under Section 35 and almost 100% under Section 32 . (In many cases, the rate of depreciation under Section 32 is 20% or even higher). If such a course was barred by clause (iv) during the initial five years, it would not be reasonable to say that same thing can be achieved by claiming the deduction after the expiry of five years. If both the deductions are in the alternative, as indicated by clause (iv), they must be understood as being in the alternative and not consecutive. It would be a rather curious thing to say (in the case of an asset acquired prior to April 1, 1967) that <ORG> barred claim for depreciation under Section 32 even in the first year when only 20% of the cost of the asset is allowed as deduction under Section 35(1) (iv), it barred it in the second, third and fourth years, when the deduction had reached 40, 60 and 80 per cent but permitted it be claimed after the fifth year, by which year the entire 100% cost was allowed as a deduction. No express provision was necessary to say what is so obvious. The position after April 1. 1967 is no different. That the aforesaid view is the correct one is indicated by Explanation (1) to clause (1) of Section 43 [the corresponding provision in the 1922 Act being sub-clause (e) of clause (xiv) of Section 10(2) of 1922 Act]. [177-H; 178-A-E] 13. The amendment of Section 35(2) in 1980 is merely clarificatory in nature. It makes explicit what was implicit in the provisions. question of its constitutionality, therefore, does not arise. Though purporting to be retrospective, it does not take away any rights which had legally vested in the assessees. [180- <CITATION> , (1991) 187 I.T.R 517, overruled. 1.4. None of the assessments relating to any of the assessment years in question has become final. They are pending at one or the other stage and in one or the other forum. Since the amendment under challenge merely makes explicit which was implicit in the unamended clause, there is no question of any right vesting in the assessee and its being taken away. [180-H; 181-A] JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition No. 90 of 1981 etc. etc, (Under Article 32 of the Constitution of India). Dr. <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, Ms. <NAME>, <NAME>, Ms. <NAME>, Ms. <NAME>, <NAME>, <NAME>, Ms. <NAME>, Ms. <NAME>, <NAME>, <NAME>, <NAME>, Ms. <NAME>, <NAME> and <NAME> for the Petitioners.

<NAME>, <NAME>, <NAME>, <NAME> and Ms. <NAME> for the Respondents.

The Judgment of the <ORG> was delivered by <NAME>, J. The seeds of the present controversy were sown as early as in 1946. It is unfortunate that this matter should be coming up before this <ORG> for its consideration nearly five decades later, though it must be pointed out that the issue in its present form is the outcome of an amendment made by the Finance (No.2) Act , 1980 (hereinafter referred to as 'the 1980 Act') to the Income Tax Act , 1961* (hereinafter referred to as 'the 1961 Act'). It is also a curious co-incidence that the 1980 Act effected two amendments in the 1961 Act with retrospective effect and the validity of both these provisions have been challenged before the courts. The first was the controversy with regard to the retrospective amendment of s.80-J which was settled by this <ORG> by its decision in <CITATION> , (1985) 152 I.T.R. 308 (SC). It is the second amendment to the provisions contained in section 35(2) of the 1961 Act that has given rise to the present controversy between the parties.

The question is really one of interpretation of two important provisions relating to the computation of business income for purposes of income tax. We may start with the provisions of the Indian lncome Tax Act , 1922 (hereinafter referred to as the '1922 Act'). The computation of business income for purposes of income tax was done in accordance with the provisions of section 10 of the said Act. In the process of making such computation, the Act provided for two important deductions (among others), in respect of the capital assets employed in the business. The first was the deduction under clause (vi) of Section 10(2) of an allowance in respect of the depreciation of building, machinery, plant or furniture being the property of the assessee and used for the purposes of the business, at a prescribed percentage of the written down value of such assets. This allowance is calculated, in respect of the year of acquisition of the property, at a percentage of its actual cost to the assessee and in subsequent years at a graduated scale on the basis of the actual cost less the depreciation allowances granted in the preceding years. In strict principle, this is an allowance of capital nature but it is now well settled that the allowance of depreciation has to be taken into account in order to ascertain the true profits of a business and, therefore, an assessee is permitted to deduct, in the computation of the business income year after year, the prescribed percentage of the value of the assets used for the purposes of business. The second allowance was not there in the 1922 Act originally and was introduced by the Income- tax (Amendment) Act , 1946. The introduction was of certain allowances in respect of expenditure on. "scientific research related to the business", an expression which was defined in a fairly comprehensive manner by the statute. Three types of allowances were permitted in respect of this category of expenditure of which we are here concerned with only one. This provision was contained in clause (xiv) of S.10(2) which permitted a deduction.

"in respect of any expenditure of a capital nature on scientific research related to the business, an allowance for each of the Five consecutive previous year. beginning with the year in which the expenditure was incurred, or where the expenditure was incurred prior to the commencement of the business, for each of the five consecutive previous years beginning with the year in which the business was commenced, equal 2to one-fifth of such expenditure: Provided that no allowance shall be made for any expenditure incurred more than three years before the commencement of the business: A Provided further that-

XXX XXX XXX

(d) where a deduction is allowed for any previous year under this clause in respect of expenditure represented wholly or partly by any asset, no deduction shall be allowed under clause (vi) or clause

(vii) for the same previous year in respect of that asset;

(e) where an asset is used in the business after it ceases to be used for scientific research related to that business, and a claim for an allowance under clause (vi) or clause (vii) is made in respect of that asset, the actual cost to the assessee of the asset shall be treated as reduced by the amount of any deductions allowed under this clause;"

A cursory and conjoint reading of section 10(2) (vi) and section 10(2) (xiv) suggests that where an assessee incurs expenditure of a capital nature on scientific research related to the business and the expenditure results in the acquisition of an asset, the assessee can claim, under clause (vi), a deduction of the specified percentage of the written down value of the asset and under clause

(xiv) he can ask for a deduction, in five consecutive years, of the expenditure he has incurred on the acquisition of the asset. For this purpose, we are assuming that an asset used for scientific research related to the business is also ipso facto an asset used for the purpose of business. There has been some debate before us as to whether this is always so but we need not enter into that controversy for the purposes of the present case.

It will at once be seen that, if these two provisions are applied simultaneously, it would result in granting an assessee a double allowance in respect of the same expenditure - one of the entire amount over a period of 5 years and the other a percentage of the expenditure over a number . consecutive years at a graded scale as already mentioned. The question at once leaps to the mind as to whether it could have been the intention of the legislature to permit both these deductions simultaneously to an assessee. The provisions of clauses (d) and (e) of the proviso to S.10(2) (xiv) contain a clue to answer this question. More about it later.

We next turn to the provisions of 1961 Act. The topic of depreciation is dealt with by section 32 . Section 32(1)

(ii) provides for depreciation. As under the 1922 Act, it is allowed at a percentage of the written down value of certain capital assets employed in the bussiness. The topic of scientific research expenditure is dealt with by section 35 . Section 35(1) provides for the deduction of four types of expenditure on scientific research and what we are concerned with is the deduction provided under section 35(1)

(iv), which is to the following effect:

(iv) in respect of any expenditure of a capital nature on scientific research related to the business carried on by the assessee, such deduction as may be admissible under the provisions of sub- section (2)."

Sub-section (2) provides that, for the purposes of clause (iv)of sub-section (1), one-fifth of the capital expenditure incurred in any previous year shall be deducted for that previous year; and the balance of the expenditure shall be deducted in equal instalments in each of the four immediately succeeding previous years. There is an explanation which is not relevant for our present purposes. Reading S.35(2) further, it provides in clauses (iv) and (v) as follows:

(iii) of sub-section (1) of section 32 for the same previous year in respect of that asset;

(v) where the asset mentioned in clause (ii) is used in the business after it ceases to be used for scientific research related to that business, depreciation shall be admissible under clauses (i), (ii) and (iii) of sub-section(1) of section 32 ."

Reference must also be made to Explanation 1 to s. 43(1) in this context. It read as follows at the relevant time:

"Explanation: Where an asset is used in business after it ceases to be used for scientific research related to that business and a deduction has to be made under clause (i), clause (ii) or clause

(iii) of sub-section (I) or sub- section (1A) of section 32 in respect of that asset, the actual cost of the asset to the assessee, as reduced by the amount of any deduction allowed under clause (iv) of sub-section (1) of section 35 or under any corresponding provision of the Indian Income-tax Act , 1922 ."

From the above it will be seen that the provisions of Section 32(1) (ii) and Section 35(2) (i) (iv) and (v) read with Explanation 1 to s.43(1) virtually repeat the provisions contained in Section 10(2) (vi) and 10(2)(xiv) of the 1922 Act, so that the question earlier posed still loomed in the background of 1961 Act.

In 1968 there was an amendment in the provisions of Section 35(2) . The sub-section was amended to read as follows:

"(2) For the purposes of clause

(iv) of sub-section (1),-

(i) in a case where such capital expenditure is incurred before the 1st day of April, 1967, one-fifth of the capital expenditure incurred in any previous year shall be deducted for that previous year;

and the balance of the expenditure shall be deducted in equal instalments for each of the four immediately succeeding previous years;

(i-a) in a case where such capital expenditure is incurred after the 31st day of March, 1967, the whole of such capital expenditure incurred in any previous year shall be deducted for that previous year."

The effect of this amendment was only to provided that the entire amount of capital expenditure incurred in relation to scientific research was allowed as a deduction in one year instead of being spread over a period of five years as was the position earlier. This amendment does not touch the controversy in issue before us and it has no solution to offer to our present difficulty.

The provisions of Section 10(2) (vi) and (xiv) of the old Act had been administered between 1946 and 1962 and the provisions of Section 32 and 35 of the 1961 Act have been administered since 1962. The question whether an assessee can simultaneously claim an allowance or deduction in respect of the same expenditure once under Section 32 and again in Section 35 must have cropped up in some cases and does appear that such a double claim was put forward in some cases. The contention on behalf of the assessees was that the allowances in respect of depreciation on the one hand and in respect of capital expenditure on scientific research on the other are two totally different and independent heads of allowances. one is a notional allowance to provide for the wear and tear of a capital asset employed in the business as the years roll by; the other is an allowance for actual expenditure of a capital nature granted, on the eve of our country's independence, in order to give fillip to new industrial innovations and the development of indigenous know-how and techniques by proper planning on research and development by various business houses. It is therefore suggested that there is nothing absurd in construing the statutes act as providing cumulatively for both types of deductions in respect of the same capital asset. The only limitations on this right are the two placed by the statute itself. The first limitation, contained in clause (d) of the proviso to Section 10(2) (xiv) and s.35(2) (iv) is that both the deductions cannot be claimed "for the same previous year" in respect of the same capital asset. The second limitation is found in clause (e) of the proviso to Section 10(2) (xiv) and s.35(2) (v) which say that if a capital asset used for scientific research ceases to be so used but is thereafter brought into a business for use therein, the actual cost for purposes of granting depreciation in respect of the asset thereafter should be taken as the amount of its original cost reduced by the amount of deductions allowed under Section 10(2) (xiv) or s.35(2). In other words, the contention of the assessee was and is that both the types of allowances are permissible under the statute except to the extent limited by clauses (d) and (e) of the proviso to Section 10(2) (xiv) of the 1922 Act and reproduced in clauses (iv) and (v) of Section 35(2) of the 1961 Act.

Before us it is claimed on behalf of the assessee that this interpretation of the statutory provisions is very clear, patent and unambiguous. It is alleged that despite this, some Income-tax Officers started disallowing the claim of depreciation in respect of such capital assets even in previous years during which no deduction was claimed or allowed under Section 10(2) (xiv) or Section 35(2) , contrary to the clear language of clause (d) of s.10(2) (xiv) and s.35(2) (iv). These Of orders were reversed on appeal either by the Appellate Commissioner or by the <ORG>. It was suggested that these decisions were almost unanimously in favour of the assessee but the department persisted in pursuing the matter upto the stage of <ORG>. Only one reference on this topic came up before <ORG>s and is reflected in the decision of <ORG>, reported as <CITATION> ., (1980) 126 I.T.R. 528. This was a reference of the year 1977 made at the instance of the Commissioner of Income Tax and the Commissioner of Income Tax lost this reference. The High (Sourt re-affirmed the position contended for by the assessee as the one and only possible interpretation of the statutory provisions. It is, therefore, contended that there was, and could have been, no doubt that an assessee was entitled to claim depreciation allowance in respect of such assets in respect of previous years other than those in which an allowance had been allowed under the other head. We shall revert later to this aspect of the matter.

At this stage, the Finance (No.2) Act , 1980 intervened. It amended section 35(2) (iv) to read as follows:

"(iv) where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clauses (i), (ii) and (iii) of sub-section (1) of section 32 for the same or any other previous year in respect of that asset."

(Emphasis added) The Finance Act made this amendment retrospective w.e.f. 1.4.62, that is, the date of the commencement of the 1961 Act. This amendment is undoubtedly far-reaching in its effect. It will result in completion of the pending assessments of several years on the footing of the new provision. It will also involve re-opening or rectification of completed assessments of earlier years, to the extent permissible under the provisions of sections 148 and 154 , in cases where assessees had been granted "double allowance"

accepting their contention at the time of the original assessments. The effect will be not for one assessment year but for a number of assessment years in succession. Painting a very grim picture of the consequences of giving full retrospective effect to the amendment, the assessees say that it will impose unexpected and impossible burden on them over the years. jeopardise their solvency and lay them open to action by creditor and financial institutions. Such an onerous burden, it is said. is unreasonable and oppressive and the provision imposing such burden violates the fundamental rights of the assessees under Articles 14 and 19(1) (g) of the Constitution of India. It is on this plea that, even though assessments and appeals are pending in several of these cases, the petitioners chose to approach this <ORG> by way of writ petitions under Article 32 of the Constitution. These are mostly writ petitions of the year 1981 and are now coming up for hearing after a period of 10 years.

Learned counsel for the assessees do not contest the competence of the legislature to enact the impugned provision, nor do they dispute the right of the legislature to give retrospective effect to statutory provisions. The contention only is that retrospective provisions may be permissible even in taxing statutes in certain special circumstances such as in the case of provisions clarifying the impact of a statute, provisions curing defective legislations in the light of the judicial decisions and the like. They, however, say that if the legislature chooses to impose a totally new burden, which was not at all in contemplation earlier and proceeds to give full retrospective effect thereto, such an attempt should be struck down as unreasonable and discriminatory. The principal questions, therefore, for our consideration are:

1) Were the earlier statutory provisions capable of only one interpretation, namely, that placed by the assessees or was there any ambiguity in relation thereto ? (2) If there was some doubt or ambiguity about the earlier legislation, and the 1980 Act clarified the position by a retrospective amendment, would it offend the provisions of the Constitution ?

(3) If, on the other hand, the earlier provision was very clear and capable of only one interpretation, as placed by the assessee, was the legislature within its rights in amending the provision retrospectively w.e.f. 1.4.62 and thus imposing an unreasonable tax burden on the assessees?

Taking up the first of the three questions, it has to be considered from two angles, one factual and the other, legal. An attempt was made on behalf of the petitioners to project an image as if the interpretation sought to be placed by the department on pre-1980 provisions to disallow depreciation on such assets was so far-fetched that it never received the approval of the higher appellate authorities. It was suggested that the appeals by assessees against the disallowance invariably succeeded and it was the <ORG> that had to move <ORG> on reference, the first of which references came up before <ORG> in C.l. <CITATION> (1980) 126 I.T.R. 548 and was answered against the <ORG>. On the basis of such allegations the petitioners attempted to make out that the <ORG>'s interpretation was patently untenable and that the 1980 amendment is not in the nature of a statutory clarification of an ambiguity but a totally new and fresh imposition sought to be unjustifiably given retrospective effect.

But, as <NAME> has pointed out on the basis of the averments of the petitioner in one of the cases, viz., W.P.1153/81, the impression sought to be created by the petitioners does not accord with the correct facts. The position in the case is available only as it stood at the time when the writ petition and the counter affidavit were filed and subsequent developments are not known. Nevertheless, the picture that emerges is this. In that case, the Income-tax Officer (<ORG>) is said to have allowed depreciation on assets used for scientific research, for the assessment year 1969-70, though this is denied by the department. The claim was perhaps disallowed by the <ORG> for the assessment year 1970-71, but it was allowed by the Allahabad Bench of <ORG> (<ORG>) by its order dated 30.8.76. For the assessment year 1971-72, the <ORG> disallowed the depreciation. The Appellate Assistant Commissioner (A.A.C.) allowed it. The department appealed to the Delhi Bench of the <ORG> which accepted the department's plea by its order dated 13.8.79 placing reliance on the decision of a Special Bench of the <ORG> It has been stated that the assessee filed an application for reference to <ORG> which was pending when the writ petition was filed. For the assessment years 1972-73 to 1974-75, the assessments are pending as a stay order had been obtained for reasons which are not known. For the assessment years 1975-76 and 1976-77, the assessee claimed depreciation on a number of items of scientific research assets. The <ORG> "allowed" the claims subject to the rider that "there is no provision to give deduction of more than 100% of the expenditure by way of depreciation". The assessee appealed to Commissioner of Income-tax (Appeals) who disallowed the claim. For 1977-78, the l.T.O. disallowed the claim and the C.l.T. dismissed the assessee's appeals. For assessment years 1978-79 to 1980-81, the assessments are stated to be pending. The above facts are sufficient to show that, atleast after 1.4.1968, - there is no information before us as to the position between 1.4.1946 and 31.3.1968 - the <ORG> has been putting forward its objections on the issue and that the same was the subject matter of controversy at various appellate stages, some decided in favour of, and some against, the assessee. A Special Bench of the l.T.A.T. had indeed decided the issue against the assessee. In this background, it is not correct to say that the position was crystal clear and that, save for a few ITOs who took a biassed view, the authorities were all agreed that the <ORG>'s stand was untenable. Some of the reported decisions also show that there was a live controversy and that references have been made to <ORG> both at the instances or the assessees [see <CITATION> .l.T. (1986) 161 I.T.R. 820 (Cal.), and <CITATION> ., (1992) 192 I.T.R. 144 (Cal.)], as well as at the instance of the <ORG> [see, <CITATION> ., (1983) 144 I.T.R. 936 (Kar.); <CITATION> . (1986) 161 I.T.R. 692 (Bom.) and <CITATION> , (1988) 171 I.T.R. 224 (A.P.)]. The petitioner's contention that, under the pre-amended provisions, depreciation on such assets was recognised allround as clearly allowable is therefore rejected. We have dealt with this aspect only to meet an aspect that was urged. What is really important is the true and correct interpretation of those provisions, not what someone thought of it then and to this aspect we shall now turn.

The second aspect of the First of the three questions posed earlier for our consideration is the legal or interpretational aspect of the provisions as they stood prior to the 1980 Amendment. Under the provisions of the statute as they stood earlier, could the assessees have claimed continued grant of depreciation after the expiry of five previous years before the 1968 amendment and after the expiry or the first year after the 1968 amendment, even though the entire cost of the capital asset in question had been allowed to be written off completely against the business profits of those five previous years or one previous year as the case may be? We think the answer to this question must emphatically be in the negative. In our view, it is impossible to conceive of the legislature having envisaged a double deduction in respect of the same expenditure, even though it is true that the two heads of deduction do not completely overlap and there is some difference in the rationale of the two deductions under consideration. On behalf of the assessees reliance is placed on the following circumstances to support a contention that the statute did not intend one deduction to preclude the other :

(i) lt is pointed out that s.10(2) (xiv) of the 1922 Act, was inserted in 1946 consequent on the insertion of a corresponding provision in the United Kingdom. That provision, viz. s.20(4) of the U.K. Finance Act, 1944 read thus :

(4) Where a deduction is allowed for any year under this or the last preceding section in respect of expenditure represented wholly or partly by any assets, no deduction shall be allowed under any provisions of the Income-tax Act other than this part of this Act in respect of wear and tear, obsolescence, depreciation or exceptional depreciation of these assets for any year of assessment during any part of which they are used by the person carrying on the trade for scientific research related to the trade. "

(emphasis supplied) The Indian provision, it is said, has made a deliberate departure from the said provision and limited the bar of depreciation only to those previous years during which a deduction is allowed under S.10(2) (xiv);

(ii) When the Income-tax Bill, 1961 was under the consideration of <ORG>, the provisions of S.10(2) (vi) and (xiv) were carefully reviewed. But changes were made and the provisions of the new Act in this regard were drafted in pari materia with those of the old Act ;

(iii) The language used in clause (d) of the proviso to S.10(2) (xiv) and S.35(2) (iv) again is significantly different from the language used in various other provisions of the Act which, in like contexts of possible double allowances, emphatically rule out deductions in respect of the same expense or exemptions in respect of the same income under two different provisions for the same or even any other assessment year : See, for example, Sections 20(2)  35B(2) , 35C(2) , 35CC(4) , 35CCA(3) , 35CCB(3) , 35D(b) , 35E(8) , 80GGA(4) , 80HH(9A) , 80HHA(7) and 80HHB(S) ; and

(iv) When the relevant provisions say that depreciation shall not be allowed in certain previous years, it permits a disallowance only in those previous years and means, by necessary implication, that it shall be allowed in other years, if otherwise eligible on the language of the provision for depreciation.

There is an apparent plausibility about these arguments, particularly in the context of the alleged departure in the language used by S.10(2)(xiv) from that employed in S.20 of the U.K. Finance Act, 1944. We may, however, point out that the last few underlined words of the English statute show that there is really no difference between the English and Indian Act s; the former also in terms prohibits depreciation only so long as the assets are used for scientific research. In our opinion, the other provisions of the Act to which reference has been made - some of which were inserted after the present controversy started - are not helpful and we have to construe the real scope of the provisions with which we are concerned. We think that all misconception will vanish and all the provisions will fall into place, if we hear in mind a fundamental, through unwritten, axiom that no legislature could have at all intended a double deduction in regard to the same business outgoing, and if it is intended it will be clearly expressed. In other words, in the absence of clear statutory indication to the contrary, the statute should not be read so as to permit an assessee two deductions both under S.10(2) (vi) and S.10(2) (xiv) under the 1922 Act or under S.32(1)(ii) and 35(2)(iv) of the 1922 Act - qua the same expenditure. Is then the use of the words "in respect of the same previous year" in clause (d) of the proviso to S.10(2) (xiv) of the 1922 Act and S. 35(2) (iv) of the 1961 Act a contra-indication which permits a disallowance of depreciation only in the previous years in which the other allowance is actually allowed. We think the answer is an emphatic `no' and that the purpose of the words above referred to is totally different. If, as contended for by the assessees, there can be no objection in principle to allowances being made under both the provisions as their nature and purpose are different, then the interdict disallowing a double deduction will be meaningless even in respect of the previous years for which deduction is allowed under S.10(2) (xiv) /S.35 in respect of the same asset. If that were the correct principle, The assessee should logically be entitled to deduction by way of depreciation for all previous years including those for which allowance have been granted under the provision relating to scientific research. The statute does not permit this. The restriction imposed would, therefore, be illogical and unjustified on the basis suggested by the assessees. On the other hand, if we accept the principle we have outlined earlier viz. that, there is a basic legislative scheme, unspoken but clearly underlying the Act, that two allowances cannot be, and are not intended to be, granted in respect of the same asset or expenditure, one will easily see the necessity for the limitation imposed by the quoted words. For, in this view, where the capital asset is one of the nature specified, the assessee can get only one of the two allowances in question but not both. Then the question would arise and might create a difficulty : in that event, which not the two allowance should the assessee be granted - that which the assessee chooses or that which the assessing officer might prefer? It is necessary for the statute to define this and this is what has been done by the rider in clause (d) of the proviso to S.10 (2) (xiv)/S.35(2) (iv). It mandates that the assessee should, in such a case, be granted the special allowance for scientific research and not the routine and annual one for depreciation. Clause (d) of the proviso to S.10(2) (xiv) and S.30(2) (iv) thus fall into place as an appropriate and necessary provision. The provision contained in clause (e) of the proviso to S.10(2) (xiv) of the 1922 Act, re-enacted in Explanation, to S.43 (1) of the 1961 Act, also reinforces this line of approach. It provides that the extent of capital expenditure written off under the second of the above headings (whether it be ]00% under the post-1968 provision or 20%, 40%, 60%, 80% or 100% under the pre-1968 provision) has to be pro-tanto deducted in ascertaining the actual cost for purposes of depreciation. This provision militates, in our view, against the petitioners, contention that the allowances under the two provisions are by nature unconnected with, and independent of, each other. Its effect is this. Suppose a person uses an asset for scientific research for sometime and then brings it into his business for other use later, he would be thereafter entitled to depreciation thereon only on the actual cost less deduction allowed under S.10 (2) (xiv)/S.35. However, if the asset continues to be used in scientific research related to the business, he would be entitled to get depreciation on its full cost after the first few previous years during which allowance is granted under those provisions. This seems to be anomalous but <NAME> says that there is no anomaly because this is a provision intended to act as a disincentive to persons who purport to purchase assets for scientific research but withdraw it from such use soon after. Granted that this is so, still the deduction of the allowances given on scientific research assets for computing depreciation is consistent only with the principle stated by us that they are deductions basically of the same nature intended to enable the assessee to write off certain items of capital expenditure against his business profits. We may add that the report of <ORG>, on the basis of which the 1980-amendment was effected only echoed the same view when it said in para 3.29 of its report :

"3.29 Our attention has also been drawn to certain anomalous situations in the matter of allowance of depreciation. In certain cases where a full deduction has been allowed in relation to a capital asset under other sections (as for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the taxpayers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention of the legislature is not to allow a double deduction (of 200%) in respect of the same asset, once under section 35 and, again, by way of depreciation under section 32 . If and to the extent that there is any anomaly or contrary view possible on a construction of section 35 , we recommend that the law should be clarified to provide that no depreciation under section 32 shall be allowable in respect of capital expenditure for scientific research qualifying for deduction under section 35 ."

For the reasons discussed above, we are of the view that, even before the 1980-amendment, the Act did not permit a deduction for depreciation in respect of the cost of a capital asset acquired for purposes of scientific research to the extent such cost has been written off under S.10(2) (xiv)/35 (1) & (2). Prior to 1968, such assets qualified for an allowance of one-fifth of the cost of the asset in five previous years starting with that of its acquisition and during these years the assessee could not get any depreciation in relation thereto. In respect of assets acquired in previous year relevant to assessment year 1968-69 and thereafter, their cost was written off in the previous year of acquisition and no depreciation could be allowed in that year. This is clear from the statute. Equally, it is not envisaged, and indeed, it would be meaningless to say, that depreciation could be allowed on them thereafter with a further absurdity that it could be allowed starting with the original cost of the asset despite its user for scientific research and the allowances made under the 'scientific research' clause. In our view, there was no difficulty at all in the interpretation of the provisions. The mere fact that a baseless claim was raised by some over-enthusiastic assessees who sought a double allowance or that such claim may perhaps have been accepted by some authorities is not sufficient to attribute any ambiguity or doubt as to the true scope of the provisions as they stood earlier. We are, for the reasons discussed above, unable to approve of the cryptic view expressed by <ORG> in <CITATION> ., (1980) 126 I.T.R. 548 or the view taken by <ORG> in <CITATION> , (1991) 187 I.T.R. 517.

In view of the answer given by us to the first question posed by us, there is no need to answer the second and third questions since, even without the amendment, the assessees cannot claim the depreciation allowance in question. The second question can arise only if it is assumed that there was an ambiguity or doubt as to interpretation that was retrospectively clarified by the legislature. But it is common ground before us that, even on this hypothesis, the validity of the amendment cannot be challenged. This is indeed beyond all doubt: <CITATION> ,  1 S.C.R. 897; <CITATION> .,  1 S.C.R. 268; <CITATION> ,  2 S.C.R. 54; <CITATION> , (1973) 31 S.T.C. 178 and <CITATION> , (1984) 148 I.T.R. 644. Even the Bombay decision inC.l.T. v. <ORG>, (1991) 187 I.T.R. 517 on which the assessees heavily rely, concedes, in our opinion rightly, this position. The assessees may have some possible case only if the earlier statutory provisions can be said to have been unambiguously in favour of the assessee and the 1980 amendment had radically altered the provisions to cast a new and substantial burden on the assessee with retrospective effect. It is this third alternative, reflected by the third question posed by us, that was success fully urged before <ORG> by the assessees. But we are unable to accept this argument or conclusion. In our view, the first question has to be answered by saying that the pre-1980 provisions were capable of only one interpretation but that was as urged on behalf of the <ORG>. The 1980-amendment has effected no change at all in the provision except to set out more clearly and categorically what the provision said even earlier. In this view, the second and third questions earlier posed do not arise.

For the reasons discussed above, these Writ Petitions are dismissed. We, however, make no order as to costs.

<NAME>, J. I agree with my learned brother <NAME> J. that these writ petitions should fall. Having regard to the nature and significance of the question raised herein, however, I felt impelled to say a few words.

The challenge in this batch of writ petitions is to the retrospective operation given to the amended clause (iv) of sub-section (2) of Section 35 of Income Tax Act, 1961, by the Finance (No.2) Act , 1980. The said Finance Act added the words "or any other" in the said clause and gave it retrospective effect from April 1, 1962. As amended, clause

(iv) reads as follows:

"(iv) - where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clause (ii) or sub-section (1) of section 32 for the same or any other previous year in respect of that asset."

Learned Counsel for the petitioners-assessees contended that the retrospective effect given to the said amendment has the effect of taking away the rights vested in the assessees by the unamended provisions, making them liable to pay huge amounts by way of tax. Such payment, if enforced, has the effect of debilitating the assessees, industries beyond recall. It is submitted that the retrospectivity given to the said amendment is violative of the petitioners fundamental rights guaranteed by Articles 19(1) (g) and 14 besides the guarantee in Article 300A.

In the year 1946, clause (xiv) among other clauses was introduced in sub-section (2) of Section 10 of the Indian Income-tax Act, 1922. It provided, for the first time, that even expenditure of a capital nature laid out on scientific research related to the business of the assessee shall be allowed to be deducted. The deduction was hundred per cent spread over a period of five consecutive previous years commencing from the previous year on which the expenditure was incurred. Sub-clause (d) of clause (xiv) provided at the same time that "where a deduction is allowed for any previous year under this clause in respect of expenditure represented wholly or partly by any asset, no deduction shall be allowed under clause(vi) or clause (vii) for the same previous year in respect of that asset." The effect of sub-clause (d) was that if an assessee claimed and was allowed a deduction in respect of expenditure of a capital nature on scientific research, - and where such expenditure took the shape of an asset, which in the normal course would be entitled to deduction on account of depreciation under clauses (vi) and (vii) of Section 10(2) - no depreciation would be allowed in respect of that asset in those respective previous years. In other words, during the period of five previous years the assessee was allowed the deduction under clause (xiv) of sub-section (2) of section 10 , claim for depreciation under clauses (vi) an/or (vii) of the same sub-section was excluded.

In the Income-tax Act , 1961, a similar provision was made in section 35 . Clause (iv) of sub-section (1) of section 35 provided for deduction of expenditure of a capital nature incurred on scientific research related to the business carried on by the assessee. Sub-section (2) of Section 35 set out the manner in which and the terms subject to which the deduction was to be allowed. As enacted in 1961, sub-section (2) provided, - as was done by clause

(xiv) of Section 10(2) of the 1922 Act - that the said deduction shall be allowed in equal measure in five consecutive previous years, commencing from the previous year in which the expenditure was incurred. In the year 1967, however, sub-section (2) was amended, providing for full deduction of the expenditure in the very previous year in which such expenditure was incurred. Clause (iv) of sub section (2), however, remained unchanged. Clause (iv) declares that where a deduction is allowed for any previous year under the said section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clauses (i), (ii) and (iii) of sub-section (I) or under sub-section (1A) of section 32 for the same previous year in respect of that asset. Thus, the position obtaining under the 1922 Act and the previous Act is the same, with the difference that if such expenditure is incurred after April 1, 1967, hundred per cent deduction was granted in the very previous year in which the asset (representing the capital expenditure of the nature mentioned in clause (iv) of sub-section (1) of Section 35 ) is acquired.

The <ORG> says that the deduction provided by Section 35(1) (iv) is in the alternative to the deduction provided by clauses (i), (ii) and (iii) of sub-section (1) and sub- section (1A) of Section 32 . If one is availed of, the other is not available, not only during the year or years in which the deduction under Section 35(1) (iv) is availed of, but permanently. The reason, according to them, is obvious: if both are allowed to be availed of, it amounts to grant of 200% deduction viz., 100% under Section-35 (1) (iv) and another 100% under sub-sections (1) and (1A) of Section 32 . This is totally outside the contemplation of the Act, they say. On the other hand, the case of the asssessees is that the bar created by clause (iv) of sub-section (2) applies only to that previous year or those previous years during which the said expenditure is allowed as a deduction. That is the express language of the clause. The bar does not extend beyond the year or years in which the deduction under Section 35(1) (iv) is availed. There is no reason - more so in a taxing enactment - to extend the said bar beyond the limit prescribed by the statute. They say, if the intention of the <ORG> was to bar the claim of depreciation in respect of such asset for all time to come, nothing was easier than to say so in clear words, as was done by sub section (4), of section 20 of U.K. Finance Act, 1944. It is pointed out that clause (xiv) of sub-section (2) of section 10 was introduced in the Indian Income-tax Act within two years of the introduction of a similar provision in the English Act , evidently inspired by the Amendment in the English Act . But while incorporating the said provision, a conscious, departure was made by <ORG>, say the assessees. Having regard to the scant investment in scientific research in India, it is submitted, the legislature must have thought it necessary to provide an additional inducement over and above the deduction on account of depreciation. Considerations of equity have no place in the interpretation of a taxing enactments, they say further.

I find it difficult to agree with the reasoning of the assessees. Acceding to it would amount to placing an unreasonable interpretation upon the relevant provisions and to negating the intention of <ORG>. I find it difficult to agree that <ORG> - as also the <ORG> made a conscious departure from the English Amendment with the idea of providing an additional benefit to induce the Indian assessees to invest more in scientific research. I find the argument rather convoluted. If the intention of the Legislature/<ORG> was to provide more than 100% deduction, they would have said so, as they have done in cases where they provided for what is called weighted deduction'. (For example, See Section 35(B) of 1961 Act). A double deduction cannot be a matter of inference, it must be provided for in clear and express language. regard having to its unusual nature and its serious impact on the Revenues of the <ORG>. Now, what does clause (iv) of Section 35(2) say? It says that during the years or the year in which the assessee avails of the deduction under Section 35 (1 ) (iv) he shall not avail of the deduction on account of depreciation provided by clauses (i), (ii) and (iii) of sub-section (1) and sub-section (1A) of Section 32 . What could be the underlying reason? It is obviously to ensure that the assessee doesn't get double deduction. Take a case where the asset was acquired prior to April 1,1957. The deduction under Section 35(1) (iv) would be allowed in five consecutive years. If during the very five previous years, depreciation under the aforementioned provisions is also allowed, the assessee would obtain, at the end of five years, a double depreciation i.e., 100% under Section 35 and almost 100% under Section 32 . (It may be noted that in many cases, the rate of depreciation under Section 32 is 20% or even higher). If such a course was barred by clause (iv) during the initial five years, would it be reasonable to say that same thing can be achieved by claiming the deduction after the expiry of five years? If both the deductions are in the alternative, as indicated by clause (iv), they must be understood as being in the alternative and not consecutive. It would be a rather curious thing to say (in the case of an asset acquired prior to April 1, 1967) that <ORG> barred claim for depreciation under Section 32 even in the first year when only 20% of the cost of the asset is allowed as deduction under Section 35(1) (iv), it barred it in the second, third and fourth years, when the deduction has reached 40, 60 and 80 per cent, but permitted it be claimed after the fifth year, by which year the entire 100% cost was allowed as a deduction. No express provision was necessary to say what is so obvious. The position after April 1, 1967 is no different.

That the aforesaid view is the correct one is indicated by Explanation (1) to clause (1) of section 43 [the corresponding provision in the 1922 Act being sub-clause (e) of clause (xiv) of Section 10(2) ]. Clause (1) of section 43 defines the expression `actual cost'. Explanation (1) appended , to the definition says "Where an asset is used in the business after it ceases to be used for scientific research related to that business and a deduction has to be made under clause (ii) of sub-section (1) of section 32 in respect of that asset, the actual cost of the asset to the assessee shall be the actual cost to the assessee as reduced by the amount of any deduction allowed under clause (iv) of sub-section (1) of section 35 or under any corresponding provision of the Indian Income-tax Act , 1922 ." Now what does this mean? Take a case where the asset of a like nature acquired prior to April 1, 1967 is diverted to other purposes after the expiry of two previous years; the `actual cost' of the asset to the assessee in such a case would be 60% of the original cost. And if it is diverted after five years, it would be nil which means that the assessee cannot claim any depreciation on it at all. Counsel for the assessee explains this provision to say that it was meant to prevent diversion of such an asset from scientific research to assessee's business purposes. The explanation does not stand scrutiny. The fallacy in the explanation can be demonstrated by taking the very same illustration, where the asset is acquired prior to April 1, 1967. Suppose, such an asset is diverted after first two previous years, its `actual cost' to the assessee would be 60% of the original cost, which alone would qualify for deduction under Section 32(1) and (1A). The remaining 40% would not. This 40% goes without earning any depreciation. Why is it so, if the assessees are right in saying what they do. According to their reasoning, this 40% too should qualify for depreciation. The fallacy in their argument would become clearer, if the diversion is at the end of the fifth year.

That the <ORG> never intended to provide for a double deduction is also the opinion of <ORG>. In its interim report, (December, 1977) the Committee (popularly known as '<ORG>') had this to say in para 3.29 of its report:

"3.29.- Our attention has also been drawn to certain anomalous situations in the matter of allowance of depreciation. In certain cases where a full deduction has been allowed in relation to a capital asset under other sections (as for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention of the legislature is not to allow a double deduction (of 20%) in respect of the same asset, once under section 35 and, again, by way of depreciation under section 32 . If and to the extent that there is any anomaly or contrary view possible on a construction of section 35 , we recommend that the law should be clarified to provide that no depreciation under section 32 shall be allowable in respect of capital expenditure for scientificresearch qualifying for deduction under section 35 ."

lt is evidently on the basis of this recommendation that clause (iv) of sub-section (2) of section 35 was amended to make express what was implicit in it. The amendment introduced the words "or any other" in the said clause. After amendment, clause (iv) of section 35 (2) reads as follows: "where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clause (ii) of sub-section (1) of section 32 for the same or any other previous year in respect of that asset." In our opinion the said amendment is merely clarificatory in nature. It makes explicit what was implicit in the provisions. Question of its constitutionality, therefore, does not arise. Though purporting to be retrospective, it does not take away any rights which had legally vested in the assessees.

<ORG> has struck down the said amendment of clause (iv) in <CITATION> ., 187 I.T.R. 517. The approach of <ORG> is at variance with ours. It has practically accepted the line of reasoning put forward by the assessees which has not commended to us. Among other reasons, <ORG> was impressed by the difference in the language employed in Section 10(2)(xiv)(d) and the one employed in Section 20 (4) of the U.K.Finance Act, which reads as follows:

"(4) Where a deduction is allowed for any year under this or the last preceding section in respect of expenditure represented wholly or partly by any assets, no deduction shall be allowed under any provisions of the Income-tax Act other than this part of this Act in respect of wear and tear, absolescence, depreciation or exceptional depreciation of these assets for any year of assessment during any part of which they are used by the person carrying on the trade for scientific research related to the trade."

It is apparent that the scheme and structure of the English provision is different than ours, as has been demonstrated by my learned brother <NAME> J.

So far as the arguments of taking away of vested rights is concerned, it is evident from the facts stated in the writ petition 1153/81 - which was treated as representative of the facts and contentions in all the writ petitions and with reference to which facts were arguments addressed itself that none of the assessments relating to any of the assessment years concerned herein has become final. They are pending at one or the other stage and in one or the other forum. I need not dilate upon this aspect inasmuch as the impugned amendment merely makes explicit what was implicit in the unamended clause, as explained hereinabove. In such a situation, the argument of any right vesting in the assessees is misplaced.

The writ petitions accordingly fail and are dismissed. No costs.

N.P.V. Petitions dismissed.