66 and 67.
asked the Chancellor of the Exchequer (1) whether his attention has been called to the decision by Mr. Justice Atkinson in the King's Bench Division on 24th March, that compensation rent under Section 2 of the Compensation Defence Act, 1939, is not assessable for Defence Contribution insofar as those taxpayers who were wrongly assessed by revenue officials are penalised whilst others who challenged the decision of these officials have been able to avoid payment on an incorrect assessment; and whether he will make an ex gratia repayment to those who have suffered in this connection;(2) whether he is aware that by the decision in G.I.R. v. Buxton Palace Hotel Limited on 24th March, 1948, by Mr. Justice Atkinson in the King's Bench Division that compensation rent under Section 2 of the Compensation Defence Act, 1939, is not assessable for National Defence Contribution, but that despite this judgment, the Board of Inland Revenue have stated that they are unable to agree to this decision being applied retrospectively to any cases which in their view are for technical reasons not regarded as under appeal; and, in view of the obscurity of the legislation involved, what steps he will take to ensure that the present attitude of the Board of Inland Revenue is reconsidered.
In general, an assessment to tax which has become final and conclusive can be re-opened only under the provisions of Section 24 of the Finance Act, 1923, which deals with certain cases of error and mistake and is applied to Profits Tax—formerly called National Defence Contribution—by Section 35 and the Fifth Schedule to the Finance (No. 2) Act, 1945. Under these provisions a judicial decision has no retrospective effect in relation to assessments which have become final and conclusive under the law, and the cases to which the hon. Member refers have accordingly been correctly dealt with. My right hon. and learned Friend cannot accept the suggestion that an exgratia payment should be made to those taxpayers who did not avail themselves of their statutory right of appeal on the point.