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Issues Involved:
1. Power of the Tribunal to rectify an order under Section 35. 2. Competency of the assessee's application to rectify the order under Section 35. 3. Determination of the bad debt's permissibility as a deduction in the assessment year 1943-44. Issue-wise Detailed Analysis: 1. Power of the Tribunal to Rectify an Order under Section 35: The Tribunal initially allowed the assessee's appeal but later rectified its order under Section 35, leading to the dismissal of the appeal. The primary contention was whether the Tribunal's action constituted a review or revision rather than a rectification. The Tribunal's power under Section 35(2) is to rectify its own mistakes, which includes rectification on the application of a party, such as the Commissioner. The Tribunal's power to rectify on its own motion is broader and includes the ability to act upon a party's application. The Tribunal's rectification of its order was within its power, as the mistake was apparent on the record, specifically the erroneous assumption regarding the assessment year. The Tribunal's action of dismissing the appeal after rectification was a necessary consequence of correcting the mistake and was not beyond its rectification powers. 2. Competency of the Assessee's Application to Rectify the Order under Section 35: The assessee's application for rectification was based on the Tribunal's failure to consider his application for leave to appeal to the Privy Council. However, this omission did not constitute an error apparent on the face of the record. The Tribunal's oversight of this fact did not amount to a patent mistake that could be corrected under Section 35. The Tribunal's decision not to rectify its order at the instance of the assessee was correct, as the failure to consider the application for leave to appeal did not present an error that was apparent and rectifiable on the record. 3. Determination of the Bad Debt's Permissibility as a Deduction in the Assessment Year 1943-44: The Tribunal determined that the debt became a bad debt on the 29th of September, 1941, when the High Court dismissed the appeal. This date was within the assessment year 1943-44. The fact that the assessee applied for leave to appeal to the Privy Council did not affect the finality of the High Court's judgment, as no appeal was actually preferred. The determination of a bad debt is a factual question based on the possibility of debt realization. Since the High Court's judgment rendered the debt irrecoverable, the Tribunal correctly identified the date of the bad debt. The assessee's later entries in his books of account did not influence the objective determination of the debt's status. The Tribunal's decision that the debt became bad on the specified date was upheld, and the debt's deduction in the assessment year 1943-44 was not permissible. Conclusion: - Question No. 1: The Tribunal had the power to rectify its order under Section 35. - Question No. 2: The assessee's application to rectify the order was not competent. - Question No. 3: The Tribunal was correct in holding that the bad debt was not a permissible deduction in the assessment year 1943-44. The assessee was ordered to pay the costs of the reference.
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