1968 (2) TMI 22 - HC - Income Tax

Rectification - HC - Whether the period of 4 years, prescribed for rectification u/s 35(1) had expired, the High Court had power to issue a writ directing the ITO to make the necessary rectification - Held, yes

Summary

Issues:
Rectification under section 35 of the Indian Income-tax Act, 1922.

Analysis:
The judgment pertains to three connected petitions under Article 226 of the Constitution seeking rectification under section 35 of the Indian Income-tax Act, 1922. The petitioner's total income was fixed at a certain amount, including share income from a firm. Subsequently, the firm's assessment was done, resulting in a lower share income for the petitioner. The petitioner requested rectification, but the authorities did not act, leading to the filing of the writ petition. The key legal provision in question is section 35 of the Act, which allows rectification of mistakes apparent from the record, either on the officer's own motion or upon the assessee's request. Sub-section (5) of section 35 deals with rectification in cases involving subsequent firm assessments.

The petitioner contended that the officer had the necessary material for rectification within the limitation period but failed to act. The respondents argued that the limitation period had expired, rendering intervention by the court impermissible. The court considered precedents like Kadiruvel Nadar v. State of Madras and Commissioner of Income-tax v. Duncan Brothers and Co. Ltd, emphasizing that the limitation period sets the time for initiating proceedings but does not restrict the exercise of power thereafter. The court cited All India Groundnut Syndicate Ltd. v. Commissioner of Income-tax and Rex v. Hanley to support the principle that a public officer's failure to perform a duty can be remedied through a mandamus, even if the statutory time limit has passed.

The court held that the officer's failure to rectify the mistake, despite being notified by the assessee, did not preclude rectification at a later stage. Therefore, the court allowed the petitions, directing the officer to rectify the assessment orders and awarded costs to the petitioners. The judgment underscores the court's authority to compel rectification even after the statutory limitation period has lapsed, emphasizing the duty of public officials to fulfill their obligations.

This detailed analysis of the judgment highlights the issues surrounding rectification under section 35 of the Indian Income-tax Act, 1922, the application of statutory limitations, and the court's power to intervene in cases of administrative inaction.