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TMI Blog1958 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... statements. The officer examined the accounts being detail and ultimately dropped proceedings as he was then satisfied that the petitioner's s income was below the taxable limit. For the assessment years 1945-46, 1946-47, 1947-48 and 1948-49, the Income-tax Officer made assessments under section 23(3) of the Act after investigation and after looking into the accounts and the statements produced by the petitioner. The income assessed for these years was respectively ₹ 2,234, ₹ 2,841, ₹ 4,398 and ₹ 6,332. Subsequently the Income-tax Officer took action under section 34(1)(a) of the Act for the assessment years 1944-45 to 1948-49 and issued notice that he proposed to re-assess the income of the petitioner. The Income-tax Officer took action on the basis that for the assessment year 1944-45 no return had been filed, and, that as regards the other years, the petitioner had failed to disclose fully and truly all the material particulars of his income and that as a result his income had escaped assessment. By orders, all of them dated February 20, 1957, the Income-tax Officer completed the re-assessment for the years 1944-45 to 1948-49 on revised total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the credits in question did not represent genuine borrowings. But the Tribunal was also of the opinion that the Department had not correctly appreciated the situation when they added the entire credits from year to year. The Tribunal found that the maximum that had been brought in as cash credits was ₹ 22,500 and that this had happened in the assessment year 1947-48. It considered that on this basis all the credits could be explained. In this view it directed that ₹ 3,500 should be added for the year 1944-45, ₹ 1,500 for 1945-46 and ₹ 17,500 for 1947-48 and nothing should be added for 1946-47 and 1948-49. The petitioner applied to the Tribunal under section 66(1) of the Income-tax Acts to state a case and refer certain questions to the Kerala High Court in respect of the assessment for the years 1944-45, 1945-46, and 1947-48. On November 26, 1956, the authorised representative of the Income- tax Department filed a petitioner under section 35 of the Act before the Tribunal pointing out that the order of the Tribunal dated November 8, 1956, required rectification. In brief that application pointed out that the Tribunal had given relief of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so made. The final result of all this was that the appeal which the petitioner had preferred to the Income-tax Appellate Tribunal was dismissed. These writ petitions have been filed to quash the order of the Tribunal whereby it purposed to rectify the mistakes it had committed in its earlier order The question for determination is whether in rectifying its earlier order in the circumstances that have been set out the Tribunal acted in excess of its jurisdiction. Mr. Viswanatha Aiyar, the learned advocate for the petitioner, contended that though under section 35(2) of the Income-tax Act the Tribunal can rectify a mistake suo motu or on the application of the assessee, it cannot do so at the instance of the Income-tax Department, and that in fact the Tribunal would be deprived of its own power to act suo motu if its attention is drawn to an error by the authorised representative of the Income-tax Department. Mr. Rama Rao Sahib, the learned advocate for the Department, however, contended that not only has the authorised representative of the Department a right to apply to the Tribunal pointing out any obvious mistake that may have been made but that when such an applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and allowed a reasonable opportunity of being heard. The second proviso is not of any consequences now. The second sub-section of section 35 merely states that the Appellate Tribunal also may rectify its mistakes in like manner . The words in like manner do not mean anything more in the context than similarly . This means that the Tribunal can rectify mistakes it has made provided the mistakes are apparent from the record. It is given power to act suo motu. It is bound to rectify the mistake when the existence of the mistake is brought to its notice by the assessee. It may not rectify a mistake to the prejudice of an assessee until he has been given notice and allowed a reasonable opportunity of being heard. The words in like manner are not, in our opinion, sufficient to carry the matter any further. Mr. Rama Rao Sahib contended that sub-section (1) of section 35 gives the assessee a right of draw the attention of the Tribunal to any mistake it may have made and that when the assessee does so the Tribunal is bound to take action, and that the words in like manner are sufficient to comprehend a similar application by the authorised representative of the Department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of an assessee to move the Commissioner to take action but as the Commissioner may take action of his own motion the assessee must have the right of calling his attention to a prejudicial order and of asking that action be taken. A Bench of three Judges of Rangoon High Court expressed complete accord with these observations in Amulakharai Chhotalal v. Commissioner of Income-tax [1940] 8 I.T.R. 382 at 402. The case in Sidhramappa v. Commissioner of Income-tax.[1952] 21 I.T.R. 333 is even more directly in point. In that case contention exactly similar to that which Mr. Viswanatha Aiyar pressed before us was urged and repelled by the court. We quote the relevant passage: It is also contended by Mr. Kola that the power of rectification can only be exercised by the Tribunal on its own motion. The Tribunal cannot exercise the power of rectification at the instance of the Commissioner. Now when we turn to section 35(2) the power of rectification which is conferred upon the Tribunal is the same as the power which is conferred upon the Commissioner and the Appellate Assistant Commissioner under section 35(1) and that power is to rectify on its own motion its own mistake appeari ..... 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