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TMI Blog1965 (12) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ax for the year 1954-55. He was assessed for that year by exhibit P-2 order, dated April 27, 1962. By that order, no interest had been charged under section 18A(6) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act). It is said that a notice dated September 3, 1964, was issued to the petitioner on September 4, 1964, asking him to show cause why interest under section 18A(8) of the Act should not be charged. It is further averred that the petitioner did not object to the date of hearing which was fixed on September 19, 1964. So an order, exhibit P-1, dated September 19, 1964, has been passed reading as under: " I find from my records that interest is due from you under section 217 at the rate of 4 per cent. in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the purpose of elucidating what is meant by " error apparent on the face of the record ". " A mistake must be patent on the record; it must not be a mistake which can be discovered by a process of elucidation, or argument, or debate. The mistake being patent on the record, rectification must be limited to correcting that mistake only without any further argument or debate. " The argument is that there was no error apparent on the record relating to the assessment that was concluded by exhibit P-2 order. The question as to whether interest under section 18A(6) must be charged depended on the exercise of discretion vested in the Income-tax Officer by the fifth proviso to that sub-section and the further questions of fact as to wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not being attributable to the assessee. (2) Where a person is under section 43 deemed to be an agent of another person and is assessed upon the latter's income. (3) Where the assessee has income from an unregistered firm to which the provisions of clause (b) of sub-section (5) of section 23 are applied. (4) Where the 'previous year' is the financial year or any year ending near about the close of the financial year and large profits are made after the 15th of March, in circumstances which could not be foreseen. (5) Any case in which the Inspecting Assistant Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 18A(6) is justified." From the mere fact that interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the introduction of the fifth proviso to section 18A(6), which I have already read. It was ruled that it must be supposed that the proviso was actually in the statute book when the order was passed, though actually there was no such provision in the Act then, and the question as to whether there was a patent error or not should be determined on the basis that the proviso existed at the time of the order of assessment. So it had to be assumed that the Income-tax Officer had a discretion in charging interest or in waiving it. It was, therefore, held that it was not possible to conclude that there was an error apparent on the face of the record from the mere fact that interest had not been charged. It is no doubt true that the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly satisfied at least one of the conditions precedent prescribed by the rule for the applicability of the fifth proviso to section 18A(6) of the Act. It is, therefore, urged that it is only in such cases where it is clear that the assessee was a person who had satisfied one or the other of the conditions prescribed by rule 48 of the Indian Income-tax Rules, 1922, that it can be said that there was a discretion vested in the Income-tax Officer which he could have exercised in favour of the assessee. Where it is not shown that rule 48 or any part of it has been satisfied, the Income-tax Officer would have had no discretion and the order omitting to charge interest under section 18A(6) would, therefore, be patently erroneous. Before dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been charged in the assessment order it is patent that an error has been committed. I do not think this argument is sound. Interest to be added to the tax must be calculated in the manner laid down in sub-section (6). This means that there will be addition of interest to tax only when such is chargeable under sub-section (6) of section 18A of the Act. With the utmost respect I am unable to agree with the ruling in Lata Mangeshkar v. Union of India and the ruling in V. N. S. Sockalingam Chettiar v. Income-tax Officer, Pudukottai has no application. The order, exhibit P-1, was not sought to be supported on any basis other than as an order under section 35 of the Indian Income-tax Act, 1922. I am of the view that the Income-tax Officer had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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