9911796707
TMI Blog1968 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... a partnership business started in the year 1949, in which the partners were Hirday Narain, his major son, Yogendra Prakash, and four minor sons, Surendra Prakash, Gajendra Prakash, Devendra Prakash and Bhupendra Prakash. This firm remained in existence up to July 11, 1952. But from July 12, 1952, it was reconstituted so as to exclude the father, Hirday Narain, and so as to introduce a later born minor son, Satendra Prakash, as a partner. Surendra Prakash had become major in the meantime, but Gajendra Prakash, Devendra Prakash and Bhupendra Prakash remained minors. An assessment order was passed against the firm on March 28, 1956, in respect of the assessment year 1953-54, apportioning the income among the partners as follows: " Net income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arises directly or indirectly--.... (ii) from the admission of the minor to the benefits of partnership in .a firm of which such individual is a partner." On the same day the above-quoted assessment order was passed against the firm, i.e., on March 28, 1956, individual assessment orders were passed against the separate partners and each of the three petitioners was assessed on an income of Rs. 13,193 (viz., the amount received from July 12, 1952, to September 27, 1952, only, and not the income received during the earlier period up to July 11, 1952). Subsequent modifications, which have not been challenged in these petitions, were made on November 24, 1956, and January 14, 1958, which had the effect of raising the assessed incomes of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown against each of them in the orders of assessment passed on January 14, 1958. A subsidiary contention raised in the writ petitions was that the amount of income derived by each petitioner from another firm (Choubey Madan Gopal) had been illegally enhanced by the order of March 3, 1960, from Rs. 53 to Rs. 225 without issuing any notice in respect of this item. But it appears that this matter was not pressed before the learned single judge, for it has not been dealt with by him in his judgment; and there is no specific averment about it in the grounds of appeal. We propose, therefore, to ignore this part of the case. The only part of the petitioners' case that found favour with the learned single judge was the plea that they were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in question. An exception to this rule has been introduced by sub-section (5) of section 35, which permits the assessment of a person who is a partner in a firm to be rectified on the basis of facts disclo sed by the assessment or reassessment of the firm; but that does not mean that the assessments of other partners can be looked into for the purpose of discovering mistakes in the assessment of that person. Learned counsel for the appellants, consequently, argues that in the present case it was not open to the Income-tax Officer to exercise the power of rectifying the petitioners' assessments under section 35 on the basis of a mistake revealed by the judgment given by the Appellate Tribunal on January 13, 1959, in the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory provisions and pronouncements of the Supreme Court. We see no reason why this principle should not also apply to a case where a High Court has given a decision that shows an existing assessment order to be erroneous; and if the argument is taken to its logical extreme, the Income-tax Officer should be able to take note of any judicial pronouncement by any court or tribunal, when considering whether there is a " mistake apparent from the record " of a prior assessment. Once the Income-tax Officer read the judgment of the Appellate Tribunal in Hirday Narain's appeal, he would immediately discover that section 16(3)(a)(ii) had been wrongly applied to the case of the petitioners, and here would be a " mistake apparent from the record " whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not been assessed to tax. This is a mistake apparent from the record and as such it was sought to be rectified under section 35 of the Income-tax Act. " Learned counsel for the appellants objects that the so-called discrepancy between the declared income and the income actually assessed was no discrepancy at all, because it stood explained by the reference to section 16(3)(a)(ii) in the assessment order of the firm dated March 28, 1956. But the appellants cannot have it both ways; if the Income-tax Officer was precluded from looking into extraneous assessment records for the purpose of detecting a " mistake take apparent from the record " on the assessment records of the appellants, he was in no way required in the initial s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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