9911796707
TMI Blog1973 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... was validly passed?" The assessment year in question is 1964-65 and the assessee is a registered firm. The firm was originally assessed for the year 1964-65 on March 27, 1965, on a total income of Rs. 35,361 (sic). Out of this total income, Rs. 40,661 consisted of long-term capital gains. The business income of the firm and the capital gains were both allocated amongst the partners in accordance with the relevant provisions of the Income-tax Act. No income-tax was charged on the assessee-firm because the amount of Rs. 40,661 was not taken into consideration for the purpose of calculating the income-tax payable by the registered firm itself under the provisions of section 182. Subsequently, on June 18, 1965, the Income-tax Officer thought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter, at the instance of the Revenue, the above two questions have been referred to us. It is obvious that if we come to the conclusion that the rectification proceedings under section 154 were not at all maintainable, there is no question of considering the merits of the case. As a matter of fact, the Supreme Court has observed in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, that the High Court would not be justified in such a case in going into the question whether the original assessments were in accordance with law. We would, therefore, reverse the order on the questions that have been referred to us and we would treat question No. 2 as question No. 1 and in the event of our holding that the rectification proceedings were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " The question whether section 17(1) of the Act of 1922 was applicable to the case of the respondent firm was not free from doubt, and it was not open to the Income-tax Officer to go into the true scope of the provisions of the Act in a rectification proceeding under section 154 of the Income-tax Act, 1961 : the officer was wrong in holding that there was a mistake apparent from the record of assessments of the firm." In view of this clear pronouncement of the Supreme Court, it is obvious that in the instant case also the Income-tax Officer was wrong in holding that there was a mistake apparent from the record of assessment of the assessee-firm and it was not competent for him to go into the true scope of the provisions of the Act in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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