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TMI Blog1960 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four years from the date of any assessment passed by them to rectify any mistake " apparent from the record " and in the Civil Procedure Code the words are " an error apparent on the face of the record " and the two provisions do not mean the same thing. The restrictive operation of the power of review under Order XLVII, rule 1, Civil Procedure Code, is not applicable in the case of section 35 of the Act and, in our opinion, it cannot be said that the order of the Income-tax Officer in regard to the assessment in dispute was without jurisdiction. Appeal allowed. - C.A. 311 OF 1959 - - - Dated:- 13-12-1960 - Judge(s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the rate should have been 5 annas in a rupee. By an order dated August 12, 1954, he rectified the error. Under section 18A advance income-tax had to be paid and the respondent company had deposited only ₹ 5,000 and, therefore, became liable to penal interest under section 18A(8) of the Act. By the same order this omission to impose penal interest was corrected and this error was thus rectified. Against this order the respondent company went in revision under section 33A(2) to the Commissioner of Income-tax but the revision was dismissed. Thereupon the respondent company filed a petition in the High Court of Kerala under article 226 of the Constitution on the ground that section 35 of the Act did not apply and that on the merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for the exercise of the powers under section 35 had not been laid and, therefore, the Income-tax Officer had no jurisdiction to make the order that he did. The High Court also held that the levy of penal interest under section 18A(8) of the Act for failure to make advance deposit under section 18A(3) was also without jurisdiction. The learned judges of the High Court seem to have fallen into an error in equating the language and scope of section 35 of the Act with that of Order XLVII, rule 1, Civil Procedure Code. The language of the two is different because according to section 35 of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four years from the date of any as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order and not a mistake resulting from an amendment of the law even though it was retrospective in its effect, it was held that it was a case of error apparent from the record. Gajendragadkar, J., in his judgment said : At the time when the Income-tax Officer applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1, 1952. Thus this court has held that discovery of an error on the basis of assessment due to an initial mistake in determining the written down value is a mistake from the record and so is a misapplication of the law even though the law came into operation retrospectively. The Income-tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Commissioner of Income-tax v. Khatau Makanji Spinning and Weaving Co. Ltd. ; but the facts of those cases were different. In the first case there was no total income and the Finance Act was not applicable in that case. In the second there was no profit in any preceding year and, therefore, the fiction failed because it postulates that there should be undistributed profits of one or more years immediately preceding the previous year. In the third case also the Finance Act was inapplicable because the additional tax was not properly laid upon the total income and what was actually taxed was never a part of the total income of the previous year. In our opinion the order of the High Court was erroneous. We therefore, allow this appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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