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Showing contexts for: 82 itr 50 in Lilavatiben Harjivandas Kotecha vs J.V. Shah, Income-Tax Officer, Ward-D, ... on 29 January, 1979Matching Fragments
9. In our opinion, that is the real question which is needed to be decided in the present proceedings and, incidentally, that is also the question which is urged in the special civil application and hence we are taking up both these matters and disposing of them by this common judgment.
10. In order to appreciate the contentions regarding powers of rectification. It is necessary first to refer to the provisions regarding rectification under s. 35 of the Act of 1922, and also refer to similar provisions in s. 154 of the Act of 1961. Under s. 35 : "The Commissioner or the Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision under section 33A and the Income-tax Officer may, at any time within four years from the date of any assessment order or refund order passed by him on his own motion, rectify any mistake apparent from record of the appeal, revision, assessment or refund, as the case may be, and shall within the like period rectify any such mistake which has been brought to his notice by an assessee......" that was the provision under s. 35 of the 1922 Act. It is clear that what is emphasised in the aforesaid section is that the powers of rectification could be exercised in respect of a mistake apparent from the record. Under s. 154 of the Act of 1961 also, the wording is identical, namely, "with a view to rectifying any mistake apparent from the record". In T. S. Balaram v. Volkart Brothers [1971] 82 ITR 50, the Supreme Court held that a mistake apparent on the record or from the record must be an obvious an patent mistake and not some-thing which could be established by a long drawn process of reasoning on points on which there might conceivably be two opinions. A decision on a debatable point of law was not a mistake apparent from the record .Hegde J., speaking for the Supreme Court, in Volkart Brothers' case [1971] 82 ITR 50, observed at page 53 :
11. It is the light of this interpretation of what is meant by "a mistake apparent from the record" by the Supreme Court in Volkart Brothers' case [1971] 82 ITR 50 that we will have to consider whether the rectification orders passed by the ITO concerned against the assessee, who is also the petitioner in the special civil application before us, were within the scope of the powers contemplated by s. 154 and earlier by s. 35 of the Act of 1922.
12. As regards the assessment year 1961-62, in the order dated September 10, 1970, a copy of which is annex, "E" to the petition, the ITO stated, after setting out the facts and after referring to clause 6 of the partnership deed :
14. As pointed out earlier, the order of rectification for the two years, namely, assessment year 1961-62, which is challenged in the special civil application, and the assessment year 1962-63, which is challenged in the income-tax reference, were both passed on the very same day, namely, September 10, 1970, and as we have pointed out above, they were passed in identical words and for identical reasons.
15. The learned Advocate-General, appearing in the special civil application for the petitioner, who is also assessee in the I.T. Reference, has urged that there was no error apparent from the record in the sense pointed out by the Supreme Court in Volkart Brothers' case [1971] 82 ITR 50 because of three grounds. His first ground is that the decision of the Gujarat High Court in Dayalbhai Vadera's case [1966] 60 ITR 551 has not been followed by the Mysore High Court in two of its decisions and thus there was a question open to debate whether the decision in Daylabhai's case could be invoked for the purpose of rectification. He, secondly, pointed out that as regards clause 6 of the partnership deed, which is in identical terms in the case of Rasik Solvent Extraction Company and Krishna Oil Mills, there were two interpretations possible and there was scope for debate and argument as regards the exact meaning of clause 6, namely, whether resort could be had to the capital contribution brought in on behalf of the minor in each of these two firms for meeting the losses attributable to their respective shares in these two firms. His third contention was that in 1944, the CBR had issued a circular, a copy of which has been set out as annex "B-1" in the special civil application, and that in the light of this circular which was a beneficent circular meant for the benefit of the assessee and in view of the further fact that this circular was in force till 1972 when it was ultimately with-drawn by the CBDT, it was not open to the ITO to hold in rectification proceedings that there was an error apparent on the face of the record or that there was any error at all in the earlier original assessment orders for these two respective years, if we turn to annex. "B-1", the circular is in these terms :
18. It is further to be noted that the decision in Dayalbhai Vadera's case [1966] 60 ITR 551 (Guj) was in the context of a clause of a partnership deed which was altogether different from the clause before us. That is another point of argument and debate which is required to be considered in the context of the observations of the Supreme Court in Volkart Brother's case [1971] 82 ITR 50 (SC).
19. In Dr. T. P. Kapadia v. CIT [1973] 87 ITR 511, a Division Bench of the Mysore High Court consisting of G. K. Govinda Bhat and B. Venkataswami JJ. held :