M SUBBARAJA MUDALIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE order of the Income-tax Officer, Cuddalore, revising the assessment of the petition under section 35 of the Income Tax Act, 1961 is challenged in this petition as beyond the jurisdiction and power of the officer.

(2.) THE proceedings are concerned with the assessment year 1953-54. THE petitioner who is the assessee was anon-resident and he was residing at Penang. For the assessment year in question the Income-tax Officer completed the assessment and issued an order on 31st December, 1953, computing the total income of the assessee at Rs. 27, 560 and treating the assessee as a non-resident. Section 17(1) of the Act provides for the determination of the tax payable in certain cases including that by individuals not resident in the taxable territories. THE tax payable by a non-resident assessee is under this section computed on the basis of the maximum rate applicable to his total income liable to tax. THE assessee is, however, given an option by the first proviso to section 17 of the Act to effect a declaration and on this being made, the tax would be assessed on the basis of the rate applicable to his total world income the relevant words being

(3.) IT is no doubt true that a mistake capable of being rectified under section 35 is not confined to clerical or arithmetical mistakes. On the other hand it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. In the present case that a declaration which purported to be under the first proviso to section 17 was filed by the assessee though out of time, if regard were had only to the dates specified in the first proviso, is not in controversy. That this declaration was treated by the assessing officer as one within the first proviso and that the assessment proceeded on the basis that the assessee had properly exercised his option is also not in dispute. The point, however, on which the mistake is said to have crept in was that the assessing authority had misconstrued the scope of the second proviso to section 17(1) as enabling him to condone that delay in the exercise of the option. This would certainly not be a mistake a apparent from the record. The scope of the second proviso is to say the least not so absolutely clear as to preclude and argument that it would apply to the petitioner's case. In this view, I am clearly of the opinion that the mistake, assuming one existed, was not apparent from the record within the meaning of section 35(1) of the Act and the order of the Income-tax Officer rectifying the mistake with which the Commissioner refused to interfere is clearly beyond the jurisdiction of the assessing authority under section 35 of the Act.