HAKIM UDDIN KHAN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner, Hakimuddin Khan, has prayed for the issue of writs of certiorari to quash an order of the Income-tax Officer dated 13th December, 1954, passed under section 35 of the Income-tax Act and an order of the Commissioner of Income-tax dated 18th September, 1955, dismissing a revision against that order of the Income-tax Officer. In addition, there is a prayer for the issue of a writ of mandamus directing the Income-tax Officer, Mirzapur, to withdraw his notice of demand dated 13th December, 1954, issued to the petitioner in pursuance of his order of the same date under section 35 of the Income-tax Act.

(2.) THE assessee was assessed to income-tax in respect of his income for the assessment year 1953-54 by the income-tax Officer by his order dated 22nd September, 1953. In this assessment was included income from dividends received by the petitioner in respect of shares held by him in some companies including Messrs. Obeetee Limited. in the assessment year the Income-tax Officer; found that a net income of Rs. 17,056 had been received by the assessee as dividends. In respect of these dividends warrants had also been filed by the assessee. THE Income-tax Officer then found that the grossed up income from dividends amounted To Rs. 22,967-6-0 and the income-tax deducted at source was Rs. 5,629-15-0 and the surcharge was Rs. 281-10-0. On these findings, the Income-tax Officer further proceeded to work out the total income of the assessee and to determine the tax payable by him. To this assessment order no objection was taken by the petitioner. Subsequently, on 8th October, 1954, the Income-tax Act to the petitioner informing him that a mistake had occurred in calculating his income from dividends for the assessment year 1953-54 in so far as a sum of Rs. 16,100 received by him as dividend from Messrs. Obeetee Limited, Mirzapur, had been wrongly grossed up and credit to tax allowed to him. It was further stated that, since the mistake was apparent from the records and his income from dividends had been taken at a wrong figure, the Income-tax Office proposed to rectify it under section 35 of the Income-tax Act. THE assessee filed objections against this notice. THEreafter the Income-tax Officer passed the order under section 35 of the Income-tax Act on 13th December, 1954, which is now challenged in this writ petition. In this order, the Income-tax Officer took note of the fact that the dividend of Rs. 16,100 had been paid by Messrs. Obeetee Limited, Mirzapur, out of the reserve fund created on 31st December, 1949, from the profits of earlier years and, while computing the total income of the assessee, this dividend was wrongly grossed up and credit of tax deducted at source amounting to Rs. 5,629-15-0 was wrongly allowed to the assessee. He then proceeded further to hold that the mistake was committed on account of wrong calculation, so that the was entitled to make the correction. THEreafter the assessee went up in revision before the Commissioner of Income-tax who, by his order dated 18th September, 1955, dismissed the revision upholding the order of the Income-tax Officer.

(3.) FOR these reasons, we allow this petition and quash the order of the Income-tax Officer dated 13th December, 1954, passed under section 35 of the Income-tax Act and the order of the Commissioner of Income-tax dated 18th September, 1955, passed in revision confirming that order of the Income-tax Officer. The petitioner will be entitled to costs of this petition form the Department which we fix at Rs. 400. FOR purposes of taxation, the fee of learned counsel for the Department will be taken at the same amount.