SHANTILAL RAWJI Vs. NAIR M C ITO FOURTH

JUDGEMENT

(1.) THIS is a petition which has come before us as a result of the judgment delivered by us on the 26th June, 1957 in appeal No. 105 of 1956. The facts were briefly stated in the judgment but they may be recaptitualte here.

(2.) AN assessment order was passed on 10th March, 1953, against the petitioner in respect of his income for the assessment year 1948 -49. The total income assessed was Rs. 95,928 and on of the items of this income was a one -third share from Bombay Zone Works in respect of which a contract had been taken by the Joint Hindu family of which the assessee wa a coparcener. It appears that the assess had paid advance tax on his own estimate under section 18A and after the assessment order had been sassed, the Income -tax Officer discovered that penal interest amounting to Rs. 7,562 -10 -0 had not been charged to the assessee. The penal interest was due under section 18A(6) inasmuch as the assessee had not paid any advance tax in respect of the income of Rs. 49,808 shown in the assessment order. On the 14th February, 1956, a notice was issued by the Income -tax Officer calling upon the petitioner to show cause against a rectification order which the Income -tax Officer proposed to pass in respect of the penal interest amounting to Rs. 7,562 -10 -0, and ultimately the order of rectification was passed on the 9th October 1956, by which the Income -tax Officer rectified the assessment order by adding penal interest in the sum of Rs. 7,562 -10 -0. On the 11th October, 1956, a notice of demand was issued by the Income -tax Officer and the petitioner filed this petition challenging the order of rectification as being without jurisdiction.

(3.) THE contention of the Department is that looking to the provision of section 18A(6) there was a statutory obligation upon the Income -tax Officer to charge penal interest and there was a clear error of law on the face of the record when the Income -tax Officer failed to carry out his statutory obligation and it was open to the Income -tax Officer under section 35 to rectify that error. We do not agree with Mr. Palkhivala that the error contemplated by section 35 must be an error of fact. It is true that in Sidhramappa v. Commissioner of Income -tax we were dealing with an error of fact but there is nothing i the language of section 35 to suggest that the error contemplated by that section must necessarily be an error of fact. It can be an error of law. If all the facts are on the record and no further elucidation or ascertainment is necessary and if on those facts it is clear that the Income -tax Officer has rectified under section 35. Mr. Palkhivala's contention is that inasmuch as the Income -tax Officer has not deletion his contention is that inasmuch as the Income -tax Officer has not dealt in his assessment order with this aspect of the matter at all it is not dealt in his assessment order with this aspect of the matter at all it is not a case of rectification it is rather a case of revision or review. We are unable to accept that argument. An error of law may consist of deciding a particular point contrary to the clear provision of a statute. It maybe equally due to ignorance or overlooking of the clear provisions of the statute. It is difficult to understand why if the Income -tax Officer acts contrary to law and says so in his assessment order that error could be rectified under section 35; but if he overlooks of clear provision of the law and fails to give effect to that provision of the law, it should not be considered as a mistake and it cannot be rectified under section 35. An error of law is an error of law, whether the error consists in the failure to carry out a statutory duty imposed upon the officer or in acting in a manner which is contrary to the mandate of the Legislature; and in this case if the statute required the Income -tax Officer to impose a penal interest upon the assessee and that obligation is clear from the record than the failure to discharge that obligation would be an error which would be susceptible of being correct and rectified under section 35.