VUTUKURI KANAKIAH Vs. ADDITIONAL INCOME-TAX OFFICER

JUDGEMENT

(1.) This is an application under article 226 of the Constitution of India for issuing a writ of certiorari to quash the order of the Additional Income-tax Officer, Visakhapatnam, dated March 31, 1955. The petitioner who is one of the partners of the registered firm of Messrs. Vuppala Peda Venkataramaniah and Sons, Oil Mills, Anakapalli, submitted a return of income-tax on August 31, 1951, for the assessment year 1951-52. He declared his income as Rs. 30, 823 including therein a provisional sum of Rs. 10, 986 as his share of income from the aforesaid firm. As the firm's assessment was not completed by that time he requested the Department to accept that share of income provisionally as correct income and make assessment subject to the condition that it may be revised, if necessary, by the Department under section 35 as and when the firm's assessment is completed. The Income-tax Officer, as is evident from the order dated October 31, 1951, acceded to his request, made an assessment and determined the sum payable as Rs. 5, 841-1-0. The assessment of the firm under section 23(1) was completed on March 31, 1955, and the total income was computed at Rs. 1, 10, 934 for the assessment year 1951-52. According to this, the assessee's correct share of income was found to be Rs. 27, 279 instead of Rs. 10, 986 as adopted in the original assessment. The Income-tax Officer thereupon revised the assessment of income in pursuance of the agreement at the time of the original assessment under section 35 of the Act and passed the impugned order. The petitioner has challenged the legality of the order made and the competence of the authority purporting to make the order under section 35 of the Income-tax Act Several contentions were raised by the respondent. It was urged that as the assessee had expressly agreed to a revision of his income and as the provisional assessment was made at his instance, it is not open to him to turn round when the assessment of the firm warrants further taxation on him and say that the Income-tax Department had no longer any authority to revise the assessment. His second contention is that the earliest assessment being made on a provisional basis the assessee had no vested right to any finality of that assessment. The third contention is that since he has a remedy by way of revision, he cannot invoke the writ jurisdiction of this court under article 226 of the Constitution of India. It is further urged that as the share income from the partnership firm is part of the income on which the assessment was made, the record of the assessment of the firm's income in so far as the petitioner's share is concerned is in fact a part of the record of the assessment of the petitioner's income. The income-tax authority could therefore under section 35(1) rectify the mistake apparent from such record. Lastly, it was urged that the provisions of section 35(5) did apply to this assessment as the provision is merely declaratory of the pre-existing law and has retrospective operation Three points emerge out of the rival contentions which require consideration :

(2.) I will take up the second point first, for if that is decided against the petitioner, that will be the end of the matter and the petitioner would fail. Section 35(5) has been introduced by virtue of Act XXV of 1953, which received the assent of the President on May 24, 1953. It reads as below

(3.) Section 1(2) reads thus