KALOORAM TIRASILAL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY this application under Articles 226 and 227 of the Constitution, the petitioners seek a writ of certiorari for quashing an order made by the Income-tax Officer, C-Ward, Jabalpur, on 28th March, 1962, under Section 35 of the Indian Income-tax Act, 1922, rectifying an error in the assessment made against the petitioners for the assessment year 1956-57.

(2.) THE matter arises thus : In the course of assessment proceedings with respect to the assessment, year 1956-57, the Income-tax Officer noticed an item of Rs. 44,659 as cash credit in the capital account of the petitioner-assessee. When asked to explain this item, the assessee said that they were sale proceeds of 508 tolas of gold and gold-ornaments belonging to the family. THE Income-tax Officer was not satisfied with this explanation. Me took the view that having regard to the financial condition of the assessee, the accumulation or possession of so much gold as to yield Rs. 44,659 as sale proceeds was not possible. Having regard to the circumstances of the assessee, he came to the conclusion that the assessee had derived Rs. 40,000 as income from undisclosed sources.

(3.) IN our judgment, this petition must be dismissed. It is now authoritatively settled by the decisions of the Supreme Court in Maharana Mills (Private), Ltd. v. INcome-tax Officer, (1959) 36 ITR 350: (AIR 1959 SC 881) and INcome-tax Officer v. Asok Textiles Ltd., (1961) 41 ITR 732: (AIR 1961 SC 699), that INcome-tax Officer can under Section 35 of the Act examine the record and if he discovers that he has made a mistake he can rectify the error and the error which can be corrected may be an error of fact or of law, and that the mistake contemplated by this section is not one which is to be discovered as a result of an argument but it is open to the INcome-tax Officer to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error. IN (1961) 41 ITR 732; (AIR 1961 SC 699) the Supreme Court regarded the overlooking by the INcome-tax Officer of the provisions of Section 2 of the Finance Act, 1952, and of Section 18A(8) of the INcome-tax Act as a mistake apparent from the record justifying rectification under Section 35. As will be shown presently, the mistake which the INcome-tax Officer rectified here did not constitute any change of opinion with regard to the source of the income of Rs. 30,000. The mistake lay in the omission to apply the clear and mandatory provisions of Section 24(2) of the Act. The mistake was apparent from the record and did not require any debate or argument for being brought to the surface.