9911796707
TMI Blog1996 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the First Schedule. In other words, the Income-tax Act imposes a charge on the total income of an assessee. The Companies (Profits) Surtax Act provides for levy of additional tax on the total income as computed under the Income-tax Act, after certain adjustments by excluding certain types of income and some deductions from the total income as computed under the Income-tax Act. One of the deductions which has to be made for computing chargeable profits for the purpose of levy of surtax is the amount of income-tax, if any, payable by a company under section 104 of the Income-tax Act. The assessee-company in this case was assessed to income-tax for the assessment year 1964-65 on March 29, 1965. The tax payable was determined to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Both the Appellate Assistant Commissioner and the Tribunal held that the Income-tax Officer's order was logical and justified in the facts and circumstances of this case. On the assessee's application, the Tribunal referred the following question of law to the High Court (see [1978] 115 ITR 286, 288) : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income-tax Officer's action in rectifying his order passed in September, 1968, under section 13 of the Surtax Act was in order both in law and in equity ?" The assessee's contention before the High Court was two-fold. It was argued in the first place that there was no mistake apparent from the record. Secondly, it was argued in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm specifying the sum payable. 14. Other amendments. --- Where as a result of any order made under section 154, 155, 250, 254, 260, 262, 263 or 264 of the Income-tax Act, it is necessary to recompute the chargeable profits determined in any assessment under this Act, the Income-tax Officer may proceed to recompute the chargeable profits, and determine the surtax payable or refundable on the basis of such recomputation and make the necessary amendment and the provisions of section 13 shall, so far as may be, apply thereto, the period of four years specified in sub-section (1) of that section being reckoned from the date of the order passed under the aforesaid sections of the Income-tax Act." The first contention of the assessee is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Surtax Act has to be the total income computed under the Income-tax Act. That being so, the income-tax assessment order must necessarily form part of the records of the surtax assessment. Any change or variation of tax liability in the income-tax assessment order will have to be given effect to in the surtax assessment. There is no reason to hold that the income-tax assessment order which is the very assessment is not a part of the records of the surtax assessment proceedings. As has been stated earlier, if this contention of the assessee is to be upheld, logically it has to be held that even the first order of rectification giving relief to the assessee was invalid. Sabyasachi Mukherji J. (as His Lordship then was), rightly point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax which was not actually payable. Therefore, the Income-tax Officer was justified in invoking the provisions of section 13 and correcting the error in the order passed on September 16, 1968. The Income-tax Officer by the second order of rectification was not trying to rectify the original order of assessment passed on March 30, 1965, but was seeking to restore it by rectifying the error in the amended order passed on September 16, 1968. In that view of the matter, it is not necessary to go into the contention of the assessee that section 14 of the Surtax Act was amended only on April 1, 1971, and the power under the amended section could not be utilised for passing a second rectification order on April 21, 1971. The appeal, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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