TMI Blog1963 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... d ended December 31, 1956, though his total receipts from business was to the tune of ₹ 4.46 lakhs. The assessee was not maintaining regular books of account. On investigation and enquiry, the department found that several amounts were invested in the name of his wife in the Eastern Bank Ltd., Cochin. When the department called upon him to explain the source of the investment made in the name of his wife, the assessee was not able to explain it, but merely requested the department to treat the amount as undisclosed income spread over the assessed years. Thereupon, the department accepted the proposal subject to certain adjustments. Subsequently, penalty proceedings were taken against the assessee under section 28(1)(c) of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are attracted. There are, however, extenuating circumstances. The assessee has co-operated largely with the department and has offered, through his chartered accountant, to accept assessments by an apportionment of the cash credits over a few years. This attitude should not go unappreciated. The penalties as levied for the offences committed are, in our opinion, somewhat excessive. They are reduced to ₹ 250, ₹ 250 and ₹ 100 for the three years under appeal. Evidently this order was passed under section 35 of the Income-tax Act, which is as follows: 35. (1) The Commissioner or the Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal...on his own mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or by the Appellate Tribunal on their own motion, or when such a mistake is brought to their notice by an assessee. Clearly that section does not enable an order to be reversed by revision or by review, but permits only some error, which is apparent on the face of the record, to be corrected. This decision has been consistently followed in other High Courts. A Bench of the Bombay High Court consisting of Chagla C.J. and Tendolkar J. had to consider the scope of section 35 of the Indian Income-tax Act in Sidhramappa v. Commissioner of Income-tax [1952] 21 I.T.R. 333, 341, where the Tribunal held that a certain debt became bad on a particular date (September 29, 1941). The Commissioner of Income-tax made an application purporting to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation: Before an Income-tax Officer can exercise his powers under section 35 of the Act to rectify a mistake that mistake must be apparent from the record of the assessment. This 'record of the assessment' is only that part of the record which leads to the determination and ascertainment of the tax payable and no more. Again, before it can properly be said that a mistake is apparent from the record it must be something very obvious and manifest. A mistake to establish which a very elaborate process of reasoning, and controversial reasoning at that, is called for cannot be said to be a mistake apparent from the record. An error in law or a wrong procedure adopted in the assessment proceedings would not be a mistake within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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