TMI Blog1975 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... tton shown in the books of the assessee and the records of the State Bank of India with which it had hypothecated that stock. The assessee tried to explain away this discrepancy by saying that it had given an incorrect figure of its stock to the bank with a view to obtain higher amount of overdraft. The Income-tax Officer rejected this explanation and added Rs. 2,14,682 to the value of the stock so that, according to his assessment, the closing stock for the assessment year 1959-60 worked out to Rs. 8,04,121. Having failed in first appeal before the Appellate Assistant Commissioner, the assessee preferred a second appeal to the Tribunal. Pending the appeal before the Tribunal, the Income-tax Officer took up the assessment of its income for the next assessment year, i.e., 1960-61. The assessee contended that the opening stock for the assessment year 1960-61 should be taken as Rs. 8,04,121. The Income-tax Officer rejected this contention and took up the opening stock for that assessment year at Rs. 5,89,439 without making the addition of Rs. 2,14,682. Against this order of the Income-tax Officer, the assessee went in appeal before the Appellate Assistant Commissioner who, on June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 226 of the Constitution before the Gujarat High Court, on the ground that the Appellate Assistant Commissioner had overstepped the jurisdiction conferred on him under section 35 of the Act. The High Court dismissed the petition. Hence, this appeal. Before the High Court, the assessee raised two contentions which have been reagitated before us. They are: (i) The Appellate Assistant Commissioner had no jurisdiction to make the impugned order because there was no mistake apparent "from the record of the appeal" within the contemplation of section 35 of the Act. (ii) Assuming that the words "record of the appeal" in section 35 were comprehensive enough to include the record of other related proceedings, the Appellate Assistant Commissioner had no jurisdiction to rectify his decision dated June 30, 1965, by referring to something which actually and factually took place four years after that decision. Elaborating his contentions, Mr. Desai submits that, in the context of the present case, the words "record of the appeal" in section 35 would mean the record for the assessment year 1960-61, which the Appellate Assistant Commissioner had actually before him at the time of hearing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its own finding regarding such value being Rs. 5,89,439, with effect from the date of the income-tax Officer's order and thus the Tribunal's order, though passed subsequently, had, with retrospective effect, become a part of the record of the appeal relating to the assessment year 1960-61, which could legitimately be looked into by the Appellate Assistant Commissioner for the purpose of ascertaining and rectifying the mistake in his appellate decision. Reliance has been placed on the decisions of this court in Maharana Mills (P.) Ltd. v. Income-tax Officer, Porbandar and that of the Privy Council in Commissioner of Income-tax v. Khemchand Ramdas. The material part of section 35 is in these term: "35. (1) The Commissioner or Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision under section 33A and the Income-tax Officer may, at any time, within four years from the date of any assessment order or refund order passed by him on his own motion rectify any mistake apparent from the record of the appeal, revision, assessment or refund, as the case may be, and shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations in accordance with the law applicable including the rules made thereunder." This court then noticed Venkatachalam's case and Khemchand's case in support of the view taken by it. Counsel for the then appellant sought to distinguish those cases on the ground that the record there considered was the assessment record of that year and the Income-tax Officer did not have to go to the records of the previous year. This argument was repelled in these terms: "That is a distinction without a difference. If, for instance, the Income-tax Officer had found that in the assessment year 1952-53 there was an apparent arithmetical mistake in the account of the written down value of the properties which resulted in a corresponding mistake in the assessment of the year in controversy could he not take the corrected figure for the purposes of the assessment and could it be said that the mistake was not apparent form the record? A fortiori if he discovered that the very basis of the different assessments was erroneous because of an initial mistake in determining the written down value could it be said that this would not be a mistake apparent from the record ? And if in order to determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Shri Desai is well-nigh covered by the ratio of the Privy Council decision in Khemchand's case. The assessee in that case did not produce his account books and the Income-tax Officer made an assessment on the "best judgment basis". On the application of the assessee, however, he allowed registration of the assessee-firm on January 17, 1927. As it was a registered firm, he did not, in the assessment order made under section 23(4) on the same day, assess any super-tax. The Commissioner of Income-tax, in exercise of his powers under section 33 of the Act, called for the record, cancelled the registration on January 28, 1927, and directed the Income-tax Officer to take necessary consequential action. The result was that by an order dated May 4, 1929, the assessee was assessed to super-tax. Three days later, a demand notice was issued. On these facts, delivering the opinion of the Judicial Committee, Lord Romer made these pertinent observations in regard to the applicability of section 35: "...in their Lordship's opinion, the case clearly would have fallen within the provisions of section 35 had the Income-tax Officer exercised his powers under the section within one year from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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