TMI Blog1971 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the firm for the aforesaid year was completed on March 19, 1957. The firm's final assessment was, however, completed later, on June 28, 1957. In the said order, the Income-tax Officer granted depreciation under the first part of section 10(2)(vi) as also additional depreciation under section 10(2)(vib), but did not allow initial depreciation under the latter part of section 10(2)(vi). This initial depreciation was disallowed on the ground that the bus MDS 2953 for which additional depreciation allowances were granted was put on road by the petitioner and was run for about a fortnight before being transferred to the partnership of Ramani Bus Service. The firm unsuccessfully appealed on the main order of assessment, and ultimately even in the revision proceedings before the Commissioner of Income-tax the assessment order was confirmed. But, on May 13, 1959, the original authority addressed a letter to the partnership firm under section 35 of the Indian Income-tax Act, 1922, hereinafter referred to as the Act, proposing to revise the assessment for the year 1956-57 as the additional depreciation allowed in the original order was not correct. The firm filed its objections on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not expressly refer to orders passed under section 35(1) as coming within its compass, the impugned order is illegal and has to be quashed as it cannot be undertaken under section 35(5). Relying on Arulanandam v. Income-tax Officer, Tuticorin , and Vijayaranga Mudaliar v. Additional Income-tax Officer, Mr. Narayanaswami contends that there was no jurisdiction to rectify the assessment order on the firm as it did on January 30, 1961. The facts disclose that the Income-tax Officer disallowed the initial depreciation but granted additional depreciation to the firm. The mainstay of the argument is that the order was subject to appeal and revision to the appropriate authorities and the disallowance of the initial depreciation was fully fought out. It is in this view it is stated that if the mistake was not discovered till all the available avenues of attack on the original order of assessment are over, then it ceases to be an apparent error. If a mistake is apparent, it does not cease to be so on the only ground that the appellate or revisional authorities failed to notice the same. They have obviously committed an error in not noticing it. The further proceedings before the higher h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground of discovery of the apparent error within the time provided. The facts here do not present a change of opinion. Mr. Narayanaswami relied upon Arulanandam v. Income-tax Officer, Tuticorin , not so much to further his case in this writ petition, but to strike at the bottom of the process initiated under section 35(5). When once the parent rectification order under section 35(1) is non est, then the impugned order which springs from it would be liable to be set aside. I have already held that the first order of rectification under section 35(1) was passed in the rightful exercise of statutory power by the appropriate authority and in this view of the matter, the ancillary contention as above also fails and the order impugned is justified. The second contention based on the plea of limitation has no substance. Section 35(5) is a deeming provision projecting a statutory fiction. It is wholly dependent upon the assessment or reassessment of the firm, in which the assessee concerned is a partner. Reassessment of a firm takes place even if the original order of assessment is rectified under section 35(1). The jurisdiction of the officer to act under section 35(5) being cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond order under section 35(1) was also made on the individual partner because of discovery of certain other mistakes and this was on July 30, 1958. The firm's assessment however was revised consequent upon certain directions issued by the Appellate Tribunal in its order dated March 9, 1959, and a fresh assessment was made on the firm on March 11, 1960. Consequent upon such a fresh assessment on the firm, an order under section 35(5) was made again as against the individual partner on March 23, 1960. It was in this context that the court held that what survives in such proceedings is the assessment as rectified. If, therefore, it is the rectified order made under section 35(1) that is the order of assessment, vis-a-vis the firm, it would be illogical to say that the period of limitation contemplated in section 35(5) should commence only from the erroneous original order of assessment and not from the corrected order made on the firm under section 35(1). I am, therefore, of the view that the reopening of the assessment made as against the partner, within four years from January 30, 1961, is proper and unassailable. The third contention is that, in the absence of the enumeration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves the purpose of assessment it is also caught in the stream of assessment. If, therefore, rectification is a procedure which ultimately leads to a reappraisal of the mistaken original order of assessment at whatever stage it may be, then the first part of section 35(5) enables the revenue to rectify the order of assessment on a partner if the firm's assessment is reopened under section 35(1) as a result of which the firm is reassessed. The sections referred to in section 35(5) are specific illustrative cases. But the contingency of the firm suffering a reassessment is the foundation for reopening the partner's assessment, because the legislature considers such an event of reassessment of the firm as reflecting an error apparent on record, enabling rectification of the first order of assessment against the partner. Thus, my conclusion is that the firm's assessment has been validly reopened under section 35(1) and in consequence the rectification of the order of assessment on the assessee as partner of the firm is competent. Such a reopening of the assessee's tax liability is well within time as well. The assessee's contentions fail. The writ petition fails and is hereby dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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