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TMI Blog1972 (9) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made on behalf of the petitioner-company to challenge the legality of the orders is that, having regard to the facts involved and the record before him, the Income-tax Officer had no authority, power and jurisdiction under section 35 of the Act to rectify the previous orders made under section 23A. In connection with this contention the facts which require to be noticed are as follows : The assessment of income-tax of the petitioner-company in respect of the assessment years 1960-61 and 1961-62 was completed respectively on November 23, 1960, and December 11, 1961. The distributable balance left in the hands of the petitioner-company for these two respective years was respectively Rs. 49,113 and Rs. 53,438. Having regard to the failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. Relevant part of section 35, under which the above impugned orders dated August 27 and September 23, 1965, were passed by the Income-tax Officer, runs as follows : ". . . 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 ... assessment or refund ... and shall within the like period rectify any such mistake which has been brought to his notice by an assessee . . . " For the purpose of taking action against the petitioner-company under the above section the Income-tax Officer served the petitioner-company with two separate undated notices for the above assessment years. In the notices he stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than 50% of the total assets of the company. It is, therefore, apparent that the company is an investment company." On the basis of the above findings, he rectified the previous orders and directed that the petitioner-company was liable to pay super-tax at the rate of 50% and not at the rate of 37%. The attempt of the petitioner-company to have the above impugned orders set aside in appeals before the Appellate Assistant Commissioner and, thereafter, before the Income-tax Tribunal did not succeed because these authorities held that the orders made were not appealable. As already recorded the main contention of the petitioner-company in challenging the legality and validity of the above orders is that having regard to the facts on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake about jurisdictional fact and further that different opinions on questions of law involved did not constitute "a mistake" enabling exercise of jurisdiction under section 35. In connection with this contention it requires to be noticed that the real question which arises on the contentions made on behalf of the petitioner-company in the matter of the action to be taken under section 35 was that the petitioner-company's assets which constituted of loans and advances and call deposits could in law never be held to be "holding of investment" as was necessary for the imposition of super-tax at the rate of 50% under section 23A. This question must be held to have arisen for decision when the orignal orders were made under section 23A. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions... A decision on a debatable point of law is not a mistake apparent from the record--see Sidhramappa Andannappa Manvi v. Commissioner of Income-tax." The position of law as enunciated in the above decision has not been disputed on behalf of the respondents. Having regard to the above discussion, it must be held that the two impugned orders of rectification dated August 27, 1965, and September 23, 1969, made under section 35 of the Act were made in this case without any justification and in matters in which the Income-tax Officer had no jurisdiction under section 35. The orders are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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