TMI Blog1959 (5) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the appellant's father, came to ₹ 24,957. Subsequently, on a re-assessment according to section 34 of the Indian Income-tax Act, 1922, the Income-tax Officer found the taxable income of the firm to be ₹ 77,179, and the appellant's share of the profits of the firm, that thus became available for inclusion in his taxable income, came to ₹ 57,884. The reassessment of the firm was made on March 28, 1956. After that on August 23, 1956, the Income-tax Officer took steps to recover the additional amount of income-tax due from the appellant. The appellant then came in with a petition under article 226 to this court questioning the legality of the additional demand from him. The ground taken was that the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in this appeal is the same as was the ground in the petition and as was, after argument, negatived by the learned single Judge. It is not denied by the learned Advocate-General appearing on behalf of the respondent that before the enactment of sub-section (5) of section 35 of the said Act, a mistake of the type as is involved in the present case could not have been rectified in the assessment of the appellant under sub-section (1) of section 35 even though on re-assessment it was found that the taxable income of a registered firm was more than it had been originally assessed. The appellant's firm is a registered firm. But the learned Advocate-General has contended that after the enactment of that sub-section the re-assessment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory of a pre-existing law but clearly affect vested rights which have accrued to the assessees; the sub-section, therefore, must be deemed to have come into force on April 1, 1952, and no retrospective operation can be given to it. This position is unexceptional for the Indian Income-tax (Amendment) Act, 1953, having been given retrospective effect to a definite particular date, it cannot have a greater retrospective effect so as to be operative from a date further back than that date. So far the position is clear. But it appears to me that this case is not helpful to the appellant in the present case because the assessment of the registered firm, by reason of which the share of the profits of the assessee in that case was found to be much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of this section, and the provisions of sub-section (1) shall apply thereto accordingly, the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the firm. Once on assessment or re-assessment of a firm it is found that the share of its partner in the profits and loss of the firm has not been included in the assessment of the partner or, if included, is not correct, the inclusion of the share in the assessment or the correction thereof, as the case may be, is by statutory fiction deemed to be a rectification of a mistake apparent from the record within the meaning of section 35 and under sub-section (1) of this section the limitation provided for such rectific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -assessment of the firm by virtue of the express provisions of sub-section (5) of this section power and authority is given to the proper authority under the Indian Income-tax Act, 1922, to rectify the mistake in the assessment of the partner of such a firm and it is further expressly provided that that can be done within four years from the date of the final order passed in the case of such a firm. So that express provision has been made in sub-section (5) of section 35 for rectification of a mistake in the assessment of a partner once that mistake is found on assessment or re-assessment of the firm of which he is a partner and such rectification can be made within four years from the final order passed in the case of such a firm. This, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been denied that the re-assessment of the firm in this case under section 34 of the Indian Income-tax Act, 1922, has been properly and validly done and that has not been a matter of argument at any stage in the present case. That re-assessment was done after April 1, 1952. It is a re-assessment of the firm as referred to in sub-section (5) of section 35. In consequence of this reassessment and increase in the taxable income of the firm having been found, that means corresponding increase in the taxable income of the appellant when his share of the increase in the taxable income of the firm is added to his taxable income. Such inclusion in his taxable income is by statutory fiction deemed to be a rectification of a mistake apparent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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