TMI Blog1980 (4) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... of the three respondents in the references before us was assessed on his respective share income as apportioned in the assessment of the firm. These three assessments were completed under s. 23(3) of the Indian I.T. Act, 1922. The assessments in the cases of Om Parkash and Sri Kishan Dass were completed on October 21, 1963, and the assessment in the case of Rameshwar Dass was completed on February 22, 1966. Subsequently, a mistake in the assessment order of the firm came to light. The ITO thereupon rectified the assessment of the firm for the year under s. 154 of the I.T. Act, 1961, on 9th February, 1968. As a result of this order, the income from the ready business carried on by the firm was enhanced. The ITO thereafter initiated proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contended that, if these provisions of s. 35 were found to apply, the mere fact that the proceedings had been initiated under s. 155 of the 1961 Act would not render the rectification invalid. The Tribunal, however, pointed out that the order in the case of Rameshwar Dass could not be supported under s. 35(1) of the 1922 Act as the mistake sought to be rectified was apparent only from the record of the firm and not from the record of the individual assessee. It was also pointed out that s. 35(5) would not apply in any of the cases as in its wording, there was a conspicuous omission of any reference to a variation in the income of the firm as a result of a rectification under s. 35 whereas there was a reference to any variation in the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification of an assessment would fall within the scope of this clause and the Supreme Court in the case of Kalawati Devi Harlalka [1967] 66 ITR 680 and Sankappa [1968] 68 ITR 760 (earlier referred to) answered the question in the affirmative. It was held that the words " proceedings for the assessment " used in the section had a very wide meaning and were comprehensive enough to include proceedings by way of revision or rectification of an assessment. The same view has also been taken by this court in CIT v. National Small Industries Corporation Ltd. [1973] 91 ITR 579. The Tribunal, therefore, has relied upon Sankappa [1968] 68 ITR 760 (SC) rightly for coming to the conclusion that, in the present case, any rectification of the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is found, on any reduction or enhancement made in the income of the firm by an order under s. 31, s. 33, s. 33A, s. 33B, s. 66 or s. 66A that such share income has not been included at all or included correctly. These are two independent limbs of the sub-section and the reference to ss. 31, 33, 33A, 33B, 66 and 66A occurs only in the second limb. Perhaps a reference to s. 35 also could have been included in the second limb and had it been done the present difficulty would not have arisen. As it is, we have to consider whether the action taken to rectify the assessment can be justified under the first limb. This, once again, turns on the meaning of the words et assessment or reassessment " used in that limb. There is no reason to interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision in s.35(5) of the 1922 Act.But, as mentioned earlier in the discussion, this is only a case of wrong labelling and since we have held that the ITO has the requisite authority to pass the order under s. 35(5) of the 1922 Act, the order passed by him cannot be held invalid merely because it was purportedly made under s. 155 of the Act. The decision of the Supreme Court in Hazari Mal Kuthiala [1961] 41 ITR 12 the decision of this court in National Small Industries Corporation's case [1973] 91 ITR 579 (Delhi) and the decision of the Gujarat High Court in P. M. Bharuha Co. v. G. S. Venkatesan, ITO [1969] 74 ITR 513, referred to by the Tribunal, make this position absolutely clear. For the above reasons, we answer the question referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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