COMMISSIONER OF INCOME TAX, KANPUR versus M/S. J. K. COMMERCIAL CORPORATION LTD. ETC.

Citation: [1977] 1 S.C.R. 512 · Decided: 03-09-1976 · Supreme Court of India · Bench: HANS RAJ KHANNA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

512 
A 
COMMISSIONER OF INCOME TAX, KANPUR 
v. 
M/S. J. K. COMMERCIAL CORPORATION LTD. ETC. 
September 3, 1976 
B 
[H. R. KHANNA, N. L. UNTWALIA AND JAswANT SINGH, JJ.] 
c 
D 
E 
F 
G 
H 
Income Tax Act (11 of 1922), ss. 23A and 35(1)-Whether income tax o{fi- · 
cer has power under s. 35 ( 1) to rectify an order passed under s. 23A. 
Section 23A, Income Tax Act, 1922, confers power on the Income Tax 
Offi~r to assess Companies to super-tax on their undistributed income in 
certam cases. 
· 
In the present case, subsequent to the passing of the orders of asscssmen~, 
the Income Tax Officer passed orders under s. 23A of the Income Ta.x Act, 
1922, asking the respondent-companies to pay certain amounts of additional 
super-tax on the undistributed profit. Thereafter, under s. 35 (I), over-ruling 
!he objections of the respondents that he had no power to r~ctify any mistake 
1Il an order under s. 23A of the Act, he rectified some mistakes and increased 
the amounts of additional super-tax payable by the respondents. The respon-
dents' revision applications were dismissed by the Commissioner, but the High 
Court quashed the orders, relying on M. M. Parikh v. Navanagar Transport & 
Industries Ltd. [19671 63 !TR 663 and Sankappa v. l.T.O. Bangalore, (19681 
68 ITR 760. 
Allowing the appeal this Court, 
HELD : The Income Tax Officer had jurisdiction ood competency to rectify 
under s. 35 (1) any mistakes in his previous orders under s. 23A. The language 
of s. 35(1) may not be wide enough to confer power on the Income Tax Officer 
to amend any order passed by him under tjle Act, and he may not have the 
wide powers conferred on him under s. 154(1)(a) of the 1961-Act. 
But it is 
not so narrow as to cover only the order of assessment or of refund in a very 
restricted or limited sense; but is wide enough to cover some other orders includ-
ing an order under s. 23A. (518 E-F] 
(I) Section 35 (1) provides inter ·alia that the Income Tai<; 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 assessment or refund as the case may be. If such rectification 
has the effect of enhancing an assessment or reducing the refund, under the 
first proviso, the assessee is entitled to notice and reasonable opportunity to 
show cause against such enhancement or reduction. [515 G-Hl 
(2) The word 'assessment' is capable of bearing a very comprehensive mean-
ing. 
[515 BJ 
. 
Commissioner of lncome-tax v. Kl1emchand Ramdas [19381 6 J.T.R. 414 
applied. 
C. A. Abraham v. Income-tax Officer, Kottayam and another [1961] 41 J.T.R. 
425 at 429 and Ka/awati Devi Harlalka v. Commissioner of Income-tax [1967] 
66 I.T.R. 680 followed. 
The assessment under s. 23 is the assessment of the total income of the 
assessee 
and the determination of the sum pa,yable by the assessee including 
income 'tax, surcharge, super tax etc. Under s. 24, loss is co~puted a-nd is 
allowed to be ·set off against the income of the same year or earned forward to 
the next year. · If one were to go upon the use of the literal words, then s. 24 
is only for computation of the loss. Yet, it is a stel? in the ~ss7ssment proceed-
ing a-nd will form part of the order of assessment itself. 
S1m1larly, the order 
under s. 23A may not be called an order of assessment, but it is a part of the 
assessment proceeding and may be called a supplementary assessme~t . order 
directing a company to pay additional amount of supertax on the und1st~1buted 
balance of ·the totaL income as assessed and determined in accordance with the 
provisions of s. 23. 
(515 C-D; F] 
t 
. C.I.T. KANPUR v. M/s. J. K. COMM. CORP. (Untwalia, !.) 
513 
(3) Under s. 35, the Commissioner in revision. the Appellate Assistant Com-
missioner and the Tribunal in appea.l, can rectify a mistake in the record of 
revision or appeal taken from orders under s. 23, s. 24' and s. 23A, because 
such orders are appealable orders under s. 30. Therefore under the same 
section, the Income Tax Officer can also rectify any 
mistake 
apparent from 
the record assessment, which expression is' wide enough not only to cover an 
order of assessment made under s. 23 but also an order computing loss under 
s. 24 and an order made under s. 23 A directing an assessee-company to 
pay 
additional super-tax. [516 D-E] 
(4) Fu·rther, the first proviso to s. 35(1) ands. 35(3) shows that rectifica-
tion of apparent mista

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