LexHIRDAY NARAIN versus INCOME-TAX OFFICER, BAREILLY
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A B c D E F HIRDA Y NARAIN V. INCOME-TAX OFFICER, RAREILLY July 21, 1970 [J. C. SHAH AND K. S. HEGDE, JJ.] Income-ta.~ Act 1922, Ss. 16(3) (a)(ii)-/f applicable in case of as.~·essnu•nt of H.U.F. incon1e. S. 35-Nature of power of rectification- lj discmionary The appellant with his five sons constituted' a Hindu undivided family and up to the .assessment year 1950-5 l the income received by the appellant was as·iessed to tax as the income of the H. U.F. The previous year of the Hindµ Undivided Family for each assessment year was from October 1 to September 30 of the following year. The property of the Joint Family was partitioned on November 19, 1949. For the assessment year 1951-52 the income tax Officer assessed the appellant's income as that of the H.U.F. In appeal, the Appellate Assistant Commissioner direct- ed that the income earned between October I and November 18, 1949 should he treated as that of the H. U.F. and excluded from the assessment. The l.T.O. thereafter made two orders of assessment, assessing Rs. 18,52.00 earn£d upto November 18 as the, income of the old H.U.F. and assessin~ the balance also as income of a" Hindu undivided family and liable to tax in the hands of the appellanl by the application of s. 16(3) (a) (ii). of the Income Tax Act. 1921. T1\r appollant then applied for rectification of an error in' the second order of a~sessment under s. 35 of the Act claiming that his income assessed as that of an H.U.F.. Section 16(3) (a)( ii) -did not apply. The 1.T.0. \iccepted the plea that s. 16 ( 3 )(a)( ii) did not apply to an H.U.F. hut declined to give relief holding that for the period between November 19 1949 and September 30, 1950, the ap- pellant should have been assessed as an individual. A petition filed by the appellant in. the High Court under Article 226 challenging the order of the J.T.O. wa. dismis•ed by a Single Judge holding, inter alia, that the aope.Jlant had not applied in revision to the Commissioner under section 33-A. A division Bench dismissed an appeal against the order of the sir.gle jud~e observing that the rectification under section 35 was "di•cretionary", and if the I.T•O. thought that the proceed- ings were "substantially fair" he was "not bound to rectify the assessment on technical ~rounds". On appeal to this Court, G HELO : The income from November 19, 1949 onwards being assessed to tax as the income of a'Hindu undivided family consisting of the appel- lant. his wife and a new Sorn minor ·son; s.' J6(3)(a)(ii) plainly did not apply and·writs must issue for the rectification of the appellant'.s assess- ments, Gowli Budaanna v. T/lnommissioner of Income-tax My.rore (I) 60 I.T.R. 293; N. V. Narendra Nath v. Commissioner of Wealth tax (2) 14 I.T:R. 190. referred to. [686 E-Fl ' H The High Court was wrong in assuming that exercise of the oov•t:r under s. 35 to rectify an error· apparent from the record was discretionary and the Income-tax Officer could. even if the conditions for its exercise were shown to exist, decline to exercise the power. If a statute invests 684 SLIP REM F. COIJl<T REPORTS [197 J] l S.C.R. 1.1 public Officer with .1uthoritv to do .111 act in a • pcciticd s•.!t of cjrcum- stanccs, it is impcrati·1c Lipn1i him to exercise his authority in a manner appropriate ~:o the case when a p~:rty intcrcs:cu nn<l havir..~ a right to apply moves in that behalf and. circum•:tanccs for exercise of nuthority ::?re s~own to exist. Even if thcj \vo:-ds usctl in the.~Jatute are pri11u1 /acie enabling. the Courts will readily infer a duty to exercise power which is invested in ?i<.f of enforcement of •;1 right--public or private-of a citizen. [688 G. 689] \Vhilc ncccp:in.g the arr-..·H.1nt"s pica 'that th~ income Of his rTI°inor chilt..l~ rcn \Vas nor liable to h-: included in his assessn1cnt in th:.! status of an H.U.F. t.i:v ri1?ht lo o!it:dn ihc bent~fit of rectification could not be refl1sed bR_ changini; ihe status on the bllsi.., of which the original assessment wns made without investigating, aftcfr due notice. whether in assessing the income for the period November. 19. 1949 to September 30. 1950. a mistake in fact, was committed. !68R B-Cl 1 Bcc.aus.: a revision application could have 'been !118vcd fdr an order correcting the order o'f the I ncomc Tax Officer under s. 35, but was not moved. the High Coun was nbl justified in di~issing as· not maintainftblc the \\'fit
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