LexT. S. BALARAM, INCOME TAX OFFICER, COMPANY CIRCLE IV, BOMBAY versus M/S. VOLKART BROTHERS, BOMBAY
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
T. S. BALARAM, INCOME TAX OFFICER,
COI\fP~NY CIRCLE IV, BOMBAY
v.
MJS. VOLKA:JtT BROTHERS, BOMBAY
August 5, 1971
[K. s. HEGJ?E AND A. N. GROVER, JJ.]
lncome tax
Act~ ·t961, s. 154-Mistake apparent from
tl1<·
re,·ord must be a patew mistake on which there can
be no two
opinions-Whether s. 17(1) of Jncome-tax Act, 1922 applied to firm ...
is not a question on which rher.e can be no two opinions.
ll.
('
The respondent tlnn \\as duly registered under the J nco me-tax
Act. 1922 as well as the lncome tax Act, 1961. In the original asses~
ments of the firm fo~ the years 19.58-59, 1960-61, 1961-62 and 1962-63
assessments were made on the sJab rates prescribed under the respective
Finance Acts applicable to registered firms.
In the individual asses~
ments of the partners, their re~pective shares in the income of the firm
\\ere included and asses~ed at the maximum rates since their assessmcm~ l>
were made in the status of non-resident.
On February 1, · 1965 the re:.·
pondcnt firm was served wi1h notices dated January 29,
1965 by th(!
Income-tax Officer intimating to it that in its assessments for the fouf
~cars in question there were mi~takes apparent from the record inas-
much as the firm l1ad not been -charged at the maximum T'!tes of tax
- under s. 17(1) of the Income tax Act, 1922 and that therefore he proposed
h ) rectify those assessment'!> under s. 154 of the Income tax Act, 1961.
E.
Thereafter the Income-tax Onicer assesstd the respondent firm by appJy-
;ng the provisions of s. 17( 1) (lf the 1912 Act. The respondent challen~d
the vnlidity of the said orders in n writ petition under Art. 226 of the
Constitution. The High Court l1cld that s here was no obvious and
patent mistake jn the <)riginnJ
~l~!:>es!ill"lent orders and therefore
th~
lncomc ta" Officer wa ... not competent to pass the impugned ordcr't
\lndcr s. J54. Jn apJ')Cal by certificate,
1lELD: A mistnkc apparent on the record must he an obvious a11J
11:\tent mistake and no a something "hich can be established by a long
<.lrawn process or reasoning on points (ln which there may conceivabl)
be two opinions. [34E)
F
The applicability ol ~ . 17( 1) to the ~pondcnt would depend an th~ (,
~lccision of the que~tion "hc th~r a firm can be considered as 3 •person ·
\\ilhin the meaning of th<H section. The tc!rm 'person' \\-as defined in
a he J922 Act as including a Hindu Undivided Family ond a local autho-
rity. ln the 1961 Act the definition has been expanded and indud~s ~t
tinn. Jt is a matter for ~\"msidcration whether the new definition con·
taincd in 1. 2(31) of the lncome-tax Act, 1961 is nn nmcndm~nt of th~
law or is merely dednratory of the law
tfHtl wus in f\)rce earlier.
Jl
To pronounce upon this que,tioll it may be ncc6sary to examine variou'
provision& in the Act as well us its scheme. The 1 ncomC·l~\X onker in
»he present case wa$ not ju,tifi~d in think.ing th ~1t there could be no two
A
B
c
T. S. BALARAM, I.T.O. v. VOLKART BROS. (Hegdc, J.)
31
. opinions about the applicability of s. 17(1) . He was therefore ,-.·holly
wrong in holding that there was a mistake apparent from the rec0;d of
the assessments of the respondent. [33F-34D]
Satyanarayan Laxmi11arayan Hegde & Ors. v. Mi/ikm:jwz B}rava-
nappa Thirumale, [1960] 1 S.C.R. 890 and Sidhramappa \'. Commf_I:.Joner
of Income-tax, Bombay, 21 J.T.R. 333 referred to
CIVIL APPELLATE JURlSDICTIO~ : Civil Appeal No.
1170 of 1968.
· Appeal
from the judgement
and ot:der dated
February 3, 6, 1967 of the Bombay High Cour~ in ~ iisc.
Pethion No. _104 of 1965. ·
S. Mitra J. Ramamurthi, R. N. Sachthey and B. D.
Sharma for the Appellant.
M. C. Chag!a, N.A. Palkhivala, Bhuvanesh Kumari,
J. B. Dadachanji and Ravinder Nara;,1 for the respJndent.
D
The Judgment of the Court was delivered by
Hegde, J.-This appeal by certi1icate arises f~on1 the
decision of the High Court of Bombay in Misc. Petition
No. 104 of 1968 on its file. That was a petition under_
Art. 226 :.of the Constitution. Therein the respondents
E challenged the validity of the orders of rectification made
by the Income- tax Officer. Company Circle, Bombay
in the assessments of the respondents for the assessment
years 1958-591 1960-61, 1961-62 acd 1962-63 under s. 154
of the Income-tax Act, 1961. Respondents Nos. 2 and
3 are the partners in the first respondent-firm. The first
F, respondent-firm was duly registered under the Indian
Income-tax Act 1922 a'5 well as under the Excerpt shown. Read the full judgment & AI analysis in Lexace.