THE INCOME-TAX OFFICER, ALWAYE versus THE ASOK TEXTILES LTD., ALWAYE

Citation: [1961] 3 S.C.R. 236 · Decided: 13-12-1960 · Supreme Court of India · Bench: J.L. KAPUR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

..... 
236 
SUPREME COURT REPORTS 
[1961] 
,960 
folders. That was the finding made by the authority 
on an earlier occasion when Punamchand and Vishnuc 
Sh•i Ambic• Mills prasad had moved the authority under s. 15 of the 
<;o.~-Lld. 
Act. The learned Attorney-General has strenuously 
Slri s. B. Bhatt contended that it is unfair to give the same pay to the 
b Anoth" 
three workmen who &re doing the work of cut.lookers 
. -
only for a part of the time· and were substantially 
.<i•1•ndragadAa• J. doing the work of bleach-folders; that, however, has 
no relevance in determining the present dispute. The 
only point which calls for decision is whether or not 
the work done by the three respondents takes them 
within the category of cut.-lookers specified under cl. 5, 
and as wc have already pointed out, on an earlier 
occasion the authority has found in favour of two of 
the three respondents when it held that they were fol-
ders doing cut-looking. If the said finding amounts 
to res judic.ata it is in favour of the two respondents 
and not in favour of the appella.nt; that is why the 
learned Attorney-General did not seriously dispute the 
correctness of the decision of the High Court on the 
question of 'res judic.ata. 
In the result the appeal fails and is dismissed with 
costs. 
Appeal dismissed. 
THE INCOME-TAX OFFICER, ALWAYE 
v. 
THE ASOK TEXTILES LTD., ALWAYE 
(J. L. KAPUR, M. HIDAYATULLAH and 
J. c. SHAH, JJ.) 
Income-tax-Rectification, scope of-If can be equated with 
review under the Code-Advance payment of tax-Penal interest due 
to additional tax on rectification, if could be imposcd-~Code of Civil 
Procedure (V of i908), 0. 47, r. I-Indian Income-lax Act, I922 
(Ir of i922), SS. rBA (8), 35· 
After the respondents 'net assessable income for the years 
1952-53 was determined, it declared dividends which attracted 
provisions of the Finance Act, ry52, and became liable to the 
I 
3 S.C.R. SUPREME COURT REPORTS 
237 
payment of additional income-tax, which fact was overlooked by 
,yoo 
the Income-tax Officer, who, after giving notice under s. 35 of 
the Income-tax Act, rectified the error and imposed an additional The l11conu-tax 
tax at the rate of one anna in the rupee. 
He ]ater discovered 
Officer, Alwayt1 
that this ~·as also erroneous ancl the rate should have heen five 
v. 
annas in a rupee and rectified the error; by the same order the The Asok Textitt1s 
omission to impose penal interest under s. 18A<8) was rectified 
Ltd., Alway• 
and penal interest was imposed. The respondent's case pefore 
the High Court was thats. 35 of the Act did not apply and that 
on the merits the additional tax could not be imposed. The High 
Court held that the necessary foundation for the exercise of the 
powers under s. 35 had not been laid and therefore the Income-
tax Officer had no jurisdiction to make the order; and also that 
the penal interest under s. r8A(8) of the Act for failure to make 
advance deposit was also without jurisdiction. 
Held, that the language and scope of s. 35 of the Indian 
Income-tax Act. r922, could not be equated with that of 0. 47, 
r. r of the Code of Civil Procedure. The Income-tax Officer 
could under s. 35 of the Act examine the record and if he disco-
vered that a mistake had been made, could rectify the error both 
of law and fact. 
The restrictive operation of the powers of· 
review under 0. 4 7, r. r of the Code of .Civil Procedure was not 
applicable in the case of s. 35 of the Income-tax Act. 
Held, further, that the s. r8A(8) was a mandatory one and 
the Income-tax Officer was required to calculate the interest in 
the manner provided under the provisions of that sub.section and 
had to add it to the assessment. 
Maharana Mills (P.) Ltd. v. Income-tax Officer, (1959] 36 
I.T.R. 350 and M. K. V enkatachalam v. Bombay Dyeing c5- Manu-
facturing Co. Ltd., [1958] 34 I.T.R. r43, discussed. 
Commissioner of Income-tax v. Elphinstone Spi1ming c5- IV cav-
ing Mills Co. Ltd. [1960] 40 I.T.R. r4>, Commi>sioner of Income-
tax, Bombay City v. ]algaon Electric Supply Co. Ltd., [1960] 40 
l.T.R. 184 and Commissioner of Income-tax, Bombay City v. 
Khatau Makanji Spng. c5- Weavg Co. Ltd., [1960] 40 l.T.R. r89, 
not applicable. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal No. 
311 of 1959. 
Appeal from the judgment and order dated October 
31, 1955, of the Travancore Cochin High Court, Erna-
kulam, in Original Petition No. 75 of 1955. 
A. N. Kripal and D. Gupta, for the appellant. 
Sardar Bahadur, 

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