LexWALDIES LTD. versus COMMISSIONER OF INCOME TAX, WEST BENGAL
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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WALDIES LTD.
A
v.
COMMISSIONER OF INCOME TAX, WEST BENGAL
NOVEMBER 20, 1996
[B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.]
B
Companies (Profits) Surtax Act: Sections 4, 13 and 14.
Mistakes-Apparentfi"om the record-Rectification of-A Y 1964-65-
'Record '-Scope of-Tax liability under S.147 of Income Tax Act-
Enhanced-Consequently surtex assessment rectified-On reversal of order C
passed under S.147 surtex assessment again rectified-Held: Income Tax
assessment order part of records of surtax assessment proceedings-Hence,
for second rectification there was mistake apparentfi"om the record-Income
Tax Act, 1961, S.147.
D
Rectified Order-Rectification of-To restore original order-After
expiry of time-limit prescribed under S.13(1)-Validity of-AY 1964-65-
assessment orders under Income Tax and Surtax Acts passed-Subsequently ·
income tax liability of assessee--Company enhanced in reassessment under
S.147 of Income Tax Act-Consequently, within statutory time-limit
assessment order under Surtax Act rectified and surtax reduced by additional E
amount of income tax determined under S.147-After expiry of time-
Limit for rectifying assessment under Surtax Act, order under S.147 set
aside in appeal-Consequently, rectified assessment order under
Surtax Act again rectified to restore original order-Held: lnspite of the
expiry of time-limit under S.13 (I) a/Surtax Act, second rectification F
justified.
Words and Phrases :
"Record" and "mistake apparentfi"om the record"-Meaning of-In G
the context o/S.13 {I) of the Companies (Profits) Surtax Act.
The assessee-company was assessed to Income Tax for the
assessment year 1964-65. This was followed by an assessment under
the Companies (Profits) Surtax Act. Later on, the assessment was
reopened under Section 147 of the Income Tax Act, 1961 and the H
879
880
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A Income Ta.x liability was enhanced. Consequently, the assessment order
was rectified under Section 13 of the Surtax Act. The amount by
which the income tax liability was enhanced under Section 147 was
allowed as a deduction from the chargeable profits under the Surtax
Act and consequently the surtax liability of the assessee stood reduced.
Subsequently, the Income Tax Officer, after three years, again took
B resort to Section 13 of the Surtax Act, rectified the surtax assessment
by withdrawing the deduction of the additional amount of tax which
had been held payable under the order passed under section 147 of
the Income Tax Act.
The Appcllante Assistant Commissioner and the Tribunal held
C that the Income Tax Officer's order was logical and justified in the
facts and circumstances of this case. Being aggrieved the appellant-
assessee preferred the present appeal.
On behalf of the appellant-assessee it was contended that there -
was no mistake apparent from the record; and that a proceeding
D under Section 13 of the Surtax Act could not be taken because four
years had already passed from the date of the assessment order.
Dismissing the appeal, this Court.
HELD: I. The starting point of the assessment under Section 4
E of the Companies (Profits) Surtax Act has to be the total income
computed under the Income Tax Act, 1961. That being so, the Income
Tax assessment order must necessarily form part of the records of the
Surtax Assessment. Any change or variation of tax liability in the
Income Tax assessment order will have to be given effect to in the
Surtax assessment. There is no reason to hold that the Income Tax
F assessment is not a part of the records of the Surtax assessment
proceedings. If this contention of the assessee is to be upheld, logically
it has to be held that even the first order of rectification giving relief
to the assessee was invalid. Hence, it could not be said for the second
rectification there was no mistake apparent from the record.
G
1884 E-H)
2. The first rectification order under the Surtax Act had given
relief to the assessee by deducting the additional amount of Income
Tax levied by the order passed under Section 147 of the Income Tax
Act. This relief had to be taken out when the order under Section 147
H was set aside by the Appellant Assistant Commissioner and the Income
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WALDIES LTD. v. COMNR. OF LT. [SEN, J.]
881
Tax liability of the assessee stood reduced. What the Income Tax Officer A
was trying to do in effect was to nullify the order of rectification.
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