Law: Income Tax Act, 1922

Section: 23(4),33,35

Income-tax Act, 1922 -- Sections 33, 35 -- Rectification of mistake -- Whether confined to arithmetical errors only -- Held no -- Whether applicable to all mistakes apparent from record of appeal, revision, assessment or refund -- Held yes -- Opportunity of hearing in case of enhancement of assessment or reduction of refund -- Whether condition precedent -- Held yes -- Correction of mistakes under section 35 -- Not confined to arithmetical errors -- Rectification of all mistakes apparent from record of appeal, revision, assessment or refund, as case may be -- Permissible subject to giving of notice to assessee and of allowing him opportunity of being heard where rectification would enhance assessment or reduce refund -- JUDGMENT The judgment of the court was delivered by NOORUL ARIFIN J.---The Income-tax Appellate Tribunal has stated the following questions for the opinion of this Court:-- "Where on the fact of the records the assessee is non-resident, but in the assessment under Section 23(4) of the Income-tax Act, the assessee has been treated as resident and ordinarily resident, is the Income-tax Officer entitled to rectify the mistake under Section 35 of the Income-tax Act? Whether an assessment under Section 23(4) of the Income-tax Act would not be best judgment assessment, where the assessee had by mistake apparent on the record been treated as resident and the mistake is subsequently rectified by the Income-tax Officer? Whether the Tribunal had any material to hold that the assessment made by the Income-tax Officer under Section 23(4) of the Income-tax Act was not a best judgment assessment?" 2. The late Mr. F.E. Dinshaw was a citizen of the United States and was admittedly not resident in this country, nor the beneficiaries of his estate under the will executed by him. Previous to 1952-53, the assessment of assessee or assessees was as non-resident. But, in the three assessments for the year 1952-53, it appears that due to oversight, the Income-tax Officer treated the assessees as resident and ordinary resident. Later, the Income-tax Officer rectified this mistake under Section 35 of the Income-tax Act, which order was upheld in appeal by the Appellate…

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