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Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from record - Assessment year 1966-67 - Whether in a case where two views are not possible, if by misreading section or miscalculation of rate provided therein it, a mistake is committed, such a mistake would come with in purview of section 154 - Held, yes FACTS In the original assessment, tax was computed as payable by the assessee-company on the basis of 25% of the dividend income of Rs. 16,01,769 and the taxable figure arrived at was Rs. 4,00,442.26. After giving the assessee credit for the tax deducted at source on this account, the tax liability of the assessee was nil on this amount. Thereafter, on 26-12-1967, supplementary assessment was made under section 143(3) read with section 147(a) to include the capital gains arising as a result of the sale of 2,14,174 shares of Rs. 10 each to a certain company. On 15-12-1968, the ITO passed order under section 154 on the ground that there was a mistake in the calculation of tax and the tax on dividend income was calculated at 25% as was made in the original assessment. Thereafter, on 5-1-1970, another ITO made an order under section 154, on the ground that there was some mistake in computation of the capital gains. While computing the tax he also followed the same computation of tax on the dividend income, i.e., at 25% as was done in the original assessment. On 16-1-1970, there was a subsequent rectification order under section 154, on the ground that there was a mistake in tax calculation. But in the said order also the tax on the dividend income was computed at 25% as was done in the original assessment. On 3-2-1971, a notice was issued under section 154 on the ground that there was an error in the calculation of tax on the dividend and, therefore, rectification under section 154 was proposed. The assessee thereupon filed writ petition the ground that there was no mistake as contemplated under section 154. The Single Judge quashed the said notice and the proceedings thereunder. On appeal: HELD The scope and ambit of section 154 and section 25 of the 1922 Act, have been the subject-matter of several decisions and it has been held that…

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