Law: Income Tax Act, 1922

Section: 23A,34,35

Income-tax Act, 1922 -Sections 23A, 34, 35 -Rectification of mistake -Assessment made originally erroneosuly treating assessee as a public limited company, levying super-tax at the rate of 20 per cent instead of 25 per cent and allowing rebate of 5 per cent of super-tax -Mistake rectified under Sec. 35 after issue of show cause notice -Whether proper and valid -Held yes -Provisions of Sec. 34 and 35 -Whether mutually exclusive -Held no -Cause of action under Sec. 34 available -Whether action under Sec. 35 also permissible -Held yes -- Assessment -Rectification -Income-tax Officer allowing rebate of 5% of super tax erroneously treating assessee as a public company and levying super-tax at 20% instead of 25% -On realisation of mistake Income-tax Officer taking action under section 35 and rectifying mistake -Grievance that having once held assessee to be public company Income-tax Officer was competent to take action under section 34 and not under section 35 -Held, sections 34 & 35 are not mutually exclusive; if cause of action under section 34 available action under section 35 also permissible -- Corresponding Sections: Income-tax Ordinance, 1979 -Section 65 -- ORDER The order was passed by M.T. SIDDIQUI, President.---We propose to dispose of these two appeals by a company manufacturing textile goods as the facts and the objections are identical. 2. The two assessments under appeal were originally completed on 29-6-1968 and 31-5-1971, respectively. The same were, however, rectified under Section 35 on 7-10-1971 in the following circumstances. 3. In the original assessments the Income Tax Officer levied super tax at 20% instead of 25%. He committed this error as he took the appellant to be a public company in which the public was substantially interested within the meaning of Explanation 1 to sub-section (1) of Section 23A of the Income Tax Act and in consequence erroneously allowed a rebate of 5% of super-tax available to such a company vide sub-clause (ii) of proviso to clause (I) of para A of Part-II of the Fourth Schedule to the Finance Act, 1963 and the corresponding provisions of the Finance Act, 1964. The appellant was all along assessed as a public…

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