Law:

Section:

Section 154, read with section 297(2)(a), of Income-tax Act, 1961 – Rectification of mistake – Apparent from record – Assessment year 1961-62 – ITO in compliance with AAC's order, withdrew super-tax rebate allowed in excess at time of original assessment by resorting to section 154 – Tribunal held that ITO was not within his rights in rectifying assessment because question did not involve any obvious or apparent mistake of fact or law – Further treating ITO's Order as one passed under section 35 of 1922 Act, Tribunal held that no appeal lay from such an order and, therefore, assessee's appeal was incompetent – Whether in clause (a) of section 297(2), though a power is given to ITO to proceed under provisions of 1922 Act, there is no duty as such, cast upon him to do in sense that he must proceed only under 1922 Act and not under 1961 Act if situation in a particular case so warrants – Held, yes – Whether use of expression 'may' is, thus, an enabling provision entitling ITO to resort of 1922 Act, but where he choses to proceed under 1961 Act his action is not illegal – Held, yes – Whether, in view of aforesaid legal position, ITO's action under section 154 need not be treated as action under section 35 of 1922 Act to confer validity, and consequently, appeal filed by assessee was competent – Held, yes Words and phrases: Word 'may' as interpreted in section 297(2)(a). FACTs For the assessment year 1961-62, the ITO in compliance with the AAC's order, withdrew the super-tax rebate which was allowed in excess at the time of the original assessment, by resorting to section 154. On appeal, the AAC upheld the ITO's order. On second appeal, the Tribunal was of the opinion that the ITO was not within his rights in rectifying the assessment as he did because the question die not involve any obvious or apparent mistake of fact or law. But treating the order passes by the ITO as an order under section 35 of the Indian IT Act, 1922, the Tribunal came to the conclusion that no appeal lay from such an order passed under section 35 of the Act of 1922, and, therefore, the appeal before the Tribunal was held to be incompetent. On reference: HELD The expression 'may' used in…

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