Law:

Section:

Section 154 of the Income-tax Act, 1961 [Corresponding to section 35(1) of the Indian Income-tax Act, 1922] - Rectification of mistake - Apparent from records - Assessment year 1947-48 - For assessment year in question, assessee filed voluntary return of income - But he did not file estimate of his total income and pay advance tax as required under section 18A(3) of 1922 Act - Thus, there was a default under sec. 18A(3) and penal interest was leviable under sec. 18A(8) of 1922 Act - In original assessment, penal interest was omitted to be levied by mistake - Whether, on facts, provisions of sec. 18A(3) of 1922 Act had not been complied with and it was evident from sub-section (8) that ITO had duty to add to tax interest calculated in manner laid down in sub section (6) - Held, yes - Whether failure to discharge said duly in assessment order was nothing more or other than an obvious error apparent from record of assessment - Held, yes - Whether, in such circumstances, Assessing Officer was justified in rectifying his order under sec. 35(1) of 1922 Act and, therefore, including penal interest in original assessment of assessee - Held, yes FACTS For the relevant assessment year, the assessee filed a voluntary return of income. But he did not file an estimate of his total income and pay advance tax as required by section 18A(3) of the 1922 Act. Thus, there was a default under section 18A(3) and penal interest was leviable under section 18A(8) of the 1922 Act. In the original assessment penal interest was omitted to be levied by mistake. This was a mistake apparent on the record, rectifiable under section 35(1) of the 1922 Act. Accordingly the assessee's objections against such rectification were invited. The assessee raised objection to effect that mistake in question was not mistake apparent on the record and the Income-tax Officer had no power to review his own assessment. However, the assessee's objection was overruled. The original order of assessment was accordingly rectified under section 35(1) of the 1922 Act"; On petition : HELD A mistake is an omission made not by design, but by mischance and a "mistake apparent" is a mistake that is manifest, plain or…

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