Law:

Section:

section 280zb of the income-tax act, 1961 and para 8(1) of the tax credit certificate (corporation tax) scheme, 1966-tax credit certificate-rectification of mistake-while granting tax credit certificate to petitioner, ito originally treated miscellaneous receipts, rent, interest and surplus on sale of assets, as its business income-whether ito could subsequently exclude these items and pass modified orders, treating it as a case of mistake apparent from record-held, no Facts The assessee-company, which manufactured and produced articles covered by the First Schedule to the Industries (Development and Regulation) Act, 1951, was granted tax credit certificate under section 280ZB for the assessment years 1966-67 to 1970-71. Subsequently, the ITO issued a notice to the assessee for rectifying the order under paragraph 8(1) of the Tax credit Certificate (Corporation Tax) Scheme, 1966, so as to exclude from its business income certain items mentioned therein on the ground that they were earlier included erroneously. After overruling the assessee's objection, he modified his earlier orders, with a view to rectify a mistake apparent from the record. On writ: Held It is well established that a mistake apparent from the record must be an obvious and patent mistake and not something that can be established only by a long drawn process of reasoning on points on which there may conceivably be two opinions. Undoubtedly, in the instant case, it could not be established without debate that the income purported to be excluded by the impugned orders, which related to miscellaneous receipts, rent and interest, other than interest on securities, and surplus on sale of assets under section 41(2), was not income attributable to the manufacture or production of the articles mentioned in the First Schedule to the Industries (Development and Regulation) Act, 1951. Accordingly, the inclusion of the income which the ITO had now purported to exclude was not a mistake apparent from the record and the ITO was not entitled to rectify it under the provisions of Para 8(1 ) of Tax Credit Certificate(Corporation Tax) Scheme, 1966. Case review T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50…

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