Law:

Section:

Section 155 of the Income-tax Act, 1961 [Corresponding to section 35(5) of the Indian Income-tax Act, 1922] - Rectification of mistakes - Other amendments - Assessment year 1948-49 - Assessee was partner in firms doing film business - Assessment was made on 1-3-1953 by taking share of loss from one of these firms which was subsequently reduced in a revision of assessment of firm - ITO gave notice to assessee for rectification by taking revised share of loss - A date for filing objections, if any, was fixed - Assessee sent a reply claiming set off of unabsorbed loss for 1947-48 - This was rejected and assessment was rectified under section 35(1) read with sub-section (5) which was inserted in 1953 effective from 1-4-1952 - Whether assessee was given proper opportunity of being heard - Held, yes - Whether since sub-section (5) was effective from 1-4-1952, assessment was made on 1-3-1953 and rectification was made thereafter, provision of sub-section applied to assessee's case and ITO had power under sub-section (1), read with sub-section (5) to rectify said mistake - Held, yes - Whether there was no vested right in assessee not to have a mistake corrected in his assessment which according to law was a mistake on date on which correction was made and could be made under law - Held, yes FACTS The assessee was partner in different firms carrying on film business. In the assessment year 1947-48 there was unabsorbed loss of Rs. 29,337 in the case of the assessee. In the assessment year 1948-49 made on 1-3-1953, assessee's share of loss from one of the firms was Rs. 77,405. This loss of his share when set off against his income from other sources, the result was that his assessment showed a loss of Rs. 26,592. Subsequently, the 1948-49 assessment of the firm as revised and its loss was reduced, in consequence of which the assessee's share of loss was reduced to Rs. 16,488. The ITO gave notice to the assessee on 23-2-1956, of his intention to rectify his assessment under section 35 so as to accord an opportunity to the assessee to file his objections, if any, on or before 29-2-1956. In his reply the assessee sought to adjust the unabsorbed loss of Rs. 29,337 of the year…

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