Law: Income Tax Act, 1961

Section: 155,64

Law: Income Tax Act, 1922

Section: 35

(a) Income Tax----Rectification of assessment---Partner of firm---Change of law---Inclusion of income of minor child from firm in total income of parent---Difference between S.35(5) of the Act of 1922 and 5.155 of the Indian Act of 1961--¬Inclusion of income of minor child from firm in total income of parent under S.155---Valid---Indian Income Tax Act, 1922, S.35(5)---Indian Income Tax Act, 1961, Ss.5, 64 & 155. Section 5 of the Indian Income Tax Act, 1961, lays down that all the income, profits or gains which had accrued or arisen to the assessee or been received by or on behalf of the assessee would be liable to be included in his total income. This provision is subject to the other provisions of the Act and, therefore, if the income of any person is declared by section 64 to be includible in computing the total income of the assessee such income would form part of the total income exigible to tax under section 4 of the Act. Under section 35(5) of the Income Tax Act, 1922, the inclusion or necessary correction of a partner's share of income from his firm, in his assessment, consequent upon the subsequent assessment of the firm, is deemed to be rectification of a mistake apparent from the record within the meaning of section 35(1). However, there is no such provision in section 1'55 of the Act of 1961. Under section 155, the power to amend the assessment of the partners has been conferred without recourse to any fiction. If the share income of a partner from a firm is omitted to be included in his/her assessment, it can be rectified under section 155 and if the share of a minor from the firm is omitted to be included in the assessment of the parent, it can also be rectified under section 155(1). Held, that, on the facts of the case, particularly in view of the concession made by the representative of the assessee to the effect that the share income of the minor children could be clubbed with the income of the assessee, the order under, section 155 clubbing the share of the minors in the income of the assessee was valid. Additional CIT v. Shree Shankar & Co. (1979) 118 ITR 636 (Mad.); Balaram (T.S.), ITO v. Volkart Bros. (1971) 82 ITR 50 (SC); CIT v.…

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