Law:

Section:

JUDGMENT V.S. Desai, J.-This is a petition under article 226 of the Constitution of India challenging the orders of rectification under section 154 of the Indian Income-tax Act made on February 8, 1965, by the respondent of the assessments of the petitioner No. 1 firm for theassessment years 1958-59, 1960-61, 1961-62 and 1962-63 and for quashing the said orders and the subsequent notices of demand issued in pursuance thereof dated February 9, 1965. The petitioners Nos. 2 and 3 are the two partners of the petitioner No. 1 firm and the firm as well as the partners are being assessed in India as non-residents. The petitioner-firm was duly registered under the Indian Income-tax Act, 1922, and also under the Income-tax Act of 1961. In the original assessments of the firm for the relevant assessment years with which we are concerned, the assessments were made on the slab rates applicable to registered firms in the respective Finance Acts. In the individual assessments of the partners their respective shares in the income of the firm were included and assessed at the maximum rate of income-tax since the assessments were made in the status of non-residents. On February 1, 1965, the petitioner-firm was served with a notice dated January 29, 1965, by the respondent intimating to it that in its assessments for the assessment years 1958-59, 1960-61, 1961-62 and 1962-63 there were mistakes apparent from the record inasmuch as the firm had not been charged at the maximum rates of income-tax under section 17(1) of the Act of 1922, corresponding to section 113 of the Act of 1961, and he, therefore, proposed to rectify the assessment and enhance the tax under section 154 of the Indian Income-tax Act of 1961. The petitioners replied to the said notice contending that there was no mistake either apparent or otherwise in the said assessments and consequently the Income-tax Officer had no power to invoke his jurisdiction under section 154 of the Act. The respondent did not accept the said contentions and rectified the assessments for the said years by applying the provisions of section 17(1) of the Act of 1922 to the assessments of the firm and followed the said orders made by him…

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