Law:

Section:

Section 154, read with section 217, of the Income-tax Act, 1961 [Corresponding to section 35 read with section 18A(8) of the Indian Income-tax Act, 1922] - Rectification of mistake - Apparent from records - Assessment year 1954-55 - Whether question as to whether interest under section 18A(6) of 1922 Act must be charged depended on exercise of discretion vested in ITO by fifth proviso to that sub section and further question of fact as to whether conditions all or any of them mentioned in rule 48 of Indian Income-tax Rules, 1922 have been satisfied - Held, yes - Whether mere fact that no interest had been charged in original assessment order could not lead to a conclusion that ITO had committed a patent error and, therefore, he had no jurisdiction to pass an order under section 35 of 1922 Act to include interest - Held, yes FACTS The assessment of the assessee for the assessment year 1954-55 was completed wherein no interest had been charged under section 18A(6) of the 1922 Act. Subsequently, the ITO rectify the assessment by adding the interest under section 217 of 1961 Act. On writ application the assessee contended that the impugned order, apparently passed in exercise of the powers under section 154 of the 1961 Act, corresponding to section 35 of 1922, was without jurisdiction in that there was no error apparent on the face of the record justifying action being taken under the section. HELD The question as to whether interest under section 18A(6) of 1922 Act must be charged depended on the exercise of discretion vested in the ITO by the fifth proviso to that sub-section and the further questions of fact as to whether the conditions, all or any of them mentioned in rule 48 of the 1922 Rules, have been satisfied. If it is necessary to conduct an investigation to find out whether a discretion is vested in the ITO or not by determining whether any part of the rule (rule 48(1)), of 1922 rules, had been satisfied and if it is possible to decide whether there was an error or not only after coming to the conclusion whether rule 48(1) has been satisfied, it appears that the error is not an error apparent on the face of the record, it could not be said that that…

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