Law: Income Tax Ordinance, 1979

Section: 156

[Income Tax Ordinance (XXXI OF 1979)].....Section 156.....Mistake apparent from the record" would not cover a "mistake" committed at time when the law was not clear.-- "Mistake apparent from the record" would not cover a "mistake" committed at time when the law was not clear. If two interpretations of law were possible when the original assessment order was made and the assessing Officer adopted one of those interpretations, it cannot be said that the mistake is apparent from the record. Therefore, the Assessing Officer could not have invoked section 156(2).--If two interpretations of law were possible when the original assessment order was made and the Assessing Officer adopted one of those interpretations, it cannot be said that the mistake is apparent from the record. In view of what has been said above, we are of the considered view that the Assessing Officer could not have invoked section 156(2) of the Income Tax Ordinance, 1979. ORDER MR. JUSTICE MUHAMMAD MUNIR PERACHA.--(1). The respondent-assessee, a Limited Company, derives income from manufacture and sale of polyester fibre. In the assessment year 1995-96, it filed a return of income with audited accounts. For the above mentioned period, the statement under section 143-B was also filed along with the return. In this statement, interest income has been declared at Rs. 3,48,91,250 and tax deduction at Rs. 34,89,125. Assessment was finalized under section 62 of the Income Tax Ordinance, 1979, whereby tax was not charged at the normal rate by the Assessing Officer on the interest income of the respondent-company and the deducted tax Rs. 34,89,125 was taken as final discharge of the tax liability. However, the Assessing Officer gave a notice under section 156(2) of the Ordinance to show cause as to why its case should not be rectified under section 156(2). After hearing representative of the assessee, the Assessing Officer came to the conclusion that the interest income of Rs. 3,48,91,250 is liable to income tax at the normal rate. The assessee challenged the order of the Deputy Commissioner Income Tax through an appeal filed before the Commissioner of Income Tax (Appeals). Learned Commissioner Income Tax…

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