The power under S. 35 of the Act is not limited to rectification of mistakes which are apparent on the face of the order but includes mistakes which are discovered as a result of an examination of the record.

Judgment

KAPUR, J. : This is an appeal pursuant to a certificate of the High Court of Kerala against the judgment and order of that Court and the question for decision is the applicability of S. 35 of the Indian Income-tax Act (hereinafter termed the Act ).

2. The facts which have given rise to the appeal are these: The respondent is a limited company which owns a spinning mill at Alwaye. It commenced business in January 1951, and its first accounting year ended on December 31, 1951 and the relevant assessment year is 1952-53. It filed its return showing an income of Rs. 3,21,284 without taking into account the amount allowable under S. 15-C of the Act. On February 2, 1953, the net assessable income of the respondent was determined at Rs. 1,47,083 after deducting Rs. 1,79081 under S. 15-C. The respondent however declared a dividend of Rs. 4,72,415 which attracted the application of S. 2 of the Finance Act, 1952, read with Part B, proviso (ii) of First Schedule and thus it became liable to the payment of additional income-tax and this fact was overlooked by the Income-tax Officer. After giving notice under S. 35 of the Act, the Income-tax Officer by an order dated January 25, 1954, rectified this error and imposed an additional tax at the rate of one anna in the rupee. He later discovered that this was also erroneous and the rate should have been 5 annas in a rupee. By an order dated August 12, 1954, he rectified the error. Under S. 18 A, advance income tax had to be paid and the respondent company had deposited only Rs. 5,000 and therefore became liable to penal interest under S. 18A (8) of the Act. By the same order this omission to impose penal interest was corrected and this error was thus rectified.

3. Against this order the respondent company went in revision under S. 33-A (2) to the Commissioner of Income-tax but the revision was dismissed. Thereupon the respondent company filed a petition in the High Court of Kerala under Art 226 of the Constitution on the ground that S. 35 of the Act did not apply and that on the merits additional tax could not be imposed. The High Court by its judgment dated October 31, 1955, held that the orders made were without jurisdiction and therefore granted a writ of certiorari quashing the orders and the Income-tax Officer has brought this appeal pursuant to a certificate of that High Court.

4. According to the High Court, S. 35 of the Act was a provision for rectification of "mistakes apparent on the record" and in the opinion of the High Court it was a mistake analogous to Order 47, Rule 1 of the Code of Civil Procedure for grant of review on the ground of mistake or error apparent on the face of the record and it construed it in the following words:

"i. e. an evident error which does not require any extraneous matter to show its incorrectness. The error may be one of fact but is not limited to matters of fact and include also errors of law. But the law must be definite and capable of ascertainment. An erroneous view of law on a debatable point or a wrong exposition of the law or a wrong application of the law or a failure to apply the appropriate law cannot be considered a mistake or error apparent on the fact of the record. See Chitaley s C. P. C., Vol. III, pp. 3549-50, 5th edition."

On the ground that the applicability of proviso (ii) of Part B of the First Schedule of the Finance Act was a complex question which could not be said to be "apparent on the face of the record", the High Court held that the necessary foundation for the exercise of the powers under S. 35 had not been laid and therefore the Income-tax Officer had no jurisdiction to make the order that he did. The High Court also held that the levy of penal interest under S. 18-A (8) of the Act for failure to make advance deposit under S. 18-A (3) was also without jurisdiction.

5. The learned Judges of the High Court seem to have fallen into an error in equating the language and scope of S. 35 of the Act with that of Order 47, Rule 1