S.R. DASS, J.

(1) THIS appeal on a certificate of fitness granted by the High court of Bombay raises a question of interrpetation of sub-s. (10) of s 35 of the Indian Income- tax Act, 1922. This sub-seption is one of a group of Ss. substituted or inserted in the said section by s. 19 of the Finance Act, 1956 (Act 18 of 1956). By s. 28 of the said Finance, Act, sub-s. (10) of s. 35 of the Income-tax Act, 1922, came into force on 1/04/1956. The short question before us is, whether on its true construction, sub-s. (10) of s. 35 applies in a case where a company declares dividends by availing itself wholly or partly of the amount on which a rebate of income-tax was earlier allowed to it under clause (1) of the proviso to Paragraph B of Part I of the relevant Schedules to the Finance Acts, when such dividends were declared prior to the coming into force of the subsection, that is, prior to 1/04/1956.

(2) THE facts which have given rise to the appeal are these. The Ahmedabad Manufacturing And Calico Printing Co., Ltd., is the appellant before us. The appellant company was incorporated under the Indian Companies Act, 1866, and has its office at Ahmedabad. It carries on the business of manufacturing, and selling cotton piece goods and chemicals. For the assessment year 1952-53, the corresponding account year being the calendar year 1951, the appellant was assessed to income-tax and super-tax on a total income of Rs. 1,02,79,808.00 and was allowed a rebate of one anna per rupee on the undistributed fits of Rs. 36,62,776.00 under the first proviso to paragraph B of. Part I of the first Schedule to the Finance Act, 1952. The amount of rebate allowed was Rs. 2,28,924.00 . For the assessment year 1953- 54, the corresponding account year being the calendar year 1952, the appellant showed a book profit of Rs. 45,67,96,660,.00 , but was assessed to a loss of Rs. 5,98,353.00 on 17/04/1954. For the said calendar year 1952, the appellant declared a dividend of Rs. 19,32,0000.00 on April 20, 1954. This dividend came out of the undistributed profits of the calendar year 1951 on which the appellant had been allowed rebate.

(3) ON 18/03/1958, the Income-tax Officer, Special Circle, Ahmedabad, respondent No. 1 before us, issued a notice to the appellant calling upon the latter to show cause why action under sub-s. (10) of s. 35 should not be taken against the appellant by withdrawing the rebate allowed on the sum of Rs. 19,32,000.00 . The appellant raised some objections, one of which was that sub-s. (10) of s. 35 did, not apply to his case. The Income-tax Officer, however, held that sub-s. (10) of s. 35 applied and accordingly directed that the rebate allowed on the sum of Rs. 19,32,000.00 should be withdrawn, by recomputing the tax payable by the appellant. He ordered the issue of a demand notice for a sum of Rs. 1,20,750.00 which was the rebate allowed on Rs. 19,32,000.00 . The Income-tax Officer passed this order on 27/03/1958.

(4) BEING aggrieved by that order, the appellant moved the High court of Bombay by a writ petition filed on 26/06/1958. The main ground taken by the appellant was that sub-s. (10) of s. 35 did not apply to a case where dividend was declared, as in this case, before the coming into force of sub-s. (10) of s. 35. The High court rejected this contention and dismissed the writ petition. The appellant then obtained certificate of fitness and has preferred the present appeal in pursuance of that certificate.

(5) WE may now read some of the provisions of s. 35 in so far as they are relevant for our purpose- `S. 35(1) The Commissioner or Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision under s. 33A and the Income-tax Officer may, at any time within four years from the date of any assessment order or refund order passed by him on his own motion rectify any mistake. apparent from t