Judgment

G. K. MITTER

( 1 ) THIS group of five appeals by special leave arises out of a common order made under Art. 226 of the Constitution of the High Court of Judicature at Madras. The appeals involve the interpretation of S. 35 (5) of the Income-tax Act, l922.

( 2 ) THE facts in Civil Appeal No. 2154 of 1966 - relevant for the disposal of the appeal, taken by way of sample, are as follows. The respondent along with his four brothers were partners of a registered firm carrying on business in gunnies. The assessment of the firm for the year l943-44 was completed on 22/01/1946 and the share Income of each partner was determined at Rs. 8,265. The assessment of the respondent as individual was completed on 24/01/1946 wherein was included his income from the partnership just noted. Subsequently, the assessment of the firm was reopened by proceedings under S. 34 (1) (a) of the Act and a sum of Rs. 90,000 was added to the income of the firm liable to be brought to tax. The notice under S. 34 was issued on 11/09/1952 and the reassessment of the firm took place of 30/05/1959. On 24/07/1959 notice under S. 35 (5) of the Act was served on the respondent for rectification of his assessment as an individual. The rectification was ultimately ordered to be made on 31/08/1959. The respondent applied to the High Court for quashing the said order.

( 3 ) WHEN the matter came to be beard by the High Court of Madras, there were already three reported decisions of this Court bearing on the interpretation of S. 35 (5) of the Act. In the last of these decisions, a doubt had been cast as to the correctness of the two earlier decisions but the High Court felt that the decision in Second Addl. Income-tax Officer v. Atmala Nagaraj, 1962-46 ITR 609 (SC)being, the second decision of this Court in point of time, was fully applicable to the cases before it and in view of the matter the order of rectification was quashed. Hence these appeals.

( 4 ) BEFORE talking note of the earlier decisions of this Court, it would be appropriate to consider the relevant provisions of the Income-tax Act and interpret the m as if the matter were res integra. If the result leads to a, conflict of decisions, we will have to examine the question as to whether the view taken in an earlier case should be adhered to. It is only when this Court finds itself unable to accept the earlier view that it would be justified in deciding these appeals in a different way.

( 5 ) THE two sub-section of S. 35 which call for interpretation are transcribed as follows :

"35. Rectification of mistake.- (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. 33-A 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 the record of the appeal, revision, assessment or refund as the case may be, and shall within the like period rectify any such mistake which has been brought to his notice by an assessee :

PROVIDED that no such rectification shall be made, having the effect of enhancing an assessment or reducing a refund unless the Commissioner, the Appellate Assistant Commissioner or the Income-tax Officer, as the case may be, has given notice to the assessee of his intention so to do and has allowed him a reasonable opportunity of being heard :

PROVIDED further that no such rectification shall be made of any mistake in any order passed more than one year before the commencement of the Indian Income-tax (Amendment) Act, 1939.

(2) to (4) *****

(5) Where in respect of any completed assessment of a partner In a firm it is found on the assessment or re-assessment of the firm or on-any reduction or enhancement made in the income of the firm under S. 31, S. 33, S. 33-A. S. 33-B, S. 66 or S. 66-A that the share of the partner in the profit or los