C. P. Sen, J.

1. This is an application under section 256 (2) of the Indian, Income-tax Act, 1961 (hereinafter referred to as the Act), read with section 18 of the Companies (Profits) Sur-tax Act, 1964 (hereinafter referred to as the Sur-tax Act) at the instance of the Commissioner of Sur-tax Madhya Pradesh, Bhopal (hereinafter referred to as the Department) requesting this Court that as the following points of law arise out of the order passed by the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal) on 31-3-1980 in R A. Nos. 100, 101, 102, 103, 104 and 105, respectively :-

"(1) Whether, on the facts and in the circumstances of the case, the amounts of deductions under sections 80-I and 80-L of the Income-tax Act, 1961 could not be considered as sums not includible in the total income for income-tax assessment and, therefore, would not fall for deduction under rule 4 for computing the capital under the second Schedule to the Companies (Profits) Sur-tax Act. 1964?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the ITO's failure at the time of the assessment in not considering the deductions under sections 80-I and 80-L of the Income-tax Act, 1961 for the purpose of rule 4 of the second Schedule to the Companies (Profits) Sur-tax Act, 1964 is not a mistake of law apparent from the record and therefore, could not be rectified under section 13 or 14 of the said Act?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the rectification orders passed on 18-7-1977 by the Sur-tax Officer/ITO under section 14 of the Companies (Profits) Sur-tax Act, 1964 read with section 154/155 of the Income tax Act, 1961 were barred by limitation?

If the questions No. 1, 2 and 3 above are answered in favour of the department and against the assessee, whether the Tribunal was right in law in upholding the AAC's orders and consequently in canceling the rectification orders passed by the Sur-tax Officer/ITO on 18-7-1977 under section 14 of the Companies (Profits) Surtax Act, 1964 read with section 154/155 of the Income-tax Act, 1961".

2. The facts giving rise to this application are that M/s. India Thermit Corporation Limited (hereinafter referred to as the Company) has its address as 'Shree Bhawan' Sarafa Road, Lashkar, Gwalior and the Company is a limited Company engaged in the business of manufacture and sale of Thermit used for welding railway lines. The said Company is liable to payment of Sur-tax under the Surtax Act. Assessment years are 1967-68, 1968-69, 1969-70, 1970-71, 1171-72 & 1972-73. Sur-tax assessments were completed on different dates. The dates are mentioned in Annexure I to the petition. While completing the said Sur-tax assessments, the Sur-tax Officer (hereinafter referred to as the S.T.O.) had computed the capital without making any deduction in respect for the capital under rule 4 of the Second Schedule to the Sur-tax Act, proportionate to the deduction allowed under section 80-L and 80-I in the income-tax assessment. The dates of assessment of Sur-tax are between 3-7-1970 & 27-12-1972. Later on, the S. T. O. discovered that there was a mistake, which in his opinion, was apparent on the face of the record in the aforesaid assessment' inasmuch as there was an omission to make proportionate deduction in the capital computed for different years in view of the deduction allowed under section 80-I and 80-L in the income-tax assessments. Details regarding the deduction allowed under section 80-I and the deduction that ought to have been made proportionately in the computation of the capital in terms of rule 4 in the Second Schedule of the Sur-tax Act are as under :-

A. Y. Income 801 relief Capital & Proportionate

assessed. Granted Reserves. deduction of capital.

1967-68 13,28,110 59,264 31,02,989 1,38,000

1968-69 9,64,005 76,960 33,52,989 2,67,579

1969-70 18,40,717 1,47,097 34,33,315 2,74,665

1970