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  • V.G Oak, C.J
  • R.S Pathak, J.
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  • V.G Oak, C.J
  • R.S Pathak, J.
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Smart Summary

Structured Summary of the Opinion (V.G. Oak, C.J.)

Factual and Procedural Background

These three connected petitions under article 226 of the Constitution arise from three connected rectification proceedings under section 35 of the Indian Income-Tax Act, 1922. The court treated the factual matrix as sufficiently similar across the three matters and proceeded by reference to the facts of one representative case (Civil Misc. Writ No. 21 of 1967).

In the representative matter, Sri Vithaldas (the petitioner) was assessed by the Income-Tax Officer, District II, Kanpur, by an order dated December 15, 1955, fixing his total income for 1952–53 at Rs. 57,992. That total included Rs. 21,291 stated to be the petitioner's share of income from the firm M/s. Bhawani Prasad Girdhar Lal, Bombay. Subsequently, the Income-Tax Officer, Bombay passed an assessment of the firm on March 27, 1956, fixing the firm's total income at Rs. 66,472 and the petitioner's share at Rs. 9,678 — substantially lower than the Rs. 21,291 assumed in the Kanpur assessment.

The petitioner applied to respondent No. 1 (the assessing officer in Kanpur) for rectification under section 35 so that Rs. 9,678 would be substituted for Rs. 21,291. Despite reminders and further representations and revisions to the Inspecting Assistant Commissioner, Income-Tax Commissioner and the Central Board of Revenue, respondent No. 1 did not pass the rectification order requested. The writ petition was filed in this Court on January 12, 1967 seeking directions for rectification.

Relevant dates and documentary points appearing in the opinion: the firm assessment (Bombay) dated March 27, 1956 (annexure “A” / annexure RA-1), the petitioner's rectification application dated May 13, 1959 (annexure “B”), a rectification order in respect of other firms dated December 5, 1959 (annexure “D”), and other documentary endorsements indicating copies and correspondence were exchanged (including an endorsement that a copy of the March 27, 1956 order was sent to respondent No. 1 on April 3, 1959).

Legal Issues Presented

  1. Whether respondent No. 1 was obliged to rectify the petitioner's assessment under section 35 of the Indian Income-Tax Act when the firm's subsequent assessment showed a lower share for the petitioner than the share assumed in the petitioner's initial assessment.
  2. Whether the court can direct rectification (including by issuing prerogative relief) after the expiry of the period of limitation prescribed by section 35 (four years), i.e., whether the limitation in section 35 is an absolute bar to rectification by the assessing officer, or whether the court can compel performance despite the expiry.
  3. Whether delay in moving the writ petition (the writ being filed in January 1967 when the limitation period under section 35 ran up to March 1960) precludes the court's intervention or whether the delay is excusable in view of the petitioner's continuing attempts to obtain relief from tax authorities up to October 1966.

Arguments of the Parties

Petitioner's Position

  • The petitioner asserted entitlement to rectification under section 35 because the Bombay firm's assessment (dated March 27, 1956) fixed his share at Rs. 9,678 whereas the Kanpur assessment had assumed Rs. 21,291.
  • The petitioner argued that he brought the mistake to respondent No. 1's notice (application dated May 13, 1959) and pursued the matter through reminders, representations, and revisions to higher authorities up to October 1966. He furnished documentary proof (annexures) that the necessary material and communications were available to respondent No. 1 well before March 27, 1960.
  • The petitioner contended that respondent No. 1's omission to rectify was prejudicial and that suitable directions from the Court were warranted.

Respondents' Position

  • Respondent No. 1, by counter-affidavit, justified declining rectification on the ground that the four-year period of limitation for rectification under section 35 had expired (stated as expiring March 26/27, 1960), and that he therefore had no power to rectify the assessment thereafter.
  • Counsel for the respondents (Mr. Gopal Behari) advanced two main contentions: (a) the writ petitions were belated — the assessments were from 1955 and rectification should have been done by March 1960; and (b) the limitation under section 35 is four years and has expired, hence the court cannot now intervene to require rectification.
  • Respondent No. 1 also suggested that necessary material to complete rectification was not available to him up to March 27, 1960 (an explanation the Court examined against the documentary record submitted by the petitioner).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kadirvel Nadar v. State of Madras [1962] 46 I.T.R. 251 Interpretation that a statutory time limit may be a period within which proceedings should be commenced; if proceedings are commenced within that period the statutory power can be exercised thereafter — the time may not restrict exercise of power. The Court relied on this authority to support the view that timing provisions may be directory rather than absolute bars to the exercise of power; used to underpin the proposition that the officer's duty to rectify can be commanded although the prescribed period has passed.
Commissioner of Income-Tax v. Duncan Brothers and Co. Ltd. [1955] 28 I.T.R. 427 (Calcutta High Court) Where statutory provisions concern performance of public duties, and voiding acts done in neglect would cause grave injustice or not promote the legislative object, such time provisions are directory not mandatory. The Court invoked this case to justify treating certain statutory time limits as directionally framed (not absolute) where strict nullification would cause injustice — supporting intervention despite expiry of a time provision.
All India Groundnut Syndicate Ltd. v. Commissioner of Income-Tax (Chagla C.J.) General principle: "no person... can put forward his own default in defence to a right asserted by the other party." The Court cited the principle to reject respondent No. 1's argument that his own failure to act within time could defeat the petitioner's right to rectification.
Rajagopala Chettiar v. IV Income-Tax Officer (Madras High Court) The court had expressed doubt whether it could compel an officer to act outside the statutory time limits prescribed by section 35 and direct rectification after expiry of those limits. The opinion noted this authority as expressing doubt on the point; the present Court treated it as one view but proceeded to decide that intervention and direction to rectify were appropriate on the facts before it.
Rex v. Hanley [1912] 3 K.B. 518 Mandamus will lie to compel performance of a public duty by a public officer although the time prescribed by statute for performance has passed. The Court relied on this authority (and the Halsbury reference) to support the proposition that a court may issue a mandamus to compel fulfillment of public duties notwithstanding the expiry of a statutory time limit.
Halsbury's Laws of England (3rd ed.), vol. XI, para. 172 Statement that if public officials fail to perform a public duty, mandamus will lie to compel performance even though the statutory time for performance has passed. Used to reinforce the doctrinal support for issuing mandamus to compel rectification despite the statutory time having elapsed.

Court's Reasoning and Analysis

The Court proceeded by first identifying the material statutory provision in section 35(1): the officer "shall within the like period rectify any such mistake which has been brought to his notice by an assessee." The words impose a duty to rectify once a mistake has been brought to the officer's notice.

Applying the facts, the Court found that:

  • The petitioner did bring the relevant mistake to respondent No. 1's notice (documented application dated May 13, 1959, and other correspondence and annexures showing communications and receipt of the Bombay assessment).
  • Documentary material before the Court indicated that respondent No. 1 had sufficient information by March 27, 1960 (for example, an order dated December 5, 1959 referring to correspondence with the Income-Tax Officer, Bombay; an endorsement showing a copy of the March 27, 1956 assessment was sent to respondent No. 1 on April 3, 1959; and a rectification order in another case showed the Bombay share report arrived in August 1959).
  • Given the above, there was no clear justification on the record for respondent No. 1's failure to pass the rectification order in favour of the petitioner.

On the legal question of limitation, the Court examined authorities on whether statutory time limits for performance of public duties are mandatory or directory. The Court relied on precedents (including Kadirvel Nadar and Duncan Brothers) and text (Halsbury, Rex v. Hanley) to state that where strict enforcement of a time provision would produce injustice, courts have treated such provisions as directory and have upheld the issuance of mandamus to compel officers to perform public duties despite the expiry of the statutory period.

The Court also invoked the equitable principle that one cannot rely on his own default (All India Groundnut Syndicate) to defeat another's right. Applying these principles, the Court concluded that respondent No. 1's omission cannot be allowed to defeat the petitioner's substantive right to rectification, since the petitioner had brought the mistake to the officer's notice and had pursued the matter through appropriate channels.

Regarding delay in filing the writ, the Court accepted the petitioner's explanation that he had been seeking relief through representations and revisions up to October 1966 (an order dated October 27, 1966 was cited). On that basis the Court considered the delay in moving the writ petition on January 12, 1967 to be excusable such that intervention by the Court was warranted.

Holding and Implications

Holding: The Court's final decision was that the three connected petitions are ALLOWED.

Immediate orders and consequences:

  • The Court directed respondent No. 1 to pass necessary orders for rectification under section 35 of the Indian Income-Tax Act, 1922, and to modify the assessment order dated December 15, 1955 (in the petitioner's case) to reflect the correct share as per the firm's assessment.
  • In each case the petitioner was awarded costs of Rs. 100 to be paid by respondent No. 1.

Implications: The opinion authorises the Court to direct an assessing officer to rectify an assessment under section 35 even after the statutory four-year period has passed when:

  • the assessee brought the mistake to the officer's notice within the relevant timespan or otherwise pursued the matter through available administrative remedies,
  • documentary and factual evidence shows the officer had the material necessary to act, and
  • failure to act would prejudice the assessee and permitting the officer to rely on his own default would work injustice.

The opinion does not state that it is laying down a binding new precedent; its operative effect is to require respondent No. 1 to pass rectification orders and to award costs. No explicit broader rule-making declaration (beyond the application of cited authorities) is stated as creating a new legal precedent in the text of the opinion.

End of summary. This summary is confined to the content and citations appearing within the provided opinion and does not add or infer information beyond that text.

Show full summary ...

    Vithaldas v. Income-Tax Officer

    V.G Oak, C.J:— These three connected petitions under article 226 of the Constitution arise out of three connected proceedings for rectification under section 35 of the Indian Income-Tax Act, 1922 (hereinafter referred to as the Act). The facts of the three cases are similar. They raise common questions of law. It will, therefore, be sufficient to refer to the facts of one of the three cases.

    2. Sri Vithaldas is the petitioner in Civil Miscellaneous Writ No. 21 of 1967. On December 15, 1955, the Income-Tax Officer, District II, Kanpur, passed an assessment order against the petitioner for the year 1952-53. His total income was fixed at Rs. 57,992. This total income included a sum of Rs. 21,291 being the petitioner's share income from a certain firm. M/s. Bhawani Prasad Girdhar Lal, Bombay. The assessment was subject to rectification under section 35 of the Act. On March 27, 1956, the Income-Tax Officer, Bombay, assessed the firm, M/s. Bhawani Prasad Girdhar Lal, Bombay. The total income of the firm was fixed at Rs. 66,472. The present petitioner's share was fixed at Rs. 9,678. The share so fixed by the Income-Tax Officer, Bombay was far less than the share assumed by the Income-Tax Officer, Kanpur. So, the petitioner moved an application before respondent No. 1 to rectify the petitioner's assessment. It was requested that the income of Rs. 9,678 be substituted for the assumed income of Rs. 21,291. In spite of several reminders, respondent No. 1 did not pass any order of rectification as requested by the petitioner. The petitioner made a series of representations or revisions before the Inspecting Assistant Commissioner, Income-Tax Commissioner and the Central Board of Revenue. But none of these authorities gave any relief to the petitioner. So, on January 12, 1967, Sri Vithaldas filed the writ petition before this court requesting that necessary directions be given for rectification. Section 35 of the Act provides for rectification of mistakes. Sub-section (1) of section 35 states:

    “…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.”

    3. Sub-section (5) of section 35 deals with special cases where a partner's assessment has to be rectified in view of the subsequent assessment of the firm. In such a case the starting point for limitation is the date of the final order passed in the case of the firm.

    4. Annexure “A” to the writ petition is a copy of the order of assessment dated March 27, 1956, passed against the Bombay firm. Annexure “A” shows that the petitioner's share of income was fixed at Rs. 9,678. In the assessment order dated December 15, 1955, the petitioner's share in the income of the firm was fixed at Rs. 21,291. The share ultimately fixed in annexure “A” was a good deal below the share assumed in the order dated December 15, 1955. The petitioner was, therefore, entitled to rectification under section 35 of the Act. But respondent No. 1 did not pass any order of rectification in favour of the petitioner.

    5. Two counter-affidavits have been filed on behalf of the respondents. The first counter-affidavit has been filed by respondent No. 1. In paragraph 8 of the counter-affidavit he has attempted justification for declining to pass an order for rectification. In paragraph 8 of the counter-affidavit it is stated:

    “…as the period of limitation of 4 years for rectification under section 35 of the Income-Tax Act, 1922, had expired on March 26, 1960, the opposite party No. 1 had no power to rectify the assessment and consequently nothing was done by him.”

    6. The assessment order against the Bombay firm was passed on March 27, 1956. So, action under sub-section (5) of section 35 of the Act could be taken up to March 27, 1960. Long before March 27, 1960, the petitioner moved respondent No. 1 for rectification. The petitioner's application, annexure “B”, is dated May 13, 1959. The respondent's excuse for not taking action under section 35 of the Act is that necessary material was not available to respondent No. 1 up to March 27, 1960.

    7. Apart from the firm “Bhawani Prasad Girdhar Lal, Bombay”, the petitioner had shares in certain other firms also. In connection with the assessment of those firms, the question arose about rectification of the petitioner's assessment. Such rectification was actually carried out. Annexure “D” dated December 5, 1959, is such an order passed under section 35 of the Act with reference to those firms. Annexure “D” concluded thus:

    “The share income of M/s. Bhawani Prasad Girdhar Lal, Bombay, is under correspondence with the Income-Tax Officer, Bombay, and necessary action will be taken after receipt of reply from him.”

    8. This order dated December 5, 1959, indicates that at least since December, 1959, respondent No. 1 was making attempts to obtain the petitioner's share income with M/s. Bhawani Prasad Girdhar Lal, Bombay. There should have been no difficulty in obtaining the necessary information from Bombay by March, 1960. Annexure “RA-5” to the rejoinder-affidavit is a copy of another order of rectification with respect to Dwarka Nath, Kanpur. In that order dated October 5, 1959, it was mentioned that the share report from the Income-Tax Officer, Bombay, was received by respondent No. 1 in August, 1959. Annexure “RA-1” to the rejoinder-affidavit is a copy of the assessment order dated March 27, 1956. The petitioner's share in the income of the firm was specified in the order. The endorsement at the foot of annexure “RA-1” indicates that a copy of the assessment order dated March 27, 1956, was sent to respondent No. 1 on April 3, 1959. All these documents filed by the petitioner indicate that the necessary material was available to respondent No. 1 by March 27, 1960. It is not clear why respondent No. 1 declined to pass the necessary order for rectification in favour of the petitioner.

    9. We have shown that the petitioner was entitled to have a rectification order passed in his favour. That was not done. The omission of respondent No. 1 to pass the necessary order for rectification has been prejudicial to the petitioner. Prima facie the petitioner is entitled to have suitable directions issued by this court to respondent No. 1.

    10. Mr. Gopal Behari for the respondents urged before us that no intervention of the court is called for in these cases. Firstly, he urged that the writ petitions are belated. He points out that the assessment order was passed in December, 1955. Rectification ought to have been done by March, 1960. The present writ petitions were moved on January 12, 1967,— several years after the passing of the assessment orders. It is true that several years have elapsed since the passing of the assessment orders and the appropriate time for passing orders under section 35 of the Act. But the petitioner has explained that between 1959 and the end of 1966 he made a series of representations and revisions to the higher authorities. Annexure “Z” to the petition is a copy of the order dated October 27, 1966, passed by the Commissioner of Income-Tax, U.P He regretted that the petitioner's claim could not be entertained. It is thus clear that the petitioner was adopting different methods for getting some relief up to October, 1966. The writ petition was moved on January 12, 1967. There is sufficient ground for condoning delay in moving the writ petition.

    11. Secondly, Mr. Gopal Behari urged that the period of limitation under section 35 of the Act is four years. That period expired in March, 1960. It is not now possible for the court to intervene in the matter.

    12. In Kadirvel Nadar v. State of Madras [1962] 46 I.T.R 251. it was explained that section 34 of the Madras Agricultural Income-Tax Act merely lays down a period within which proceedings under the section should be commenced. If the proceedings commenced within the period prescribed in the section, the power of the Commissioner under the section can be exercised at any time thereafter. It is not necessary that the power should be exercised within the period fixed in the section.

    13. In Commissioner of Income-Tax v. Duncan Brothers and Co. Ltd. [1955] 28 I.T.R 427. the Calcutta High Court had to examine the provisions of section 66(1) of the Indian Income-Tax Act. It was held that the provision to the effect that the Appellate Tribunal shall within 90 days of the receipt of an application draw a statement of the case and refer it to the High Court is not mandatory. The reference made by the Tribunal to the High Court is not incompetent merely because it was made after the expiry of 90 days from the date of receipt of an application by the assessee. Where the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of that duty would work serious general inconvenience or injustice to persons who had no control over those entrusted with the duty, and at the same time would not promote the main object of the legislature, such provisions should be construed as being directory only and not imperative.

    14. In All India Groundnut Syndicate Ltd. v. Commissioner of Income-Tax Chagla C.J observed at page 100:

    “It is an elementary principle of law that no person…. can put forward his own default in defence to a right asserted by the other party.”

    15. In Rajagopala Chettiar v. IV Income-Tax Officer the Madras High Court expressed doubt whether the court can compel an officer to go outside the limits of time prescribed by section 35 of the Indian Income-Tax Act and direct him to rectify an order after the expiry of the time prescribed by the section.

    16. In Rex v. Hanley [1912] 3 K.B 518. it was observed at page 531, that “a mandamus will lie to compel the performance of a public duty by a public officer although the time prescribed by statute for the performance of it has passed.” In Halsbury's Laws of England, 3rd edition, volume XI, it is observed on pages 91 and 92 under paragraph 172 that:

    “If public officials or a public body fail to perform any public duty with which they have been charged, an order of mandamus will lie to compel them to carry it out, even though the time prescribed by statute for the performance of the duty may have passed.”

    17. In the present case the rules of limitation are contained in sub-sections (1) and (5) of section 35 of the Act. The material words in sub-section (1) are:

    “…. shall within the like period rectify any such mistake which has been brought to his notice by an assessee.”

    18. These words require that the officer must rectify if the mistake has been brought to his notice by the assessee. In the instant case the assessee did bring the mistake to the notice of respondent No. 1. It was the duty of respondent No. 1 to make the necessary correction in the initial assessment order. By omitting to carry out the necessary correction, respondent No. 1 cannot defeat the rights of the assessee. If respondent No. 1 failed to carry out his duty at the proper time, this court can give the appropriate direction to respondent No. 1 to do the needful now. There is, therefore, no difficulty in this court's giving necessary direction to respondent No. 1 to make the necessary rectification at this late stage.

    19. These three connected petitions are allowed. We direct respondent No. 1 to pass necessary orders for rectification under section 35 of the Indian Income-Tax Act, 1922, and modify the assessment order passed against the petitioner in December, 1955. In each case the petitioner shall get Rs. 100 as costs from respondent No. 1.

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    Comments

    Vithaldas v. Income-Tax Officer
    (Feb 29, 1968)