Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Writ No. 546 of 1968.

Advocates

B. S. Gupta, Advocate with Shri Gurdev Singh, Advocate,
D. N. Awasthy, Advocate, with Shri B. K. Jhingan, Advocate,

Judges

O. Chinnappa Reddy
Bhopinder Singh Dhillon
Rajendra Nath Mittal, JJ.

Acts

provisions of Section 35 of the Indian Income-tax Act, 1922. 23. Section 23-B of the 1922 Act
provisions of Section 35 of the 1922 Act or Section 154 of 1961 Act. 22.
1922 Act (by reason of Section 297(2)(a) of the 1961 Act),
Sections 5 (5) and 5 (7-A) of the Indian Income-tax Act
Section 31 (3) (b) of the 1922 Act. Both the provisions
Section 23 (3) of the Indian In come-tax Act, 1922,
Section 34 (3) of the 1922 Act. C. W. P. 546 of 1968
Section 23-B of the Indian Income-tax Act, 1922,
provisions of the Indian Income-tax Act, 1922
Section 34 (3) of the old Act. These provisions
Section 297(2)(a) of the Income-tax Act 1961.
Section 297(2) of the Income-tax Act. 1961.
provisions of Section 150 of the new Act
Section 251(2) of the Income-tax Act, 1961,
provisions of Indian Income-tax Act, 1922,
Section 5 of the Patiala Income-tax Act
provisions of Section 143(3) of 1961 Act
Section 22 (2) of the Income-tax Act, 1922,
provisions of Section 23 (3) of 1922 Act
SECTION 141 A INCOME TAX ACT 1961
INCOME TAX ACT 1961
INCOME TAX ACT 1922
SECTION 35 INCOME TAX ACT 1922
Sections 31, 33, 33-A, 33-B, 66 or 66-A.
Section 251(1)(a) of the 1961 Act
Section 31 (3) (a) of the 1922 Act
Section 143(3) of the 1961 Act
Section 251(2) of the 1961 Act
Section 34 (3) of the 1922 Act.
Section 23 (2) of the 1922 Act
Section 34 (1) of the 1922 Act
Section 22 (2) of the 1922 Act
provisions of Section 23-B (7)
Section 34 (3) of the old Act
Section 35 of the 1922 Act.
Section 34 of the 1922 Act
Section 34, the Income-tax
Section 23 (3) of 1922 Act.
Clause (7) of Section 23-B
Section 10 (2) (vi) (b)
Section 34 (1) (b).
Section 23-B (1)
Section 23-B

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The assessee (petitioner) filed his return for the assessment year 1960-61 on 20-12-1960 after a notice under Section 22(2) of the Indian Income-tax Act, 1922. On 23-12-1960 the Income-tax Officer (ITO) made a provisional assessment under Section 23-B (1922 Act) and raised provisional tax demand of Rs. 50,808/-. The ITO later completed an assessment on 24-3-1965 purporting to act under Section 143(3) of the Income-tax Act, 1961 (which had come into force 1-4-1962). The assessee appealed to the Appellate Assistant Commissioner (AAC) under section 246 of the 1961 Act, arguing that the assessment should have been completed under the 1922 Act. The AAC set aside the assessment and directed the ITO to complete the assessment afresh from the "return" stage (order dated 16-10-1967). The assessee lodged an appeal to the Income-tax Appellate Tribunal but subsequently withdrew it. The ITO issued a fresh notice under Section 23(2) of the 1922 Act on 12-1-1968; the assessee objected on limitation grounds (Section 34(3) of the 1922 Act) and challenged the notice by C.W.P. No. 546 of 1968.

Separately, on 27-2-1968 the ITO granted a refund of tax of Rs. 97,055/-, but later sought to rectify that refund (claiming an over-refund of Rs. 55,242 attributable to refunding provisional tax that, the ITO contended, should not have been refunded). The ITO passed a rectification order dated 5-6-1971; the assessee challenged this by C.W.P. No. 3396 of 1971.

Legal Issues Presented

Whether the assessment completed by the Income-tax Officer on 24-3-1965 (purportedly under Section 143(3) of the 1961 Act) was a nullity because the return had been filed before the 1961 Act came into force, and consequently whether the Appellate Assistant Commissioner lacked jurisdiction to direct a fresh assessment after the expiry of the four-year period prescribed by Section 34(3) of the 1922 Act.
Whether the Appellate Assistant Commissioner validly exercised power to set aside the assessment and direct a fresh assessment under the 1922 Act despite a technical irregularity in the provision cited by the Income-tax Officer.
Whether a refund of provisional tax paid pursuant to a provisional assessment under Section 23-B (1922 Act) could be lawfully granted when the regular assessment was set aside, and whether the ITO could subsequently rectify such a refund under Section 35 (1922 Act) as a mistake apparent on the record.
Whether the limitation bars (Section 34(3) of the 1922 Act) apply to a fresh assessment made pursuant to a finding or direction in an appellate order (i.e., whether saving provisions such as Section 150 of the 1961 Act and the second proviso to Section 34(3) of the 1922 Act remove the time bar).

Arguments of the Parties

Assessee's (Appellant's) Arguments (as recorded)

The AAC did not expressly direct the ITO to complete the assessment under the 1922 Act but only declared the assessment dated 24-3-1965 a nullity and directed disposal "in accordance with law"; thus, the assessment having been declared void, a fresh assessment was barred by the expiry of the four-year limitation under Section 34(3) of the 1922 Act.
The AAC was not competent to direct a fresh assessment after the limitation period had expired; the terms "finding" and "direction" in the second proviso to Section 34(3) were contended to be limited to findings/directions necessary to give relief to the assessee and confined to specified provisions (Sections 31, 33, 33-A, 33-B, 66 or 66-A).
Regarding the refund: the provisional assessment was part of machinery to recover tax pending determination by regular assessment; if the regular assessment died with a setting-aside, then the provisional assessment and payments made under it should also be treated as extinguished and refundable.
Submission that the question whether provisional assessment survives setting-aside of the regular assessment was debatable; therefore, no mistake apparent on record justified rectification.

Revenue's/Respondent's Position (as recorded or implied)

The AAC's order—read as a whole—directed the ITO to proceed under the provisions of the 1922 Act and did not declare the original assessment a nullity; the ITO had jurisdiction to make the original assessment under either Act depending on applicable sub-clauses of Section 297(2) of the 1961 Act.
An assessment completed by reference to the wrong statutory provision is not necessarily void if the officer could validly have acted under the correct provision; mis-quoting the provision does not divest jurisdiction.
The AAC was competent (under Section 251(1)(a) of the 1961 Act and Section 31(3)(b) of the 1922 Act) to set aside the assessment and direct a fresh assessment; the limitation would not apply where the fresh assessment is made in consequence of or to give effect to a finding or direction in an appellate order (saved by Section 150 of the 1961 Act and the second proviso to Section 34(3) of the 1922 Act).
On refund: provisional assessment (Section 23-B) is distinct from the regular assessment; provisional tax remains valid payment unless regular assessment is made showing an excess — hence the earlier refund (prompted by a misunderstanding) could be rectified; the ITO's rectification corrected a patent mistake of treating provisional payment as merged with the regular assessment.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Income-tax Officer v. Murli Dhar Bhagwan Dass, 52 ITR 335 : AIR 1965 SC 342	Limits on appellate authority under Section 34(3): findings/directions must relate to the assessment year/order in question (cannot be used to affect another year).	Court invoked the decision to clarify that the limitation on appellate power relates to the particular year/order, not that findings/directions must be only those that give advantage to the assessee.
Hazari Mal Kuthalia v. Income-tax Officer Special Circle, 41 ITR 12 : AIR 1961 SC 200	Misquotation of the provision does not necessarily invalidate an exercise of power if a valid source of jurisdiction can be identified; exercise of power is referable to a jurisdiction that confers validity.	Cited to support the proposition that jurisdiction depends on whether, on a proper view, the officer had power under the correct provision even if he invoked the wrong provision.
Kandaswami v. Commr. of Income-tax, (1963) 49 ITR 344 (Mad)	Tribunal's jurisdiction is determined by the true scope of functions/powers, not by wrong citation of statutory provision.	Used to reinforce that misquoting a provision does not deprive the Tribunal or officer of jurisdiction if the body had jurisdiction on a proper view.
Laxmi Industries & Cold Storage v. Income-tax Officer, (1971) 79 ITR 248 (All)	Where the officer enjoyed jurisdiction under the correct Act, proceedings should be ascribed to that jurisdiction even if the officer proceeded under a wrong statutory reference.	Cited as authority for upholding assessments made under the wrong Act where officer could validly act under the correct Act.
Commr. of Income-tax v. Hargopal Bhalla & Sons, 82 ITR 243 : (1971 Tax LR 738) (Punjab)	Section 23(3) of the 1922 Act and Section 143(3) of the 1961 Act are in pari materia; order under Section 143(3) may be treated as if under Section 23(3).	Applied to support that an assessment under Section 143(3) (1961 Act) could be legitimately held to have been passed in exercise of powers under Section 23(3) (1922 Act).
Kisan Workers Transport Co-operative Society Ltd. v. Commr. of Income-tax, (1973) 88 ITR 122 (Punjab)	Followed the view that similar provisions in old and new Acts can validate assessments.	Reiterated earlier holding on parity of provisions and validity despite wrong provision being cited.
Dhampur Sugar Mills Ltd v. Commr. of Income-tax, 90 ITR 236 : (1972 Tax LR 922) (All)	Same general proposition as above (parity of provisions and sustaining assessment).	Used to show consistent judicial approach across High Courts.
Commr. of Income-tax v. Kishni Bai, 1974 Tax LR 914 (Delhi)	Similar treatment where wrong provision was invoked but the officer had power under the other Act.	Referred to as part of a line of consistent authority upholding validity on proper view of jurisdiction.
Commr. of Income-tax v. Veeraswami Chettiar, (1963) 49 ITR 13 (Mad)	Appellate authority cannot by direction confer jurisdiction on the Income-tax Officer where jurisdiction was never properly acquired (distinguishing void proceedings from irregular ones).	Distinguished by the court: Veeraswami was a case where earlier proceedings were entirely without jurisdiction (notice not issued), unlike present case where jurisdiction was acquired.
Naganatha Iyer v. Commr. of Income-tax, (1966) 60 ITR 647 (Mad)	Reassessment proceedings commenced by ignoring voluntary returns were void; appellate authority cannot confer jurisdiction where none existed.	Distinguished on facts: in present case the ITO had acquired jurisdiction by notice and return, so Naganatha Iyer did not apply.
Inter Asian Footwear Corporation v. Appellate Asst. Commr., (1967) 66 ITR 110 (All)	Challenge to notices issued under wrong statutory provision; the High Court had held certain notices invalid without considering whether notice could be deemed to be under correct Act.	Referred to illustrate conflicting views; court noted that earlier decision did not consider the Hazari Mal principle.
Commr. of Income-tax v. Muthukaruppan Chettiar, 78 ITR 69 : AIR 1970 SC 486	Proceedings under Section 34 were illegal where voluntary returns had not been disposed of; appellate direction could not salvage jurisdiction.	Distinguished: that decision concerned untouched voluntary returns and illegality of issuing Section 34 notices; not analogous to the present facts.
Narinder Singh Dhingra v. Commr. of Income-tax, 90 ITR 110 : (1973 Tax LR 627) (Delhi)	Division Bench held Tribunal could not confer jurisdiction to remove limitation bar; held in that case fresh proceedings after expiry were incompetent.	Court discussed the decision but expressly disagreed with its reasoning and treated it as not persuasive in the present factual matrix.
Commr. of Income-tax v. Rambaran Ramnath, (1976) 104 ITR 691 (All)	Interpretation of a Tribunal's direction that left lower officer free to pass fresh order "if need be"—concerned interpretation of appellate direction.	Noted as an interpretation case; court said it did not assist the assessee in present facts.
Commr. of Income-tax v. National Small Industries Corporation Ltd., 91 ITR 579 : (1973 Tax LR 492) (Delhi)	Accepted Hazari Mal principle: rectification/other action may be treated as if done under the correct provision; appellate route may have been incompetent where proper provision would have applied.	Referred to show judicial trend supporting the view that proceedings can be referable to the jurisdiction which validly confers power.
Jaipur Udyog Ltd. v. Commr. of Income-tax, 71 ITR 799 : AIR 1969 SC 470	On Section 141 (1961 Act) (similar to Section 23-B, 1922 Act): provisional assessment is summary, is not binding, and tax paid pursuant to provisional assessment is liable to adjustment in light of regular assessment.	Quoted to describe the nature and scheme of provisional assessment and to support that provisional proceedings are distinct from regular assessment.
Jagan Nath Rameshwar Prasad v. Income-tax Officer, 93 ITR 16 : (1973 Tax LR 1076) (All)	Held that tax paid pursuant to provisional assessment is not liable to be refunded simply because a regular assessment is set aside; provisional assessment is distinct.	Followed by the court to support the proposition that provisional tax payments remain valid despite setting aside of the regular assessment and that refund was wrongly granted.
Income-tax Officer v. Volkart Brothers, 82 ITR 50 : (1971 Tax LR 1508) (SC)	Definition of "mistake apparent on the record": must be obvious and patent, not something requiring long reasoning and on which two opinions could conceivably exist.	Applied to determine that the ITO's confusion between provisional and regular assessment was a patent mistake amenable to rectification under Section 35.
Income-tax Officer v. Bombay Dyeing & Mfg. Co. Ltd., 34 ITR 143 : AIR 1958 SC 873	Rectification under Section 35 permitted where a retrospective legislative change produced an obvious and patent mistake in a completed assessment; the concept of "glaring and obvious" mistake.	Used to demonstrate that a glaring/patent mistake in a completed assessment is rectifiable; court analogised that the ITO's mistake in refunding provisional tax was patent and rectifiable.

Court's Reasoning and Analysis

The court proceeded by distinguishing cases where proceedings were entirely without jurisdiction from cases involving mere technical irregularity. The analysis unfolded in the following logical steps:

Jurisdictional Foundation: The court found that the ITO had validly acquired jurisdiction in the present case by the issue of a notice under Section 22(2) of the 1922 Act and by reception of a return filed by the assessee. Thus the basic preconditions for the officer's jurisdiction under the 1922 Act existed.
Wrong Provision Cited ≠ Nullity: Relying on a line of authority (Hazari Mal Kuthalia and subsequent High Court and Supreme Court decisions), the court held that invoking the wrong statutory provision does not automatically render the order a nullity where the officer could legitimately have acted under the correct provision. The ITO's reference to Section 143(3) (1961 Act) rather than the corresponding provision in the 1922 Act was a misquotation/technical irregularity but not a jurisdictional defect that would make the assessment void.
Appellate Power to Remit: The AAC's decision to set aside the assessment and remit the matter for fresh assessment under the 1922 Act was within his competence. The court observed that the AAC could have confirmed the assessment by reference to the correct provision but chose instead to set it aside because of the technical defect; the AAC was empowered to direct a fresh assessment under Section 251(1)(a) of the 1961 Act and under Section 31(3)(b) of the 1922 Act.
Limitation / Saving Provisions: Where an appellate authority gives a finding or direction, the second proviso to Section 34(3) of the 1922 Act and Section 150 of the 1961 Act operate to remove the time-bar for assessments or re-assessments made in consequence of or to give effect to such findings/directions. Consequently, a fresh assessment directed by the AAC could validly proceed notwithstanding expiry of the four-year period.
Provisional Assessment vs Regular Assessment: The court analysed Section 23-B (1922 Act) and related jurisprudence (including Jaipur Udyog). It emphasised that provisional assessment is a distinct summary procedure designed for early tax recovery; it does not merge into the regular assessment and, in particular, does not automatically cease to exist because a subsequent regular assessment was set aside. The statutory scheme contemplates separate treatment of provisional assessment and regular assessment.
Rectification and Mistake Apparent: The ITO had initially refunded amounts (including provisional tax) under a mistaken view that the AAC's order required refund. Upon reconsideration he concluded the provisional tax refund was wrongful and rectified the refund order under Section 35 (1922 Act). The court applied the established test for "mistake apparent on the record" (Volkart Brothers; Bombay Dyeing): the mistake must be obvious and patent. The ITO's confusion between provisional and regular assessment was held to be a patent, glaring mistake that justified rectification.
Distinguishing Authority: The court examined prior decisions relied on by the assessee (e.g., Veeraswami Chettiar, Naganatha Iyer, Narinder Singh Dhingra) and distinguished them on their facts—principally where proceedings were initiated without jurisdiction (no valid notice or where voluntary returns were ignored) or where the appellate question was framed differently. The court rejected the broad application of those cases to the present facts.

Holding and Implications

Holdings:

C.W.P. 546 of 1968 is DISMISSED with costs. The Appellate Assistant Commissioner validly set aside the original assessment (which contained only a technical defect arising from citation of the wrong statutory provision) and validly directed that a fresh assessment be made under the 1922 Act; the Income-tax Officer was competent to proceed with the fresh assessment notwithstanding expiry of the four-year period prescribed by Section 34(3) of the 1922 Act (because of the saving provisions).
C.W.P. 3396 of 1971 is DISMISSED with costs. The ITO's rectification of the earlier refund (to recover amounts representing provisional tax wrongly refunded) was proper because the refund resulted from an obvious and patent mistake (confusing provisional assessment with the regular assessment), and provisional assessment payments remain distinct and were not extinguished merely because the regular assessment was set aside.

Implications:

Direct effect on the parties: the taxpayer's challenges in both writ petitions were rejected; the ITO may proceed with the fresh assessment under the 1922 Act as directed and the rectification of the refund stands.
On legal principles: the opinion reinforces that a proceeding or order that invokes the wrong statutory provision will not necessarily be void if the adjudicating officer had jurisdiction under a correct provision; technical irregularity may be cured by appellate direction and can be saved from limitation when the fresh assessment is made in consequence of an appellate finding or direction (per the saving provisions cited).
Remedies for taxpayers: the court observed that where provisional tax appears to have been paid in excess and no regular assessment is eventually made, the taxpayer is not entirely remediless — remedies such as mandamus to compel assessment, an application under Section 48 (1922 Act) for refund, or possibly a suit remain available to determine true chargeability.
No assertion that the court was creating a novel or sweeping precedent beyond applying and harmonising earlier authorities; the determination rests on existing principles distinguishing voidness from irregularity and on the operation of statutory saving provisions.

This summary has been prepared strictly from the content of the provided opinion. No facts, arguments, or legal propositions have been added beyond those expressly contained in the opinion.

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R.A Boga, Petitioner. v. Appellate Assistant Commissioner Of Income Tax, A-Range, Amritsar And Another,

1. The facts of the case have given rise to an interesting situation though not to questions of complexity as we first thought. Pursuant to a notice issued by the Income-tax Officer under Section 22 (2) of the Income-tax Act, 1922, the petitioner (assessee) submitted his return of income for the Assessment year 1960-61 on 20-12-1960. On 23-12-1960, the Income-tax Officer made provisional assessment under Section 23-B of the Act and on the basis of the provisional assessment, he raised a demand on the petitioner for payment of provisional tax of Rs. 50,808/-. Thereafter, the Income-tax Officer also issued a notice under Section 23(2) of the Act. The Income-tax Act, 1961, came into force with effect from 1-4-1962. The assessment of the petitioner for the year 1960-61 was completed by the Income-tax Officer on 24-3-1965. He purported to complete the assessment under Section 143(3) of the 1961 Act. The assessee preferred an appeal to the Appellate Assistant Commissioner under section 246 of the 1961 act. One of the grounds urged by the petitioner before the Appellate Assistant Commissioner was that the Income-tax Officer should have completed the assessment under the provisions of Indian Income-tax Act, 1922, and not under the provisions of the Income-tax Act, 1961. This contention was accepted by the Appellate Assistant Commissioner who set aside the assessment made by the Income-tax Officer and directed the Income-tax Officer to complete the assessment afresh from the "return" stage. The order of the Appellate Assistant Commissioner which may be usefully extracted here was as follows:--

"Assessment has been challenged both on technical grounds as well as on merits. Taking the technical objections first, it is contended before me that as the return of income was filed on 20-12-1960 before the commencement of the Income-tax Act, 1961, the assessment should have been completed under the provisions of the Indian Income-tax Act, 1922 and the Income-tax Officer has erred in completing the assessment under the provisions of the Income-tax Act, 1961. I have considered the assessee's submissions very carefully and find that they have great force. The assessee's contention about the filing of the return before the commencement of the Income-tax Act, 1961 is correct and supported by the record. The appellant's contention that the Income-tax Officer should have completed the assessment under the provisions of the Indian Income-tax Act, 1922 and has erred in completing the assessment under the provisions of the Income-tax Act 1961 is also correct and is supported by Section 297(2)(a) of the Income-tax Act 1961. The assessment is, therefore, set aside with a direction to the Income-tax Officer to complete the fresh assessment from the return's stage. As I have set aside the assessment on the technical objections taken by the appellant, I have not considered it necessary to discuss the objections on merits."

2. From a perusal of the order of the Appellate Assistant Commissioner, it is apparent that no argument was advanced at that stage to the effect that the order of assessment made by the Income-tax Officer on 24-3-1965 was a nullity and that the Appellate Assistant Commissioner had no jurisdiction to direct the Income-tax Officer to make a fresh assessment as such fresh assessment would be barred by the time-limit prescribed by Section 34 (3) of the 1922 Act. Though the Appellate Assistant Commissioner did not expressly direct the Income-tax Officer to complete the assessment under the provisions of the 1922 Act, such a direction is patently implicit in the order. The order of the Appellate Assistant Commissioner was passed on 16-10-1967. The petitioner preferred an appeal to the Income-tax Appellate Tribunal on 4-12-1967 but withdrew the same subsequently. Consequent upon the direction issued by the Appellate Assistant Commissioner, the Income-tax Officer issued a fresh notice under Section 23 (2) of the 1922 Act on 12-1-1968. On 17-1-1968, the assessee submitted written objections claiming that no assessment was permissible as the period of four years prescribed by Section 34 (3) of the Act had elapsed. As the Income-tax Officer was going ahead with the assessment despite his objections, the petitioner filed Civil Writ Petition No. 546 of 1968 challenging the notice issued to him on 12-1-1968.

3. On 27-2-1968, the Income-tax Officer purporting to act under section 240 of the 1961 act, granted a refund of tax of Rs. 97055/-, making adjustments against demands of tax for later years. Subsequently, he issued a notice seeking to rectify the order for refund of tax on the ground that it had been wrongly allowed to the extent of Rs. 55242/-. The assessee submitted his objections and, finally, the Income-tax Officer passed order dated 5-6-1971 rectifying the order of refund to the extent to Rs. 55,242/-. The Income-tax Officer observed in his order that the provisional tax paid pursuant to the provisional assessment dt. 23-12-1960 had been wrongly refunded. The appellate order of the Appellate Assistant Commissioner merely set aside the assessment made under Section 143(3). The provisional assessment and provisional tax were never disputed and were never cancelled by the Appellate Assistant Commissioner. Therefore, the refund of provisional tax was wrong. The petitioner filed Civil Writ Petition No. 3396 of 1971 questioning this order of the Income-tax Officer.

4. The first submission of Shri B. Section Gupta, learned counsel for the assessee was that there was no direction in the order of the Appellate Assistant Commissioner to complete the assessment under the provisions of the Income-tax Act, 1922, but that there was only a direction to dispose of the matter in accordance with law. According to the learned counsel, the effect of the order of the Appellate Assistant Commissioner was to declare the assessment dated 24-3-1965 a nullity, leaving it to the Income-tax Officer to proceed with fresh assessment if that was permissible under the law. Since by then the period of four years prescribed by Section 34 (3) had already expired, the Income-tax Officer had no jurisdiction to proceed with fresh assessment We do not think we can agree with Shri Gupta's interpretation of the order of the Appellate Assistant Commissioner. If the Appellate Assistant Commissioner was declaring the order of assessment a nullity, there was no need for him to remit the matter to the Income-tax Office for fresh assessment since even by then the period of four years had expired. Though the actual direction contained in the concluding part of the Appellate Assistant Commissioner's order did not refer to the provisions of 1922 Act, it is clear on a reading of the whole of the order that what the Appellate Assistant Commissioner in fact did was to direct the Income-tax Officer to complete the fresh assessment under the provisions of the Income-tax Act, 1922.

5. The next submission of Shri Gupta was that the Appellate Assistant Commissioner was not competent to give a direction to the Income-tax Officer to complete the fresh assessment when the time for making the assessment had already run out. He submitted that the expression "finding" and "direction" in the second proviso to Section 34 (3) meant respectively, a finding necessary for giving relief to the assessee and a finding which the appellate or revisional authority was empowered to give under Sections 31, 33, 33-A, 33-B, 66 or 66-A. He invited our attention to the decision of the Supreme Court in Income-tax Officer v. Murli Dhar Bhagwan Dass, 52 ITR 335 : (AIR 1965 SC 342). That was a case in which the assessee- preferred an appeal to the Appellate Assistant Commissioner against his assessment for the year 1949-50. The Appellate Assistant Commissioner took the view that certain interest income was received by the assessee not in the relevant accounting year but in the previous accounting year. He, therefore, directed the deletion of that part of the income from the assessment for the year 1949-50 and the inclusion of it in the assessment for the year 1948-49. Pursuant to the direction, the Income-tax Officer initiated re-assessment proceedings under Section 34 (1) of the 1922 Act in respect of the assessment year 1948-49. The Supreme Court held that the finding and the direction which the Appellate Assistant Commissioner was competent to give were finding and direction necessary for dealing with the assessment for the year in question and not with the assessment for some other year. In other words, they held that the Appellate Assistant Commissioner while dealing with an appeal relating to assessment for the year 1949-50, was not competent to give a finding and a direction in respect of the assessment for the year 1948-49. We do not understand the judgment of the Supreme Court as laying down that the finding and direction contemplated by Section 34 (3) were finding and direction which gave relief to the assessee in the sense of being to his advantage only. The limitation on the exercise of the power of the Appellate Assistant Commissioner wag that the finding and direction should relate to the particular year and order of assessment.

6. The substance of the argument of Shri Gupta wag that the original assessment order made by the Income-tax Officer was a nullity and that it was so declared by the Appellate Assistant Commissioner, if Mr. Gupta was right in this submission, he would of course be right in submitting that the Appellate Assistant Commissioner had no jurisdiction to give a direction to the Income-tax Officer to make a fresh assessment without regard to the expiry of the four years' period of limitation prescribed by Section 34 (3). We are, however, unable to agree with the submission of Shri Gupta that the original order of assessment was a nullity or that it had been so declared by the Appellate Assistant Commissioner. We are unable to hold that merely because the Income-tax Officer misquoted the relevant provision of law, the assessment could be declared a nullity when the nature and extent of the power under the Act of 1922 as well as the Act of 1961 was precisely the same. The same Income-tax Officer had the necessary jurisdiction to complete the assessment under one or the other Act depending on whether the case fell under one or the other of the Sub-clauses of Section 297(2) of the Income-tax Act. 1961. That the Income-tax Officer invoked the provisions of one Act and not of the other Act would make no difference, if he could validly exercise the same power under the provisions of the other Act.

7. In Hazari Mal Kuthalia v. Income-tax Officer Special Circle, 41 ITR 12) (AIR 1961 SC 200) the question arose whether the order of the Commissioner of Income-tax transferring a case from one Income-tax Officer to another purporting to be under Sections 5 (5) and 5 (7-A) of the Indian Income-tax Act when it ought to have been under Section 5 of the Patiala Income-tax Act was void on that account. The Supreme Court said.

"This argument, however, loses point, because the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory. This principle is well settled."

8. In Kandaswami v. Commr. of Income-tax, (1963) 49 ITR 344 (Mad), the Madras High Court stated the position thus:

"It is now well settled that the jurisdiction of any Tribunal does not depend upon the wrong provisions of law upon which the Tribunal might have purported to act, but upon the question whether the Tribunal had jurisdiction on a proper view of the functions and powers with which it is clothed under the law or the statute creating it. In other words, the Tribunal will not lose its jurisdiction which it undoubtedly has in a particular case because of its having misquoted the provision of law under which it exercised the jurisdiction."

9. In Laxmi Industries and Cold Storage v. Income-tax Officer, (1971) 79 ITR 248 (All) the facts were that the assessee had filed a return of income for the assessment year 1961-62 before the 1961 Act came into force. The Income-tax Officer though bound to proceed under the 1922 Act (by reason of Section 297(2)(a) of the 1961 Act), proceeded with the assessment under the provisions of the 1961 Act. Pathak J. said.

"......... the Income-tax Officer completed the assessment under the Act of 1961, when properly he should have done so under the Act of 1922. Inasmuch as he did enjoy jurisdiction to proceed under the Act of 1922 he must be considered to have dealt with the case under the jurisdiction and "even if he was not quite alive to it at the time" the proceedings must be ascribed to the jurisdiction existing in him which would give them validity rather than to the jurisdiction under which they would be void."

10. The same question was considered by this Court in Commr. of Income-tax v. Hargopal Bhalla & Sons, 82 ITR 243 : (1971 Tax LR 738) (Punj) where it was said,

The provisions of Section 23 (3) of 1922 Act are in pari materia with the provisions of Section 143(3) of 1961 Act and deal with the same subject-matter, i. e., assessment. There is a slight difference in the language, but the purport of the provisions in both the Acts is the same. The order of the Income-tax Officer passed under Section 143(3) of the 1961 Act could, therefore, be legitimately held to have been passed in exercise of the powers vested in the Income-tax Officer under Section 23 (3) of 1922 Act.

This view was reiterated by this Court in Kisan Workers Transport Co-operative Society Ltd. v. Commr. of Income-tax, (1973) 88 ITR 122 (Punj) and by the Allahabad High Court in Dhampur Sugar Mills Ltd v. Commr. of Income-tax, 90 ITR 236 : (1972 Tax LR 922), The Delhi High Court expressed the same view in Commr. of Income-tax v. Kishni Bai, 1974 Tax LR 914 (Delhi).

11. In the present case, the Income-tax Officer completed the original assessment under the provisions of 1961 act when he ought to have completed it under the 1922 Act. In view of the various authorities referred to above, the assessment was not void. It was not a nullity. At the worst there was a technical irregularity. That was what the Appellate Assistant Commissioner said in his order. He remanded the case to the Income-tax Officer with a direction to make fresh assessment under the provisions of the old Act. The Appellate Assistant Commissioner could well have declared the assessment valid but he chose to set aside the assessment because of the technical defect and gave the direction already mentioned. He was competent to give such a direction under Section 251(1)(a) of the 1961 Act as well as under Section 31 (3) (b) of the 1922 Act. Both the provisions enabled the Appellate Assistant Commissioner to set aside the assessment and direct the Income-tax Officer to make a fresh assessment. If the assessment made' by the I. T. O. was entirely without jurisdiction and was a nullity, the Appellate Assistant Commissioner could not give a direction to make a fresh assessment after the expiry of the period of limitation but where the assessment made by the Income-tax Officer was not entirely without jurisdiction but suffered from a mere technical defect, the Appellate Assistant Commissioner, in the exercise of his jurisdiction, could direct the Income-tax Officer to make a fresh assessment notwithstanding the expiry of the four years' period of limitation. In such an event, the fresh assessment would be saved by the provisions of Section 150 of the new Act and second proviso to Section 34 (3) of the old Act. These provisions declare that the limitation of time would not apply to assessments or re-assessments made in consequence of or to give effect to any finding or direction contained in an order passed by any authority in a proceeding by way of appeal, reference or revision.

12. Shri B. Section Gupta, learned counsel for the assessee, relied upon the decisions in Commr. of Income-tax v. Veeraswami Chettiar, (1963) 49 ITR 13 (Mad), Naga-natha Iyer v. Commr. of Income-tax, (1966) 60 ITR 647 (Mad), Inter Asian Footwear Corporation v. Appellate Asst. Commr. (1967) 66 ITR 110 (All), Commr. of Income-tax v. Muthukuruppan Chettiar, 78 ITR 69: (AIR 1970 SC 486), Commr. of I. T. v. Rambaran Ramnath, (1976) 104 ITR 691 (All) and Narinder Singh Dhingra v. Commr. of Income-tax, 90 ITR 110 : (1973 Tax LR 627) (Delhi).

13. In Commr. of I. T. v Veeraswami Chettiar, (1963) 49 ITR 13 (Mad) assessment for the assessment year 1950-51 was made under Section 34 of the 1922 Act without the issue of a notice. The assessment was set aside by the Appellate Assistant Commissioner with a direction to the Income-tax Officer to proceed under Section 34 of the Act. Pursuant to the direction of the Appellate Assistant Commissioner, the Income-tax Officer issued a notice to the assessee on 27-10-1950 and thereafter proceeded with the re-assessment. The assessee objected on the ground that four years' period prescribed by Section 34 (3) had expired. The Madras High Court held that the direction given by the Appellate Assistant Commissioner travelled far beyond the scope of Section 31 of the Act and it did not serve to remove the bar of limitation. It is evident that the earlier proceeding before the Income-tax Officer was entirely without jurisdiction as the condition precedent for the exercise of the power under Section 34, namely, the issue of a notice, was not fulfilled. The Appellate Assistant Commissioner could not, by his direction, confer jurisdiction on the Income-tax Officer. The learned Judges observed,

Section 31 (3) of the Act confers powers upon the appellate authority to set aside the assessments and direct the Income-tax Officer to make fresh assessment after making such further enquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct. But that contemplates that the assessment proceedings themselves had been validly initiated and it was set aside only for the reason that a proper enquiry had not been made by the Income-tax Officer, that is to say, the Income-tax Officer had been seized of jurisdiction in the matter and only the final order made by him was defective for some reason or other. But in a proceeding for reopening an assessment and making a reassessment under Section 34, the Income-tax Officer acquires jurisdiction in a particular manner and it is not open to the appellate authority to make a direction which would have the effect of conferring jurisdiction in a case where such jurisdiction has not been properly acquired by the Income-tax Officer.

13-A. In the case before us, the Income-tax Officer had validly acquired jurisdiction by the issue of a notice under Section 22 (2) of the 1922 Act and by the submission of a return by assessee under the provisions of that Act. He went wrong in completing the assessment under the provisions of the New Act. There was no question of the Income-tax Officer having commenced the proceedings without jurisdiction or the Appellate Assistant Commissioner conferring jurisdiction where it did not exist.

14. In Naganatha Iyer v. Commr. of Income-tax, (1966-60 ITR 647) (Mad) the Income-tax Officer, ignoring the returns filed by the assessee, issued notices under section 34 (1) (a). He completed the assessments despite the protest of the assessee, The Appellate Assistant Commissioner set aside the assessments and directed the Income-tax Officer to proceed under Section 34 (1) (b). The Madras High Court held that reassessment proceedings commenced by the Income-tax Officer, completely ignoring the returns filed by the assessee, were void. The direction given by the Appellate Assistant Commissioner was also void as he could not confer jurisdiction upon the Income-tax Officer where it did not exist. It was a clear case where the Income-tax Officer acted without jurisdiction in issuing notices under Section 34, ignoring the returns filed by the assessee. The Appellate Assistant Commissioner could not confer jurisdiction where it did not exist.

15. In Inter Asian Footwear Corporation v. Appellate Assistant Commr, (1967) 66 ITR 110 (All), the assessee preferred an appeal to the Appellate Assistant Commissioner against an assessment made under Section 23 (3) of the Indian In come-tax Act, 1922, for the Assessment year 1960-61. The Appellate Assistant Commissioner issued a notice under Section 251(2) of the Income-tax Act, 1961, proposing to enhance the assessment. A learned Single Judge of the Allahabad High Court held that the notice should have been issued under Section 31 (3) (a) of the 1922 Act and, therefore the notice issued under Section 251(2) of the 1961 Act was without jurisdiction. The learned Judge did not consider the question whether the notice could be deemed to be one issued under the provisions of the 1922 Act. No reference was made to the decision of the Supreme Court in Hazari Mal Kuthalia v. Income-tax Officer Special Circle, (AIR 1961 SC 200) and the series of cases which followed that decision.

16. In Commr. of Income-tax v. Muthukaruppan Chettiar, (AIR 1970 SC 486) the facts were as follows: Kuruppan, his son Muthukaruppan and two minor sons of Muthukaruppan, together, formed a Hindu undivided family which was assessed as such till the end of the assessment year 1948-49. For the assessment year 1949-50, and subsequent assessment years, it was claimed that there was a partition between Karuppan on the one hand and Muthukaruppan and his sons on the other. Karuppan filed returns in his individual capacity while Muthukaruppan and his sons filed separate returns as Hindu undivided family. The income-tax Officer rejected the claim of partition and treating Karuppan's returns as returns of the original Hindu undivided family, assessed the family as before. The assessments relating to the returns filed by Muthukaruppan and his sons were closed with the endorsement "no assessment." In the appeals filed by Karuppan, the Appellate Assistant Commissioner upheld the partition. Thereafter, the Income-tax Officer issued notices under Section 34 to the Hindu undivided family consisting of Muthukaruppan and his two minor sons and completed the assessments. On those facts, the Supreme Court held that the Hindu undivided family consisting of Muthukaruppan and his sons had submitted voluntary returns and that there was no disposal of those returns. It was, therefore, held that the proceedings under Section 34 were illegal. We do not see how this case is of any 'assistance to the assessee. All that was decided in that case was that voluntary returns submitted by the assessee not having been disposed of, there was no occasion for exercising the power under Section 34 of the 1922 Act.

17. In Commr. of Income-tax v. Ram-baran Ramnath, (1976) 104 ITR 691 (All) the Income-tax Appellate Tribunal while setting aside the order of the Inspecting Assistant Commissioner levying penalty, gave a direction which read as follows:--

We accordingly set aside the order of the Inspecting Assistant Commissioner, who shall, if need be, pass a fresh order as he thinks expedient in accordance with law.

This direction was interpreted by the Allahabad High Court to mean that it left the Inspecting Assistant Commissioner free to make a fresh order if he could make a valid order in law. The decision turned upon an interpretation of the order of the Income-tax Appellate Tribunal and does not assist the asses-see in the present case. In Narinder Singh Dhingra v. Commr. of Income-tax, (1973 Tax LR 627) (Delhi) a return was filed by the assessee, for the assessment year 1961-62 on 8-3-1962. The Income-tax Officer passed an assessment order under Section 143(3) of the 1961 Act. The Income-tax Appellate Tribunal while setting aside the order of assessment on the ground that it ought to have been made under the 1922 Act. gave a direction that the Income-tax Officer should proceed with the assessment from the 'return stage' and make a fresh assessment according to law under the old Act. By that date, the period of four years prescribed by Section 34 (3) of the old Act had expired. A Division Bench of the Delhi High Court held that it was incompetent for the Tribunal to confer jurisdiction on the income-tax Officer to remove the bar of limitation and proceed on the basis of the return long after the expiry of the period of limitation. The decision fully supports the assessee. However, with great respect, we do not agree with the decision. The learned Judges purported to follow Commr. of Income-tax v. Veeraswami Chettiar (1963) 49 ITR 13 (Mad) and Naganatha Iyer v. Commr. of Income-tax, (1966) 60 ITR 647 (Mad). We have already referred to these two decisions and explained why they do not apply to the facts of the present case. The learned Judges repelled the argument that the assessments could not be held to be invalid merely because of reference to the wrong provision of law, on the ground that it was not within the scope of the question referred to them for their decision. The learned Judges expressed the view that the question referred to them was based on the invalidity of the assessment and, therefore, the Revenue could not contend that the assessment was valid. The learned Judges appeared to equate "invalid" with "void" and "without jurisdiction". We are unable to agree with this view. An assessment might be declared invalid or defective for several reasons. The question to be considered was, whether the assessment was without jurisdiction and void or whether it was merely irregular. The learned Judges did not consider the question whether an assessment made by invoking a wrong provision of law was altogether void merely on that ground, though the assessment was capable of being sustained under the correct provision of law. Where an assessment is found to be defective because of being made under an incorrect provision of law, the assessment would not be without jurisdiction and void. In such a case, it would be open to the appellate authority to confirm the assessment by reference to the appropriate provision of law or set aside the assessment and direct the Income-tax Officer to make a fresh assessment with reference to the correct provision of law. If the latter course were to be adopted, it would not mean that the appellate authority had declared the assessment to be without jurisdiction and void.

18. The very Division Bench of the Delhi High Court which decided the case of Narinder Singh Dhingra v. Commr. of Income-tax, (1973 Tax LR 627) (Delhi) was faced with a somewhat similar situation in Commr. of Income-tax v. National Small Industries Corporation Ltd., 91 ITR 579 : (1973 Tax LR 492) (Delhi) where the question of law referred to the Court was:--

"Whether" on the facts and in the circumstances of the case, the rectification order could be passed only under Section 35 of the Income-tax Act, 1922, and not under Section 154(1)(a) of the Income-tax Act, 1961?"

The learned Judges, after referring to Hazari Mal Kuthalia v. Commr. of Income-tax, (AIR 1961 SC 200) and Commr. of Income-tax v. Hargopal Bhalla & Sons, accepted the argument advanced on behalf of the Revenue that the reference itself was incompetent as the rectification could have been made and must be considered to have been made under section 35 of the old act and, therefore, the appeal to the Appellate Assistant Commissioner and the further appeal to the Income-tax Appellate Tribunal were incompetent. The decision clearly indicates a retreat from the view earlier expressed in Narinder Singh Dhingra v. Commr. of Income-tax, (1973 Tax LR 627) (Delhi).

19. In view of the foregoing discussion, we hold that the Appellate Assistant Commissioner was competent to issue the direction which he gave to the Income-tax Officer and that the Income-

tax Officer was competent to proceed with the fresh assessment notwithstanding the expiry of the period of four years prescribed by Section 34 (3) of the 1922 Act.

C. W. P. 546 of 1968 is, therefore, dismissed with costs.

20. C. W. P. 3396 of 1971 must also follow suit, but we have been invited to express our view on the question, whether it was competent for the Income-tax Officer to rectify the order of refund in the circumstances of the case if the order of the Appellate Assistant Commissioner directing fresh assessment and fresh assessment proceedings taken by the Income-tax Officer were to be declared invalid.

21. The submission of Shri Gupta was that a provisional assessment made under Section 23-B of the Indian Income-tax Act, 1922, was but part of the machinery devised to recover the tax that might ultimately be assessed and found payable by the assessee on the completion of the assessment proceedings. If no tax became payable in the regular assessment proceedings, any provisional tax paid by the assessee was bound to be refunded, According to him, the provisional assessment died with the regular assessment when the latter was set aside. In any case, it was argued that there was no apparent error such as could attract the provisions of Section 35 of the 1922 Act or Section 154 of 1961 Act.

22. The Income-tax Officer ordered the refund of the provisional tax paid by the assessee as he was under the impression that by doing so he would be giving effect to the order of the Appellate Assistant Commissioner setting aside the regular assessment. Later, he thought that the refund had been wrongly ordered as the Appellate Assistant Commissioner never directed the refund of the provisional tax or set aside the provisional assessment. The question for consideration is, whether the first impression or the second thought of the Income-tax Officer was correct. The further question for consideration is, whether the first impression of the Income-tax Officer was vitiated by such an apparent mistake as to attract the provisions of Section 35 of the Indian Income-tax Act, 1922.

23. Section 23-B of the 1922 Act enabled the Income-tax Officer, at any time after the receipt of the return made under Section 22, to proceed to make, in a summary manner, a provisional assessment of the tax payable by the assessee on the basis of the return and the accounts and documents, if any, accompanying it, after giving due effect to the allowance referred to in Section 10 (2) (vi) (b) and the loss carried forward under section 24 (2). Apparently, it was designed to facilitate early recovery of the tax at least to the extent admitted by the assessee himself or to the extent payable on the facts stated by the assessee himself. Naturally, at the stage of provisional assessment, there would be no scope for any enquiry into any disputed questions of fact or of law. Appeal was expressly barred against a provisional assessment. It was further provided by Clause (7) of Section 23-B that any amount paid or deemed to have been paid towards provisional assessment should be deemed to have been paid towards regular assessment, after a regular assessment was made under Section 23. If the amount paid or deemed to have been paid towards the provisional assessment exceeded the amount payable under the regular assessment, the excess was to be refunded to the assessee. It was further provided by Sub-section (8) that nothing done or suffered by reason or in consequence of any provisional assessment should prejudice the determination on the merits of any issue which might arise in the course of the regular assessment under Section 23. The scheme of Section 23-B clearly was to treat provisional assessment as altogether distinct from regular assessment and, further to treat it not as a step towards regular assessment, but only as a design for speedy collection of tax. It is clear that provisional assessment was not meant to merge in regular assessment. If therefore, regular assessment was set aside for any reason, it would not follow that the provisional assessment also stood set aside.

24. Dealing with Section 141 of the Income-tax Act, 1961, which is similar to Section 23-B of the Indian Income-tax Act, 1922, the Supreme Court in Jaipur Udyog Ltd. v. Commr. of Income-tax, 71 ITR 799 : (AIR 1969 SC 470) said:--

Section 141 of the Income-tax Act, 1961, authorises the Income-tax Officer to make a provisional assessment of the income of the assessee on the basis of the return made under Section 139 and the accounts and documents, if any, accompanying the return. The assessment so made is summary and is based only on the return and the accounts and documents filed by the assessee. The Income-tax Officer is not bound to make any enquiry before making a provisional assessment; he is not bound even to give to the assessee any notice of his intention to make a provisional assessment, nor to hear the assessee. He may, if he desires, call upon the assessee to elucidate the return or the entries posted in the accounts and documents but he is not obliged to do so. Section 141 has been enacted with the object of expediting collection of tax on the basis of the return made by the assessee ...... The provisional assessment does not bind the assessee nor the department: the quantum of tax computed and the levy thereof are not binding upon the assessee and the revenue. Tax paid pursuant to provisional assessment is liable to be adjusted in the light of the final order in the regular assessment. An appeal against the order is expressly prohibited.

25. An identical question came up for consideration before the Allahabad High Court in Jagan Nath Rameshwar Prasad v. Income-tax Officer 93 ITR 16: (1973 Tax LR 1076) (All). The learned Judges held that tax paid pursuant to provisional assessment was not liable to be refunded on the setting aside of the regular assessment. After referring to the scheme of the Act, they said:--

"In case the amount paid towards provisional assessment exceeds the amount payable under the regular assessment, the excess amount is to be refunded to the assessee. Except for this limited purpose the provisional assessment is a distinct proceeding. It is described as a provisional assessment only for the purpose of indicating that it is provisional as to the amount of the tax payable and that it does not preclude a regular assessment determining the tax liability finally......

The provisional assessment does not merge in the final assessment. Moreover if the regular assessment is a void proceeding and, therefore, non est, the amount paid towards the provisional assessment continues to bear that character and cannot be deemed to have been paid towards the regular assessment In the present case this Court has held that the regular assessment under Section 23 (4) of the Act was without jurisdiction and a nullity. It did not exist in the eye of law. In such, a situation the provisions of Section 23-B (7) are not attracted, as no regular assessment came to be made. The amount of tax paid by the appellant pursuant to the provisional assessment continues to bear that character. The order under Section 23-B (1) has not been set aside and still remains a valid order and the amount paid by the assessee continues to be a valid payment In these circumstances, the appellant is not entitled to a refund of that amount."

26. We respectfully agree with the observations made by the learned Judges of the Allahabad High Court and we wish to add that the assessee is not altogether without remedy as was suggested by Shri B. Section Gupta, learned counsel for the assessee. The learned counsel urgad that if provisional tax was paid and if later the assessee discovered that he had paid in excess of what was lawfully due from him he would be without remedy to obtain refund of the excess tax paid by him if no regular assessment was ever made. Such a contingency would hardly arise, but, even so, we do not think that the assessee would be without remedy. It would be open to the assessee to ask this Court for a mandamus to direct the Income-tax Officer to complete the assessment. It would perhaps be open to the assessee to file an application before the Income-tax Officer under section 48 of the 1922 act seeking a refund of the excess amount paid by him. He would then have to establish that the tax paid by him exceeded the amount with which he was properly chargeable under the Act. Chargeability to Income-tax arises as soon as the income is earned. The quantification of the tax is postponed till the assessment is made. Where quantification of the tax payable is not done through a regular assessment, it would perhaps be open to the assessee to insist upon the determination of the tax to which he was properly chargeable under the Act and claim a refund of the excess, if any, paid by him. Perhaps, a suit also would not be barred. Whether a suit is filed or an application under Section 48 is filed, the assessee would have to, as already indicated, establish that the provisional tax paid by him exceeded the amount with which he was properly chargeable under the Act

27. Shri Gupta urged that, in any case, the question whether the provisional assessment stood wiped out when the regular assessment was set aside was a debatable question and, therefore, there was no mistake apparent from the record. Reliance was placed upon the decision of the Supreme Court in In come-tax Officer v. Volkart Brothers, 82 ITR 50 : (1971 Tax LR 1508) (SC) where it was said :--

"A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process and reasoning on which there may conceivably be two opinions."

28. We may also refer to Income-tax Officer v. Bombay Dyeing and Manufacturing Co. Ltd. 34 ITR 143 : (AIR 1958 SC 873). In that case, the Income-tax Officer had assessed the assessee for the assessment year 1952-53 on 9-10-1952. He gave credit to the assessee for a sum of Rs. 50,503/- which represented interest at 2 per cent on the advance tax paid by the assessee under section 18-a (5) as it then stood. Some months after the completion of the assessment, section 18-a (5) was amended by the addition of a proviso to the effect that the assessee was entitled to get interest at the rate of 2 per cent not on the whole of the advance tax paid by him but only on the difference between the advance tax paid and the tax assessed. It was provided that the amendment was to be deemed to have come into force on 1-4-1952. The I. T. O. thereupon purported to rectify the mistake under Section 35 of the 1922 Act. He held that the assessee was entitled to credit for Rs. 21,253/- only and not for Rs. 50603/-. The learned Judges of the Bombay High Court took the view that the Income-tax Officer was not competent to exercise any power under Section 35 since the original order made by the Income-tax Officer if judged in the light of the law as it stood on that day was correct. The Supreme Court, however, held that the legislature had given retrospective operation to the amendment and if the proviso added by the amendment was deemed to be in force from 1-4-1952, the Income-tax Officer was in error in giving credit for the interest on the whole of the advance tax paid. The Supreme Court also held that a completed assessment was also affected by the amendment since no assessment could ever be said to be final in the literal sense of the word as it was always liable to be modified in rectification proceedings under Section 35 of the Act, It was held that the principle of the finality of orders could not be invoked by the assessee. They held that the mistake was 'glaring and obvious' and it could, therefore, be rectified under Section 35 of the 1922 Act. It would be seen from this decision of the Supreme Court that if a mistake was 'glaring and obvious', it would be a mistake apparent from the record notwithstanding the complexity of the issues involved.

29. The basic principle is thus clear. A mistake apparent from the record means an 'obvious and patent' or a 'glaring and obvious' mistake. Hotly debatable issues are excluded. Hardly debatable issues are included. The issues may be complicated, yet the mistake may be simple. It is a mistake apparent from the record. The test is not the complexity of the issues but the simplicity of the mistake, in the present case the refund was the result of confusing the provisional assessment with the regular assessment: Because the regular assessment was set aside, the provisional tax was refunded. It could not be done. It was a patent mistake. The Income-tax Officer rightly rectified the mistake.

30. In the result both the civil writ petitions are dismissed with costs.

Bhopinder Singh Dhillon, J.

I agree.

Rajendra Nath Mittal, J.