M.S. Menon, J.
1. The petitioner was finally assessed to income-tax by an order of the Income-tax Officer, Alleppey, dated 29-2-1952, in respect of the accounting period, 11-1-1947 to 31-12-1947 (assessment year : 1124 M. E.). The Income-tax Officer sketched the history of the case as follows in the assessment order (Ext. C):
'Assessee was the sole proprietor of a mate and mattings business till the end of 1947. The assessment for 1124 was made on 22-11-1124 on a total income of Rs. 66738. Later on it was ascertained that assessee had large bank deposits, which were not recorded in his books of accounts and that the income, from these deposits were also not assessed to income-tax. Notice under Section 47 was issued on 23-8-1951 to tax the escaped incomes.
Assessee filed a return on 27-9-1951. Subsequently on 22-10-1951 assessee filed a disclosure statement showing Rs. 160000 as untaxed income from sundry business during 1942 to 1947.
Assessee also filed an amended return of income for 1124 assessment on 28-11-1951 showing a total income of Rs. 99531 which included untaxed income of Rs. 30000 under business and Rs. 2796 under interest and dividends. The disclosure case has been fully discussed with assessee's representatives and assessee has agreed to be assessed on Rs. 225000 in the place of Rs. 160000 originally disclosed by him. According to the agreed apportionment the business income for 1947 to be assessed now is Rs. 40000', revised the assessment already made and directed that the balance of the tax due should be paid by 15-3-1952.
2. The tax was accordingly paid and there is no prayer in the petition for the refund of the whole or any portion thereof. The prayers in the petition (omitting the prayer regarding costs) are :
(a) for a declaration 'that the order of re-assessment passed by the 1st respondent on 29-2-52 in respect of the Income and profits of the petitioner's business in the year 1124 (Ext. C) is vitiated by mistake apparent on the face of the record, in that under Section 85 (4) of the Travancore Income-tax Act, 23 of 1121, no tax shall be payable by the petitioner on such income';
(b) 'for a writ of certiorari or other appropriate writ' quashing 'the order of the 2nd respondent G1. 112/J-dated 9-2-56 (Ext. F)'; and
(c) for a writ of mandamus 'to either or both the respondents to rectify the mistake apparent in the order of assessment, dated 29-2-52 (Ext. C)'.
3. Section 35 (4) of the Travancore Income-tax Act, 1121 (Act 23 of 1121) corresponds to Section 25 (4) of the Indian Income-tax Act, 1922 (Act 11 of 1922).
Sub-section (4) of Section 35 of the Travancore Act reads as follows :
'Where the person who was at the commencement of this Act carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Travancore Income-tax Act 8 of 1096, is succeeded in such capacity by another person the change not being merely a change in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and, such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period.
Whore any such claim is made, an assessment shall he made on the basis of the income, profits and gains of the said period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference.
Provided that Sub-sections (3) and (4) shall not apply to super-tax'.
4. According to Section 35 (5) of the Travancore Act (corresponding to Section 25 (5) of the Indian Act):
''No claim to the relief afforded under Sub-section (3)or Sub-section (4) shall be entertained unless it is made before the expiry of one year from the date on which the business, profession or vocation was discontinued or the succession took place, as the case may be'.
The petitioner did not make any claim within the time prescribed by Sub-section (5) and the first contention on behalf of the Department is that the petition should be dismissed on that ground, Kanga's commentary on Sub-section (5) reads as follows :
'Sub-section (5) provides that a claim to 'relief' under Sub-section (3) or (4) must be made within a period of one year from the date of discontinuance of or succession to the business. The word 'relief' in this sub-section refers to the right of the assessee to claim that the profits of the previous year should be exempted from tax instead of the profits of the period between the end of the previous year and the date of discontinuance or succession.
It does not refer to the exemption granted by Sub-sections (3) and (4) in respect of the profits of the period between the end of the previous year and the date of discontinuance or succession. Therefore, the assessee's claim to elect for exemption in respect of the profits of the previous year instead of the profits of the said period cannot be entertained after the lapse of a year from the date of discontinuance or succession, but exemption in respect of the profits of the said period must be granted to the assessee even if he makes a claim to such exemption after the lapse of the period of limitation prescribed by this sub-section.
It is obligatory upon the Revenue to refrain from charging the income of the year of discontinuance or succession, which is exempted from tax by Sub-sections (3) and (4), irrespective of any formal claim by the assessee in that behalf; and failure of the assessee to assert within a year his right to exemption in respect of the profits of the year of discontinuance or succession docs not defeat that right'. (Indian Income-tax Act, 1923, Third Edition, P. 738).
5. The petitioner's claim is for exemption from tax in respect of the income, profits and grains of the year of succession which it is contended is the year 1947. We propose to assume without deciding that that claim is not barred by the one year rule prescribed by Sub-section (5).
6. Ext. I is a petition filed by the petitioner before the Income-tax Officer, Mavelikara, in May 1951. In that petition he stated as follows :
'Your petitioner was assessed by the Income-tax Officer Higher Income Circle, Alleppey, for the I. T. year 1124 in respect of his income for the Calendar year 1947 being his previous year for the said assessment year to income-tax and super-tax amounting to Rs. 21,616-17-0 (Sic) calculated on a total income of S. Rs. 67,930 vide assessment Order dated 22-11-1124 by the Income-tax Officer Higher Income Circle, Alleppey. The petitioner has paid the tax due as per the Notice of demand sent to him.
Your petitioner was carrying on a business on which I was charged under the provisions of the Travancore Income-tax Act, 8 of 1096 and the said business which was being carried on by him was succeeded to by a Limited company by name Messrs. The Orion Coir Mats and Matting ., as and from 1-1-1948. Your petitioner submits that under Section 35 (4) of the Travancore Income-lax Act, 1121, no tax was payable by the petitioner in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession i.e. between the period 31-12-1948 to 31-12-1947.
Your petitioner submits that at the time of making the assessment the Income-tax Officer Higher Income Circle, Alleppey, overlooked the fact that your petitioner was entitled to certain reliefs under the Statute and not only did he not grant to the petitioner the statutory relief he was entitled to, but actually charged the petitioner tax both Income-tax and Super-tax. The Tax so charged is not legally payable and your petitioner is entitled to a refund of a portion of the tax representing the income-tax paid by him.
As your petitioner has overpaid tax he submits that under the law he is entitled to a refund of the tax so overpaid and prays that orders in this behalf may be passed at an early date'.
No order appears to have been passed on the petition and the only endorsement thereon is :
'Forwarded to the Income-tax Officer, Alleppey, as the records of the case relating to the year in question have been transferred to him.'
The petitioner did not raise any question thereafter on the basis of Sub-section (4) either at the time of the final assessment evidenced by Ext. C or subsequently, until he filed Ext. D, dated 11-1-1958, a petition for rectification under Section 48 of the Travancore Income-tax Act, 1121 (corresponding to Section 35 of the Indian Income-tax Act, 1922).
7. The rectification contemplated by Section 48 is only of mistakes 'apparent from the record of the appeal, revision, assessment or refund as the case may be'. Ext. F, the order on Ext. D, proceeds on the assumption that there is no such mistake :
'There is no mistake for rectification under Section 48/35 of the Travancore/Indian Income-tax Act' (Ext F).
8. It is agreed that in order to succeed thepetitioner must show
(a) that the succession was in 1947; and
(b) that the omission to grant relief on the basis of a succession in 1947 is a mistake apparent from the record of the assessment.
9. Even now the date on which the succession took place is a matter of controversy. In Ext. I the petitioner stated that the succession was 'as and from 1-1-1948'. If it were on 1-1-1948 the petitioner will not be entitled to any financial benefit by the application of Section 35 (4) of the Travancore Income-tax Act, 1121 (Section 25 (4) of the Indian Income-tax Act, 1022). The case of the affidavit of the petitioner filed in support of the petitioner is :
'I discontinued my the said business on the last day of December, 1947 and sold it to a limited liability company namely the 'Orion Coir Mats & Mattings Manufacturers Limited, Alleppey' (paragraph 2).
and the statement by the petitioner's son in the affidavit filed on 20-10-1956:
'I have read the above petition and find that the averment in para 2 of the supporting affidavit, that the petitioner discontinued his business on the last day of December 1947 is not an accurate statement. The sale to the company of the business was completed by an agreement of sale dated 27th September 1947 herewith produced marked Exhibit G, and the sale was adopted and accepted by the company in the first meeting of its Directors held on 27-0-1947 itself. The minutes book of the meetings of the Directors is herewith produced marked Ext.' (paragraph 2) and :
''my father the petitioner has been sick since last two years and his memory is very weak. I believe that the factual error in paragraph 2 of his affidavit was occasioned by this circumstance and not due to any wilful act of negligence', (p. 5)
10. The evidence before us is insufficient for a definite conclusion that the succession was in 1947. Even assuming that the succession was on 31-12-1947 as contended by the petitioner or on 27-9-1947 as contended by his son it is impossible to say that the omission to give relief on the basis of a succession in 1947 is a mistake apparent from the record of the assessment.
There was no such case at the time the assessment was made and the record of the assessment gives no indication of a succession in 1947. As a matter of fact the only statement anterior to Ext. C is the statement in Ext. I to the effect that the succession was 'as and from 1-1-1948' and we must hold that Ext. F is correct and that it should be sustained.
11. It follows that the petition has to be rejected and it is hereby dismissed though in thecircumstances of the case without any order as tocosts.