RAJAGOPALA AYYANGAR, J. - This is a petition seeking the quashing of an order of the Income-tax Officer, dated February 24, 1956, by which the assessment of the petitioner was revised under section 35 of the Income-tax Act.
The petitioner was a non-resident and for the assessment year 1951-52, an order was passed computing his income at Rs. 11,703 and levying income-tax at the rate appropriate to an assessee who had not opted under section 17(1) of the Act. The sum due in respect of the tax was ascertained as Rs. 2,562-8-0 and notice of demand under section 29 was issued and the same was duly paid.
On January 10, 1956, the Income-tax Officer issued a notice to the assessee pointing out that in working out the tax liability for 1951-52 in the relevant assessment order super-tax and surcharge on super-tax had not been included by mistake, which he said was apparent from the assessment order. He, therefore, intimated that he proposed to revise the assessment under section 35 to include those items and the assessee was given notice to show cause why this should not be done. The assessee questioned the jurisdiction of the officer under section 35, but this was overruled and a revision was made by including those items by an order passed on February 24, 1956.
There is no dispute that if the assessee was a non-resident who had not exercised the option under section 17(1) (which was the situation of the petitioner) super-tax at the rate charged in the order dated February 24, 1956, and the surcharge thereon ought really to have been added under the provisions of the Indian Income-tax Act, as it stood in the relevant assessment year.
The points however urged by the learned counsel for the assessee, the petitioner here, were two. He urged that section 35, under which these proceedings were taken, had to be read in conjunction with section 34, and that so read, the officer ought to have exercised, if at all, jurisdiction under section 34 to re-open the assessment and should not have proceeded under section 35. I am unable to agree in this submission. The question is whether in the instant case there was a mistake apparent from the record which attracted the jurisdiction of the officer under section 35. On the facts narrated above and which were not in dispute this question can be answered only in one way, viz., that there was such a mistake. If that were so, there is no reason or justification for denying jurisdiction to the Income-tax Officer to procced under section 35.
The next point argued was that section 35(1) provided for a four year period of limitation within which the revision could take place. Learned counsel urged that though the original order of assessment was revised on February 24, 1956, well within the four year period prescribed still no notice of demand of the tax, which became due as a result of this revision, was served on the petitioner till June, 1956, and that as by that date the four year period commencing from the original assessment order had expired, the officer had no jurisdiction to make the demand. I have no hesitation in overruling this contention. Subsection (4) of section 35, on which this argument is based, runs :
'Whether any such rectification has the effect of enhancing the assessment or reducing re fund the Income-tax Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 29, and the provisions of this Act shall apply accordingly.'
This only means that before proceedings are taken for the recovery of the tax which becomes payable as a result of the revision effected by order passed under section 35(1), there ought to be notice of demand under section 29. On the terms of section 35(1), a limitation is prescribed only for the making of the order of rectification. When once that is made, an order for refund under sub-section (3) or that for payment of the tax under sub-section (4) are only consequential, and so far as these two orders are concerned, they are governed by no period of limitation. I do not see how it is possible to project the limitation provided for in sub-section (1) into the notice of demand which is referred to under sub-section (4). This contention has in my opinion no substance and deserves to be rejected.
The result is that this petition fails and is dismissed with costs : counsels fee Rs. 100.