THE IN'CO!IIE TAX OI<'l<'ICER. MADRAS v. S. K. HABIBULLAH, MADRAS (S. K. DAs, M. HmAYATULT,AH a.nd J.C. SuAH, JJ.) Income Tax-Aaaeument of firm complered prior to April 1, 1952 -P<ruw lo rtctify partner'.• asaeaamenl-lnrlividual and firm distinct enliliM -Mi.talce diacovererl in firm"' wiaeuni.nt.- Parfners if can be ma4' liable -Inoorne Ta.i: Art, 1922 ( 11 of 1922), a. 35, els. I, 5.
M was a partner in two firms registered under the Indian Income Tax Act. He submitted returru for assessment of lnc·>me Tax for the years 1916-47 and 47-·18 with regard to both the firms
showing losses. The assessment of one of the firm for the year 1946-47 antl 47·48 was completed on 31. 10.50 and of the other for the year 1947 48 on :lO 6.51 whcrtby the los>e1 calcul•ted were less tha·1 claimed by M before the
Income Titx Officrr. On receipt of intimation of the orden passed in the a~set~rnents of the t No finru the Jnl.01nc Tax Officor issued on May +, 1953, notice to M to show cause why the assessment for
the year 1946-47 and 47 .. 13 should not be rectified under s. 35 of the Act. M replied that he had no oh_jectinn if the ao:sessmcnt was cornplr:t~d according to law. On 27.3 .. i4 the
Income-tax Offtcer revised the a1scss- mt-nt in rtsper.t of the t\\'O yearo; after taking into account the share:: of the lo~ses as comput<'d in the assessmrnt of the two firms. r.r rlieil on
17.4. j4 and his son H applied to the Con1n1issi':'.n('r of Income Tax for rt'vi1iutt of the orders. 'fhe Co1nn1hsinner held that s. 3'.i was properly invoked fer rectifi- cation of the
as..o;essment. "fhe }Jigh Co-Jrt of Madras on a petition 1noved hy 11 ordered that a writ of certiorari to is!ne quash in!{ the ordtr. 'fhr Conunissio 1cr of Inco1ne·l tX came up in appc•I.
f/r/d, thats. 35 (1) of the Income T•< Acl empower< the lnc•>n1e Tax Authorities to rectify mi!t:t1'e:; apparent fro1n the record of crrtain ordcn pa~s~d hy the1n. But if the la\\'
docs not authnri!\C the lnco1ne Tax Officer to rtctify the assessn1~11t, assent could not validate what \\'as uuauthori..ed lff/,[, f11rther. that for the purpose of assessment an
individua1 and a firn1 art' distinct eutitits; and even if an indh·i<lual is a partner of a firm, a ndstakt> disco\'crcd because of something- containrd in the assessment of tht: fi.r111 i~ no.t !1
mistake apparrnt fron1 the record of assess1ncnt ol the 1nd1v1· dual partner. 2 s.c.R. Held, also, that the Legislature has given to cl. (5) of s. 35 which was incon:iorated with effect from April I, 1952, a partial retrospective operation .. The provision.enacted by cl. (5) is not procedural in charac~er, it affects ve<ted rights of the assessre. Therefore in the absence of compelling reasons the court would not be justified in giving a greater retrospec- tivity to the provision than is warranted by the plain words used by· the Legislature. Clause (5) of s. 35 docs not purport to amend cl.
(I) of the same section. It conftrs additional power of rectification upon the Income Tax Authorities; and that power cannot be exercised in respect of a<Sessmont of firm which have been completed before the date on which the
power was invested. CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 557 and 558 of 1960. Appeals from the judgment and order dated April 10, 1957, of the Madras High Court in W.P.
No. 952 of 1955. K. N. RajagopalSastri and D. Gupt,a, for the appellants. R. Thiagarajan, for the respondent. 1962. January 24. The Judgment of the Court was delivered by SHAH, J.-One S. K. Mohideen-hereinafter
referred to as the assessee-was a partner in two firms-Messrs. Dinshaw and Co. and Messrs. Pala- niappa Chettiar and Co. The firms were registered under the Indian Income T3x Act. The assessee
submitted returns of his income and incorporated therein the estimated share of his losses in the two firms at Rs .. .20,000/- and Rs. 10,000/-, for the assess- ment year 1946-47 and at Rs. nil and Rs. 12,436/-
for the assessmel)t year 1947-48. The Income-tax Officer, V. Circle, Madras completed the assessment for the two years on February 20, 1950 after adopt- ing the estimates furnished by the assessee, but he
made a note that the lo11S0s accepted were subject to revision on ascertainment of correct particulars. The assessment of Messrs. Dinshaw & Co. for the years 1946-47 and 1947-48 was completed on
Tire /ru:ome·lax Offi<tr, M adNs v. S. K, Halibvllo, MadraJ Sluih J. TM llllonv·tu Ofjiw, M.drcs v. B. IC. Hui!M/I_,,, M1.Jr1s 11/Wi J. 718 SUPREME OOURT REPORTS [1962] SUl>P. October 31, 1950 by tbe Income-tax Officer II Circle,
Madra.s and the proportionate share of the aSBessee for the loBBcs was computed for the two years at Rs. 15,839/- a.nd Rs. 1,046/- respectively. Assees- mcnt of Messrs. Pa.lania.ppa. Chettiar & Co. for
1947-48 was completed by the Income-t.&x Officer, Special Circle on June 30, 1951 a.nd the share of the a.BBessce in the 1068 suffered by that firm wa.s computed at Rs. 2,009/-. On receipt of intimation..
of the orders p8!11ffld in the a.sseBBment of the two firms, the Income-tax Officer, V Circle, Madras issued on May 4, .1953 notices to show ca.use why the assessments of the a.sse8800, for the years 1946-
4 7 a.nd 194 7 -48 ehould not be rectified under s. 35 of the Income-tax Act. On March 24, 1954, the a.sseSBee wrote to the Income-tax Officer stating : "This is to inform you that I have no objection in
completing the assessments of the previous years in accordance with law". On March 27, 1954, the Income-tax Officflr rovis~d tho aB8088ment of the al!&e88Ce in rcspett of the two yea.re after ta.king
into account the aha.re of the losses as computed in the 8.8808Sments of the two firms. The a.saessee died on April 17, 1954 a.nd hia son S. K. Ha.bibullah-hcreinafter referred to as the
respondent-applied to the Commissioner of In- come-tax, Madrae praying for revision of the ordol'IJ. The CommiBBioner held that s. 35 was properly invoked for rectification of the assessments a.nd
rejected the applications. But the High Court of Judicature at Madras in petitions under Art. 226 of the Constitution filed by the respondent ordered that writs of cerliorari do iBBue quaehing the ordere
of the Income-tax Officer, V Circle. The Commis- sioner of Incomfl·t.&X, Madre.a appeals to tbie Coart with oertifioate of fitnllBB granted by the High Court. The plea 01 the CommiBBioner that the 8886·
BSee having assented to the rectification, it was not r 2 S.C.R. SUPREME OOURT REPORTS open to the respondent to challenge the authority of the Income-tax Officer, has no force. By his
letter dated March 24, 1954 the assessee merely informed the Income-tax Officer that he had no objection to rectification according to law. But if the la.w did not authorise the Income-tax Officer to
rectify the assessment, assent could not validate what was unauthorised. Section 35( I) empowers the income-tax autho- rities to rectify mistakes ii,pparent from the record of certain orders passed by them. The clause (omit-
ting parts not material) provides that the Income- tax Officer may at any time within four years from the date of any assessment order passed by him, on his own motion rectify any mistake apparent from
the record of the aAsessment. The power of rectification may be exercised subject to two condi- tions : (I) that there is a mistake apparent from the record of the assessment, and (2) that the order of
rectification is made within four years from the date of the assessment sought to be rectified. The mistake which may be rectified need not be in the order itself : it may be in any part of the record
or proceeding of assessment of the assessee. But for the purpose of assessment an individual and a firm are distinct entities and even if an individual is a partner of the firm, a mistake discovered because
of something contained in the assessment of the firm is not a mistake apparent from the record of assessment of the individual partner. In Kanumar- lapaudi Lakshminarayana Chetty v. First Additional
Incorne-tax Officer, Nellore{') in dealing with the question whether the record of the assessment of the firm may be regarded as the record of the assessment of the individual partner, Subba Rao,
C.J. speaking for the Court observed, and, in our Judgment, correctly : "But it is said that section 35 of the Act even without the amendment would have (I) [ 1956] 29 I. T. R. •19.
I96Z The Income-tax OJfictr, Modros v. S. K. Habibullah, lJ.tathas ShahJ, J'81 T1t1 /ncorrt·ta Offictr, .. \J ctiras v. . S. K. HabibulkJh, Modra1 ShdJ. enabled the Income Tax authorities to reopen
the assessment on the ground that there was a mistake apparent from tho record. Bat from t.hc record of final asseBBment, it is impol!llihle to say that there was a mistake apparent from
the record, for tho a.ssossing authority accepted a certain figure as representing the share of the assessees in the firm and made u final assessment. The mistake is not in the record
but by & sµbsequent &1seRBment of the firm it was discovered that the earlier assessment was wrong to the extent of tho assessees' share in the firm. It is not a mistake apparent from
the record bnt a mistake discovered from the disposal of another oase". Section 35(1) of the Income-Tax Act could not therefore be resorted to by the Income-tax authori· ties for rectifioation of the assessments of the
assessee, for there was no error apparent from the record of those assessments. The Income.tax Officer, however, sought to rely upon s. 35(5) whi~h was incorporated bys. 19 of the Indian Income-tax (Amendment) Act, 1953
(25 of l!l53) with effect from April l, 1952. The clause which was incorporated i1 in the following terms:- "(5) Where in respect of any completed aBSessment of a partner in a firm it is found
on tho MSessment or reassessment of the firm or any reduction or enhancement made in the income of the firm under section 31, Section 33, Section 33A, Section 33B, Section 66 or Section 66A that the share of the partner
in the profit or loss of the firm has not been inoludcd in tho assessem<'nt of the partner or, if inducli>d, is not corre<"t, tho inclusion of the share in the assessment or the c0rreotion
thcreuf, a11 the case may lw, shall he de<"med to be a rectification of a. miat.a.ke apparent from the record within the 2 s.o.R. meaning of this Section, and the provisions of sub-section (I) shall apply thereto accordingly,
the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the firm," Clause (5) was one of a group of clauses, added by
Act 25 of 1953, dealing with .rectification of assess- ments. Clause (5) dealt with inclusion of income or correction of the income of a partner in a firm consequent upon assessment or reassessment of the
firm of which he was a partner. Clause (6) dealt with recomputation of total income of an assessee in consequence of modifications made in the Excess Profits Tax or the Business Profits Tax payable by
an assessee subsequent to an assessment made under the Indian Income-tax Act. Clause (7) dealt with rectification consequent upon modification of orders under s. 23A of the Income-tax Act cl.(8),
which was enacted (in the form in which it now exists) by the Indian Finance Act, 1956, dealt with the rectifiaation consequent upon proceedings in reassessment under s. 34 (1) (al. or s. 31 (IA).
The Legislature by a fiction in all these classes of cases regarded the inclusion, correction, computation or reoomputation as rectification of a mistake appa- rent from the record and prescribed special terminii
recokoning for the period of four years within which the rectification must be made, Under. cl. ( 5) with which alone we are directly concerned in these appeals, the inclusion of the share in the assessment
of the partners or the correction thereof is deemed to be a mistake apparent from the record within the meaning of the section, and sub-s. (1) applies thereto accordingly-the period of four years being computed from the date
of the final order passed in the case of the firm. The discrepancy diiiclos~d as a result of assess- ment. or reassessment of a firm between the share of a partner included in the individual assessment
nf that par.tner and his share disclosed in tho The lnconirtax Officer, }J.adrus v, S. K. Hal:iibultah, Madrcs Tlw l~omt·tox Offkt.r, Madras v. S. K. H JbibuUah, Ma./rar BJuJi J. aRsessment of the firm was not an nror npparPnt
from the record within the meaning of~. 3511) and the Legislature t-nacted a fiction making t}1p inclusion of thP share in the aRs•·ssment or ccrn·c· tion th<·reof such a mistake. If the inclusicn 0f the
sh11re or the correction of the assefifim~nt were· an error apparent from the record and falling um'er cl. (I) ofs. 35, the <'nactment of cl. (5) was plain· ly unne()('~sary. 'Vhen the Legislature has deli-
berat<>ly enacted a fiction of the nature set out in cl. (5), ~e are unable to agr<'e with the contention raised hv counsel for the Revenue that the enact- ment o(thP. fiction was r:r-aburuktnti r,aute!n. R{lcti.
fication 1.f the nature contemplated by cl. (/i) could not ha v" been effected under cl. (I), and to remove tho lacuna the legislature declared that what waH not a mistake i-hould for the purpose of rectifica.
tion of a~se"Rill<'llt bo regarded a8 a mistake appa- rent from tlw record and provided a terminus for t.be C<'mputation of tho period of four years. Th~ ,1Hsessments nf tho two firms Wl're com.
pleted u long time b•~fore April I, l!Jii::!. It is also commo11 ground that the indh·idual assessments of the asscssce were not prO\·isional but final aAAeRsments under s. :!3 (:{) of the Inm•me-tax
Ac·t. The question whi"h falls to be considered is whether r<'lying upon cl. (5) of H. :15 an Incomo- tax Officer may rectify tho aso;essment of a person who is a partner of a firm when the assessment of
the firm is C<·mpleted before tht> 1st of April, I!Jii2. The Legislature has given to cl. (;)) a partial r••trospt·ctivo operation. The µrovision .. nacted by cl. (5) is not procedural in c·haractcr :
it affects vested ri~hts of the Rllsessee. Therefore in the ahscmec of compelling reasons the court would not be ju-itilh·d in giving a greater retros1l!'clivity to the prnvi"ion than is warranted by the pl~m
words us<'cl by the Legislature. As observed by 2 S.C.R. the Judicial Committee of the Privy Council in Income-tax Commissioner v. Khemchand Ramdas(') : x x x when once a final assessment is arrived at, it cannot, in
their Lordships' opinion, be reopened except in the circumtances detailed in sections 34 and 35 of the Act x x x and within the time limited by those section." The orders of assessment are,
eubject to the provisions relating to appeals, revisions, reassess- ment and rectification, finitl : it is not open to the Income-tax Officer to reClpen the assessment be- cause he thinks fit to do so.
The provisions rela- ting to assessments and rectification or reopening thereof are exhaustive, and may not be extended by analogies. The right to rectify an assessment may therefore be exercised in strict compliance with
conditions prescribed by tbe statute in that behalf. Before April I, 1952, rectification of assessment of an individual ori the disclosure of errors consequent upon assessment of the firm of which be is a part-
ner was not for reasons already stated permissible under cl. ( 1) of s. 35. This power was conferred for the first time by cl. (5) as from April 1, 1952, and by the express words of the clause arose from
the assessment of the firm. If by the law prevail- ing at the time when the assessment of the firm was mad.e, no such result as is contemplated by the new clause (5) arose, to givi> a larger retros-
pective operation than is dirc·cted, is to ascribe to the Legislature an intention dift'erent from the one expressed, and to make a larg<'r inroad upon the finality of that assessment than is permitted
by the Legislature. Section 35(5) does not pur- port to amend cl. ( 1) ; that clause is left untouched by the amending statute. It~ application, by fic- tion, is extended to other clauses of cases
by declaring what in truth are not mistakes, as mistakes. Clause (5), therefore, confers an (I) (1938) L. R. 65 I. A. 236, 248. Tile Income-tax Offu:ef', Mcdt-u v. S. K. Habibullah,
Madru &ah J. lf62 Tiu lncolfl#-T ax 0 ffio.r, MaJ•as v. 8. K. Habilnd/1111, J1 ttd,as Shalo J. 724 SUPllEME COURT REPORTS (1962] SUPP. additional power of rectification upon the Income· tax
authorities and "in the absence of compelling reasonR we will not bt1 justified in upholding the exercise of the power to assessments of firms which have been completed before the date on which the power
was invested. Some assistanco may be derived from the phraseolt>gy used by the legislature in cl. (fil whi<>h was enacted simultaneously with. cl. (5). That chuso provides, omitting parts which ar<' not
material : ''Where the exoe@S profits t&x or the busi· ness profits tax payable by an asst>BBce has bocn modified x x x x or where any excess profits tax or busineBB profit tall" has been assessed aft1>r the comple·
tion of the corresponding 888essmt>nt for incomo-tax (whether before or after the com- menC('ment of th11 Indian Income-tax (Amend- ment) Aet, 1953), and in consequence thereof it is neceasary to recompute the total income
of the assesSl'e chargeable to income-tax, such rccomputation shall be deemed to be a recti· fication of a mistake apparent from the r1>cord within the meaning of this sectinn, x x x".
Manifestly, by the expreBB provisions contained in cl. (6) tho fiction applies whether the assessment is completed before or after the commencement of the Indian Income-tax (Amendment) Act, 1953. Even
though cl. (6) ia al~o made retrospectively operative as from April l, 1952, the legislature has authorised the revenue authorities after April I, H!'i2 to pass an order recomputing the total income of the
assessee whether or not the asseasm,•nt was completod before the commencement of the Indian Inco•oe tax (Amendmcnti Act, 1953. It is true that by the Explanation to that olau~e. for the
purpo8ed of this sub-soction, where the assessee is a firm, the provisions of sub-s. (5) shall also apply as they apply to the rectification of the assessment of the partners of the firm, but thereby an intention
to give a larger retrospective operation to cl. ( 5 ), in so far as it deals with rectification of assessments of partners consequential upon the completion of the assessment of the firm in which thay are partners,
is not indicated. When the Legislature under cl. (6) of~. 35 expressly authorised rectification in the circumstances mentioned therein even if the ass~ssment has been completed before the Indian
Income-tax (Amendment) Act, 1953, and it made no such provision in cl. ( 5), it woald be reasonable to infer that the Legislature did not intend to grant to the revenue authorities a power to rectify assess-
ments falling within cl. (5) where the firm's assess- ment was completed before April 1, 1952. In our view, it was rightly held in Kandan Lal v. Income-tax Officer(') following Kanumarlapudi
Lakshminarayana Ghetty v. First Additional Income- Tax Officer, Nellore (2) that· cl. (5) of s. 35 of the Indian Income-tax Act, which was enacted by the Income Tax (Amendment) Act, 1953,
was not declaratory of pre-existing law, and as it clearly affected vested rights which had accrued to the assessee, must be deemed to have come into force from April 1, 1952. It had no
greater retrospective effect than was expressly granted to it. The power to rectify assessment of a partner consequent upon the assessment of the firm of which he is a partner by including or
"orrecting his share of profit or lo~s c0n therefore be exercised only in case of assessment of the firm made on or after April I, 1952. The Income-tax Officer has no jurisdiction under cl. (5) of s. 35 of
the Act to rectify tho ·assessment of a partner of a firm consequent upon the assessment or (I) ll95'l] 37 I.T.R. 3:li. (2) li956] 291. T. R. 419. 191! Tire lru:ome•tax Officer, Mat!ias
v. S. K. Habibultah, Madras Shah J. 19112 n. r …… i.x Ofiur, JIHros . '· S. Ir. Huihll.V., Jlw., SWJ. 19112 726 SUPREME COU!t'f REPOI~T~ [ l ·• 2j SU Pf. reaseessment of tho firm disclosing an error made
before April I, 19.5~. The appeals therefore fail and a.re dismissed with costs. One hearing fee. Appeals dismissed. KANBI KARSAN JADAV v. STATE OF GUJARAT (J. L. KAPUR and R.to.GIIUBAR DAYAL, ,JJ.)
Criminal Trial-Et-idenct of anrot'-r-Corroioration on mat.rial partiou/ara-Other circum•tanct• to be con•Utrtd- CMniical !Czaminer'• evidenct, if can bt taken into Conoi<kration tn duidt idtntily of haira-lndian Penal Code, 1860 (45 of
1860), 302, 201-IAdia EWknct Act, 1872 (1of1872), a. 45. The appellant and two othcn were convicted for murder undtr "· 302 and 201 of the Indian Penal Code. The High Court acc,pted the testimony of the appro'''r as being a
reliable piece of evidence. It relieJ upon the <liscovery of the dtad body of the deceased at the instance uf t lte appellant and of hlord sralned buttons also at his instance and attached importanc(':.to tile scarf recovered from the pit \\·here the dead body was alkgcJ to have been first buried and "hid1 had
hair> both of the appellant as well as the deceased. The apprll.mt contended that the evidence of the approver, even 1h.Jugh it had been accepted as true, was not corrohorated in 1naterial particulan connecting the appellant with the ofJCncc.
None of the recoveries arc corroborative of the statement of the approver to the extent of connecting the appcllanl with the offence committed ; on the other hand they are somewhat contradictory of the statement.
~fhc evidence of the CheJnical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence WM not admissible under s. 45 of the
Evidence ,\ct and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant. Held, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstance>