Rectification for apparent mistake fails where the tax issue is debatable and needs interpretation, not record correction.

Section 35 rectification under the Indian Income-tax Act, 1922 is confined to mistakes apparent from the record, meaning clear, obvious and self-evident errors. Where correction depends on competing statutory constructions or a long-drawn process of reasoning, the issue is debatable and falls outside rectification power. On the Finance Acts of 1956 and 1957, the treatment of unabsorbed reduction in rebate and the carry-forward of earlier excess dividend was not free from doubt. The rectification was therefore without jurisdiction, and the impugned order and demand notice were quashed.

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Issues: Whether the Income-tax Officer could invoke section 35 of the Indian Income-tax Act, 1922 to rectify the assessment on the footing that the unabsorbed reduction in rebate relating to the earlier year had not been carried forward and adjusted in the later assessment year.

Analysis: The power under section 35 is confined to rectification of a mistake apparent from the record. Such a mistake may be one of law or fact, but it must be glaring, obvious or self-evident, and not one that can be established only by a long-drawn process of reasoning or by examining competing interpretations of the relevant provisions. On the scheme of the Finance Acts of 1956 and 1957, the question whether the excess dividend declared in the earlier year was an amount not deemed to have been taken into account under the earlier Finance Act, so as to permit further reduction of rebate in the later year, was not free from doubt. The competing constructions showed that the point was debatable and not something that could be rectified as an obvious mistake from the assessment record.

Conclusion: The rectification under section 35 was without jurisdiction, as the alleged mistake was not apparent from the record, and the assessee succeeded.

Final Conclusion: The writ petition was allowed and the impugned rectification order and demand notice were quashed because the statutory conditions for rectification were not satisfied.

Ratio Decidendi: Rectification under section 35 is permissible only where the mistake is apparent from the record, meaning a clear and obvious error not requiring elaborate argument or debate; a debatable point of law cannot be rectified under that provision.

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