Rectification cannot reopen a conscious assessment decision absent apparent error; interest under the relevant tax provision was not automatic.

Rectification under section 17(3) required a mistake apparent on the face of the record; where earlier assessment orders had consciously declined to levy penalty and interest, the assessing authority could not use notices to reopen that discretionary decision without identifying a specific apparent error. The notices proposing penalty under section 7AA and interest under section 11B were therefore without jurisdiction. Interest under the relevant version of section 11B was not automatic and depended on the statutory conditions then in force, so it could not be imposed through rectification in the absence of a demonstrable mistake. The writ petition succeeded and the impugned notices were quashed.

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Issues: (i) Whether the assessing authority could invoke the rectification power under section 17(3) to issue notices proposing penalty under section 7AA and interest under section 11B in the absence of any mistake apparent on the face of the record in the earlier assessment orders. (ii) Whether interest under section 11B, as it stood during the relevant assessment years, was automatic or discretionary.

Issue (i): Whether the assessing authority could invoke the rectification power under section 17(3) to issue notices proposing penalty under section 7AA and interest under section 11B in the absence of any mistake apparent on the face of the record in the earlier assessment orders.

Analysis: Rectification under section 17(1) could be exercised only where a mistake apparent on the face of the record existed. The earlier assessment orders had consciously declined to levy penalty and interest, and the subsequent notices did not disclose any specific error in those orders warranting rectification. In the absence of a demonstrated apparent mistake, the authority could not reopen or revise its own discretionary determination through notices under section 17(3).

Conclusion: The notices proposing penalty and interest were without jurisdiction insofar as they sought rectification without showing any mistake apparent on the face of the record.

Issue (ii): Whether interest under section 11B, as it stood during the relevant assessment years, was automatic or discretionary.

Analysis: The applicable version of section 11B was the one inserted by Act No. 11 of 1969 and operating during the assessment years in question. On its language, interest was not an automatic statutory levy in every case, but depended on the statutory conditions then prevailing. The assessment authority had exercised its discretion in the original orders, and that discretion could not be displaced unless a rectifiable mistake was shown.

Conclusion: Interest under the relevant version of section 11B was not automatic; it was not open to the assessing authority to impose it by rectification without establishing an apparent mistake.

Final Conclusion: The writ petition succeeded, and the impugned notices were quashed, with restraint against levying penalty or interest under the challenged provisions on the basis of those notices.

Ratio Decidendi: A discretionary assessment order cannot be reopened by rectification unless a clear mistake apparent on the face of the record is demonstrated, and interest under the applicable taxing provision cannot be imposed through rectification where the provision does not operate as an automatic charging section.

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