Rectification and bad debt principles: patent record errors only, consequential orders allowed, and irrecoverability fixes deduction timing.

Rectification under section 35 is confined to patent mistakes apparent on the record and is not a power of review. Where a clear error is corrected, consequential orders may follow, including an order adverse to the assessee, provided the statutory notice safeguard is observed. A rectification application must itself disclose a mistake visible from the record; a request that merely seeks a different view on the merits does not qualify. On bad debt deduction, the relevant date is fixed objectively by the point of real irrecoverability, and later bookkeeping entries or an unpursued possibility of appeal do not alter that date.

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Issues: (i) Whether the Appellate Tribunal could rectify an apparent mistake under section 35 and pass a consequential order adverse to the assessee; (ii) whether the assessee's own application for rectification disclosed any mistake apparent on the face of the record; (iii) when the debt in question became a bad debt for purposes of deduction in assessment.

Issue (i): Whether the Appellate Tribunal could rectify an apparent mistake under section 35 and pass a consequential order adverse to the assessee.

Analysis: The rectification power under section 35 was held to be limited to correcting mistakes apparent from the record and not a power of review or revision. A correction of a patent error may necessarily require consequential orders to follow, and the statutory notice requirement protects the assessee where such correction may enhance the assessment. The Tribunal was therefore competent to act on the Commissioner's application and, after correcting the mistake, to pass the consequential order dismissing the appeal.

Conclusion: The Tribunal had jurisdiction to rectify the mistake and to pass the consequential adverse order.

Issue (ii): Whether the assessee's own application for rectification disclosed any mistake apparent on the face of the record.

Analysis: A matter can be rectified only if there is a patent error on the record capable of being corrected by reference to the record itself. The assessee's reliance on the unprosecuted application for leave to appeal to the Privy Council did not identify any such error in the Tribunal's order. At most, it invited a different view on the merits, which would amount to review rather than rectification.

Conclusion: The assessee's application disclosed no mistake apparent on the face of the record and was rightly rejected.

Issue (iii): When the debt in question became a bad debt for purposes of deduction in assessment.

Analysis: Whether a debt has become bad is an objective question depending on the real possibility of recovery. Once the High Court had finally held on 29 September 1941 that the debt was not realisable, there was no practical possibility of recovery, and the mere fact that leave to appeal had been sought, without any appeal being pursued, did not prevent finality. The assessee's later entries in his books could not control the legal date on which the debt became irrecoverable.

Conclusion: The debt became a bad debt on 29 September 1941 and was not deductible in the later assessment year claimed.

Final Conclusion: The reference was answered in favour of the Revenue and the assessee failed on all substantial questions referred.

Ratio Decidendi: Rectification under section 35 is confined to patent mistakes apparent on the record, may carry consequential orders, and the date when a debt becomes bad is fixed objectively by final irrecoverability, not by the assessee's bookkeeping or an unpursued possibility of appeal.

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