Rectification of partner's share income upheld where firm assessment disclosed the mistake and no prior notice was required.

Section 35(5) of the Indian Income-tax Act treats omission or incorrect inclusion of a partner's share income, discovered on the firm's assessment or reassessment, as a mistake apparent from the record and permits rectification of the partner's individual assessment. The rectification was upheld as within jurisdiction because the firm had been assessed on the footing that the assessee was a partner, and the final firm assessment could be reflected in his individual case. Prior notice was not required, since the rectification reduced tax liability and did not enhance the assessment or reduce a refund. The challenge to inclusion of the share income therefore failed.

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Issues: (i) Whether the Income-tax Officer had jurisdiction to rectify the petitioner's assessment under section 35 in view of section 35(5) of the Indian Income-tax Act; (ii) Whether the rectification order was invalid for want of notice, or because the petitioner's share income from the firm could not be included in his individual assessment.

Issue (i): Whether the Income-tax Officer had jurisdiction to rectify the petitioner's assessment under section 35 in view of section 35(5) of the Indian Income-tax Act.

Analysis: Section 35(1) permits rectification of mistakes apparent from the record, and section 35(5) treats omission or incorrect inclusion of a partner's share in the firm's profits or loss, discovered on the firm's assessment or reassessment, as a rectifiable mistake. The provision operates as a statutory fiction to enable correction of an individual partner's assessment once the firm's income is determined.

Conclusion: The rectification order was within jurisdiction and was not invalid on the ground that section 35 could not be invoked.

Issue (ii): Whether the rectification order was invalid for want of notice, or because the petitioner's share income from the firm could not be included in his individual assessment.

Analysis: Notice is required under the proviso to section 35(1) only when rectification enhances an assessment or reduces a refund. Here, the rectification resulted in a reduction of the petitioner's tax liability, so absence of prior notice did not vitiate the order. The petitioner's denial of partnership also failed because the firm had been assessed on the footing that he was a partner, he had signed the registration application under section 26A, and the final assessment of the firm could not be ignored in his individual assessment.

Conclusion: The order was not bad for want of notice, and the petitioner's challenge to inclusion of his share income was rejected.

Final Conclusion: No error of law or jurisdiction was shown, and the writ petition challenging the rectification of the petitioner's income-tax assessment failed.

Ratio Decidendi: Under section 35(5) of the Indian Income-tax Act, omission or incorrect inclusion of a partner's share income in an assessment becomes a mistake apparent from the record, and rectification without prior notice is permissible where it does not enhance the assessment or reduce a refund.

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