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Issues: (i) whether the Income-tax Officer could validly invoke rectification powers to withdraw the earlier refusal and grant registration to the firm on the footing of the appellate order in the earlier year; (ii) whether the subsequent rectification of the individual partners' assessments under the rectification provisions was within jurisdiction.
Issue (i): whether the Income-tax Officer could validly invoke rectification powers to withdraw the earlier refusal and grant registration to the firm on the footing of the appellate order in the earlier year
Analysis: The earlier appellate order did not itself grant registration for the assessment years in question; it merely dismissed the appeals after recording that the appellant was entitled to registration and that the Income-tax Officer's purported grant need not be disturbed. The only operative basis for treating the firm as registered for the relevant years was the Income-tax Officer's own order dated 29 March 1956. Rectification under Section 35(1) of the Income-tax Act, 1922 was available only for a mistake apparent from the record and did not authorise the assessing authority to revise and supersede its earlier orders merely because a different view had been taken in another year. The officer had no revisional power to substitute a fresh decision on registration in these circumstances.
Conclusion: The Income-tax Officer had no jurisdiction to pass the orders dated 29 March 1956.
Issue (ii): whether the subsequent rectification of the individual partners' assessments under the rectification provisions was within jurisdiction
Analysis: The rectification of the partners' assessments proceeded entirely on the premise that the firm had become a registered firm by reason of the order dated 29 March 1956. Once that order was found to be without jurisdiction, there was no lawful foundation for treating the firm as registered for the relevant assessment years. Section 35(5) of the Income-tax Act, 1922 could not be invoked to give effect to an appellate order that did not itself grant registration, and Section 35(1) could not be used to correct what was not a mistake apparent on the face of the record but a purported re-determination of status and tax liability.
Conclusion: The rectification orders and the Commissioner's confirming orders were without jurisdiction and liable to be set aside.
Final Conclusion: The writ petitions succeeded, and the impugned rectification proceedings based on the purported registration of the firm were quashed.
Ratio Decidendi: Rectification provisions cannot be used to revise or supersede a concluded assessment decision unless the correction is confined to a mistake apparent on the face of the record, and a later order lacking jurisdiction cannot supply the foundation for further rectification.
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