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AI Drafter ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the Income-tax Officer could invoke section 35 of the Indian Income-tax Act, 1922 to withdraw interest earlier allowed under section 244 of the Income-tax Act, 1961, and whether the grant of interest could be treated as a mistake apparent from the record.
Analysis: The refund and interest proceedings had already been dealt with under the 1961 Act, including orders passed under sections 154, 155, 241, 244 and 250. The impugned allowance of interest under section 244 was made pursuant to the Commissioner's direction and was not an independent exercise by the Income-tax Officer. The attempt to reopen that order under section 35 of the 1922 Act depended on the debatable question whether the 1922 Act could be applied to deny interest after the department had itself proceeded under the 1961 Act. A mistake apparent from the record must be patent and obvious, and not one requiring prolonged reasoning or resolution of competing views.
Conclusion: The Income-tax Officer had no jurisdiction to rectify the order under section 35 of the 1922 Act, and the withdrawal of interest was not sustainable. The issue was decided in favour of the assessee.
Final Conclusion: The rectification order was quashed and the writ petition succeeded.
Ratio Decidendi: Rectification is unavailable where the alleged error is not patent and the earlier order was made under the operative statutory regime on the basis of a binding superior direction; a debatable question of law cannot be corrected as a mistake apparent from the record.
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