Limitation for rectification under section 35(5) does not revive pre-1952 assessments; time-barred orders were invalidated.

Section 35(5) of the Income-tax Act, introduced as a special rectification provision by legal fiction, was held not to extend the limitation under section 35(1) for assessments already completed before 1 April 1952. The four-year period for rectifying mistakes apparent from the record had to be counted from the original assessment order where section 35(1) applied. Because the relevant assessments were completed on 20 February 1950, the rectification orders made on 27 March 1954 and confirmed on 30 September 1955 were beyond time and without jurisdiction. The orders for the assessment years 1946-47 and 1947-48 were therefore set aside.

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Issues: (i) Whether section 35(5) of the Income-tax Act could be invoked to rectify assessments completed before 1 April 1952; (ii) whether the rectification orders made on 27 March 1954 were within the permissible period under section 35(1) or otherwise legally sustainable.

Issue (i): Whether section 35(5) of the Income-tax Act could be invoked to rectify assessments completed before 1 April 1952.

Analysis: Section 35(5) created a new class of rectifiable mistakes by deeming an incorrect inclusion or omission of a partner's share in the firm's profits or losses to be a mistake apparent from the record. The provision was enacted later and given effect from 1 April 1952, but it contained no express or necessary intendment making it applicable to assessments already completed before that date. The legal fiction introduced by section 35(5) was held to be inconsistent with treating the provision as merely declaratory of the earlier law.

Conclusion: Section 35(5) could not be applied to assessments completed before 1 April 1952.

Issue (ii): Whether the rectification orders made on 27 March 1954 were within the permissible period under section 35(1) or otherwise legally sustainable.

Analysis: Although the original assessments referred to provisional figures of the assessee's share of partnership losses, the power under section 35(1) had to be exercised within four years from the date of the original assessment order. That period had expired before the rectification order was made. The later introduction of section 35(5) did not enlarge the limitation under section 35(1), and the Income-tax Officer therefore lacked jurisdiction to reopen the completed assessments under either provision on the relevant date.

Conclusion: The rectification orders were barred by limitation under section 35(1) and were without jurisdiction.

Final Conclusion: The petitioner succeeded in challenging the rectification of the earlier assessment years, and the impugned orders relating to those years were set aside.

Ratio Decidendi: A later amendment creating a deemed rectification cannot be applied to completed assessments antecedent to its commencement unless the statute clearly so provides, and the limitation for rectification must be computed strictly in accordance with the governing provision.

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