Rectification of partner's assessment after firm reassessment is valid when statutory conditions and limitation are satisfied.

Section 35(5) of the Indian Income-tax Act, 1922 deems an omission or wrong inclusion in a partner's assessment, arising from the assessment or reassessment of a firm, to be a mistake apparent from the record. The limitation period runs from the firm's final order, not from the partner's original assessment. Where the firm's reassessment occurs after 1 April 1952, the provision applies to the resulting rectification without giving the amendment retrospective effect beyond the date fixed by Parliament. The prior finality of the partner's assessment does not bar rectification once the statutory conditions are met.

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Issues: Whether the assessment of a partner could be rectified under section 35(5) of the Indian Income-tax Act, 1922 on the reassessment of the firm made after 1 April 1952, even though the partner's original assessment had become final earlier and the amendment was not retrospective beyond that date.

Analysis: Section 35(5) creates a statutory fiction that, where on assessment or reassessment of a firm the partner's share is found to have been omitted or wrongly included, the correction is to be treated as a rectification of a mistake apparent from the record. The limitation of four years runs from the final order in the firm's case, not from the partner's original assessment. The amendment was held to apply where the firm's reassessment took place after 1 April 1952, because the provision operates on the consequence of that reassessment and does not give the amendment a retrospective effect beyond the date fixed by Parliament. The earlier finality of the partner's assessment did not bar rectification once the statutory conditions were satisfied.

Conclusion: The rectification was valid and the objection based on want of retrospective operation failed.

Ratio Decidendi: Where the reassessment of a firm takes place within the statutory period and after the date from which the amendment operates, section 35(5) authorises rectification of the partner's assessment by treating the omission or incorrect inclusion of the partner's share as a mistake apparent from the record, with limitation computed from the firm's final order.

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