Rectification for apparent mistake upheld where depreciation calculations could be revised and no prejudicial notice defect arose.

Written notice under section 35(2) was not essential where the assessee had reasonable awareness of the proposed recalculation and the rectification did not enhance assessment or reduce refund without hearing; the objection therefore failed. Rectification of written down value and depreciation was also permissible as a mistake apparent from the record, because the record for section 35 includes the assessment materials and earlier calculations, and an obvious error of law or fact may be corrected on fresh computation. The earlier depreciation basis was not final for future years and did not create res judicata or estoppel. The challenge to the rectification was therefore rejected.

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Issues: (i) Whether the absence of written notice under section 35(2) of the Income-tax Act invalidated the rectification order; (ii) Whether the Income-tax Officer could rectify the written down value and depreciation under section 35 as a mistake apparent from the record.

Issue (i): Whether the absence of written notice under section 35(2) of the Income-tax Act invalidated the rectification order.

Analysis: The statutory object of notice under section 35(2) is to prevent an adverse order without opportunity of being heard where the rectification results in enhancement of assessment or reduction of refund. On the facts, the matter had been discussed with the assessee's representative and the assessee had been aware of the intended recalculation. The case did not involve enhancement of assessment or reduction of refund within the meaning of the provision.

Conclusion: The absence of written notice did not invalidate the rectification order, and the objection failed.

Issue (ii): Whether the Income-tax Officer could rectify the written down value and depreciation under section 35 as a mistake apparent from the record.

Analysis: The record for section 35 includes the materials on which the assessment is based, and the officer is entitled to examine earlier calculations and the applicable law to find an apparent mistake. The determination of written down value and depreciation for an earlier year was not final for all future years, nor did it operate as res judicata or estoppel. Where the basis of depreciation was found to be erroneous, the officer could make fresh calculations under section 35. The authorities on rectification supported the view that even an obvious error of law or fact could be corrected when apparent from the record.

Conclusion: The rectification of the written down value and depreciation was valid under section 35 as a mistake apparent from the record.

Final Conclusion: The challenge to the rectification failed, and the assessment-related relief sought by the assessee was not available.

Ratio Decidendi: For rectification under section 35 of the Income-tax Act, the record includes the assessment materials and earlier calculations forming its basis, and an apparent mistake in law or fact may be corrected where the assessee has had a reasonable opportunity of being heard and the case does not involve enhancement of assessment or reduction of refund without notice.

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