Rectification for unlawful tax collection upheld where the refund request substantively sought correction despite imperfect form.

Where additional tax on excess dividend had already been held illegal, a taxpayer's request to the Income-tax Officer could be treated as a valid rectification application even though it was not expressly framed under section 35 of the Indian Income-tax Act, 1922. The authorities had themselves dealt with the request on that basis, and relief could not be refused by recharacterising the application or by treating the error as beyond correction. The refusal to grant refund of unlawfully collected tax was therefore unsustainable, and the order directing refund was maintained.

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Issues: Whether the respondent-company was entitled to refund of excess dividend tax collected under section 35 of the Indian Income-tax Act, 1922, despite there being no express application for rectification, and whether the authorities were justified in refusing relief.

Analysis: The levy of additional tax on excess dividend had already been held illegal. The application made to the Income-tax Officer, though not couched in express terms, in substance sought rectification and refund of tax unlawfully collected. The income-tax authorities themselves treated the request as one under section 35 and considered it on that basis. The Commissioner's view that the matter was barred or that the error was not apparent from the record was not accepted, since the relief sought was directed against an unlawful collection that ought to be reversed.

Conclusion: The respondent-company was entitled to refund, and the refusal to grant relief was unsustainable.

Final Conclusion: The appeal failed and the order directing refund of the illegally collected tax was maintained.

Ratio Decidendi: A request for rectification may be treated as valid where, though not express in form, it substantively seeks correction of an unlawful tax collection, and relief cannot be denied merely because the tax authorities characterise the application differently.

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