Rectification for penalty-date error under Wealth-tax Act upheld after later Supreme Court ruling clarified the governing date.

A later Supreme Court ruling on the relevant date for levy of penalty under the Wealth-tax Act rendered the Tribunal's earlier contrary view inconsistent with the law declared by the apex court, creating a mistake apparent from the record and justifying rectification. The Tribunal therefore allowed rectification and directed recomputation of penalty under section 18(1)(a) by treating the period of default from 1 January 1974 in line with the law applicable on the dates of the assessment orders.

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Issues: Whether the Tribunal's earlier view on the date relevant for levy of penalty under the Wealth-tax Act required rectification in light of the subsequent Supreme Court ruling, and whether the penalty for the assessment years in question had to be recomputed with reference to the date of the assessment orders.

Analysis: The application under section 35 of the Wealth-tax Act, 1957 was based on the contention that the later Supreme Court decision had declared the crucial date for penalty to be the date of completion of assessment and the authority's satisfaction to initiate penalty proceedings. Since the Tribunal's earlier order had proceeded on a contrary view derived from an earlier decision, the order was treated as inconsistent with the law as declared by the Supreme Court and therefore contained an obvious error warranting rectification.

Conclusion: The rectification was allowed. The Wealth-tax Officer was directed to recompute the penalty under section 18(1)(a) of the Wealth-tax Act, 1957 by treating the period of default from 1 January 1974 in accordance with the law prevalent on the dates of the assessment orders.

Final Conclusion: The assessee succeeded in obtaining rectification of the Tribunal's earlier order, and the department's appeals did not survive.

Ratio Decidendi: Where a subsequent Supreme Court ruling declares the governing law on the relevant date for levy of penalty, an order applying a contrary view suffers from a rectifiable mistake apparent from the record.

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