Rectification for mistake apparent on record: erroneous surcharge levy on a minor's income was quashed.

A clear legal mistake apparent from the record in an assessment order can be corrected under section 35 of the Income-tax Act, 1922. The Madras HC treated the levy of additional surcharge at 15 per cent on a minor son's share of income, on the footing that it was unearned income, as such a mistake. It held that the rectification power could reach the erroneous levy, and the challenge to the refusal to rectify was not barred merely because it sought correction of the original assessment in substance. The erroneous portion of the assessment was therefore quashed.

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Issues: Whether the portion of the assessment order levying additional surcharge at 15 per cent on the minor son's share of income, treated as unearned income, could be rectified and quashed under the rectification power under section 35 of the Income-tax Act, 1922.

Analysis: The additional surcharge was levied on a mistaken view of law, and the error was one apparent from the record. The rectification power under section 35 was held capable of reaching such a mistake, and earlier decisions were treated as covering the situation. The challenge to the Commissioner's refusal was therefore not treated as barred merely because it sought correction of the original assessment in substance.

Conclusion: The assessee succeeded on the rectification issue, and the portion of the assessment order treating the minor's share as unearned income for additional surcharge was quashed.

Ratio Decidendi: An assessment order founded on a clear legal mistake apparent from the record can be rectified under section 35 of the Income-tax Act, 1922, and the erroneous portion may be quashed when it is inseparable from the mistaken levy.

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