AI Drafter 
TaxTMI 
TaxTMI 
1957 (7) TMI 39
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....e the sum of Rs. 26,000 being the value of twenty-six notes of Rs. 1,000 each, the source of which the assessee has failed to explain ?" 2. The facts out of which this reference arises are as follows: The assessee was being assessed on his income in the accounting year 1946-47. He was found to have encashed high denomination notes of the value of Rs. 66,000. He encashed notes of the value of Rs. 40,000 on 24th January, 1946, and the remaining, viz., Rs. 26,000, on 25th January, 1946. The Income-tax Officer in dealing with these notes held them to be income from an undisclosed source. In giving his finding he observed as follows: "Rs. 26,000 income concealed from the sales of high denomination notes as explained........." We a....
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....he made an application purporting to be under section 35 of the Income-tax Act asking that ground No. 3 which had been overlooked should be re-tried and a decision should be given. In the prayer it is quite clearly stated by the assessee that the mistake was sought to be rectified under section 35 of the Income-tax Act and/or otherwise a reference should be made under section 66(1) of the Income-tax Act to the High Court for the determination of the legal question whether this income could be taken in the accounting year 1946-47. 4. When the matter came before the Appellate Tribunal it gave its decision by an order made on 20th October, 1953. The interim application for rectification of the so-called mistake was allowed, and in the penul....
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....tions now mooted before us, therefore, concern this observation and the powers of the Appellate Tribunal to rectify mistakes, if any, in the order which had been previously passed in the appeal. 6. The two questions clearly disclose that the first is a question of competence of the Appellate Tribunal and the second relates to the facts of the case, that is to say, whether the assessment year in respect of Rs. 26,000 was the correct year or not. We have been taken through the provisions of sections 33 and 35 of the Income-tax Act. It was admitted before us that the Income-tax Appellate Tribunal does not possess any power of review. Shri Thakkar, who appeared for the assessee, contended, however, that no review was involved inasmuch as it ....
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....e Tribunal had also stated as follows in its order made on the previous occasion : "For want of proof, therefore, the amount has been rightly added as the assessee's income from undisclosed sources." Emphasis is laid upon "undisclosed" and it shows that it is not the regular business of the assessee which was the case in the two Patna cases cited before us by Shri Thakkar Commissioner of Income-tax v. Meghu Sao Jhandhu Sao [1955] 27 ITR 371 and Commissioner of Income-tax v. P. Darolia & Sons [1955] 27 ITR 515. In our opinion, this was a matter which was governed by section 2(11) of the Income-tax Act, and in the absence of an option exercisable by the assessee the income could naturally be taken only in the previous year of ....
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....k for themselves and the finding is also equally clear. The finding about an undisclosed source shows that a source other than the normal business of the assessee is in view. Therefore, the conclusion of the Appellate Tribunal in the second order that the income must be taken in the previous accounting year was quite correct and was quite clear. There was thus an error in putting it in the accounting year 1946-47, which we think the Appellate Tribunal was authorized under section 35 of the Income-tax Act to rectify. We rely upon the decision of the Bombay High Court in Sidhramappa v. Commissioner of Income-tax [1952] 21 ITR 333 where the powers of rectification were considered by Chagla, C.J., and Tendolkar, J. We respectfully agree with th....