TaxTMI 
TaxTMI 
1988 (2) TMI 13
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.... Tribunal is justified in holding that section 154 cannot be invoked to include the income of the spouse in the hands of the assessee under section 64 of the Income-tax Act for the assessment years 1973-74 and 1974-75 ?" The assessee and his wife constituted themselves into a partnership firm under a deed of partnership dated October 26, 1965. There is no other person as a partner in the partnership firm. The firm's assessments were completed and the assessments of the individual persons were also completed on the basis of the assessments made in the hands of the partnership firm. After the assessments were made, the Income-tax Officer seems to have realised that an error was committed, in that, the income of the wife arising from the pa....
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.... not possible to say that there was any error apparent on the record of the assessee. The Tribunal also referred to Explanation I to section 64(1)(i) stating that the individual whose total income is referred to in clause (i) shall be the husband or wife whose total income, excluding the income from the firm, is greater. The Tribunal observed that in order to determine whether there was a mistake or not, it was necessary to go into the effect of the Explanation and unless, in terms of the Explanation, the husband's income is found to be greater, the income of the wife is not liable to be included. In the opinion of the Tribunal, this renders the entire exercise debatable and, consequently, the provisions of section 154 will have no applicat....
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....affirmed by the Supreme Court in the above case applied to the matter under consideration in the present case. In the Karnataka case in Ethel Rodrigues [1963] 49 ITR (ED) 128, on a perusal of the probate proceedings in the civil court, a certain error was discovered in the estate duty assessment made and section 61 of the Estate Duty Act, 1953 (which corresponds to section 154 of the Income-tax Act), was invoked and the error rectified. The Revenue contended that on a perusal of the probate record in the civil court, it was clear that there was an apparent error in the estate duty assessment made and, consequently, the rectification proceedings were correctly taken. The Karnataka High Court rejected the Revenue's contention stating that the....
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....If only the Income-tax Officer had looked into the records of the partnership firm, it would have clearly indicated, by a perusal of the partnership deed, that the firm consisted of only two persons, namely, the wife and the husband, and that would automatically bring in section 64 for consideration. It is obvious that the Income-tax Officer failed to look into the records of the firm while making assessments of the income in the hands of the husband and his wife. That was clearly an omission on the part of the Income-tax Officer. It was only subsequently that a perusal of the record indicated that indisputably the partnership firm consisted of only the husband and the wife and, therefore, the provisions of section 64 of the Act were liable....