TaxTMI 
TaxTMI 
1978 (2) TMI 35
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 1966-67 and 1967- 68 ? " The assessee is a firm consisting of two partners, viz., T. S. Krishna and S. B. Shankar. While completing the assessment of the income under s. 143(3) on 12th October, 1966, in the hands of the firm which amounted to Rs. 43,450, the ITO observed that there was no application for registration and that it would be beneficial to the revenue, if the firm was treated as a registered firm under the provisions of s. 183(b) of the Act. He proceeded to state that both partners were actively engaged in the business. Similarly, for the assessment year 1967-68, in completing the assessment under s. 143(3) on September 21, 1967, on a total income of Rs. 86,150 he made similar observations. The audit party of the Account....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... these two years. It is this order of the Tribunal that has given rise to the question extracted already. Section 154(1)(a) provides that with a view to rectifying any mistake apparent from the record, the ITO may amend any order of assessment or of refund or any other order passed by him. In order to attract the application of this section, there must be a mistake and the mistake must be one apparent from the record. For the purpose of assessment, it is well settled that an individual and a firm are distinct entities. The courts have considered the question whether a mistake discovered because of something contained in the assessment of the firm is a mistake apparent from the record of assessment of an individual partner. In Kanumarl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... hands of a partner. There is no difference in the legal position, because this is a converse case and the same principle holds good in a case like this also. The learned counsel appearing for the CIT brought to our notice a passage from the judgment of a Bench of this court in T. S. Rajam v. CED [1968] 69 ITR 342 at 349 (Mad), running as follows : " ' Mistake' is an ordinary word, but in taxation law, it has a special signification. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. It is difficult to axiomatise and lay down dicta for the discovery of a mistake from official records. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the partner, is more in the nature of an exercise of a power of review, which power he does not have. Section 155 has provided for the records of the firm being used in the assessment of a partner so as to rectify it in accordance with the assessment of the firm. There is, however, no provision to rectify an order passed under s.183(b) on the firm in the light of the return submitted by or the assessment on partners. Section 183(b) is a provision enabling the ITO to treat a firm as a registered firm if he was of the opinion that the tax payable by the partners individually if the firm were assessed as a registered firm would be greater than the aggregate amount of the tax payable by the firm. In such a case, if the ITO had really some i....