Decided on March 27,1963

The 1St Addl. Income Tax Officer, Trichur Appellant
Paul Perincheri Respondents


M.S. Menon, J. - (1.)This is an appeal by the 1st Additional income tax 'Officer, Trichur-the respondent in Original Petition No. 1012 of 1960- against the decision in that petition in so far as it is adverse to the Department. There is a memorandum of cross-objections by the petitioner in that case-the assessee, the respondent before us-challenging that portion of the decision which is not in his favor. This petition questioned the correctness of Ext. P. 2, an order of the 1st Additional income tax Officer, Trichur dated the 29th June 1960. That order was passed u/s 35(5) of the Indian income tax Act, 1922. The sole question for determination is whether action under that sub-section is permissible in this case.
(2.)Sub-section (5) of section 35 of the Indian income tax Act, 1922, reads as follows:
Where in respect of any completed assessment of a partner in a firm it is found on the assessment or reassessment of the firm or on any reduction or enhancement made in the income of the firm u/s 31, section 33, section 33 A, section 33B, section 66, or section 66A that the share of the partner in the profit or loss of the firm has not been included in the assessment of the partner or, if included, is not correct, the inclusion of the share in the assessment or the correction thereof, as the case may be, shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section, and the provisions of subsection (1) shall apply thereto accordingly, the period of four years referred to in that sub. section being computed from the date of the final order passed in the case of the firm.

The sub-section was inserted into section 35 by the Indian income tax (Amendment) Act, 1953 with effect from 1st April 1952.

(3.)Sub-section (5) of section 35 has no application to assessments completed before 1st April 1952. The decision of the Supreme Court in Second Additional Income Tax Officer, Guntur Vs. Atmala Nagaraj and Others, (1962) 46 ITR 609 is a direct authority for the proposition that the sub-section affects the vested rights of an assessee and is not "applicable to cases where the assessment of the partner was completed before April 1, 1952, even though the assessment of the firm was completed after April 1, 1952.

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