Untwalia, J. - (1.) These four appeals by certificate are from a common judgement of the Allahabad High Court allowing four writ petitions filed by the two respondent companies namely J.K. Commercial Corporation Ltd. and J.K. Synthetics Ltd. In respect of the assessment years 1955-56 and 1956-57 assessment orders were passes by the Income-tax Officer, Kanpur under Section 23 (3) of the Income Tax Act, 1922 -- hereinafter referred to as the Act. Subsequent to the passing of the said orders of assessment the Income-tax Officer passes four orders in respect of the two assessment years against the two companies under Section 23A of the Act on January 21, 1957 asking the companies to pay certain amounts of additional super-tax on the undistributed profit of the concerned years. In November, 1959 the Income-tax Officer issued a notice under Section 35 (1) of the Act for rectification of the mistakes committed in the previous orders passed under Section 23A on 21-1-1957. The assessee companies in response to the notices objected to the proposed rectification by the Income-tax Officer, inter alia, on the ground that he had no power to rectify any mistake in an order under Section 23A of the Act. The Income-tax Officer overruled the objections raised by the companies, rectified the mistakes in his previous orders and increased the amounts of additional super-tax payable by the companies in relation to the two assessment years. The companies revision applications filed before the Commissioner of Income Tax, U.P. were dismissed. Thereupon, four writ applications were filed in the High Court to challenge the orders passed by the Income-tax Officer under S. 35 (1) of the Act as affirmed by the Commissioner of Income Tax in revisions. A Bench of the High Court feeling compelled to follow the decisions of this Court and in M.M. Parikh, v. Navanagar Transport and Industries Ltd. (1967) 63 ITR 663 and in S. Sankappa v. Income-tax Officer. Central Circle II, Bangalore, (1968) 68 ITR 760 has allowed the writ applications and quashed the impugned orders passed by the Commissioner of Income-tax and the Income-tax Officer. The decision of the High Court is reported in J.K. Commercial Corporation Ltd. v. Income-tax Officer, District I(i). Kanpur, (1969) 73 ITR 464 (All). Hence these appeals by the Revenue.
(2.) In our judgement the High Court was not right in applying the ratio of the two decisions of this Court referred to above to the facts of these cases. We shall presently show that the Income-tax Officer had jurisdiction and competency to rectify the mistakes under Section 35 (1) of the Act in his previous orders passed under Section 23-A.
(3.) Chapter IV of the Act is entitled "Deductions and Assessment". In this chapter occur various sections relating to assessments of income, determination of tax or super-tax tax payable on it, payment of additional super-tax, computation of loss, provisions for appeal and revision and provisions for rectification of mistakes either by the Income-tax Officer or by the Appellate or the Revisional authorities. In one of the earliest decisions of the Privy Council in Commr. of Income-tax v. Khemchand Ramdas (1938) 6 ITR 414 at page No. 416 at it was said: "One of the peculiarities of most Income-tax Acts is that the word "assessment" is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax-payer. the Indian Income-tax Act is no exception in this respect...............". The above dictum of the Privy Council was quoted with approval by this Court in C.A. Abraham v. Income-tax Officer, Kottayam, (1961) 41 ITR 425 at page No. 429 . In Sankappa's case (supra) the same Bench which had decided the Parikh's case (supra) and delivered the judgement through Shah, J. as he then was, speaking through Bhargave, J. followed Abraham's case (supra) and the decision of this Court in Kalawati Devi v. Commr. of Income-tax, (1967) 66 ITR 680 , wherein it has been stated that the word "assessment" is capable of bearing a very comprehensive meaning; in the context it can comprehend the whole procedure for ascertaining and imposing liability on the tax payer. It is to be noticed that the marginal note of Section 23 is "Assessment" and sub-section (3) says " the Income-tax Officer............ shall, by an order in writing, assess the total income of the assessee" and then adds "determine the sum payable by him on the basis of such assessment". Literally speaking, therefore, the assessment is of the total income of the assessee and then in the same order the sum payable by the assessee is determined which would include income-tax, surcharge, super-tax etc. Under Section 24 of the Act, loss is computed and is allowed to be set off against the income of the same year or carried forward to the next year. If one were to go upon the use of the literal words, then Section 24 is for computation of the loss. Yet it is a step in the assessment proceeding and will form part of the order of assessment itself. Section 23A as the marginal note indicates is the " Power to assess Companies to super-tax on undistributed income in certain cases". The relevant words of sub-section (1) of Section 23A are the following: "Where the Income-tax Officer is satisfied ........ the Income-tax Officer shall unless he is satisfied......... make an order in writing that the company shall, apart from the sum determined as payable by it on the basis of the assessment under Section 23, be liable to pay super-tax" at the rates specified "on the undistributed balance of the total income of the previous year ........". It would thus be seen that although in a narrow sense an order under S. 23-A may not be called an order or assessment, surely it is a part of the assessment proceeding and may be called a Supplementary assessment order directing a company to pay additional amount of super-tax on the undistributed balance of the total income as assessed and determined in accordance with the provisions of S. 23.;