Bhargava, J. - (1.) These eighteen appeals have been filed by six persons, some of whom were partners in a firm called "The Lalitha Silk-Throwing Factory", some in another firm called "The Srinivasa Textiles", and some in both these firms. The appeals brought up to this Court under certificate granted by the High Court of Mysore are against the judgment of the High Court dismissing eighteen writ petitions by these six appellants praying for quashing notices issued by the Income-tax Officer, Bangalore, purporting to be under Section 155 of the Income-tax Act No. 43 of l961, proposing to rectify the assessments of the appellants in respect of the assessment years 1958-59,1959-60 and 1960-61. Thus, the notices challenged are three notices for each of these assessment years in respect of each of the six appellants, so that there were 18 petitions before the High Court. The High Court decided all the petitions by a common judgment and, consequently, in these appeals, all of them are being dealt with together.
(2.) During all these three assessment years 1958-59, 1959-60 and l960-61, both the firms filed Returns declaring themselves to be registered firms and also presented applications for registration of the firms under S. 26-A of the Income-tax Act No. 11 of 1922. The Income-tax Officer refused registration of the firms and assessed the income of the firms, treating them as unregistered. The assessments of these six appellants were also made, so that their incomes from the two firms were included in their individual assessments as if they had received the income in the capacity of partners in unregistered firms. The firms went up in appeal against the orders of the Income-tax Officer refusing registration. These appeals were allowed by the Appellate Assistant Commissioner by an order dated 26th November, 1966 in respect of the Lalitha Silk-Throwing Factory, and 14th December, 1965 in respect of Srinivasa Textiles. The Income-tax Officer, in pursuance of the appellate order of the Assistant Commissioner, passed a consolidated order revising the assessments of the firms for all these years on the basis that they were registered firms and also apportioned the income of the fines between these six partners. Subsequently, the notices impugned in these petitions were issued on l9th January, 1967, whereby the Income-tax Officer proposed to rectify the individual assessments of the six appellants in respect of each of' the three years of assessment under Section 155 of the Act of 1961. The appellants in the writ petitions challenged the validity of these notices, but the High Court dismissed the writ petitions and, consequently, the appellants have come up in these appeals before us.
(3.) It was conceded before the High Court on behalf of the Income-tax Officer that proceedings for rectification of the assessments of the appellants could not be taken under S. 155 of the Act of 1961, because, admittedly, the rectifications related to assessments of tax for assessment years when the Act of l922 was applicable, so that proceedings could only be taken under S. 35 (5) of the Act of 1922 in view of the provisions of S. 297 (2) (a) of the Act of l961. Before us, learned counsel for the appellants urged that proceedings for rectification under S. 35 (5) of the Act of 1922 cannot be held to be proceedings for assessment within the meaning of that expression used in S. 297 (2) (a) of the Act of 1961, so that, under that provision of law, the Act of 1922 could not be resorted to by the Income-tax Officer in order to rectify the assessments of the appellants. On the same basis, it was further urged that, in any case, the provisions of S. 35 (5) of the Act of 1922 are not attracted, because proceedings under that section can only be taken when it is found on the assessment or reassessment of a firm 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; and, in the present cases, there was no assessment or reassessment of the firms when the Income-tax Officer, in pursuance of the order of the Appellate Assistant Commissioner granting registration to the firms, proceeded to pass orders rectifying the assessments of the firms under S. 35 (1) of the Act of 1922 on 20th December, l966. It was urged that no fresh computation of income of the partners is sought to be made in pursuance of the notices issued and, similarly, no fresh computation of the income of the firms was made when the Income-tax Officer passed his orders on 20th December, 1966 to give effect to the decision of the Appellate Assistant Commissioner granting registration to the firms. No fresh computation of income being involved, it must be held that the proceedings now sought to be taken are not proceedings for assessment, and, similarly, no proceedings for assessment or reassessment were taken by the Income-tax Officer when he passed his orders on 20th December 1966. This submission, in our opinion, has been rightly rejected by the High Court, because it has already been explained by this Court that the word "assessment" is used in the Income-tax Act in a number of provisions in a comprehensive sense and includes all proceedings, starting with the filing of the Return or issue of notice and ending with determination of the tax payable by the assessee. Though in some sections, the word "assessment" is used only with reference to computation of income in other sections it has the more comprehensive meaning mentioned by us above. Reference may be made to the decision of this Court in Abraham vs. Income-tax Officer, (1961) 41 ITR 425. The same principle has been recently reiterated in the case of Kalawati Devi Harlalka vs. Commr. of Income-tax, West Bengal, Civil Appeal No. 1421 of 1966, D/- 1-5-1967, (reported in AIR 1968 SC 162) where dealing with the word "assessment" used in S. 297 of the Act of 1961, the Court held:- "It is quite clear from the authorities cited above that the word "assessment" can bear a very comprehensive meaning; it can comprehend the whole procedure for ascertaining and imposing liability upon the tax-payer. Is there then anything in the context of S. 297 which compels us to give to the expression "procedure for the assessment" the narrower meaning suggested by the learned counsel for the appellant. In our view, the answer to this question must be in the negative. It seems to us that S. 297 is meant to provide as far as possible for all contingencies which may arise out of the repeal of the 1922 Act. It deals with pending appeals, revisions, etc. It deals with non-completed assessments pending at the commencement of the 1961 Act and assessments to be made after the commencement of the 1961 Act as a result of returns of income filed after the commencement of the 1961 Act." It is clear that, when proceedings are taken for rectification of assessment to tax either under S. 35 (1) or S. 35 (5) of the Act of 1922, those proceedings must be held to be proceedings for assessment. In proceeding under those provisions, what the Income-tax Officer does is to correct errors in, or rectify orders of assessment made by him, and orders making such corrections or rectifications are, therefore, clearly part of the proceedings for assessment.;