Sengupta, J. - (1.) At the instance of the Commissioner, West Bengal-III, the following question of law has been referred to this court under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1965-66 : "Whether, on the facts and in the circumstances of the case and having regard to Explanation 1 to Rule 2 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, there was a mistake apparent from the record within the meaning of Section 13 of the said Act and whether the Income-tax Officer was entitled to make an order thereunder ?"
(2.) The facts are that in the original surtax assessment order passed on February 28, 1967, the Income-tax Officer included a sum of Rs. 18 lakhs in the capital computation. Subsequently, action was taken under Section 13 of the Companies (Profits) Surtax Act, 1964, on the ground that the said sum of Rs. 18 lakhs was wrongly included in the capital computation and the mistake was apparent from the record. After a show-cause notice to the assessee, the Income-tax Officer passed an order under Section 13 rectifying the mistake. The Appellate Assistant Commissioner held that the Income-tax Officer cannot invoke Section 13 simply because he had an opinion different from that of the Income-tax Officer who passed the original assessment. Following the decision of the Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros., [1971] 82 ITR 50, he cancelled the order of the Income-tax Officer made under Section 13.
(3.) In the appeal before the Tribunal, the Departmental representative submitted that in the original assessment, the sum of Rs. 18 lakhs was wrongly included in the capital base and that that was an obvious mistake of law. The said mistake could be rectified under Section 13. The Tribunal held that the points raised by the assessee are highly debatable points. It is not a patent mistake which can be rectified under Section 13 and, accordingly, the Tribunal dismissed the appeal of the Department.;