Income-tax Act (XI of 1922)---

----S.35---Rectification of mistake---Share income from registered firm was included in the total income of the assessee by the Assessing Officer with the remarks that the share income was included subject to rectification under S.35 of the Income-tax Act, 1922---Application for rectification by the assessee---Assessing Officer rejected the application on the ground of expiry of four years---First Appellate Authority directed the Assessing Officer to rectify the mistake---Validity---Assessment of the share income was protective assessment and it did not debar the assessee from seeking the rectification, if it was called for upon finalization of the assessment of the firm---Even otherwise, the application of the assessee was well within the statutory period of four years---Order of the First Appellate Authority was upheld and Departmental appeal was dismissed.

1971 PTD 411 ref.

Mr. Ghayyour, D.R. for Appellant.

Z. H. Jafri for Respondent.

ORDER

MUHAMMAD MAZHAR ALI (JUDICIAL MEMBER).---This departmental appeal, relating to assessment year 1970-71, from the order of the learned Appellate Assistant Commissioner, A-Range, Karachi, mainly on the following ground:---

The Appellate Assistant Commissioner was not justified in directing the Assessing Officer to rectify the mistake under section 35 of the Act even after the lapse of 4 years.

2. The assessee-respondent was assessed for the year under appeal on 30th April, 1971 at an income of Rs.40,343. It included the share income from registered firm at Rs.40,510. While framing the assessment, the Income-tax Officer had endorsed that the share income was being included subject to .rectification under section 35. The assessee then filed an application under section 35 of the Act on 17-6-1975 seeking rectification of the original order of assessment in respect of share income. The Income-tax Officer rejected the application with the observation that no rectification can be done after the expiry of four years as laid down in section 35 of the Act. The assessee challenged the legality of this order before the learned Appellate Assistant Commissioner who has allowed the appeal with a direction to the Income-tax Officer to rectify the mistake under section 35 of the Act notwithstanding the lapse of four years' period since the passing of the original assessment order.

3. The learned Departmental Representative found it difficult to support the appeal in view of the fact mentioned in the assessment order by the Income-tax Officer to the effect that the income from the firm at Rs.40,510 was being added subject to rectification under section 35 of the Act. The learned Departmental Representative candidly conceded and in our opinion rightly too, that the assessment of the share, income was a protective assessment and it did not debar the assessee from seeking the rectification, if it was called for upon finalisation of the assessment of the firm. It is further pertinent to note that the application for rectification was actually presented by the assessee's counsel as far back as 16th December, 1971, i.e. well within the statutory period of 4 years. In the instant case, there was absolutely no lapse on the part of the assessee and the case is squarely covered by the decision of Allahabad High Court in the case reported as 1971 PTD 411. On the making of application under section 35 by the assessee, it was obligatory on the Income-tax Officer to effect necessary rectification in the original assessment order. By sleeping over the application, he could not defeat the rights of the assessee.

We are clearly of the view that the appeal is wholly misconceived, rather frivolous and it is accordingly dismissed.

C.M.A./550/TribAppeal dismissed.