Bengal Assam Steamship Co. Ltd. vs Commissioner of Income Tax

Deb, J.—The following questions are involved in this reference u/s 256(2) of the Income Tax Act, 1961 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the period of limitation u/s 154 of the Income Tax Act, 1961, should be computed from the order of the Income Tax Officer u/s 49A of the Indian Income Tax Act, 1922, dated, February 22, 1961, and not from his order dated September 4, 1963, u/s 154 of the Income Tax Act, 1961, in respect of which rectification of mistake was applied for and in dismissing the appeal on that ground ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the period of limitation u/s 154 of the Income Tax Act, 1961, should be computed from the order of the Income Tax Officer u/s 49A of the Indian Income Tax Act, 1922, dated March 30, 1961, and not from his order dated September 4, 1963, u/s 154 of the Income Tax Act, 1961, in respect of which rectification of mistake was applied for and in dismissing the appeal on that ground?"

The assessment years involved arc 1954-55 and 1955-56. In the assessment year 1954-55, the Income Tax Officer passed his order dated February 22, 1961, u/s 49A of the Act granting certain reliefs to the assessee under the Agreement for Avoidance of Double Taxation between India and Pakistan. On September 4, 1963, the Income Tax Officer passed an order u/s 154 by which he modified the order dated February 22, 1961.

In the assessment year 1955-56, the Income Tax Officer passed his order on March 30, 1961, granting certain reliefs u/s 49A to the assessee in respect of its Pakistan income. On September 4, 1963, the Income Tax Officer rectified his previous order.

On October 22, 1965, the assessee applied for rectification of certain mistakes in the assessment orders. The Income Tax Officer rejected those applications on February 26, 1966, u/s 154 of the Income Tax, Act, 1961, on the ground that those applications were time-barred. The Income Tax Officer, however, rectified certain mistakes on February 4, 1966. The assessee filed appeals from those orders, but both the appellate authorities dismissed those appeals as the assessee''s applications for rectification were time-barred.

Dr. D. Pal, learned advocate for the assessee, contended before us that the time to make an application for rectification of the order of the Income Tax Officer should run from his subsequent orders. We are, however, of the opinion that the period of limitation will run from the earlier orders in respect of both the assessment years, and, accordingly, we return our answer in the affirmative and in favour of the revenue. There will be no order as to costs.

S.A. Masud, Actg. C.J.

I agree.