B.L. Hansaria, J.
1. A question of some importance relating to the interpretation of Section 35 of the Wealth-tax Act, 1957, hereinafter referred to as 'the Act', has arisen for decision in this petition under Article 226 of the Constitution of India. The predecessor-in-interest of the petitioners was a wealth-tax assessee and some penalties were imposed on him for the assessment years 1966-67 to 1969-70 for the default in not filing the returns in time. In computing the penalties, the Wealth-tax Officer applied the law in force both before April 1, 1969, and after April 1, 1969, treating the default as a continuing offence. The Tribunal confirmed the imposition of penalty by its order passed on March 6, 1975. The Tribunal, in affirming the order of imposition of penalties, referred to and relied on its decision in the case of T. K. Roy. The decision in T.K. Roy came to be challenged before this court wherein the view taken by the Tribunal was not upheld. (See [1973] 115 ITR 746). The decision was rendered on April 3, 1978. After this decision, the assessee approached the learned Tribunal to reduce the penalties imposed under Section 18(1)(a) of the Act in conformity with the decision of this court in T.K. Roy v. CWT . The petitions before the learned Tribunal were filed on August 8, 1978, and, as such, were within the period of limitation mentioned in Section 35(7) of the Act. The learned Tribunal, however, refused to exercise powers under Section 35 of the Act on two grounds in the main ; (1) The assessee had not taken any step to challenge the order of the Tribunal before any forum which has, therefore, become final. In this connection, reference was made to Tilokchand Motichand v. H.B. Munshi, CST : [1969]2SCR824 . (2) Even if the Tribunal could be said to have committed a mistake by applying an erroneous interpretation of the provisions of the Act, the same was not a mistake apparent from the record in which case only power under Section 35 could be exercised.
2. Shri Sen has first submitted that the decision in Tilokchand Motichand, : [1969]2SCR824 cannot stand in the way of the assessee inasmuch as in that case what had happened was that the petitioners had approached the Supreme Court after a lapse of many years for refund of taxes realised from them pursuant to a provision of law which had subsequently been declared ultra vires by the Supreme Court in a proceeding taken out by a person different from the assessee. The relief under Article 32 of the Constitution which was invoked in that case was denied on the ground that a stale claim was being set up which the court refused to entertain. This is what has been observed in para 18 of the judgment. Though it was also stated in para 12 that the petitioners having abandoned their cases years ago could not be allowed to revive the same on the argument that the correct position was not known to the petitioners at that time when they abandoned their litigation, Sri Sen submits that these observations were made while considering the cases of the petitioners under Article 32 of the Constitution and the same would not apply while deciding a case under Section 35 of the Act. We are in agreement with learned counsel.
3. Coming to the second ground given by the learned Tribunal, it is urged by Shri Sen that the present was definitely a case of a mistake apparent from the record inasmuch as T.K. Roy's case was a part of the record which was relied on by learned counsel and as such any decision rendered by this court in T.K. Roy has to be taken to be a part of the record of the present case also. In this connection, it has been urged that the power of rectification conferred by a provision like Section 35 of the Act should not be construed to be analogous to what has been stated in Order 47, Rule 1, of the Civil Procedure Code. To substantiate this submission, our attention has been drawn to ITO v. Asok Textiles Ltd. : [1961]41ITR732(SC) wherein the provision of Section 35 of the Indian Income-tax Act, 1922, whose material language is in pari materia with Section 35 of the Act, was examined.
4. It is then urged by learned counsel that a subsequent event can be taken note of while exercising powers under Section 35 of the Act. In this connection, we have been first referred to CIT v. Khemchand Ramdas [1938] 6 ITR 414 wherein the subsequent order passed by the Commissioner relating to the status of the firm was allowed to be taken note of by the Income-tax Officer to rectify the assessment order. The decision in Khemchand [1938] 6 ITR 414 was approved by the Supreme Court in Venkatachalam (M.K.), ITO v. Bombay Dyeing and M/g. Co. Ltd. : [1958]34ITR143(SC) wherein an amendment made in the section with retrospective effect was regarded as a good cause to invoke the power of rectification. In this decision, it was further pointed put that a glaring and obvious mistake of law can be rectified under Section 35 as much as a mistake of fact apparent from the record.'
5. Being satisfied that a subsequent event can be taken note of and that a glaring and obvious mistake of law can also be rectified under the provisions of Section 35 of the Indian Income-tax Act, 1922, whose language is in pari materia with Section 35 of the Act, we are satisfied that pursuant to the decision of this court in T.K. Roy which formed part of the record of the present case also, the assessee had rightly approached the Tribunal to rectify the orders imposing penalties on him in tune with the decision of this court in T.K. Roy .
6. In the result, the petition is allowed and the learned Tribunal is directed to rectify the orders imposing penalties keeping in view the law laid down by this court in T.K. Roy .