JUDGMENT [ENTITY] J. 1. This is a reference under [SECTION] of the [ACT]. 2. The statement of case shows that the assessee-company initially was subjected to tax at 55 per cent, of the total income by treating it as within "in any other case" mentioned in [SECTION], of the respective [ACT]. Subsequently, by proceeding under [SECTION] of the Act the assessee was subjected to tax at 60 per cent, of the total income by treating it as a trading company mentioned in [SECTION] of the [ACT]. The contention of the assessee is that it is not a trading company and therefore, not to be taxed at 60 per cent, as its business was of tea brokers and auctioneers which involved wide range of services like sampling, testing, valuing and cataloguing. The order of rectification was passed by the Assessing Officer under [SECTION] of the Act for the three assessment years, viz., 1986-87, 1987-88 and 1988-89, and the assessee-company treated as a trading company. 3. Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) which was allowed and the Assessing Officer was directed to tax the assessee at the rate that was applied in the original assessment. 4. The Department preferred an appeal against the said order which was allowed by the Tribunal. 5. The statement of the case shows that the following questions were referred to this court under [SECTION] of the Act for opinion ; "1. Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the assessee was a trading company as defined in the [ACT] and was chargeable to tax at the higher rate of 60 per cent. ? 2. Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the question whether the company which worked as tea brokers and auctioneers was or was not a trading company gave no scope for any debate and as such action for rectification of the assessment under [SECTION] of the Act was justified ?" 6. Heard Mr. [ENTITY], learned counsel for the assessee-company, and Mr. [ENTITY], learned counsel for the respondent-Revenue. 7. For properly appreciating the scope of consideration, the relevant portion of Paragraph E under [SECTION] in the [ACT], is quoted below : "Paragraph E In the case of a company, Rates of income-tax 1. In the case of a domestic company, (1) where the company is a company in which the public are substantially interested 50 per cent, of the total income; (2) where the company is not a company in which the public are substantially inter- ested, (i) in the case of a trading company or an investment company 60 per cent, of the total income; (ii) in any other case 55 per cent, of the total Income." 8. The contention of the assessee as regards question No. 1 is that the nature of the business of the assessee shows that it is not a trading company. The business of the assessee is of tea brokers and auctioneers which involved a wide range of services including sampling, testing, valuing and cataloguing. It is contended that as broker and auctioneer the assessee does not trade in the goods, but trades with the goods. The contention of the assessee as regards question No. 2 is that once the assessment order was passed by the Assessing Officer accepting that the assessee is not a trading company but comes within "any other case", there was no mistake apparent from the records which justified exercise of power under [SECTION] of the Act. Reference was made to the [ACT] of the year 1984, 1985 and 1986 for contending that the assessee-company declared itself as a trading company from the year 1977-78 till 1985-86 in view of the law as it stood at the said relevant period and only on introduction of the distinction between the trading company and other companies in the [ACT], the assessee declared itself as not a trading company in view of its nature of business. Learned counsel for the appellant-assessee contended that in income-tax matters the assessment for every year is to be treated as a separate case and the principle of res judicata does not apply. Reliance was placed on the judgment in the case of [PRECEDENT] . 9. The next contention of learned counsel for the assessee is that out of the three assessment years which are the subject matter of this proceeding, the assessee did not at any stage disclose itself as a trading company except for the year 1986-87 though initially at the time of filing the return it described itself as a trading company but the same was corrected by filing a revised return and accepting the revised return assessment order was passed finally. Therefore, there was no question of estoppel in the case of the assessee for claiming itself to be not a trading company. It is contended that a separate [ACT] enforced each year provides for charging Section separately, and, therefore, each year has to be considered separately. 10. The contention has been made with regard to the said question No. 2 that as there was no error apparent from the records, the requirements of [SECTION] were not satisfied and so the power under the said [SECTION] could not have been exercised and the order passed in the said proceeding under [SECTION] is bad. In support of such contention, reliance was placed on the judgment in the case of [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] ; [PRECEDENT] and [PRECEDENT]. 11. Mr. [ENTITY], learned counsel appearing for the respondents, contended with regard to question No. 1 that the assessee has been declaring itself to be a trading company all through and assessments were being made for successive years and suddenly it altered its status and described itself as not a trading company which is neither permissible nor can be allowed as the assessee is estopped from declaring its status in a different manner than it was declaring for a long time whereupon assessment orders have been made accepting the stand. 12. It is further contended on behalf of the respondent that the position in the [ACT] is different from the position in the [ACT] and therefore, the decisions cited by the assessee relating to proceedings under the [ACT], do not have any application in this case. 13. Reference was also made to the judgment in the case of [PRECEDENT] . 14. Reliance was also placed on the provision of law as it then stood and contained in [SECTION]. 15. In respect of question No. 2 on behalf of the respondent it is contended that the status of the assessee stood admitted by its own declaration in a number of years and therefore no further enquiry was required and the error was apparent from the records and therefore power under [SECTION] could very well be exercised in the present case. 16. After considering the aforesaid contentions, we find that in the present case, admittedly, the assessee was describing its own status as a trading company till 1986-87. It is apparent that the law has been changed in the meantime by the [ACT], when categories have been introduced differentiating between the cases of trading company and other cases. Therefore, the assessee though it described itself as a trading company in its return for the assessment year 1986-87, filed a revised return describing itself no more as a trading company. Assessment order has been passed on such revised return and the position became final. Therefore, when for the subsequent years, the assessee continued to describe itself as not a trading company, the authorities could not take a different stand nor could they prohibit the assessee from describing itself as not a trading company. In the above facts, it is apparent that the assessee was not precluded from so describing itself in the same manner as it has done in the revised return for the year 1986-87 on which the assessment order has since been passed. Therefore, the principle of res judicata does not affect the assessee any more as it merely continues to describe itself as not a trading company following the said assessment year 1986-87 for which alteration was made in the revised return and the same has since been accepted. 17. With regard to the nature of the business of the assessee/ the Assessing Officer has recorded his finding as follows : "The assessee-company derived income from the brokerage, commission, interest dividend and house property. On scrutiny of the assessment records revealed that the assessee-company was a tea broker, auctioneer, financier and major portion of its income (over 70 per cent.) comprised of brokerage from tea auctioneering, business and the residual income derived from interest, dividend, house property, etc. It was noticed that the assessee-company in doing the tea auctioneering business used to collect 'teas' from various tea gardens and conducted the sales through its various tea auction centres. The assessee-company also collected sales tax on such transactions in the auction centres and the sales tax remained unpaid to the sales tax authority was being assessed to income-tax under [SECTION] of the [ACT]. Thus, the assessee-company was actually acting as dealer in 'tea' and the entire sales were effected through its auction centres. Under [SECTION] of the [ACT], trading company means a company whose business consists mainly in dealing in goods or merchandise, manufactured, produced or processed by a person other than that company and whose income attributable to such business included in its gross total income is not less than 51 per cent, of such gross total income, and an investment company means a company whose gross total income consists mainly of income which is chargeable under the heads 'Interest on securities', 'Income from house property', 'Capital gains' and 'Income from other sources'." 18. Considering the aforesaid acts as regards nature of business of the assessee as has been accepted by the authorities, we find that the assessee collects teas from the various tea gardens and conducts their sales through tea auction centres. It does not appear that the assessee ever acquires title over the said tea nor it actually trades in the said goods. The assessee only rendered services in the matter of holding auction sale of the tea whereas the tea is sold by the seller and it is purchased by the auction purchaser. It is apparent that the assessee does not trade in the said goods nor it purchases it or sells it. Therefore, in our opinion, the assessee is not a trading company within the meaning of the statutory provisions as it was prevalent at the relevant point of time as the assessee does not deal in the said goods nor manufacture or produce or process the same. 19. With regard to the assessee being treated as a "dealer" so far as the [ACT] is concerned, it appears that [SECTION] of the [ACT], read with [SECTION] thereto, has an implication that a dealer is a person who carries on business of selling goods in West Bengal or purchasing goods in West Bengal in specified circumstances and it includes a factor, a broker, a commission agent, a del credere agent, an auctioneer, an agent for handling or transporting of goods or handling all documents of title to goods or any other mercantile agent, by whatever name called. Therefore, it is apparent that by legal fiction as an auctioneer, the asses-see is a dealer within the meaning of the [ACT]. But the assessee does not appear to be a trading company within the meaning of the [ACT] in view of the nature of business admittedly carried on by it. When on the facts it is found that the assessee is not a trading company, merely being dealt with as a dealer under the [ACT], cannot have an implication making the assessee a trading company within the meaning of the income-tax law. 20. In view of the above findings, question No. 1 is answered in the negative in favour of the assessee. 21. With regard to the power under [SECTION] of the Act, the law appears to have been stated that the error apparent from the records, has been explained in different cases. The Division Bench of this court in the year 1978 in the case of [PRECEDENT] held as follows (page 818) : "From the records before us, as appearing in the paper book, it is quite clear that the assessee was carrying on business of piling, that is, laying foundation of other constructions, and not a production of piles simpliciter. In any event, it cannot be said with certainty whether the activities of the assessee was mainly manufacture or mainly construction, the manufacture of piles being ancillary to such construction. Two views were possible as to whether the assessee was carrying on manufacture or processing and also whether the assessee was engaged wholly or mainly in such manufacture or processing. On this grounds, it appears to us that the mistake, if any, in the records is not apparent so as to be rectified under [SECTION] of the [ACT]." 22. Similarly, in the case of Calcutta Steel Co, Ltd. , another Division Bench of this court considered this aspect and held as follows (page 491) : "It is now well-settled that a mistake which can be rectified under [SECTION] of the Act must be a mistake apparent from the record. It may be a mistake either of law or of fact. However, the power of rectification can only be exercised if there is a mistake apparent from the record." 23. When this aspect was considered by the Supreme Court in the case of [PRECEDENT] , the following observation was made (page 53) : "Therefore, the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under [SECTION] of the [ACT]. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question." 24. In the present case, while exercising the power under [SECTION], the authority proceeded on the basis that the assessee-company is a trading company and was liable to pay income-tax at the rate of 60 per cent, and it has got the benefit of payment of income-tax at the rate of 55 per cent, by describing itself wrongly as a trading company. In such circumstances of the case, it is apparent to us that when the assessment order was passed in respect of the disputed three years treating the assessee-company as not a trading company, there was no material on record to hold that a rectification is required under [SECTION] as there was a mistake apparent from the records. For holding the assessee-company as a trading company after the assessment order was passed, the records were not apparent showing that the assessee carried on business bringing it within the definition of a trading company. For so holding the assessee-company as a trading company, enquiries were required. Initial admission by the assessee describing itself as a trading company, was no more existing as in respect of the year 1986-87, the assessee declared in the revised return its status as not a trading company and the subsequent two years originally described itself as not a trading company and assessment orders were passed in respect of all these three years treating it as a non-trading company. Therefore, it was no more a case of error apparent from the records justifying interference under [SECTION] without holding any further enquiry. 25. In the above view of the findings the order passed under [SECTION] cannot stand nor could the power be exercised by the concerned authority under [SECTION] in the facts and circumstances of the case and this question is also to be answered in favour of the assessee. 26. Therefore, both questions Nos. 1 and 2 are answered in the negative in favour of the assessee. [ENTITY], J.
27. I agree.