Law:

Section:

Section 155 read with section 297 of the Income-tax Act, 1961 - (Corresponding to section 35(5) of the Indian Income-tax Act, 1922) - Rectification of mistake - Assessment year 1961-62 - Other amendments - Assessment of assessee, a partner of a firm, was made under 1922 Act - For same assessment year firm's assessment was made under 1961 Act - Rectification of assessee's assessment was made under section 154/155 of 1961 Act - Assessee's case was that rectification made was one contemplated under section 35(5) of 1922 Act and could not be made under 1961 Act since firm was assessed under 1961 Act - Whether though notice had been issued under section 154 of 1961 Act it should be regarded as a valid notice under section 35 of 1922 Act - Held, yes - W hether since firm filed return after 1961 Act came into force assessment had to be made under 1961 Act in view of section 297(2)(b) and power of rectification under section 35(5) of 1922 Act must also be utilised on assessment of firm in accordance with provisions of 1961 Act - Held, yes - Whether, therefore, rectification was valid - Held, yes FACTS For the relevant assessment year, assessment on the assessee was made under section 23(3) of the 1922 Act on 14-3-1962. Order of assessment was passed against the firm, in which the assessee was a partner, on 31-3-1966 since the firm filed return subsequent to the coming into operation of 1961 Act. Thereafter, the ITO gave to the petitioner on 6-5-1966, a notice under section 154/155 of the ITO Act. Upon the assessment of the firm he passed an order against the petitioner under section 154 of the new Act, rectifying the assessment on the basis of the completed assessment of the partnership firm. The assessee's case was that the notice under section 154 was bad in view of the provisions of section 297(2)(a) in view of the fact that the return of the income of the petitioner in his individual capacity had been filed prior to 1-4-1962, and the assessment was made before 1-4-1962. It was contended that inasmuch as the rectification was under section 35(5) of the 1922 Act, the order of rectification could not have been passed in the facts and circumstances of the case because…

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