Law:

Section:

Section 154(7) of the income-tax act, 1961-Rectification of mistake-Bar of limitation-Whether where reassessment is made; period of limitation for rectification would be counted from date of reassessment-held, yes-whether, where ito's order is only partially revised under section 264, period of limitation for rectification would be counted from date of ito's original order and not from date of revision-held, yes Facts For the assessment year 1964-65, the ITO made the original assessment and reassessment of the assessee-company on 29-3-1965 and 3-12-1968, respectively. For the assessment year 1965-66, the ITO made the original assessment of the assessee on 24-2-1966, but the Commissioner, acting under section 264, passed an order on 23-8-1968 whereby he allowed a deduction on account of income-tax fees paid by the assessee to its advocate. Thereafter, assessments for the aforesaid years were rectified on 30-4-1970 and on 17-10-1968, respectively. On 30-12-1970, the assessee made an application to the ITO for rectification of the aforesaid assessment years to grant the assessee relief under section 80-1. The ITO rejected the claim holding that the applications were barred by limitation provided under section 154(7). The ITO's order was upheld by the AAC. On second appeal, the Tribunal held that the time-limit prescribed under section 154(7) for the assessment year 1964-65 would start from 3-12-1968 when the order of reassessment was passed and thus the application made by the assessee on 30-12-1970 for that year was in time. As regards the assessment year 1965-66, it held that the revisional order of the Commissioner dated 23-8-1968, by which he allowed a deduction of Rs. 4,800, amended the order of the ITO only to the extent of the deduction allowed and to that limited extent the order of the ITO merged with the order of the Commissioner and the rest of the order of the ITO stood as it was on 24-2-1966, when the assessment order was passed by the ITO. Accordingly, since the entire order of the ITO did not merge with the order of the Commissioner passed on 23-8-1968, limitation period for the application of section 154 for the assessment year 1965-66 should be…

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