Law:

Section:

Section 154 of the Income-tax Act, 1961-Rectification of mistake-Apparent from record-ITO allowed development rebate on certain machinery to assessee for assessment year 1967-68-Assessee's return for next assessment year 1968-69 showed that said machinery had been let out-Whether on the basis of this information, TTO could withdraw development rebate allowed for assessment year 1967-68 by rectification proceedings under section 154 on the ground that machinery had been let out and not used by assessee, although there was nothing on record of assessment for assessment year 1967-68 to show letting out of machinery-Held, on facts, no Facts In the original assessment for the year 1967-68, the assessee was allowed development rebate on certain machinery. Subsequently, by way of rectification proceedings under section 154, the ITO withdrew the development rebate on the ground that in the relevant assessment year the machinery was let out by the assessee and was not used for its business. The Tribunal upheld the order of the ITO. On reference: Held As there was nothing on record pertaining to the assessment for the assessment year 1967-68 to show that the machinery was not used by the assessee for its business and was let out, the mistake, if any, could not be said to be apparent from the record. The ITO had, therefore, no jurisdiction to rectify the assessment and to withdraw the development rebate by invoking the provisions of section 154. B.L. Nema for the Applicant. B.K. Rawat for the Respondent. JUDGMENT SINGH, CJ. - The question of law referred in this case is as follows: "Whether, on the facts and in the circumstances of the case, the development rebate of Rs. 2,000 allowed in the original assessment can be legally withdrawn by the ITO by invoking the provisions of section 154 of the Income-tax Act, 1961?" 2. The reference relates to the assessment year 1967-68. In the assessment, the assessee was allowed development rebate of Rs. 2,000 under section 33 of the Income-tax Act, 1961 ('the Act'). In rectification proceedings under section 154 of the Act, the ITO withdrew this rebate on the ground that the machinery was let out by the assessee and was not used…

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