Law:

Section:

Section 154 of the Income-tax Act, 1961 - Rectification of mistake - Apparent from record - Assessee was a State-owned corporation which took over transport undertaking from State Government on basis of balance sheet of said undertaking -Assessment of assessee for assessment year 1960-61 was completed on 18-11-1985 - Later on ITO found that two mistakes, regarding status of assessee as well as period for which depreciation was to be allowed, bad been committed in original assessment order - He, therefore, rectified assessment order by his order dated 17-8-1966 - Subsequently, ITO came to know that written down value of buses taken over by assessee from Government bad been taken in earlier order on a wrong figure insofar as depreciation reserve which bad been created in balance sheet had not been taken into consideration in determining written down value of those buses -He, therefore, rectified same by order under section 154 dated 14-11-1969 -Whether aforesaid was a mistake apparent from record and, thus, ITO was justified in rectifying it under section 154 - Held, yes - Whether as both rectification orders dated 17-8-1866 and 14-11-1969 related to rectification of depreciation allowance, bar of limitation for passing order under section 154 was to be reckoned with reference to order dated 17-8-1966 and not with reference to original assessment order - Held, yes Section 217 of the Income-tax Act, 1961 - Advance tax - Interest payable by assessee - Whether rectification of assessment under section 154 has effect of making original assessment order, regular assessment order and. therefore, where after rectification under section 154 a positive income is determined, ITO is justified in ordering charge of interest under section 217, even when no such interest had been charged at time of original assessment as there was negative income or loss - Held, yes FACTS The assessee was a State-owned corporation which took over the transport undertaking from the State Government on the basis of the balance sheet of the undertaking. For the assessment year 1960-61, the assessment order was passed under section 143(3) on 15-2-1965 and in this assessment order some loss was…

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