R .L.GULATI J. - (1.) This is a petition under article 226 of the Constitution.
(2.) THE petitioner, which is a private limited company, was assessed to income -tax for the assessment year 1966 -67. In computing the total income the assessee was granted development rebate in respect of some machinery which had been installed by it in the calendar year 1964. The assessee had also claimed depreciation on certain assets including land. Later on, the Supreme Court in a case, Commissioner of Income -tax v. Alps Theatre : [1967]65ITR377(SC) held that depreciation was allowable only on the value of buildings and not on the value of land. The Income -tax Officer, accordingly, realised that depreciation on land had wrongly been allowed to the assessee and to that extent a part of the assessees income had escaped assessment. He, accordingly, issued a notice under section 148 of the Income -tax Act on November 15, 1968, and passed a supplementary assessment order on October 16, 1969, withdrawing the depreciation on the value of land. Thereafter, the Income -tax Officer felt that the development rebate had also wrongly been allowed to the assessee inasmuch as the assessee had not created a reserve for the same during the year the machinery was installed. He issued a notice under section 154 of the Act on April 14, 1971, treating it as a case of rectification of mistake. He finally passed an order under that section on September 10, 1971, withdrawing the development rebate which had been allowed to the assessee in the original assessment order after overruling the assessees contention that the order was time -barred. The present petition is directed against that order.
(3.) THE original assessment order under which the development rebate was allowed to the assessee was passed on 9th February, 1967. This order could be rectified under section 154 within four years. The rectification order passed on September 10, 1971, was, therefore, clearly barred by time. The standing counsel for the income -tax department says that the limitation should be counted from the order passed under section 148 and not from the original assessment order. His plea is that the original assessment order had merged in the order passed under section 148 by the Income -tax Officer and, therefore, the limitation should be counted from the latter order. We find absolutely no merit in this contention.;