Imperial Chemical Industries Ltd. vs Commissioner Of Income-Tax on 7 March, 1978
In the case of CIT v. Ram Dayal Varma , it was held that where an assessment had been made under the provisions of the Indian I.T. Act, 1922, the assessment order could not be rectified under Section 154 of the I.T. Act, 1961, because the proceedings taken for rectification of an assessment were proceedings in an assessment. However, as the provisions of Section 35 of the Indian I.T. Act, 1922, and Section 154 of the 1961 Act were substantially the same, the ITO, it was held by the Division Bench of the Allahabad High Court, had the jurisdiction under the Indian I.T. Act, 1922, to pass a rectification order which he did and the order could not become null and void simply because he made an order under Section 154 of the 1961 Act. In this case also the contention that Clause (a) of Sub-section (2) of Section 297 of the I.T. Act, 1961, merely gave an option or a right to the ITO and did not make it obligatory on his part to proceed under the provision of repealed 1922 Act, was not adverted to or decided.