An order of rectification made under the new Act is valid if it is referable to the jurisdiction of the Income-tax Officer under Section 35 of the old Act.

SANKAR PRASAD MITRA, J.

( 1 ) ON March 14, 1962, the Income-tax Officer, "e" Ward, Dist. IV (3), made an order of assessment under Section 23 (3) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the old Act"), for the assessment year 1961-62 against the petitioner. On March 31, 1966, an order of assessment was passed against the petitioner's partnership firm, Jaswantrai and Bros. , for the assessment year 1961-62. The respondent No. 1, namely, the Income-tax Officer, "a. " Ward, Dist. III (3), Calcutta, gave to the petitioner on the 6th May, 1966, a notice under Section 154/155 of the Income-tax Act, 1961 (hereinafter referred to as "the new Act"), for the assessment year 1961-62. The purpose of this notice was to rectify the petitioner's assessment made on the 14th March, 1962, upon the assessment of the petitioner's firm on the 31st March, 1966. Needless to say that, by this rectification, the petitioner's tax liability was sought to be increased. On the 12th May, 1966, the respondent No. 1 passed an order against the petitioner under Section 154 of the new Act for the assessment year 1961-62. On January 9, 1966, the petitioner was served with a notice of demand under Section 156 of the new Act for the assessment year 1961-62 pursuant to the aforesaid notice under Section 154. On the 4th July, 1966, the respondent No. 1 gave notice to the petitioner under Section 222 (1) of the new Act requiring the petitioner to show cause why a penalty should not be imposed for non-payment of tax. Eventually, on December 30, 1967, the petitioner was served with a notice of demand from the Tax Recovery Officer, Calcutta, with respect to the certificate for Rs. 74,348. 85 forwarded by the Income-tax Officer. The Tax Recovery Officer on the same day, namely, the 30th December, 1967, made an order prohibiting and restraining the petitioner from making any transfer of his shares in the Transport Corporation of India (P.) Ltd.

( 2 ) IN the present application the notice under Section 154 read with section 155 of the new Act dated 12th May, 1966, the notice under Section 156 of the new Act dated 23rd May, 1966, the notice under Section 222 (1) of new Act dated the 4th July, 1966, the notice of demand of the Tax Recovery Officer dated the 30th December, 1967, and the prohibitory order of the Tax Recovery Officer made on the 30th December, 1967, have all been challenged.

( 3 ) MR. Bajoria, learned counsel for the petitioner, drew my attention to Section 297 (2) (a) of the new Act, which runs thus : notwithstanding the repeal of the Indian Income-tax Act, 1922 (XI of 1922) (hereinafter referred to as 'the repealed Act'),-- (a) where a return of income has been filed before the commencement of this Act by any person for any assessment year, proceedings for the assessment, of that person for that year may be taken and continued as if this Act had not been passed. "

( 4 ) LEARNED counsel has urged that the petitioner's return of income for the assessment year 1961-62 was filed before the commencement of the new Act. In these premises, all proceedings for the petitioner's assessment for the year 1961-62 have to be taken or continued if at all not under the new Act but under the old Act. Reliance is placed on the Supreme Court's judgment in S. Sankappa v. Income-tax Officer, Central Circle II, Bangalore, In this case the Supreme Court has held that proceedings taken for rectification of assessment to tax either under Section 35 (1) or under Section 35 (5) of the old Act were proceedings for assessment. Learned counsel submits that if proceedings for rectification are proceedings for assessment then in the instant case the notice for rectification should have been served not under Section 154 or 155 of the new Act but under Section 35 (5) of the old Act. And since the initial notice for rectification was bad, all proceedings taken thereunder were also illegal and should be set aside. Mr. Bajoria invites my attention to paragraph 6 of the

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