This is appeal by department against order of Commissioner (Appeals) granting claim of depreciation to assessee for assessment year 1979-80. This is opposed by assessee. 2. By its letter dated 20-9-1977 assessee-company asked for change of accounting year. By his letter dated 15-12-1977, ITO informed assessee that 'the change of accounting year is allowed from 31-3-1978 to 30-6-1978 to start with'. change of accounting year was allowed 'subject to condition that it may be withdrawn in any of subsequent years, if it is found, change of accounting year leads to loss to revenue'. By subsequent letter dated 20- 12-1977 same ITO informed assessee that 'the period of 15 months from 1-4-1977 to 30-6-1978 is being divided into two assessment years, relevant accounting years being 1-4-1977 to 31-3-1978 and 1-4-1978 to 30-6-1978 for assessment years 1978-79 and 1979-80, respectively'. He advised it to make payment under section 210 of Income-tax Act, 1961 ('the Act') in accordance with estimate filed on 14-12-1977. He, however, stated that change in accounting year was allowed subject to condition that 'proportionate depreciation shall be allowed only for accounting year relevant to assessment year 1979-80, i.e., from 1-4-1978 to 30-6-1978 (one-fourth of normal depreciation)'. In accordance with this direction of ITO, assessee submitted return for three months, i.e., 1-4-1978 to 30-6-1978, for assessment year 1979-80 and also claimed one-fourth of depreciation allowable for year. Before Commissioner (Appeals) it was, however, contended that condition of granting one-fourth of claim for depreciation was invalid and normal depreciation should be allowed. Commissioner (Appeals) accepted this contention and held that 'the appellant would be entitled to normal depreciation to full extent allowable without any restriction with reference to number of days for which concern worked'. Being aggrieved, department preferred this appeal. 3. It was contended by departmental representative that assessee accepted condition imposed by ITO by his subsequent letter dated 20-12- 1977 and filed return in accordance with said condition. As such, he contended, that assessee could not turn back and challenge this condition imposed by ITO. He also contended that when in compliance with this condition, assessee itself claimed depreciation at rate of 25 per cent, it was stopped from challenging condition. He also drew our attention to proviso to rule 5(1) of Income-tax Rules, 1962 ('the Rules') and contended that as corollary or proviso of this section, depreciation proportionate to period during which machinery was used and not full depreciation for entire period should be granted. He also contended that both letters of ITO dated 14-12-1977 and 20-12-1977 should be read together. These contentions were opposed by authorised representative for assessee who contended that condition imposed by letter dated 20-12-1977 was n additional condition which could be imposed only in exercise of powers under section 154 of Act, but same is invalid because it was not imposed by order under section 154. He further contended that condition about proportionate depreciation imposed by letter dated 20-12-1977 and condition regarding withdrawal of permission in case change of accounting year was found to lead to loss of revenue, are invalid. For this purpose, he relied on decisions in cases of J.K. Synthetics Ltd. v. O.S. Bajpai, ITO [1976] 105 ITR 864 (All.) and CIT v. Sri Hari Prosad Lohia [1983] 143 ITR 276 (Cal.). 4. We have already stated that by his letter dated 14-12-1977 ITO allowed change in accounting year 'subject to condition that it may be withdrawn in any of subsequent years, if it is found, change of accounting y e r leads to loss to revenue'. authorised representative for assessee challenged this condition as invalid and for this purpose relied on case of J.K. Synthetics Ltd. (supra). departmental representative contended that this condition is valid and should not be disturbed. But we are of opinion that we should not record any opinion as to validity or otherwise of this condition because neither department nor assessee challenged this condition in this appeal. grievance of assessee before authorities below was regarding depreciation and as such it involves condition laid down by letter dated 20-12-1977. We make it clear that we do not think that we are required to pass any opinion as to condition imposed by letter dated 14- 12-1977. validity or otherwise of this condition may be examined in suitable proceeding, if necessary. 5. Now we come to condition imposed by letter dated 20-12-1977. It runs as follows: "The change in accounting year is allowed subject to condition that proportionate depreciation shall be allowed only for accounting year relevant to assessment year 1979-80, i.e., from 1-4-1978 to 30-6-1978 one-fourth of normal depreciation". According to authorised representative for assessee, it is additional condition imposed subsequent to granting or permission for chance of accounting year and as such is invalid for not being imposed in accordance with law. According to departmental representative, this letter dated 20-12-1977 and letter dated 14-12-1977 should be read together and it should be held that they were one and change of accounting year was allowed on conditions mentioned in both letters. We are unable to accept this contention. By letter dated 14-12-1977, change of accounting year was allowed and only condition imposed was with regard or reservation o f power to withdraw permission in case of loss to revenue. This is apparent from words: 'the change in accounting year is allowed from 31-3- 1978 to 30-6-1978 to start with'. It could at best be accepted that statements in earlier part of letter dated 20-12-1977 constitute clarification of periods which will form assessment years 1978-79 and 1979-80. But it cannot by any stretch of imagination be held that condition regarding proportionate depreciation was clarification of accounting period as mentioned in letter dated 14-12-1977. We are satisfied that this is additional condition imposed subsequent to granting of permission to change accounting year. But in case of Sri Hari Prosad Lohia (supra), Hon'ble Calcutta High Court laid down that 'detailed provision has been made in Income-tax Act for rectification or revision of order passed by ITO. But, in instant case, ITO had not invoked section 154 and there was no mistake apparent from record which could be rectified under section 154'. In our opinion, there is no mistake in instant case and condition regarding proportionate depreciation imposed by letter dated 20-12-1977 was additional condition. As such, ITO was not entitled to impose such condition by letter dated 20-12-1977. 6. There is another aspect which determines validity of imposition of this condition. In case of J.K. Synthetics Ltd. (supra) Allahabad High Court laid down that: "...sub-section (4) of section 3 provides that if assessee has already chosen previous year he shall not alter it without permission of Income- tax Officer. It is under this provision that company applied for permission to change its previous year and Income-tax Officer allowed change on certain conditions, which we have already reproduced above. It is not disputed that conditions which Income-tax Officer can impose must be valid and legal besides being reasonable. He cannot impose conditions which are contrary to provisions of Income-tax Act". (p. 875) So, in order to be binding condition regarding proportionate depreciation, has to be valid according to provisions of Act or (the Rules made thereunder). departmental representative was unable to point out any provision in Act or in Rules except proviso to rule 5(1) which reads as follows: "Provided that in case where assessee has been allowed to vary meaning of expression 'previous year' in respect of any business or profession under sub-section (4) of section 3 and, thereby, his income from such business or profession for period of thirteen months or more is included in his total income of any previous year, allowance referred to in this sub-rule, calculated in manner stated hereinabove, shall be increased by multiplying it by fraction of which numerator is number of complete months in such previous year and denominator is twelve". It is apparent from proviso that if by chance any accounting year comprises of period of 13 months or more, depreciation allowance shall be increased proportionately. But we do not think that it permits department to apply it in reverse manner and reduce depreciation proportionate to number of months comprising accounting year. Under rule 5(1) depreciation allowance for entire year is available at percentage specified in second column of Table in Part I of Appendix I to Rules. following words in this sub-rule 'the written down value of such of assets aforesaid as are used for purposes of business or profession of assessee at any time during previous year' are sufficient to show that depreciation at percentage mentioned in second column of Table in Part I of Appendix I is available though machinery is used for part of year. words 'at any time' are sufficient to show that depreciation at rate mentioned in Table is available even though machinery is used for any length of time during previous year. So, assessee was entitled to full depreciation at rate mentioned in Table under rule 5(1). ITO had no authority to reduce said depreciation allowance to one-fourth. For this reason also, this condition imposed by letter dated 20-12-1977 is invalid. Though assessee complied with this invalid condition, said fact does not validate imposition of invalid condition by ITO and assessee cannot be precluded from challenging validity of said condition. So we do not think that assessee is estopped from challenging validity of this condition imposed by letter dated 20-12-1977. In such circumstances, it cannot be said that order of Commissioner (Appeals) is incorrect. We, therefore, decline to interfere with impugned order which is hereby confirmed. 7. As result, appeal is dismissed. *** INCOME TAX OFFICER v. HARBANSLAL MALHOTRA & SONS LTD.