HON BLE SRI JUSTICE DILIP B.BHOSALE AND HON BLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION No.29925 of 2012 ORAL ORDER: (per Hon ble Sri Justice Dilip B.Bhosale) This writ petition under Article 226 of Constitution of India impugns notice issued by 1st respondent-Assistant Commissioner of Income Tax under Section 154 of Income Tax Act, 1961 (for short Act ) on 31.08.2012, proposing to rectify concluded assessment for Assessment Year 2005-06, as illegal, arbitrary and barred by limitation. 1st respondent issued notice proposing to rectify mistake in order of re-assessment dated 19-03-2010, made under Section 143(3) of Act. mistake mentioned in notice was incorrect set off of unabsorbed depreciation pertaining to Assessment Years 1993-94, 1994-95, 1995-96 and 1996-97 against income (under normal provisions) of Assessment Year 2005- 06. 2 . M/s. Rastriya Ispat Nigam Limited, (for short assessee ), Government of India undertaking, is engaged in business of manufacture and sale of Iron and Steel products. For Assessment Year 2005-06, assessee had filed return of income on 28-10-2005 declaring NIL income after setting off of unabsorbed depreciation of Rs.3081,03,64,095/-. assessee admitted total income of Rs.3099.81 Crores and claimed set off of unabsorbed depreciation of Assessment Years 1993-94 to 1998-99 aggregating Rs.3914.69 Crores. Further, assessee admitted book profit under Section 115JB of Act at Rs.1107.17 Crores and tax thereon was worked out at Rs.86.81 Crores. return of income was accordingly processed under Section 143(1) of Act on 31-03-2006, accepting income returned, and it resulted in refund of Rs.28.91 Crores. Thereafter, case of assessee was taken up for scrutiny and re-assessment was completed under Section 143(3) of Act, vide order dated 26-03-2007, determining total income at Rs.3127,21,34,124/- and after setting off of unabsorbed depreciation to extent of income so determined, taxable income under normal provisions was again computed at NIL . assessment, that was completed vide order dated 26-03-2007, was then reopened by issue of notice under Section 148 of Act dated 20- 10-2009, in respect of computation of Minimum Alternative Tax. reassessment was finally resulted in order, dated 19th March, 2010, under Sections 147 of Act, raising certain additional demands. Book profit was accordingly assessed at Rs.2266.25 Crores as against Rs.1107.17 Crores admitted by assessee. In this backdrop, impugned notice dated 31.08.2012 under Section 154 of Act was issued, proposing to rectify mistake, as indicated in notice, in assessment completed vide order dated 19-03-2010. It would be relevant to reproduce impugned notice dated 31.08.2012, which reads thus: NOTICE UNDER SECTION 154/155 OF INCOMETAX ACT, 1961 Office of Assistant Commissioner of Income Tax Circle-3(1), Visakhapatnam PAN AABCR0435L/2005-06 Date. 31-08-2012. TO M/s.Rashtriya Ispat Nigam Ltd., Visakhapatnam. Sir, order u/s.143 (3) r.w.s. 147 of I.T. Act., 1961 for A.Y. 2005-06 made on 19-03-2010 in your case requires to be amended as there is mistake apparent from record within meaning of section 154/155 of income tax Act, 1961. rectification of mistake, as per details given below, will have effect of enhancing assessment/reducing refund/increasing your liability and therefore, if you wish to be heard in this connection you are requested to appear in person or by authorized representative in my office at Visakhapatnam On 17-09-2012 at 11.30 AM. If so however, you intend sending written reply to this notice and do not wish to be heard in person, you are requested to ensure that your reply reaches me on or before date mentioned above. Yours faithfully, (Ch.HIMA BINDU) Assistant Commissioner of Incometax Circle-3(1), Visakhapatnam. Details of Mistake : Incorrect set off of unabsorbed depreciation pertaining to Asst.Years 1993-94, 1994-95, 1995-96 & 1996-97 against Income (under normal provisions) of Asst.Year 2005-06. 3 . assessee had commenced its business in 1982, and according to them, they had accumulated unabsorbed depreciation aggregating Rs.3914.68 Crores with respect to Assessment Years 1993-94 to 1998-99. Under provisions of Section 32(2) of Act, as it stood at relevant time, depreciation to extent it was not adjusted in any assessment could be carried forward and treated as depreciation for subsequent year, and so on until entire unabsorbed depreciation was adjusted against income. By Finance Act (No.2), 1996 w.e.f 04-07-1997, time limit was introduced for adjusting unabsorbed depreciation. After this amendment, such unabsorbed depreciation could be carried forward only for limited period of eight assessment years, subsequent to year in which depreciation was computed. On basis of clarification issued by Finance Minister, Central Board of Direct Taxes issued Circular No.762, dated 18-02-1997 clarifying that depreciation computed upto 1996-97 i.e., prior to amendment with effect from 1997, could be carried forward and considered for set off against income under any head for Assessment Year 1997-98 and seven subsequent assessment years. Parliament again amended Section 32 of Act by Finance Act, 2001 w.e.f.01-04-2002 and original provisions of Section 32 of Act were restored, removing time limit of eight years that was introduced with effect from 04.07.1997. In view thereof, according to assessee, in return filed for Assessment Year 2005- 06, which went through various processes as indicated above, depreciation to extent it was unabsorbed and had been determined upto years 1996-97 was adjusted and as such their income was determined/computed at Nil. 3.1 It is against this backdrop, according to assessee, what was sought to be reopened by issue of notice under Section 148 dated 20.10.2009 was book-profit in assessment order dated 26-03-2007, which had escaped assessment at time of assessment under Section 143 (3) of Act. Further, according to assessee, there was no reference in re- assessment order dated 19-03-2010 about income sought to be determined under regular provisions of Act. case of assessee is that re-assessment proceedings initiated vide notice dated 20.10.2009 under Section 148 of Act was only to consider book-profit that escaped assessment at time original assessment was completed. 4. question, therefore, falls for our consideration is whether limitation for issuing notice under Section 154 of Act, commences from date of assessment order under Section 143 (3) of Act or from order of re- assessment under Section 147 read with Section 148 of Act? According to assessee since dispute relates to allowing unabsorbed depreciation, in assessment order dated 26.03.2007, under Section 143(3) of Act, limitation of four years under Section 154(7) would commence from date of assessment order dated 26.03.2007 and not from date of re- assessment order, under Section 147 read with Section 148 of Act, dated 19.03.2010. As against this, according to Revenue, original order dated 26.03.2007 under Section 143 (3) got merged with reassessment order dated 19.03.2010 and, therefore, limitation of four years under Section 154(7) would commence from date of reassessment order under Section 147 read with 148 of Act. 5. We have heard learned counsel for parties at considerable length and with their assistance gone through entire material placed before us and relevant provisions of Act. We have also perused judgments cited by them in support of their contentions. 6 . Sri S.Ravi, learned Senior Counsel for assessee, at outset, submitted that proposed rectification under Section 154 of Act for Assessment Year 2005-06 is barred by limitation. After inviting our attention to order of assessment under Section 143(3) of Act dated 26-03-2007, he submitted that order of reassessment under Section 147 of Act dated 19-03-2010 did not disturb said order (26.03.2007) of assessment made under regular provisions of Act, and what was considered in reassessment was only computation of income for purpose of levy of Minimum Alternative Tax under Section 115JB of Act. In short, he submitted that income under regular provisions of Act and computation thereof was not touched in order dated 19.03.2010. He, therefore, submitted that limitation provided in Section 154(7) of Act would begin to run from end of financial year in which order sought to be rectified was passed i.e., order dated 26-03-2007. He submitted that last date of previous year was 31-03-2007 and four years limitation under Section 154 (7) would expire on 31-03-2011 and, therefore, notice under Section 154 of Act issued on 31-08-2012 was hopelessly barred by limitation. In support of this contention, he placed reliance upon judgment of Supreme Court to which we will make reference, in course of judgment, at appropriate stage. 7 . On other hand, Sri B.Narasimha Sarma, learned Counsel for Revenue placed heavy reliance upon judgment of Supreme Court in Hind Wire Industries Ltd., Vs. Commissioner of Income Tax() to submit that order of assessment merges with order of re-assessment and, therefore, period of limitation requires to be computed from order of reassessment. In present case, he submitted, order of assessment under Section 143 (3) of Act dated 26-03-2007 merged with order of reassessment under Section 147 dated 19-03-2010 and, therefore, period of limitation would start to run from 31-03-2010, and would expire on 31-03- 2013, and since notice was issued on 31-08-2012, it cannot be stated to be barred by limitation. He also invited our attention to impugned notice to contend that notice itself makes it clear that order under Section 143(3) read with 147 of Act dated 19-03-2010 requires amendment under Section 154 of Act. notice also refers to details of mistake. He, therefore, submitted that when notice specifically speaks about reassessment order dated 19-03-2010, Court, at this stage of proceedings, cannot proceed on assumption that it was in respect of regular assessment dated 26-03-2007. 8. In rejoinder, Sri S.Ravi, learned Senior Counsel invited our attention to judgment of Supreme Court in Commissioner of Income Tax, Chennai Vs. M/s.Alagendran Finance Ltd.,() and submitted that Supreme Court has clarified that merger , as observed in Hind Wire Industries Ltd.,(supra), is only on points which are dealt with in later proceedings and it would not mean that entire proceedings has been reopened. He submitted that although Supreme Court in M/s.Alagendran Finance Ltd., (supra) was concerned with Section 263 of Act, judgment is on all fours. He submitted that use of word any order in Section 154 of act and words order in Section 263 was necessitated by fact that in former case it is very same officer invokes jurisdiction, but in latter case it is superior officer. 9. Before we deal with question, it would be advantageous to reproduce relevant portion of Section 154 of Act, which reads thus:- Rectification of mistake. 154. (1) With view to rectifying any mistake apparent from record income -tax authority referred to in section 116 may,- a. amend any order passed by it under provisions of this Act; b. . c. . (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to order referred to in sub-section (1), authority passing such order may, notwithstanding anything contained in any law for time being in force, amend order under that sub-section in relation to any matter other than matter which has been so considered and decided. (2) Subject to other provisions of this section, authority concerned- (a) may make amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by assessee [or by deductor], and where authority concerned is Commissioner (Appeals), by [Assessing] Officer also. (3) .. (4) .. (5) .. (6) .. (7) Save s otherwise provided in section 155 or sub-section (4) of section 186 no amendment under this section shall be made after expiry of four years [from end of financial year in which order sought to be amended was passed]. (8) . Similarly, it would be necessary to reproduce relevant portion of provisions contained in Section 147 of Act, which reads thus:- Income escaping assessment. 147. If [Assessing] Officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recomputed loss or depreciation proceedings under this section, ore recomputed loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as relevant assessment year): Provided that where assessment under sub-section (3) of section 143 or this section has been made for relevant assessment year, no action shall be taken under this section after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under section 139 or in response to notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: .. .. .. Explanation 2._ For purposes of this section, following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- a. .. b. .... c. Where assessment has been made, but- (i) income chargeable to tax has been underassessed; or (ii) (iii) .. (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed;] 10. arguments advanced by learned counsel for parties detained our attention for quite sometime on judgments of Supreme Court in Hind Wire Industries Limited (supra) and M/s.Alagendran Finance Ltd., (supra). We deem it appropriate to look into these judgments in detail, to appreciate and to find out whether these judgments support their submissions. 10.1 In Hind Wire Industries Limited (supra) Sub-section (7) of Section 154 of Act, as it then stood, fell for consideration, in particular expression from date of order sought to be amended therein, of Supreme Court. background facts against which Supreme Court considered said provision are that assessee was assessed for income tax originally under assessment order dated 21-09-1979. assessee had filed petition for rectification of said order under Section 154 of Act on ground that Income Tax Officer had not taken into consideration shift allowance available to assessee. Consequent upon this application, assessment order was rectified on 12-07-1982. Thereafter, assessee again applied for rectification of fresh order of 12-07-1982 on 4th July, 1986 contending that while he was entitled to depreciation on factory building at rate of 10%, he was allowed depreciation only at rate of 5%. Income Tax Officer dismissed assessee s claim on ground that application was beyond time. This order was confirmed by Appellate Assistant Commissioner. In appeal, Tribunal allowed application holding that application made on 4th July, 1986 was within 4 years of fresh order of assessment made on 12th July, 1982 and hence within limitation. On reference, High Court reversed order of Tribunal holding that period of 4 years ought to have been calculated from initial order of assessment viz., from 21st September, 1979 and not from fresh order of assessment passed on 12th July, 1982. There was no dispute that assessee was entitled to 10% depreciation allowance on factory building and, therefore, it was observed that it had to be granted to him if it was held that rectification application was made within time. 10.2 In this backdrop, Supreme Court considered expression from date of order sought to be amended in Sub-section (7) of Section 154, as it stood then and observed that it is obvious that word order has not been qualified in any way and it does not necessarily mean original order. It can be any order including amended or rectified order. 10.3 Supreme Court considered several judgments to which we would make brief reference in subsequent paragraphs of this judgment. At this stage, we would like to reproduce concluding paragraph in Hind Wire Industries Limited (supra) which reads thus: In view of these authorities taking view that word any in expression order sought to be amended would mean even rectified order, we are satisfied that High Court was wrong in setting aside decision of Tribunal Shri G.Viswanatha Iyer, learned senior counsel cited before us decisions of Calcutta, Gujarat, Madras and Orissa High Courts in Bharat Textiles Works v. Income Tax Officer Circle-IV, 3-A,(Company) (1978) 114 ITR,28: (1979) Tax LR 206), Ahmedabad Sarangpur Mills Co.Ltd. v. A.S.Manohar, Income-Tax Officer, Circle IV, Ward-A,(Companies) Ahmedabad (1976) 102 ITR 712, Kothari (Madras) Ltd. V. Agriculture Income Tax Officer, (1989) 177 ITR 538: (1988 Tax LR 1505), and Commr. Of Income-Tax v. Kalinga Tubes (1991) 187 ITR 595, respectively in support of his contention that word any used in expression order sought to be amended would mean original order of assessment. As against this, Dr.Shankar Ghose, learned senior counsel referred us to decisions of Patna and Karnataka High Courts in Bihar State Road Corporation v. Commr.of Income-Tax, (1986) 162 ITR 114 at 130 and Commr Income- Tax, Karnataka-II Bangalore v. Mysore Iron and Steel Ltd., (1986) 157 ITR 531, respectively which decisions have taken contrary view. However, in view of decisions of this Court referred to above, we are of opinion that view taken by Tribunal in present case is correct one. We, therefore, set aside impugned order of High Court and restore that of Tribunal. appeals are allowed accordingly with no order as to costs. (emphasis supplied) 11. Supreme Court in M/s.Alagendran Finance Ltd., (supra) considered question whether for purpose of computing period of limitation envisaged under Sub-section (2) of Section 263 of Act, date of order of assessment or that of reassessment, is to be taken into consideration? . question arose for consideration against facts that assessee had filed its returns for Assessment Years 1994-95, 1995-96 and 1996-97 on 23-11-1994, 27-11-1995 and 26-11-1997 respectively and assessment for year 1994-95 was completed on 27-02-1997 and those of Assessment Years 1995-96 and 1996-97 wer e completed on 12-05-1997 and 30-03-1998 respectively. In orders of assessment, assessee s return under Head Lease Equalization Fund was accepted. 11.1 proceedings for reassessment were initiated by Assessing Officer on 05-03-2002. Orders of reassessment were passed on 28-03-2002. Proceedings for reassessment, however, were initiated only in respect of three items viz, (i) expenses claimed for share issue, (ii) bad and doubtful debts and (iii) excess depreciation on gas cylinders and goods containers. Although assessee s return in respect of lease equalization was not subject matter of reassessment proceedings, Commissioner of Income Tax purported to invoke his revisional jurisdiction in terms of Section 263 of Act and by order dated 29-03-2004 held that Orders of Assessing Officer were prejudicial to interest of Revenue as lease rentals had not been properly brought to tax. Having so observed, all three assessments were reopened under Section 263 of Act and Assessing Officer was directed to check and assess lease rentals from Lease Equalization Fund, if any, and to bring it to tax for all above three years. 11.2 Assistant Commissioner, accordingly, carried out reassessment proceedings only in respect of income on equalization reserve holding that deduction made from gross lease rent is only provisional and not actual expenditure, and therefore, same was to be disallowed and added to income returned. Income Tax Appellate Tribunal found favour with contention of assessee that said purported proceedings under Section 263 of Act were barred by limitation. Tribunal after referring to several decisions of Supreme Court and High Courts, ultimately held that order passed under Section 263 of Act, dated 29-03-2004 was clearly barred by limitation with reference to orders passed under Section 143(3) of Act. 11.3 Revenue preferred appeal against order of Tribunal before High Court. High Court dismissed appeal and confirmed order passed by Tribunal. Against order of High Court, parties were before Supreme Court. Supreme Court after considering its judgment in Hind Wire Industries Limited (supra) in paragraphs 9 and 10 observed thus:- 9. We may at this juncture also notice decision of this Court in Hind Wire Industries Ltd. (supra) wherein decision of this Court in V. Jaganmohan Rao v. CIT and CEPT (75 ITR 373) interpreting provisions of Section 34 of Act was reproduced which reads as under : "Section 34 in terms states that once Income tax officer decides to reopen assessment, he could do so within period prescribed by serving on person liable to pay tax notice containing all or any of requirements which may be included in notice under Section 22(2) and may proceed to assess or reassess such income profits or gains. It is, therefore, manifest that once assessment is reopened by issuing notice under sub-section (2) of Section 22, previous underassessment is set aside and whole assessment proceedings start afresh. When once valid proceedings are started under Section 34(1) (b), Income-tax Officer had not only jurisdiction, but it was his duty to levy tax on entire income that had escaped assessment during that year." 1 0 . There may not be any doubt or dispute that once order of assessment is reopened, previous underassessment will be held to be set aside and whole proceedings would start afresh but same would not mean that even when subject matter of reassessment is distinct and different, entire proceeding of assessment would be deemed to have been reopened. (emphasis supplied) 11.4 Then, in paragraph 12 of judgment (in M/s.Alagendran Finance Ltd.) Supreme Court after referring to Sun Engineering Works Pvt.Ltd., (supra) in depth, observed thus: 12. We may at this juncture also take note of fact that even Tribunal found that all subsequent events were in respect of matters other than allowance of 'lease equalization fund'. said finding of fact is binding on us. Doctrine of merger, therefore, in fact situation obtaining herein cannot be said to have any application whatsoever. It is not case where subject matter of reassessment and subject matter of assessment were same. They were not . (emphasis supplied) 11.5 Supreme Court, then proceeded to consider judgment of Madras High Court in Commissioner of Wealth-Tax Vs. A.K.Thanga Pillai() and judgment of Supreme Court in Commissioner of Income Tax Vs. Shri Abuda Mills Ltd.,() and in concluding paragraph 15 of judgment (in M/s.Alagendran Finance Ltd.) observed thus:- 15. We, therefore, are clearly of opinion that keeping in view facts and circumstances of this case and, in particular, having regard to fact that Commissioner of Income Tax exercising its revisional jurisdiction reopened order of assessment only in relation to lease equalization fund which being not subject of reassessment proceedings, period of limitation provided for under sub-section (2) of Section 263 of Act would begin to run from date of order of assessment and not from order of reassessment. revisional jurisdiction having, thus, been invoked by Commissioner of Income Tax beyond period of limitation, it was wholly without jurisdiction rendering entire proceeding nullity. (emphasis supplied) 12. I n Hind Wire Industries Ltd. (supra) Supreme Court considered provisions contained in Section 154 of Act, in light of almost similar facts. only difference is that, in case before Supreme Court, assessee had filed petition for rectification of re-assessment order dated 12.07.1982 contending that while he was entitled to depreciation on factory building at rate of 10%, he was allowed only at rate of 5%. In this backdrop, Supreme Court held that assessee would be entitled for rectification if his petition under Section 154 of Act was within time. 12.1 In M/s.Alagendran Finance Ltd., (supra) question of Limitation was raised in proceedings under Section 263 of Act. While dealing with question, on facts and in circumstances of case, Supreme Court observed that order passed by Commissioner of Income Tax would clearly demonstrate that only that part of order of assessment which related to lease equalization fund was found to be prejudicial to interest of Revenue. proceedings for reassessment have nothing to do with said head of income. Doctrine of merger, therefore, would not apply in case of this nature. Further, in this case Court considered judgment in Hind Wire Industries Limited (supra) and without disturbing ratio laid down therein, on facts and in circumstances of case and in exercise of revisional powers under Section 263 of Act, observed that once order of assessment is re-opened, previous under-assessment would be held to be set aside and whole proceedings would start afresh and then added that but same would not mean that when subject matter of re-assessment is distinct and different, entire proceedings of assessment would be deemed to have been re-opened. 1 3 . I n International Cotton Corporation Vs. C.T.O() Supreme Court considered similar expression in Rule 38 of Mysore Sales Tax Act and while dealing with point, as raised in instant writ petition, in paragraph 9 of judgment observed thus:- other attack that rectification order is beyond point of time provided in Rule 38 of Mysore Sales Tax Rules is also without substance. What was sought to be rectified was assessment order rectified as consequence of this Court s decision in Yaddalam s case (AIR 1965 SC 1510). After such rectification original assessment order was no longer in force and that was not order sought to be rectified. It is admitted that all rectification orders would be within time calculated from original rectification order. Rule 38 itself speaks of any order and there is no doubt that rectified order is also any order which can be rectified under Rule.38 (emphasis supplied) 14. decision of Supreme Court in International Cotton Corporation(supra) was endorsed by Supreme Court in Deputy Commissioner of Commercial Taxes Vs. H.R.Sri Ramulu() in following terms:- reason for that is that once assessment is reopened, initial order for assessment ceases to be operative. effect of reopening assessment is to vacate or set aside initial order for assessment and to substitute in its place order made on reassessment. initial order for reassessment cannot be said to survive, even partially, although jurisdiction for reassessment arises in limited field or only with respect to part of matter covered by initial assessment order. result of reopening assessment is that fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of turnover escaping assessment. As it is, we find that in present case assessment orders made under Section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier. In circumstance, only orders which could be subject- matter of revision by appellant were orders made under Section 12A of Act and not initial assessment orders. In case of J.Jatganmohan Rao v. Commr. Of Income-tax and Excess Profits Tax, Andhra Pradesh (1970) 75 ITR 373 : AIR 1970 SC 30-0), this Court dealt with Section 34 of Indian Income-tax Act,1922, which relates to reassessment in case of income escaping assessment. It was held by this Court that once assessment is reopened, previous under-assessment is set aside and whole proceedings start afresh. Ramaswamy,J., speaking for court observed: Section 34 in terms states that once Income-tax Officer decides to reopen assessment he could do so within period prescribed by serving on person liable to pay tax notice containing all or any of requirements which may be included in notice under Section 22(2) and may proceed to assess or reassess such income, profits or gains. It is, therefore, manifest that once assessment is reopened by issuing notice under sub-section (2) of Section 22 previous under-assessment is set aside and whole assessment proceedings start afresh. When once valid proceedings are started under Section 34(1)(b), Income-tax Officer had not only jurisdiction but it was his duty to levy tax on entire income that held escaped assessment during that year. (emphasis supplied) 1 5 . Similarly, in Commissioner of Sales Tax, Madhya Pradesh Vs. H.M.Esufali H.M.Abdulali() Supreme Court dealt with reassessment made under Section 19 of Madhya Pradesh Central Sales Tax Act, 1958 and held that when reassessment is made, former assessment is completely reopened and in its place fresh assessment is made. While considering said decision, Supreme Court dealt with expression date on which order was passed , which is similar to expression, as aforementioned, in Sub-section (7) of Section 154 of Act and observed that relevant provision did not qualify word order and hence period of 4 years has to be calculated from date of rectification order. For taking such view, Supreme Court referred to its earlier judgment in International Cotton Corporation (supra) in which Supreme Court had observed that what is true of assessment must also be true of reassessment because reassessment is nothing but fresh assessment. When reassessment is made under Section 19 (of Madhya Pradesh Central Sales Tax Act, 1958), former assessment is completely reopened and in its place fresh assessment is made. While assessing dealer, assessing authority does not merely assess him on escaped turnover, but it assesses him on his total estimated turnover. While making reassessment under Section 19, if assessing authority has no power to make best judgment assessment, all that assessee need to do to escape reassessment is to refuse to file return or refuse to produce, taken on behalf of assessee is correct, assessee can escape his liability to be reassessed by adopting obstructive attitude. It is difficult to conceive that such could be position in law. 16. Observations made by Supreme Court in Commissioner of Income Tax Vs. Sun Engineering Works Pvt. Ltd.,() are also relevant to appreciate and understand provisions contained in Section 147 of Act better. relevant observations read thus: Section 147, which is subject to Section 148, divides cases of income escaping assessment into two clauses i.e. viz. (a) those due to non-submission of return of income or non- disclosure of true and full facts and (b) other instances. Explanation (1) defines as to what constitutes escape of assessment. In order to invoke jurisdiction under Section 147(a) of Act, ITO must have reason to believe that some income chargeable to tax of assessee has escaped assessment by reason of omission or failure on part of assessee either to make return under Section 139 for relevant assessment year or to disclose fully and truly material facts necessary for assessment for that year. Both conditions must exist before ITO can proceed to exercise jurisdiction under Section 147(a) of Act. Under Section 147(b) Income-tax Officer also has jurisdiction to initiate proceedings for reassessment where he has reason to believe, on basis of information in his possession, that income chargeable to tax has been either under assessed or has been assessed at too low rate or has been made subject of excessive relief under Act or excessive loss or depreciation allowance has been computed. In either case whether Income-tax Officer invokes his jurisdiction under Clause (a) or Clause (b) or both, proceedings for bringing to tax 'escaped assessment' can only commence by issuance of notice under Section 148 of Act within time prescribed under Act. Thus, under Section 147, assessing officer has been vested with power to "assess or reassess" escaped income of assessee. use of expression "assess or reassess such income or recompute loss or depreciation allowance" in Section 147 after conditions for reassessment are satisfied, is only relatable to preceding expression in Clauses (a) and (b) viz. "escaped assessment". term "escaped assessment" includes both "non-assessment" as well as "under assessment". Income is said to have "escaped assessment" within meaning of this section when it has not been charged in hands of assessee in relevant year of assessment. expression "assess" refers to situation where assessment of assessee for particular year is, for first time, made by resorting to provisions of Section 147 because assessment had not been made in regular manner under Act. expression "reassess" refers to situation where assessment has already been made but Income-tax Officer has, on basis of information in his possession, reason to believe that there has been under assessment on account of existence of any of grounds contemplated by provisions of Section 147(b) read with Explanation (I) thereto." 1 7 . In yet another judgment of Supreme Court in M/s.Kundan Lal Srikishan, Mathura (U.P.) Vs. Commissioner of Sales Tax, U.P and another question considered was whether for purposes of limitation, date of order of assessment for year 1975-76 should be date of original assessment order, i.e., 07-02-1979 or whether it should be date of order passed under Section 21 of U.P. Sales Tax Act (15) 1948, i.e.18-01-1980 (for short Sales Tax Act )? In this case, original assessment order for year 1975-76 was passed on 07-02-1979. reassessment order under Section 21 of Sales Tax Act was passed on 18-01-1980. Thereafter, in 1982 assessee filed application under Section 22 for Assessment Years 1975- 76, 1976-77, 1977-78 and 1978-79 for rectification on ground that turnover in respect of purchases made on behalf of ex U.P. Principals had been wrongly assessed to sales tax. 17.1 Sales Tax Officer rejected all applications, whereas appellate authority allowed applications relating to Assessment Years 1976-77, 1977- 78 and 1978-79 and dismissed application for Assessment Year 1975- 76 on ground that application for rectification was barred by limitation. Sales Tax Tribunal allowed appeal filed by appellant/assessee for year 1975-76 on ground that application was within limitation, holding that original assessment order dated 07-02-1979 had ceased to exist on reopening of assessment and reassessment order being passed on 18- 01-1980. High Court set aside order of Tribunal holding that application for rectification of assessment for Assessment Year 1975-76 had been filed beyond three years from date of original order dated 07-02- 1979 and that order dated 18-01-1980 had no effect on ground of limitation. 17.2 Against this order, matter reached Supreme Court. Supreme Court set aside order of High Court and held that once notice is issued for purpose of making reassessment, earlier proceeding gets reopened and initial order of assessment ceases to be operative. effect of reopening assessment is to vacate or set aside initial order for assessment and to substitute in its place order made on reassessment. Supreme Court also observed that once assessment order had been rectified and it was sought to make further rectification of that order, period of limitation for making such further rectification would commence not from date of original assessment but from date of earlier rectification order. observations made by Supreme Court in concluding paragraph are relevant. Paragraph 9 of judgment reads thus:- 9. We do not find any merit in submission made on behalf of Department that order passed on 18-1-1980 should be understood as order discharging notice issued under S. 21 of Act and not order of reassessment as such. This is obvious from language of S. 21 itself. Section 21 authorises assessing authority to make order of assessment or reassessment. It says that if assessing authority has reason to believe that whole or any part of turnover of dealer, for any, assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at rate lower than that at which it is assessable under Act, or any deductions or exemptions have been wrongly allowed in respect thereof, assessing authority, may, after issuing notice to dealer and making such inquiry as it may consider necessary, assess or re-assess dealer or tax according to law. assessing authority gets jurisdiction to make reassessment by issuing notice to dealer as provided by S. 21 of Act. When once notice is issued under that section original order of assessment gets re-opened and thereafter any order made under S. 21 of Act alone would be order of assessment in respect of period in question. Section 21 of Act does not require assessing authority to pass order deciding whether it is necessary to proceed with inquiry under that section or not before passing order of assessment or reassessment under that section. only order which assessing authority is required to make under S. 21 after notice is issued to dealer under that section is order of assessment or reassessment. It is not required to pass first order whether it should proceed with reassessment proceedings or not. Such preliminary order is not contemplated under S. 21 of Act. Hence order dated 18- 1-1980 has to be treated as order of assessment even though it is not in form in which order of assessment has to be passed and not as order merely on question whether reassessment proceedings under S. 21 of Act should be proceeded with or not. In other words, it should be held that assessing authority had adopted earlier order as order of assessment passed at conclusion of proceedings under S. 21 of Act. period of limitation for application for rectification should, therefore, be calculated from date of order under S. 21 of Act. We cannot, therefore, subscribe to view of High Court expressed in its observation that since no fresh order of assessment had been passed after examining accounts of assessee original assessment order should be considered to remain intact as nothing is added or altered in pursuance of order under S. 21 of Act. (emphasis supplied) 18. In present case, assessment was reopened by issue of notice under Section 148 of Act on 20-10-2009 and re-assessment order was passed on 19.03.2010. Before that, assessment under Section 143 (3) was concluded vide order dated 26.03.2007. Having regard to position of Law settled by Supreme Court, effect of reopening assessment under section 148 would be to vacate or set aside initial order for assessment under Section 143(3) and to substitute in its place order made under Section 147 of Act. Therefore, initial order for reassessment would not survive even partially, although justification for reassessment arises in limited field or only with respect to part of matter covered by initial assessment order. In other words, once notice under Section 148 of Act is issued for purpose of making re-assessment, earlier proceedings get reopened and where re-assessment under Section 147 is done, initial order of assessment under Section 143 (3) ceases to be operative. Thus, result of reopening assessment under Section 148 is that fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of turnover escaping assessment. Apart from that, in present case, notice under Section 154 clearly states that order under Section 147 of Act made on 19-03-2010 requires amendment as there is mistake apparent from record and notice also referred to details of mistake. 19. difference between words any order in section 154 and words order in section 263 of Act would also have to be noticed and read to understand words any order to mean even order of re-assessment or amended/rectified order passed by Income-Tax authority. There cannot be any doubt that re-assessment order under Section 147 read with Section 148 of Act is also any order which could be rectified by issuing notice under Section 154 of Act. In other words, words any order in Section 154 (1) (a) of Act would mean even re- assessment order under Section 147 of Act. Merely because in case under Section 154, it is same Officer who invokes jurisdiction and in case under Section 263, it is superior Officer, would not mean or it cannot be stated that both expressions, any order and order , as occur in Sections 154 and 263 respectively would have same meaning. word clearly denotes specific order, while word any would mean any order passed by Income-Tax Authority. 20. In Hind Wire Industries Limited (supra), Supreme Court was dealing with provisions of Section 154 of Act, as has fallen for our consideration in present case, and in that case subject matter of re-assessment was distinct and different and that rectification sought was in respect of same subject matter which was considered in original assessment order. facts of our case are similar. Having regard thereto, in our opinion, present case, arising from notice under Section 154 of Act, is covered by judgment of Supreme Court in Hind Wire Industries Limited (supra) and so also other judgments referred to in foregoing paragraphs, in particular Kundan Lal Srikishan and H.R. Sri Ramulu (supra), and in view thereof we hold that doctrine of merger would apply to facts of present case. limitation, therefore, would start to run from date of re- assessment order dated 19.03.2010 and since notice under Section 154 was issued on 31.08.2012, it was well within time stipulated under sub- section (7) of Section 154 of Act. 21. Thus, we answer first question in negative. 22. Next, learned Senior Counsel for petitioners raised question whether issues, which are highly debatable could be subject matter of proceedings under Section 154 of Act. He submitted that jurisdiction under Section 154 of Act is extremely narrow and restrictive and could be exercised only to rectify any mistake apparent from record and obvious and patent mistake and not something which could be established by long drawn process and reasoning on points on which there may be conceivably two opinions. On other hand, learned counsel for Revenue submitted that question as raised by petitioners cannot be entertained in writ jurisdiction under Article 226 of Constitution of India unless action complained of is without jurisdiction. 23. notice under Section 154 of Act was issued on 31-08-2012 by 1st respondent. petitioners responded to it by exhaustive reply submitted by them on 17-09-2012. In reply, they raised all questions including questions raised before us. It is apparent from dates that reply was submitted by petitioners within time stipulated in notice dated 31-08-2012, and within less than three days therefrom instant writ petition was filed. questions whether mistake, pointed out in impugned notice is obvious and patent mistake, and whether to establish such mistake long drawn process and reasoning would require, in our opinion, cannot be and need not be gone into in writ jurisdiction under Article 226 of Constitution, when notice under Section 154 of Act would have to be decided on merits. It is true that jurisdiction under Article 226 of Constitution can be exercised in case where action complained of is without jurisdiction or is taken/initiated on assumption of power not vested in Officer. It is well settled that where exercise of power ex facie appears to be without jurisdiction, Court would be inclined to interfere but even in that case lack of jurisdiction would have to be revealed from notice and reasons on face thereof and not by discussion on merits. Challenge to notice under Section 154 of Act, in present case, is not on ground of jurisdiction or assumption of power not vested in authority. petitioners have already filed their objections, which respondent No.1 will have to decide, after following due procedure and taking into consideration reply filed by petitioners, by passing speaking order. 1st respondent is bound to furnish reasons for deciding notice and deal with all contentions urged by petitioners in their reply. In circumstances, we are not inclined to entertain second question raised for our consideration, and we keep all contentions of parties, in respect thereof, open to be considered by 1st respondent. It is always open to petitioners to challenge order, if adverse to them, in appropriate proceeding raising all contentions/questions of law for consideration. In this view of matter, even submission that writ petition cannot be dismissed on ground of alternative remedy deserves no consideration and must be rejected. 24. In result, writ petition is dismissed. However, there shall be no order as to costs. 25. Miscellaneous petitions pending in writ petition, if any, also stand disposed of. __________________ Dilip B.Bhosale, J ________________________ A.Ramalingeswara Rao, J 15th April, 2015. Tsnr L.R. Copy to be marked : Yes / No Rastriya Ispat Nigam Limit v. Asst. Commissioner of Income Tax & another