Rectification limitation and merger: later rectification on a different issue was time-barred and quashed.

For rectification under section 37 of the Karnataka Agricultural Income-tax Act, the limitation period was governed by the provision in force when rectification was initiated, provided the amended period had begun before the earlier period expired. The substituted five-year limit applied to commencement of rectification proceedings, so a notice issued in time remained valid even if the rectification order was passed later. The doctrine of merger was held inapplicable to rectification by the same authority because rectification amends the original order rather than replacing it. A later rectification on a different subject-matter runs from the original assessment order, not the first rectification. On that basis, the later rectification notices and orders were time-barred and quashed.

---

---

Issues: Whether the subsequent rectification proceedings under section 37 of the Karnataka Agricultural Income-tax Act, 1957 were barred by limitation, and whether the first rectification order caused the original assessment order to merge so as to extend the limitation period for later rectifications.

Analysis: The limitation provision governing rectification was held to be the one in force when rectification proceedings were initiated, so long as the amended provision came into force before the earlier limitation period expired. On the language of the substituted section 37, the five-year period was held to govern initiation of rectification proceedings, not the passing of the rectification order; once notice seeking rectification was issued within time, the order could be passed thereafter. The doctrine of merger was held inapplicable to rectification orders passed by the same authority, because rectification amends the original order rather than replacing it. A later rectification can be counted from the first rectification only when it concerns the same subject-matter; where the later rectification concerns different matters, limitation runs from the original assessment order.

Conclusion: The later rectification proceedings, relating to matters different from the first rectification, were time-barred when computed from the original assessment orders, and the plea of merger was rejected.

Final Conclusion: The impugned rectification orders were quashed because the subsequent notices and orders were initiated beyond the permissible period of limitation.

Ratio Decidendi: For rectification by the same authority, an order of rectification does not merge with the original order; limitation for a later rectification on a different issue runs from the original order, and timely initiation of rectification proceedings is sufficient even if the order is passed later.

---