Rectification limitation under income-tax law runs from the final operative assessment order, not from an earlier reconsideration direction.

For rectification under section 35(5) of the Indian Income-tax Act, 1922, limitation runs from the final operative assessment order that actually concludes the matter, not from an earlier order that merely directs reconsideration or further effect. An order passed by the Income-tax Officer giving effect to the Commissioner's directions under section 33A(2) was treated as a fresh assessment order because it was the final unchallenged order in the case. On that basis, the rectification made within four years of that final order was within time, and the limitation objection based on the earlier assessment or the Commissioner's order was rejected.

---

---

Issues: Whether the rectification order under section 35(5) of the Indian Income-tax Act, 1922 was barred by limitation, having regard to the order passed by the Income-tax Officer giving effect to the Commissioner's directions under section 33A(2).

Analysis: The limitation under section 35(5) runs from the date of the assessment order or the date of the final order passed in appeal, revision or reference. The Commissioner's order under section 33A(2) did not itself conclude the assessment but directed the Income-tax Officer to re-examine the accounts and modify the assessment accordingly. The later order passed by the Income-tax Officer, though described as consequential, was in substance a fresh assessment order and became the final order in the case because it was not appealed against or revised. Since the rectification order was made within four years of that final order, it was within time. The contention that the Commissioner's order or the earlier assessment order should be treated as the starting point for limitation was rejected.

Conclusion: The rectification order was not barred by limitation and was valid.

Ratio Decidendi: For the purpose of section 35(5) of the Indian Income-tax Act, 1922, limitation for rectification is computed from the date of the final operative assessment order actually concluding the matter, and not from an earlier order that merely directs reconsideration or further effect to be given.

---