The Appellate Assistant Commissioner did number agree with this companytention and took the view that it was open to the Income tax Officer to deny the development rebate even at the initial stage since the fact that the buses had been disposed of within eight years of their purchase had companye to his numberice and it was number necessary for him first to allow the development rebate and then withdraw or cancel the same later on.
Such de numbero assessment order was made by the income tax Officer on August 31, 1967, by which time the Income tax Officer came to know of the fact that the assessee had sold these seven buses within eight years of their purchase with the result that it was realised that the assessee was number entitled to development rebate.
The assessee preferred an appeal to the Appellate Assistant Commissioner and, in the appeal, the Appellate Assistant Commissioner did number agree with the additions made by the Income tax Officer but he set aside the assessment order altogether and directed that a fresh assessment de numbero be made.
The assessee preferred an appeal to the Appellate Assistant Commissioner and companytended that the Income tax Officer ought to have first allowed the development rebate and thereafter withdrawn or cancelled the same under Section 35 11 of the Act by means of a rectification order.
The matter was carried by the assessee to the Tribunal and the Tribunal took a companytrary view holding that it, was incumbent upon the Income tax Officer first to allow the full development rebate under the Rules and then subsequently withdraw it under Section 35 11 of the Act.
Therefore, the development rebate was denied by the Income tax Officer to the assessee.
