TMI Blog1992 (11) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ment framed by the Income-tax Officer is heard and decided by the Appellate Assistant Commissioner ? In other words, is section 263 of the Act rendered inapplicable upon the Appellate Assistant Commissioner deciding the assessee's appeal under section 143(3) of the Act ? Herein lies the controversy raised. The matter here pertains to the assessment year 1975-76. On February 23, 1977, the Income-tax Officer completed the assessment of the assessee, the Punjab State Civil Supplies Corporation Limited, under section 143(3) of the Act. The assessee appealed against this order which was decided by the Appellate Assistant Commissioner on April 6, 1978, whereby the assessment as framed by the Income-tax Officer was modified. Almost year later, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be seen that the matter in issue here pertains to the doctrine of merger. In dealing with this doctrine, the Supreme Court in State of Madras v. Madurai Mills Co. Ltd. [1967] 19 STC 144, 149 ; AIR 1967 SC 681, 683, observed as under : " The doctrine of merger is not a doctrine of rigid and universal application, and it cannot be said that wherever there are two orders, one by an inferior Tribunal and the other by a superior Tribunal, passed in an appeal or revision, there is a fusion or merger of the two orders irrespective of the subject matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. " Next to note is CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate jurisdiction conferred upon the Appellate Assistant Commissioner under section 251 of the Act, extends to confirmation, reduction, enhancement or annulment of the assessment. It was, accordingly, held that, in view of the scope and nature of the appellate powers, the entire subject matter of the assessment order was within the jurisdiction of the Appellate Assistant Commissioner and that being so, the entire assessment order would merge in the appellate order irrespective of the points urged by the parties or decided by the appellate authority. Further, that from the point of view of the applicability of the doctrine of merger, the fact that some points decided by the inferior authority were or were not canvassed before the superi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner any matter dealing with the assessment of the assessee. It is not as if the power of the Appellate Assistant Commissioner was confined only to those questions which had been raised before him by the assessee. He has the widest jurisdiction. The Commissioner has no right of appeal from an order of assessment passed by the Income-tax Officer. The right of appeal is confined to the assessee only and until section 33B of the 1922 Act was enacted, the position in law was that if the assessee did not appeal against the order of assessment, that order became final and conclusive. If the assessee appealed against the order of the Incometax Officer, the widest jurisdiction was given to the Appellate Assistant Commissioner in appeal. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or were left untouched by it permits the exercise of revisional jurisdiction by the Commissioner under section 263 of the Act. Instances where this view has been propounded are to be found in CIT v. R. S. Banwarilal [1983] 140 ITR 3 (MP) [FB] ; CIT v. Mandsaur Electric Supply Co. Ltd. [1983] 140 ITR 677 (MP) [FB] ; Puthuthotam-Estates (1943) Ltd. v. State of Tamil Nadu [1980] 125 ITR 41 (Mad) Karsandas Bhagwandas Patel v. G. V. Shah, ITO [1975] 98 ITR 255 (Guj) Premchand Sitanath Roy v. Addl. CIT [1977] 109 ITR 751 (Cal) ; Singho Mica Mining Co. Ltd. v. CIT [1978] 111 ITR 231 (Cal) and CIT v. City Palayacot Co. [1980] 122 ITR 430 (Mad). It was the importance and complexity of the issue raised and the conflict of judicial precedents with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order is only that part of the order of the Income-tax Officer under section 143 of the Act as was the subject-matter of the appeal and no more. Immunity from proceedings tinder section 263 of the Act, thus, is restricted to this extent. Mr. B. S. Gupta, senior advocate, counsel for the assessee, on the other hand, sought to press in aid the judgment of the High Court of Bombay in Ritz Ltd. v. Union of India [1990] 184 ITR 599, where, in dealing with the amendment to Explanation (c) of section 263(1), by the Finance Act of 1989, it was held that it is only in cases where action under section 263 is taken after June 1, 1988, that merger of the assessment order is to be treated as confined to the issues actually considered and decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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