TMI Blog2008 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 1991-92, inter alia, exercising his power under section 154(1A) purportedly seeking to revise the depreciation earlier allowed to the assessee and seeking to levy interest under section 234B (allegedly on the ground of having omitted to make such levy at the time of passing the order under section 143(3)) and therefore, seeking to rectify the aforesaid mistake by passing the impugned rectification order under section 154 and raising an additional demand of Rs. 9,89,700. The assessee being aggrieved by such order, filed a revision under section 264 of the Act before the Commissioner of Income-tax, Orissa, and the revision having been rejected vide order dated February 28, 1996, the present writ application has been filed challengin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,000 was directed by the Commissioner of Income-tax (Appeals). 3 Learned counsel for the petitioner, however, submitted that instead of complying with the direction of the Commissioner of Income-tax (Appeals) and passing consequential order implementing the said directions as required in law, the Assessing Officer issued a notice to the petitioner under section 154 asking for compliance and show-cause as to why (1) non-levy of interest under section 234B at the time of assessment under section 143(3), and (2) excess deduction allowed on account of depreciation (should not be rectified). 4 Pursuant to the said show-cause notice, the assessee filed its objections, inter alia, on the ground that the proposed section 154 action was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king correction in orders even though such orders have been carried by way of appeal or revision and that the Assessing Officer remained competent to amend the order passed by him under section 143(3). The only limitation to such power or authority is to the effect that such rectification would be carried out in relation " to any matter other than the matter which has been considered and decided" in appeal or revision. Shri Mohapatra, therefore, while placing reliance on the aforesaid provision of law also placed reliance upon a judgment of the Madras High Court in the case of CIT v. Sundaram Textiles Ltd. [1984] 149 ITR 525 and on a decision of the Karnataka High Court in the case of Add!. CIT v. India Tin Industries P. Ltd. [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive of the subject-matter of the appeal. The order of assessment made by the Income-tax Officer merges in the order of the Commissioner in so far as it relates to items considered and decided by the Commissioner. That part of the order of assessment, which relates to items not forming the subject-matter of the appellate order and left untouched, does not merge in the order of the Commissioner. Even after an appeal from an order of assessment is decided by the Commissioner, a mistake in that part of the order of assessment which was not the subject-matter of the appeal and was thereafter left untouched by the Commissioner, can be rectified by the Income-tax Officer. 10 On consideration of the aforesaid judgments relied upon by lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income determined under sub-section (1) of section 143 on regular assessment. In the present case, originally, an order under section 143(1) was passed against the assessee in which the assessee's return was accepted and certain amount was found to be refundable. Thereafter, exercising power under section 143(3), a regular assessment took place enhancing the assessed tax determined to be payable by the assessee. Explanation 3 provides that in Explanation 1 and in sub-section (3) "tax on the total income determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143. Therefore, in view of the aforesaid Explanation , it is clear that the present petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder by rejecting the same. Therefore, in so far as depreciation is concerned, it is clear that the appellate order merged with the original order under section 143(3) and since the issue regarding depreciation formed a part of the subject-matter of the appellate order and therefore, the doctrine of merger would apply in so far as depreciation is concerned. 14 Placing reliance on the two judgments referred to above, it would be clear that permitting the Assessing Officer to exercise power under section 154 in the matters which have already been carried in appeal, would lead to judicial anarchy. If the Revenue in any manner was dissatisfied, it was open to it to challenge the same in the second appeal before the Tribunal. In the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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