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Issues:
1. Jurisdiction of the Commissioner of Income-tax under section 263 of the Income-tax Act. 2. Merger of assessment orders in the appellate order. 3. Applicability of the rule of primogeniture. Detailed Analysis: 1. The judgment addresses the jurisdiction of the Commissioner of Income-tax under section 263 of the Income-tax Act for the assessment years 1968-69, 1969-70, and 1970-71. The Commissioner set aside the assessment orders, deeming them prejudicial to the Revenue's interests, and directed fresh assessments. The main contention was whether the orders of the Income-tax Officer merged with the Appellate Assistant Commissioner's order, thereby limiting the Commissioner's jurisdiction. The Income-tax Appellate Tribunal held that since the assessments were disposed of by the Appellate Assistant Commissioner before the Commissioner's intervention, the Commissioner lacked jurisdiction under section 263. However, the High Court disagreed, citing previous case law and emphasizing that only the part of the assessment not subject to appeal and examination by the Appellate Assistant Commissioner would not merge, allowing the Commissioner to act under section 263. 2. The issue of merger of assessment orders in the appellate order was crucial in determining the Commissioner's jurisdiction. The Tribunal's view that there was a merger and thus the Commissioner lacked jurisdiction was deemed incorrect by the High Court. The High Court clarified that as long as the issues before the Appellate Assistant Commissioner were different from those considered by the Commissioner, there was no merger of the orders. Therefore, the Commissioner had the authority to set aside the orders under section 263. The High Court's decision favored the Department, establishing that the orders of the Income-tax Officer had not merged with the Appellate Assistant Commissioner's order, thereby upholding the Commissioner's jurisdiction to revise the assessments. 3. The judgment also briefly touched upon the applicability of the rule of primogeniture, which was a point of contention raised by the Commissioner of Income-tax. The Tribunal had decided this issue on its merits, but the High Court noted that since this specific question was not referred by the Income-tax Appellate Tribunal, no decision could be given on it. The High Court emphasized that the Tribunal's decision on the rule of primogeniture had become final due to the lack of a separate question referred to the court. The Income-tax Officer was directed to abide by the Tribunal's decision on this point, while being allowed to address other issues in accordance with the law after hearing the assessee. In conclusion, the High Court's judgment clarified the jurisdiction of the Commissioner of Income-tax under section 263, the concept of merger of assessment orders, and the handling of specific issues like the rule of primogeniture within the context of the Income-tax Act.
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