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TMI Blog2008 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 challenging the said order under section 154 as well as the revisional order. 2 The assessee filed its return for the year 1991-92 disclosing income of Rs. 2,76,306 on December 30, 1991, whereafter it was duly assessed under section 143(1) (a) and by order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 longer available since the very order which was sought to be corrected or rectified, had already merged in the appellate order passed by the Com missioner of Income-tax (Appeals) and on the ground that the notice did not specifically point out as to where exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. [1987] 166 ITR 454. 8 In the judgment rendered by the Madras High Court in CIT v. Sundaram Textiles Ltd. [1984] 149 ITR 525 their Lordships came to hold that it is "only in the case where a particular item is dealt with in appeal"that the Income-tax Officer cannot deal with that ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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 learned standing counsel for the Revenue, it is clear that the aforesaid judicial pronouncements laid down the principle that the doctrine of merger does come to play in so far as items considered and decided by the Commissioner or in a case where a particular item is dealt with by the appellate/ revisional autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 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 petitioner assessee was not originally liable for any interest under section 234B under the orders passed against it under section 143(1). Thereafter, when the regular assessment under section 143(3) was initiated and the income of the assessee was enhanced and "additional income-tax" became payable, no question of levy of interest for "non-payment of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned. 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 of any challenge permitting the Assessing Officer to vary or review or revise his own order under a plea of correcting the mistake as contemplated under section 154 is to in effect allow him to override or overreach the order passed by the higher authorities in appeal or revision. This is clearly not the intention of legislation of section 154(1A) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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