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TMI Blog2018 (11) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... id, the assessee would revert back to the situation where he originally stood, i.e. the original assessment order would revive. The doctrine of merger would have no application in the present case as the subsequent order was held to be unsustainable in law. The said doctrine would apply only in a situation where the subsequent reassessment order has been held to be valid in law. The Tribunal had rightly held that where the reassessment order was annulled, the original assessment order would automatically get restored. No substantial question of law - ITA-301-2015 (O&M) - - - Dated:- 22-10-2018 - MR AJAY KUMAR MITTAL AND MR AVNEESH JHINGAN, JJ. For The Appellant : Mr. Sanjay Ghalawat, Advocate for Mr. Rohit Sud, Advocate For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 30.9.2008 declaring Nil income. The assessment was completed under Section 143(3) of the Act by the Assessing Officer vide order dated 8.12.2010 (Annexure A-1) by making an addition of 11,00,000/-. Feeling aggrieved by the said order, Annexure A-1, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT (A) ]. During the pendency of the said appeal, the assessment was reopened under Section 147 of the Act by the Assessing Officer. Vide reassessment order dated 18.3.2013 (Annexure A-2), the Assessing Officer assessed the income of the assessee at 7,45,80,229/-. Against the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 148 of the Act and bring the escaped income or other income to tax which had been found taxable during such reassessment proceedings. It is clarified that in the reassessment proceedings, the income which had already been determined or assessed to tax is also added to the escaped income. If the reassessment proceedings were held to be invalid by the Tribunal or a Court of Law, in that situation, it cannot be held that the original assessment stands obliterated. In other words, if the initiation of reassessment proceedings is held to be invalid, the assessee would revert back to the situation where he originally stood, i.e. the original assessment order would revive. The doctrine of merger would have no application in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was referable of the purchase of machinery etc. as revenue expenditure. The assessee filed an appeal in respect of item for which the additions were made. Later on an order u/s 263 was passed in respect of allowance of above three items. Therefore, the question arose before the Hon'ble Supreme Court whether these three items merged with the appellate order. The Hon'ble supreme Court observed as under:- We may refer to the amendment made in Section 263 of the IT Act by the Finance Act, 1989 with retrospective effect from June 1, 1988. The relevant part thereof for the present case is as under: Explanation for the removal of doubts, it is hereby declared that, for the purposes of this sub-section- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dran Finance Ltd. (supra) . 19. If the contention of the assessee is accepted then it would lead to totally undesired wild results. For example if the assessee files return declaring income of 1 crore and an addition of 25 lakhs is made then the assessed income would be 1.25 crores u/s 143(3). Let us say later on an item of income is found to have escaped for 10 lakhs and notice is issued u/s 148 to bring such item of escaped income into tax and in reassessment order income assessed at 1.35 crores. Let us further say that such reassessment is found without jurisdiction later on in appeal proceedings because of non recording of reasons or the issue is time barred and such reassessment is annulled. Then if it is held that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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