9911796707
TMI Blog1993 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1961-62. The assessments were made under the Indian Income-tax Act, 1922 (hereinafter referred to as "the Act"). The status of the assessee is a Hindu undivided family. The assessments were subsequently reopened under section 147(a) on February 28, 1977. For each of the three assessment years, the Income-tax Officer added a sum of Rs. 80,000 as concealed income. On appeal by the assessee, the Appellate Assistant Commissioner, by his order dated April 29, 1978, reduced the additions to Rs. 55,700, Rs. 55,100 and Rs. 50,800, respectively. A further appeal before the Tribunal resulted in a further reduction and the addition was fixed at Rs. 41,767, Rs. 41,198 and Rs. 34,969, respectively. In the assessments, the Income-tax Officer omitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Assistant Commissioner's order and so, the Income-tax Officer would not be competent to rectify the reassessment orders under section 154(1) unless section 154(1A) is applied. The Tribunal also found that section 154(1A) which was introduced with effect from October 6, 1964, has no application to the case. The case of the Department that section 154(1A) was only procedural law was rejected by the Tribunal holding that the section was a substantive provision of law which had no retrospective effect. Ultimately, the Tribunal found that the Income-tax Officer has no jurisdiction and power to rectify the reassessment orders and cancelled the same, allowing the assessee's appeals. On the above facts, the Tribunal wanted this court to decide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing slightly different and conflicting views on the matter, this court followed the decision in Karsandas Bhagwandas Patel. v. G. V. Shah [1975] 98 ITR 255 (Guj). In CIT v. Tejaji. Farasram Kharawala [1953] 23 ITR 412 (Bom), Chagla C. J., speaking for the Division Bench, observed that (at page 418) : " Once an appeal was preferred from the order of the Income-tax Officer and an order was passed in that appeal, the order of the Income-tax Officer became merged in the order of the Appellate Assistant Commissioner". This decision was followed in CIT v. Amritlal Bhogilal and Co. [1953] 23 ITR 420 (Bom), where it was held that even when a composite order of the Income-tax Officer dealt with the assessment and also the grant of registration to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merger of the original order only in regard to matters of assessment and not registration. There can be only a partial merger of the order on which the appellate authority has made its decision. The Supreme Court after referring to CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130, observed (at page 739 of 172 ITR) : "But 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 the inferior tribunal, and the other by a superior tribunal, passed in an appeal or revision, there is a fusion or merger of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be noted that Karsandas Bhagwandas Patel v. Shah (G. V), ITO [1975] 98 ITR 255 (Guj), dealt with a question of rectification. It has to be noted that those items not forming the subject-matter of the appellate order remain untouched by the appellate authority and will always remain the decision of the first authority the Income-tax Officer and if that part is erroneous since it is an error of the Income-tax Officer, he retains the power to rectify it de hors the fact that the assessment was challenged in appeal. Of course, for rectification, the mistake or error must be apparent from the order of assessment. In this case. there is no dispute as regards the question of adding super-tax. It was omitted to be included in the assessment order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Saju Thomas [1991] 189 ITR 488. Counsel for the assessee, we would say, on justifiable grounds, did not challenge the correctness of the decisions in CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733 (Ker), CIT v. S. Ratnam Pillai [1991] 188 ITR 494 (Ker) and CWT v. Saju Thomas [1991] 189 ITR 488 (Ker), but he brought to our notice the following passages from the Law and Practice of Income Tax by Kanga and Palkhivala. A decision on a debatable point of law or failure to apply the law to a set of facts which remain to be investigated cannot be corrected by way of rectification. If the rectification was made at a time when the issue was debatable, it cannot be supported by reference to the Supreme Court's decision settling the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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