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TMI Blog1986 (10) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the Income-tax Officer's order had merged with the order of the Appellate Assistant Commissioner and, therefore, the Commissioner was not competent to revise the order under section 263 of the Income-tax Act, 1961 ? " The material facts giving rise to this reference briefly are as follows The assessee, who was assessed in the status of an individual, carried on the business of a contractor. The assessee also derives income from plying trucks. While framing the assessment for the assessment year 1973-74, the Income-tax Officer estimated the income of the assessee from P.W.D. contracts by applying a net profit rate of 15%. The Income-tax Officer also allowed depreciation on the cost of the truck purchased on hire purchase basis. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by the Tribunal, the Revenue sought reference and it is at the instance of the Revenue that the aforesaid question of law had been referred to this court for its opinion. When this reference came up for hearing before a Division Bench of this court on April 7, 1983, it was urged by learned counsel for the parties that there was a conflict between the two Full Bench decisions of this court in CIT v. R. S. Banwarilal [1983] 140 ITR 3 (MP) and CIT v. Mandsaur Electric Supply Co. Ltd. [1983] 140 ITR 677 (MP). It was in these circumstances that a larger Bench was constituted for hearing this reference. That is how the matter has come up before us for consideration. At the time of hearing, learned counsel for the parties conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act (at p. 15) : " The result, therefore, is that the doctrine of merger applies to income-tax proceedings but the extent of its application depends on the scope and subject-matter of the appeal and the decision rendered by the appellate authority. Where an appeal has been preferred by the assessee to the Appellate Assistant Commissioner from an order of assessment made by the Income-tax Officer in respect of only some of the items covered by the Income-tax Officer's order and the remaining items, forming part of the Income-tax Officer's assessment order, were not agitated by either party, though it was open also to the Revenue to agitate them or the Appellate Assistant Commissioner to consider them suo motu and no decision of the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to set aside the entire order of assessment, because in doing so, the Commissioner, in effect, disturbs the order of the Appellate Assistant Commissioner which he has no jurisdiction to do. In our opinion, therefore, whenever a question arises as to whether the Commissioner is or is not competent to revise under section 263 of the Act, the order of assessment framed by the Income-tax Officer which has been the subject-matter of appeal before the Appellate Assistant Commissioner, it has to be ascertained as to whether the Commissioner has set aside the entire order of assessment or only that part of the order of assessment which was not the subject-matter of an appeal either because the Appellate Assistant Commissioner had no jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so that only that part of the order of assessment passed by the Income-tax Officer which was not touched by the Appellate Assistant Commissioner, would be set aside. This aspect of the matter, however, as to whether, in the circumstances of the case, the Tribunal could or could not modify the order passed by the Commissioner does not arise out of the order passed by the Tribunal and a question in that behalf has not been referred to us. We, therefore, refrain from expressing any opinion in that behalf. The only question which arose before the Tribunal and which arises in this reference is whether, in the circumstances of the case, the Tribunal was right in holding that the Commissioner was not justified in setting aside the entire order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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