1982 (7) TMI 109

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..... ical Compressors and Stone Crushing Machinery. This order had become the subject-matter of appeal before the Commissioner (Appeals) and this Tribunal. When the matter was pending before this Tribunal, the Commissioner was of the opinion that the depreciation allowed on Tower Crane at 30 per cent, as claimed by the assessee, was erroneous. He, therefore, issued notice under section 263. The assessee objected to the jurisdiction of the Commissioner on the ground that the order of the ITO has merged with the order of the Commissioner (Appeals). The assessee had also relied upon the decision of the Karnataka High Court in the case of Vijayalakshmi Lorry Service [ITRC No. 77/73 dated 17-9-1975]. The Commissioner, however, chose to follow a decis .....

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..... by the Karnataka High Court in the case of Thalibai F. Jain v. ITO [1975] 101 ITR 1, besides, he merely restored the matter to the ITO to consider the matter afresh. He, therefore, argued that the assessee was not really prejudiced if it had a case on merits. As for merger theory, he claimed that the decision of the Karnataka High Court in Thalibal's case, has not been accepted and argued that the Supreme Court has already held that the doctrine of merger is not of universal application in a sales tax case in State of Madras v. Madurai Mills Co. Ltd. [1967] 1 SCR 732. 4. We have carefully considered the records as well as the arguments. We find that it is not in dispute that the Karnataka High Court decision in the case of Vijayalakshmi .....

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..... taka High Court in Thalibai's case the assessee is entitled to succeed on the question of jurisdiction. In the view we have taken, it is not necessary to go into the further questions whether there was any justification in the records for presuming prejudice to the revenue or whether the Commissioner was really justified in taking the view that the matter called for further investigation, as to whether the assessee was eligible for higher rate of depreciation at 30 per cent. We do not go into these questions and allow the appeal on the simple ground that the order of the ITO had merged with the order of the first appellate authority and, subsequently, that of the Tribunal and, therefore, not available for action under section 263 even in re .....

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