Merger of assessment with appellate order barred section 263 revision, and the show-cause notice was quashed.

The revisional jurisdiction under section 263 of the Income-tax Act could not be invoked where the original assessment order had already merged with the appellate order. On that jurisdictional basis, the Calcutta HC held that the assessment order no longer survived for revision, so the show-cause notice issued under section 263 was unsustainable in law and was quashed. As the merger issue was dispositive, the other grounds raised in the notice were treated as academic and were not examined.

---

---

Issues: Whether the show-cause notice issued under section 263 of the Income-tax Act, 1961, was liable to be quashed on the ground that the original assessment order had merged with the appellate order and therefore could not be revised.

Analysis: The notice was challenged as lacking jurisdiction because the assessment order had already been carried in appeal and had merged with the order of the appellate authority. Once such merger took place, the revisional power under section 263 could not be invoked against the non-existent original assessment order. In view of this jurisdictional defect, the other points mentioned in the notice did not require adjudication and became academic.

Conclusion: The show-cause notice under section 263 was held to be unsustainable in law and was quashed.

---