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Issues: (i) Whether withdrawal of the surtax-related ground before the appellate authority prevented merger of the assessment order and left the Commissioner with jurisdiction to revise the original assessment under section 16 of the Companies (Profits) Surtax Act, 1964; (ii) Whether the Tribunal was justified in cancelling the Commissioner's revisional order under section 16 of the Companies (Profits) Surtax Act, 1964.
Issue (i): Whether withdrawal of the surtax-related ground before the appellate authority prevented merger of the assessment order and left the Commissioner with jurisdiction to revise the original assessment under section 16 of the Companies (Profits) Surtax Act, 1964.
Analysis: The assessment order merges only to the extent an issue is actually carried in appeal and dealt with by the appellate authority. Where a ground is withdrawn or not pressed, it is treated as not having been effectively adjudicated in appeal, so there is no appellate order on that point and no merger for that part of the assessment.
Conclusion: The Commissioner retained jurisdiction to revise the original assessment; the assessment did not merge with the appellate order on the withdrawn ground.
Issue (ii): Whether the Tribunal was justified in cancelling the Commissioner's revisional order under section 16 of the Companies (Profits) Surtax Act, 1964.
Analysis: Since the withdrawn ground did not form the subject-matter of an effective appellate decision, the revisional power remained available. The Tribunal's cancellation of the revisional order proceeded on an incorrect application of the merger doctrine.
Conclusion: The Tribunal was not justified in cancelling the Commissioner's order under section 16 of the Companies (Profits) Surtax Act, 1964.
Final Conclusion: The reference was answered against the assessee and in favour of the Revenue on both questions, upholding the Commissioner's revisional jurisdiction.
Ratio Decidendi: Merger of an assessment order with an appellate order occurs only to the extent the disputed matter is actually pressed and decided in appeal; a withdrawn or not pressed ground does not bar revision of that part of the assessment.
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