Merger doctrine in income tax bars revision of assessment matters already covered by appellate orders, including interest adjustments.

The appellate jurisdiction of the Appellate Assistant Commissioner extends to matters arising from assessment proceedings, including interest charged or omitted under sections 139(8) and 217. Those matters form part of the assessment process and are not treated as separate for merger purposes. Accordingly, the appellate order displaces the original assessment order to the extent of the appellate authority's competence, and the Commissioner cannot revise that merged portion under section 263. The Explanation to section 251 supports consideration of any matter arising from the proceedings, and later decisions on different statutory settings do not alter this merger principle.

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Issues: Whether the orders of assessment for the relevant assessment years, including the deemed orders relating to interest under sections 139(8) and 217, had merged in the appellate orders of the Appellate Assistant Commissioner so as to bar revision under section 263 of the Income-tax Act, 1961.

Analysis: The appeal jurisdiction of the Appellate Assistant Commissioner is of the widest amplitude and extends to matters arising from the assessment proceedings, even if not specifically raised by the assessee. Interest charged or omitted to be charged under sections 139(8) and 217 forms part of the assessment process and is not a separate, insulated matter for the purpose of merger. The earlier authority on merger under the income-tax law was treated as continuing to hold the field, and the later cases relied upon by the Revenue were distinguished as turning on different statutory settings and different subject-matters. The Explanation to section 251 reinforced that the appellate authority could consider any matter arising out of the proceedings, and the appellate order therefore displaced the original assessment order to the extent it was within appellate competence.

Conclusion: The orders of assessment, including the deemed orders regarding interest, had merged in the appellate orders, and the Additional Commissioner had no jurisdiction to invoke section 263.

Ratio Decidendi: Where the appellate authority has jurisdiction to examine a matter arising out of the assessment proceedings, the original assessment order merges in the appellate order to that extent, and the Commissioner cannot revise that merged part under section 263.

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