Doctrine of merger bars revision where the same section 80IC deduction issue was already decided on appeal.

The Tribunal held that revision under section 263 could not be invoked on an issue of 100% deduction under section 80IC for substantial expansion where the same question had already been decided in appeal for the same assessment year. Once the Tribunal had conclusively determined the subject matter, the assessment order and appellate order merged with that decision, barring the revisional authority from reopening the identical issue. The section 263 action was therefore held invalid and quashed.

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Issues: Whether the Principal Commissioner could invoke revisional jurisdiction under section 263 after the Tribunal had already decided the same issue of deduction under section 80IC in the assessee's favour for the same assessment year, thereby attracting the doctrine of merger.

Analysis: The same controversy regarding eligibility for 100% deduction under section 80IC on account of substantial expansion had already been examined by the Tribunal for the relevant assessment year. Once the Tribunal had conclusively ruled on that subject matter, the assessment order and the appellate order stood merged with the Tribunal's decision. In such a situation, the revisional authority could not reopen the identical issue under section 263, since the matter had already been considered and decided in appeal.

Conclusion: The invocation of section 263 was held to be invalid and was quashed.

Ratio Decidendi: Where the subject matter of revision has already been considered and decided in appeal, the doctrine of merger bars exercise of revisional jurisdiction under section 263 on the same issue.

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