Merger of assessment order and identical facts led to an infructuous section 146 challenge and dismissal of the departmental appeal.

An assessment made under section 144 merged into the Appellate Assistant Commissioner's order, so the assessee's pending application under section 146 no longer survived as an effective remedy and became infructuous. On the merits, the departmental challenge to deletion of the estimated income failed because the relevant facts were indistinguishable from those considered in the Tribunal's earlier order for the immediately preceding assessment year. Following that prior view, no basis was found to disturb the appellate relief, and the department's appeal was dismissed.

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Issues: (i) Whether the assessee's application under section 146 had become infructuous on account of merger of the assessment order in the appellate order of the Appellate Assistant Commissioner. (ii) Whether the departmental appeal challenging deletion of the estimated income could succeed on merits.

Issue (i): Whether the assessee's application under section 146 had become infructuous on account of merger of the assessment order in the appellate order of the Appellate Assistant Commissioner.

Analysis: The assessment had been made under section 144, but the assessment order had merged in the order of the Appellate Assistant Commissioner from which the present appeal arose. In that situation, the pending application under section 146 could no longer survive as an effective remedy.

Conclusion: The application under section 146 had become infructuous.

Issue (ii): Whether the departmental appeal challenging deletion of the estimated income could succeed on merits.

Analysis: The facts relevant to the assessment year in question were found to be indistinguishable from those considered in the Tribunal's earlier order for the immediately preceding assessment year. Following that earlier decision, no basis was found to interfere with the Appellate Assistant Commissioner's relief.

Conclusion: The departmental appeal was dismissed on merits.

Final Conclusion: The assessee's relief was sustained and the department's challenge failed both on the procedural issue and on the merits.

Ratio Decidendi: Where an assessment order has merged in the appellate order, a pending challenge to the original assessment becomes infructuous, and a later appeal may be dismissed on merits when the material facts are covered by an earlier binding view on identical facts.

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