1997 (1) TMI 35

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.... facts and in the circumstances of the case, the Tribunal was justified in its finding that the order passed by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, was without jurisdiction?" Against an order of assessment passed by Sri N. K. Shukla, Income-tax Officer Ward-B, Muzaffarpur, in respect of the assessee-firm for the assessment year 1977-78, the firm preferred an appeal before the Commissioner of Income-tax (Appeals). In the said appeal various points were taken, namely, disallowance of Rs. 1,000 out of packing charges, disallowance of Rs. 2,143 being the amount paid to Jai Chandars, disallowance of Rs. 1,000 on account of transport charges and disallowance of depreciation to the tune of one-third of ....

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....d Act, set aside the said order of assessment. That order of the Commissioner is, however, not on record. Admittedly, the assessee filed an appeal before the Appellate Tribunal against the said order of the Commissioner and the Tribunal held that the order of the Income-tax Officer merged with the order of the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax had no jurisdiction to pass orders under section 263 of the said Act in respect of the assessment order. This court finds that the Tribunal is obviously wrong. The Commissioner of Income-tax (Appeals) did not decide the controversy itself but sent it on remand to the Income-tax Officer for a de novo hearing and passing of a fresh order. Then a different Income-....

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....ion, has held that the principle of merger does undoubtedly apply to income-tax cases, but the same will apply only where a decision reached by an inferior authority has been reversed, modified or even confirmed by the appellate authority. But the said principle will not apply where a decision of an inferior authority does not come in for consideration by the appellate authority and there is no decision of the appellate authority either by way of affirmance or by way of reversal or modification on the point decided by the inferior authority. It has been further elucidated by saying that the real test is whether any such point was actually considered and decided by the authority and not that the same could have been agitated before the autho....