TaxTMI 
TaxTMI 
2019 (3) TMI 167
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.... first ITAT order had also rejected the assessee/petitioner's cross objections, on the issue of legality of reassessment proceedings. 2. The brief facts are that the assessee/respondent's returns became the subject matter of a re-assessment, in the course of which the Assessing officer (AO) disallowed certain amounts, under Section 68. The AO rejected the assessee's contentions with respect to the validity of the reassessment notice, under Section 147/148 of the Income Tax Act (hereafter "the Act"). The assessee appealed; the Commissioner of Appeals [CIT(A)] allowed the assessee's contentions and deleted the amounts added back (by the AO); however, the appellate commissioner rejected the assessee's arguments regarding validity of the reassessment notice (under Section 148). The first ITAT order upheld this order on both aspects. The assessee did not appeal to this court under Section 260A of the Act; the revenue did so. The revenue's appeal was allowed by judgment and order dated 21.12.2012 [reported as (2013) 60 taxmann.com]. This court allowed the revenue's appeal, and added back the amounts brought to tax under Section 68. However, at that stage, the assessee did not challenge ....
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....ITA No. 134/2012 against the rejection of its Cross Objections by the Ld. ITAT vide order dated 22.07.2011; therefore, the rejection of Cross Objections had attained finality. The revenue urges that it was after this court set aside the first ITAT order that the ITAT had allowed the assessee's Miscellaneous Application under Section 254(2) of the Act by order dated 26.03.2015 passed in M.A No. 205/Del/2014. 6. It is urged that the order dated 26.03.2015 passed in M.A No. 205/DeI/2014 in ITA No. 2177/Del/2010 is ex-facie beyond the jurisdiction of the ITAT, patently illegal and liable to be set aside. The revenue argues that the principle of merger, enunciated by the Supreme Court in several judgments applied clearly to the facts of this case, since the substratum of the assessee's grievance was with respect to additions made in the reassessment proceedings; that issue was plainly the subject matter of the decision of this court, under Section 260A; consequently the ITAT's order merged with the judgment of this court. The order of the ITAT further attained finality. In the circumstances, the assessee could not have again approached the ITAT complaining that its order was erroneous ....
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.... decision. It was held that "the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction." Counsel submitted that even in Kunhayammed, the doctrine of merger was held to be limited in its application and not that appellate decisions were not determinative of subject matter or causes not decided by the higher courts (in appeals or revisions). 10. Learned counsel relied on the decision of this court in Mitsubishi Corporation v Commissioner of Income Tax 337, ITR 498 (Del) where it was stated that: "13. Coming to the scope and ambit of Section 154 of the Act, this provision has been interpreted by the Apex Court in number of judgments. Principle of law which has been authoritatively embedded in various judgments including the judgments cited by the counsel for both the parties is that a glaring or an obvious mistake of law can be rectified under Section 154 of the Act. Insofar as factual mistake is concerned, it should be apparent on the record and exercise requiring investigation to find the mistake of fact, impermissible as when investigation is....
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.... the other provisions of this section, the authority concerned- (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee or by the deductor, or by the collector], and where the authority concerned is the Commissioner (Appeals) by the Assessing Officer also." 13. The power of the Income Tax Appellate Tribunal, to entertain its appeal and the subject matter thereof is as follows: "Section 253- Appeals to the Appellate Tribunal (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order - (3) Every appeal under sub-section (1) or sub-section (2) shall be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the 18 [Principal Commissioner or Commissioner], as the case may be: Provided that in respect of any appeal under clause (b) of subsection (1), this sub-section shall have effect as if for the words "sixty days", the words "thirty days", had been substituted. *** *** &nbs....
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....s (since on the merits it had held in its favour- i.e. in favour of the assessee) was never tested by this court and that the order of the ITAT restoring its cross objections, in the light of this court's decision against the assessee (on merits of the addition) were proper and in due exercise of its power of rectification. 16. Kunhayammed (supra), a three judge decision of the Supreme Court, considered several previous rulings - including Amritlala Bhogilal (supra); Gojer Brothers (supra) and also S.S. Rathore v. State of Madhya Pradesh, AIR 1990 SC 10. S.S. Rathore was a seven judge decision, which had, in turn considered several rulings previously rendered [State of Uttar Pradesh v. Mohammad Nooh, (1958) SCR 595; Batuk Nath v. Munni Devi, AIR 1914 PC 65; Jowad Hussain v. Gendan Singh, 1926 (53 IA 197); Madan Gopal Rungta v. Secretary to the Govt. of Orissa, AIR 1962 1513; Collector of Customs, Calcutta v. East India Commercial Co, Ltd., AIR 1962 SC 1124; Raghubir Jha v. State of Bihar, AIR 1986 SC 508; Sita Ram Goel v. The Municipal Board, Kanpur, AIR 1958 SC 1036; Pierce Leslie & Co. Ltd. v. Violet Ouchterlong Wapshare and Ors., AIR 1969 SC 843; Somnath Sahu v. The State of Or....
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....e on appeals to Supreme Court and the orders made thereon: whether after granting leave to appeal, or in the course of the order dismissing the petition, or merely disposing of the petition, in limine, as it were. It observed inter alia, as follows: "12. Once the superior court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, tribunal or the authority below. However, the doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid shall have to be kept in view." 20. The said decision has been followed by this Court in a large number of decisions including Union of India and Others v. West Coast Paper Mills Ltd. & Anr., [(2004) 2 SCC 747] etc. 21. What is discernible from the above discussion is that if an appeal is provided against an order passed by a tribunal, the decision of the....
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....ng were brushed aside by relying on a decision (T.P.S. Scott and Ors. Vs. Commissioner of Income Tax [232 ITR 475], which held that tax perquisite is the part of gross salary). The original order was thus rectified by re-computing perquisites for rent free accommodation by including tax element in the gross salary. The assessee appealed without success, to the CIT(A) and the ITAT stating that the original order of the AO had merged with the order of the Tribunal to which effect was given on 22.03.2004. This court held that the principle of merger did not apply, on the ground that the question of including the tax paid on the perquisite, while grossing up, was not considered. 23. It would be apparent on a careful reading of the discussion in that decision, that this court held that the doctrine of merger did not apply because the argument with respect to inclusion of the tax paid element was made only before the ITAT in the first round. The court held that the power of the ITAT was not concurrent and therefore, the derivative power of the CIT to make additions could be of no avail to the revenue, which had authority under Section 154 of the Act the rectify the previous order, even ....
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.....M. Garg and N.K. Saini). 26. This court further notices that there is a difference in the structure of the power of rectification conferred upon tax authorities, such as the AO and the CIT on the one hand, and the ITAT, on the other. The AO- as well as lower revenue authorities have an overriding power to rectify, in Section 154 (1A) which reads as follows: "(1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided." 27. However, such overriding power is absent, in the case of the ITAT, whose authority to amend or rectify its order is confined by the language (of Section 254 (2)), i.e. "to with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer..." 28. Furthermore, this court is....