TaxTMI 
TaxTMI 
1993 (1) TMI 24
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....ome. On appeal by the assessee, the Appellate Assistant Commissioner, by his order dated April 29, 1978, reduced the additions to Rs. 55,700, Rs. 55,100 and Rs. 50,800, respectively. A further appeal before the Tribunal resulted in a further reduction and the addition was fixed at Rs. 41,767, Rs. 41,198 and Rs. 34,969, respectively. In the assessments, the Income-tax Officer omitted to charge super tax that had to be levied under the provisions of the Act. While giving effect to the appellate orders, the Income-tax Officer, after issuing notices under section 154 of the Act, rectified the assessments by levying super tax by his order dated November 9, 1978. The Income-tax Officer rejected the assessee's contention that the Income-tax Officer had no jurisdiction to rectify the assessment orders which have merged with the appellate orders. The assessee filed an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, after considering the point raised, agreed with the Income-tax Officer in holding that the merger of the assessment orders with the appellate orders will be confined to items raised in the appeals and decided by the Appellate Assist....
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.... We feel that the decisions in CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733 (Ker), CIT v. Ratnam Pillai [1991] 188 ITR 494 (Ker) and CWT v. Saju Thomas [1991] 189 ITR 488 (Ker), have dealt with the question. In CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733, a Division Bench of this court, consisting of Kochu Thommen and Fathima Beevi JJ., as they then were, did not agree with J. K. Synthetics Ltd.'s case [1976] 105 ITR 344 (All), which has been followed by the Tribunal. After considering several decisions taking slightly different and conflicting views on the matter, this court followed the decision in Karsandas Bhagwandas Patel. v. G. V. Shah [1975] 98 ITR 255 (Guj). In CIT v. Tejaji. Farasram Kharawala [1953] 23 ITR 412 (Bom), Chagla C. J., speaking for the Division Bench, observed that (at page 418) : " Once an appeal was preferred from the order of the Income-tax Officer and an order was passed in that appeal, the order of the Income-tax Officer became merged in the order of the Appellate Assistant Commissioner". This decision was followed in CIT v. Amritlal Bhogilal and Co. [1953] 23 ITR 420 (Bom), where it was held that even when a composite order ....
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....ine 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." (emphasis added). From the above quote, we have to determine the extent of the application of the doctrine of merger on the basis of the appellate or revisional order in each case. Bhagwati C. J., as he then was, speaking for the Bench, observed in Karsandas Bhagwandas Patel v. G. V. Shah, ITO [1975] 98 ITR 255, 265 (Guj), thus (at page 740 of 172 ITR): "The order of assessment made by the Income-tax Officer merges in the order of the Appellate Assistant Commissioner only in so far as it relates to items considered and decided by the Appellate Assistant Commissioner. That part of the order of assessment which relates to items not forming the subject-matter of the appellate order is left untouched and does not merge in the order of the Appellate Assistant Commissioner. If there is any mistake in this part of the order which is apparent from the record of the assessment, the Income-tax Officer can rectify such mistake because the mistake would be his own mistake which he can always correct under section 35, sub-....
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.... supported by two other decisions of this court in CIT v. Ratnam Pillai [1991] 188 ITR 494 and CWT v. Saju Thomas [1991] 189 ITR 488. Counsel for the assessee, we would say, on justifiable grounds, did not challenge the correctness of the decisions in CIT v. Travancore Tea Estates Co. Ltd. [1988] 172 ITR 733 (Ker), CIT v. S. Ratnam Pillai [1991] 188 ITR 494 (Ker) and CWT v. Saju Thomas [1991] 189 ITR 488 (Ker), but he brought to our notice the following passages from the Law and Practice of Income Tax by Kanga and Palkhivala. A decision on a debatable point of law or failure to apply the law to a set of facts which remain to be investigated cannot be corrected by way of rectification. If the rectification was made at a time when the issue was debatable, it cannot be supported by reference to the Supreme Court's decision settling the issue which is rendered after the rectification." The second passage is based on the decision in Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710 (Cal) and CIT v. K. Venkateswar Rao [1988] 169 ITR 330 (AP). In all these cases, the question of rectification itself was debatable; whether there was a mistake or not itself was the subject-matter....