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Section 263(1) of the Income-tax Act, 1961 - Revision - Of orders prejudicial to revenue - Assessment year 1976-77 - ITO passed relevant assessment order following directions made by IAC under section 144B - Against order of ITO assessee preferred an appeal before first appellate authority, who allowed appeal in part - Thereafter Commissioner, exercising under section 263, revised assessment order - Whether Commissioner had any jurisdiction to revise assessment order - Held, no FACTS For the relevant assessment year 1976-77, the ITO passed the assessment order following the directions made by the IAC under section 144B. Against the assessment order the assessee preferred an appeal to the first appellate authority and the latter allowed the appeal in part. Thereafter the Commissioner, acting under section 263(1), revised the assessment order. The Tribunal, however, held that the order of assessment being covered by the directions given by the IAC could not be revised by the Commissioner under section 263 and that the entire assessment order merged with the appellate order of the first appellate authority irrespective of any point not appealed against and as such, the Commissioner had no jurisdiction to revise the assessment order under section 263. On reference: HELD Where an appeal has been filed against the order of assessment, such order merges with the appellate order and there is no scope for the Commissioner to revise the order of assessment by the ITO. Hence, the Tribunal was justified in holding that the Commissioner was not competent to revise the assessment order in question. CASE REVIEW S.S. Rathore v. State of Madhya Pradesh [1989] 75 FJR 425/AIR 1990 SC 10 followed and relied upon. CASES REFERRED TO S.S. Rathore v. State of Madhya Pradesh AIR 1990 SC 10 and Sita Ram Goel v. Municipal BoardAIR 1958 SC 1036. A. Patnaik, N.C. Patnaik and L. Pangari for the Respondent. JUDGMENT Mohapatra, J. - This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act") at the instance of the revenue. Statement of facts have been made on the following two questions for answer: "1. Whether, on the facts and in the circumstances of the case, the…

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