TRILOIK CHAND SETH Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE two petitions have been filed by the same petitioner and involve identical controversy. They were, therefore, heard together and are disposed of by this common judgment.

(2.) WE have heard Sri Shambhu Chopra, learned counsel for the petitioner, and Sri A.N. Mahajan, learned standing counsel for the respondents.

(3.) LET us first take up the question of merger which is relevant in Writ Petition No. 423 of 1986. In J. K. Synthetics Ltd. v. Addl. CIT [1976] 105 ITR 344 (All), a Division Bench of this court had held that where an assessment order is appealed to the Appellate Assistant Commissioner, the whole assessment order merges in the appellate order and thereafter it is only the appellate order that can be revised or rectified and this was so even if in the appeal the point on which rectification or revision is intended to be made was not involved. Learned counsel, therefore, contended that although the question of valuation of the assets was not raised in the appeals, yet since the appellate authority had the power of enhancement, the whole assessment was open before it and, consequently, the assessment order as a whole would merge in the appellate order. Learned standing counsel, on the other hand, relied upon the amendment of Section 25 by the Finance Act, 1988, by which an Explanation has been added to Section 25(2) as under :