The Judgment of the Court was delivered by

Sethuraman, J.:— This tax revision case has been filed by the assessee to revise the order of the Commissioner of Agrl. I.T, Madras, dated July 13, 1973. The assessee was assessed for the assessment year 1970-71 to agricultural income-tax under the Tamil Nadu Agrl. I.T Act, 1955, by the Agrl. ITO, Coimbatore, by his order dated September 19, 1971. He determined a loss of Rs. 52,377. The assessee appealed to the AAC and the appeal was disposed of by the Assistant Commissioner on January 31, 1972. In the said appeal, the AAC held that the assessee was eligible for the development allowance on new tea plantings under s. 33A of the I.T Act, 1961. The AAC directed the Agrl. ITO to allow the claim on the production of a certificate from the Tea Board. Thereafter, the assessee filed an appeal to the Agrl. I.T Appellate Tribunal in respect of other matters and this appeal came to be disposed of by the Tribunal on August 24, 1972.

2. The Commissioner of Agrl. I.T took proceedings under s. 34 of the Tamil Nadu Agrl, I.T Act, 1955, in March, 1973. In the view of the Commissioner, the assessee was only growing tea and was not a manufacturer of tea so that r. 7 of the Tamil Nadu Agrl. I.T Rules would have no application to him. Consequently, in the opinion of the Commissioner of Agrl. I.T, the development allowance granted by the Assistant Commissioner was not proper. He, therefore, issued a notice to the assessee asking it to show cause why the order of the Assistant Commissioner in so far as it allowed the claim for development allowance should not be revised. After hearing the assessee, the Commissioner of Agrl. I.T came to the conclusion that the allowance as given by the Assistant Commissioner was wrong and, therefore, he directed that the orders passed by the Assistant Commissioner on January 31, 1972, be set aside and the order of the Agrl. ITO dated September 19, 1971, be restored in respect of this item of allowance. The assessee has challenged this order of the Commissioner in the present revision petition. The first contention taken on behalf of the assessee is that the Commissioner had no jurisdiction to revise the order of the AAC because the said order had been taken on appeal before the Agrl. I.T Appellate Tribunal and had also been the subject of a decision by it. The question as to whether the Commissioner could revise the order of the AAC when there was an appeal against the said order to the Appellate Tribunal has to be determined in the light of the provisions of the Tamil Nadu Agrl. I.T Act, 1955. Section 31 provides for an assessee objecting to an assessment order or other orders specified in the said section filing an appeal before the Assistant Commissioner. The Assistant Commissioner ???as wide powers including powers of enhancement. Against the order of the Assistant Commissioner, the assessee has power to file an appeal under s. 32(1). Section 32(2) provides that the Commissioner also may, if he objects to an order passed by the Assistant Commissioner under s. 31, direct the Agrl. ITO to appeal to the Appellate Tribunal against such order, and such an appeal has to be presented within 60 days of the date on which the order was communicated to the Commissioner by the Assistant Commissioner. The power of the Tribunal is to dispose of the appeal before it in such manner as it thought fit. It may, however, be pointed out that the Tribunal has no power of enhancement. Section 34 provides the power of revision to the Commissioner. The relevant provisions are as follows:

“34. Revision.—(1) The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such orders thereon as he thinks fit:

Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard:

Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee.

(2) The Commissioner shall not revise any order under sub-sec tion (1) if—

(a) where an appeal against an order lies to the Appellate Tribunal, the time within which such appeal may be made has not expired; or

(b) where an appeal against the order has been made to the Appellate Tribunal, the appeal is pending before it;

(c) the order has been made more than three years previously.

(3) Every application by an assessee under sub-section (1) shall be accompanied by a fee of fifty rupees.

(4) Any order passed under sub-section (1) shall, subject to revision by the High Court under section 54, be final.”

3. The learned counsel for the assessee submitted that so long as the order of the Assistant Commissioner had been appealed against before the Appellate Tribunal, the Commissioner would have no jurisdiction to revise the order of the Assistant Commissioner. The learned additional Government pleader submitted that s. 34(1) conferred wide powers of revision on the Commissioner and that there are only certain restrictions under the provisions of sub-s. (2) of s. 34 and that if those restrictions did not apply to any particular case, then the Commissioner had jurisdiction to revise the particular order of the Assistant Commissioner.

4. As can be seen from the provisions of s. 34, the Commissioner can either of his own motion or on application by the assessee, call fur the record of any proceeding under the Act which had been taken by any authority subordinate to him. He could make such enquiry or cause such enquiry to be made and could, subject to the provisions of the Act, pass such orders thereon as he thought fit. The power of the Commissioner is open for exercise only in cases where the order to be revised was made by a subordinate authority. In the present case, the order passed is by the Assistant Commissioner and there is no dispute that the Assistant Commissioner is a subordinate authority. Another contention taken before us was that as the AAC's order had got merged with the order of the Agrl. I.T Appellate Tribunal, there was no order of the Assistant Commissioner which could have been revised by the Commissioner. We shall consider this point separately. For the purpose of disposing of the present contention, we have only to see whether the Commissioner could exercise the power of revision over the order of the Assistant Commissioner within the four corners of s. 34. As rightly pointed out by the learned additional Government pleader, the restrictions imposed on the powers of the Commissioner are under cls. (a), (b) and (c) of sub-s. (2) of s. 34. Clause (a) appi???s to a case where an appeal against an order lies to the Appellate Tribunal and the time for such an appeal has not expired. In the present case, it is not in dispute that an appeal could have been filed before the Appellate Tribunal at the instance of the Commissioner, but the time for such an appeal has already expired. Therefore, the restriction imposed by cl. (a) has no scope for application. Clause (b) applies to a case where an appeal against the order has been made to the Tribunal and the appeal is pending before it. In the present case, as can be seen from the dates given earlier, the Tribunal had already disposed of the appeal by the time the Commissioner took the revision proceedings. It, therefore, implies that cl. (b) also does not apply. It is not stated that the order of the Assistant Commissioner is more than three years old so that it is incapable of revision by the Commissioner. The Assistant Commissioner passed the order on January 31, 1972, and the order that is now in dispute was pissed by the Commissioner on July 13, 1973. It is very much within the period of three years contemplated by cl. (c). Therefore, none of the restrictions under s. 34 applies to the present case and we do not, therefore, find it possible to accept the contention of the assessee that the Commissioner should not have exercised his power of revision under s. 34 in the present case.

5. The learned counsel for the assessee submitted that in the above view, the Commissioner would have two concurrent remedies against the order of the Assistant Commissioner, one of filing an appeal before the Appellate Tribunal through the Agrl. ITO and the other of taking up proceedings in revision. According to him, on general principles, it should be held that the Commissioner could exercise his powers only in a case where the matter had not gone on appeal to the Appellate Tribunal. In support of his contention, he relied on the decision of this court in C. Gnanasundara Nayagar v. Commissioner Of Income-Tax, Madras., [1961] 41 ITR 375. That was a case in which the assessee had filed an appeal before the AAC and thereafter before the Tribunal. After the disposal of the appeal by the Assistant Commissioner but before the appeal was disposed of by the Tribunal, the assessee applied to the ITO and thereafter to the Commissioner for relief under one of the provisions of the Indian I.T Act, 1922. The question that came up before this court was whether the revision petition taken before the Commissioner under s. 33A(2) of the Indian I.T Act, 1922, was proper. This court held that the assessee could not agitate the dispute before the Commissioner invoking the powers of revision. We do not consider that the said decision helps the assessee in any manner in the present case. The assessee here had filed an appeal before the Assistant Commissioner and before the Appellate Tribunal. However, the Commissioner had two remedies open to him, one of getting an appeal filed before the Appellate Tribunal through the Agrl. ITO under s. 32(2) of the Act and the other of taking up revision under s. 34 subject to restrictions contained in s. 34. The provisions of s. 34 are so widely framed that they support the view contended for by the Addl. Govt. pleader that the Commissioner has absolute powers of revision even in matters that have gone before the Tribunal subject only to the restrictions contained in sub-s. (2) of s. 34. As already seen, none of the three restrictions contained in sub-s. (2) of s. 34 have any application to the facts here. If those restrictions are out of the way, the powers of revision under s. 34 were available for exercise by the Commissioner and, therefore, we are not satisfied that the decision relied on by the assessee stands in the way of the conclusion we have already arrived at.

6. Another decision to which attention was drawn during the course of the hearing is Commr. of Agrl. I.T v. M.K Harihara Iyer, [1966] 62 ITR 225 (Mad). The assessee in that case was the legal representative of his wife who had died on 7th December, 1949. He realised during 1957-58 and 1958-59, certain arrears of rent due to her by the lessee for the years 1945 to 1949. The Agrl. ITO assessed these amounts to tax in the respective years under the Travancore-Cochin Agrl. I.T Act, 1950, as the assessee's income. The AAC, on appeal, held that the amounts could not be assessed as his income and directed the assessment of the said sums separately through the legal representative of the deceased following the procedure prescribed under s. 24 of that Act. The Commissioner of Agrl. I.T, however, held that the assessee was liable to be assessed for the years on the rents received along with his other income. On a reference to this court, it was held that s. 34 of the Travancore-Cochin Agrl. I.T Act, 1950, did not contain any restrictions whatsoever for the Commissioner exercising his power of revision when no appeal had been preferred to the Appellate Tribunal under s. 32. In the course of that decision, this court pointed out as follows (p. 229):

“Suffice it to say that there is no restriction whatsoever for the Commissioner exercising his power under section 34 of the Act, when no appeal had been preferred to the Appellate Tribunal under section 32. The contention of the learned counsel for the assessee is that as a right of appeal has been provided against the order of the Commissioner, if the Commissioner is aggrieved, he can only direct the Income-tax Officer to file an appeal under section 32 and cannot invoke the revisional jurisdiction under section 34. We are unable to find any such restriction imposed on his powers under section 34.”

7. This case, instead of supporting the contention urged before us on behalf of the assessee, clearly supports the stand taken by the Addl. Govt. pleader that the powers of revision under s. 34 are unrestricted except in the manner provided by sub-s. (2) of s. 34. The other observations in the said judgment have necessarily, to be read in the context and cannot be understood as if this court decided that in cases where an appeal had been filed before the Appellate Tribunal, the Commissioner could not, in exercise of suo motu powers, pass orders in revision. The last contention urged before us on behalf of the assessee is that the order of the Assistant Commissioner had merged in the order of the Tribunal and the Commissioner had no powers of revision over the order of the Appellate Tribunal. The learned counsel for the assessee drew our attention to the decision in Commissioner Of Income Tax, Bombay v. Amritlal Bhogilal & Co., [1958] 34 ITR 130 (SC). We are not concerned with the facts of the said case. The relevant passage which was cited in support of the contention urged on behalf of the assessee runs as follows (p. 136):

“There can be no doubt that, if an appeal is provided against an order passed by a Tribunal, the decision of the appellate authority is the operative decision in law. If the appellate authority modifies or reverses the decision of the tribunal, it is obvious that it is the appellate decision that is effective and can be enforced. In law the position would be just the same even if the appellate decision merely confirms the decision of the tribunal. As a result of the confirmation or affirmance of the decision of the tribunal by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement.”

8. The scope of the theory of doctrine of merger has been considered by the Supreme Court in a later case arising out of the Tamil Nadu General Sales Tax Act and the decision is reported in State Of Madras v. Madurai Mills Co., Ltd. , [1967] 19 STC 144. In that case, the assessee was assessed to sales tax on a certain turnover and on appeal exclusion of certain items from the turnover was partly allowed. Thereafter, the Dy. CTO made a revised assessment on 28th November, 1952. Subsequently, the assessee preferred a revision to the Dy. CCT objecting to the inclusion in its turnover of a certain sum collected by it by way of tax. The assessee did not raise any other objection regarding the order of assessment of the Dy. CTO or the CTO. The Dy. Commissioner by his order dated 21st August, 1954, dismissed the revision petition. Thereafter, on 4th August, 1958, the Board of Revenue issued a notice to the assessee proposing to revise the assessment of the Dy. CTO by including in the turnover a certain sum representing the value of cotton purchased by the assessee from outside the State of Madras on the ground that it was wrongly excluded in the computation of the turnover. The assessee objected to the proposed revision on several grounds. But, the Board of Revenue rejected these objections and passed an order of revision di???ecting the assessment of the relevant amount to tax. On appeal, the High Court set aside the Board's order on the ground that the said order was barred by limitation under s. 12(4)(b) of the Tamil Nadu General Sales Tax Act, 1939. On further appeal to the Supreme Court, it was contended by the State of Madras that the proceedings were not barred by limitation as the order that was sought to be revised was the order dated 21st August, 1954, of the Dy. Commissioner. In dealing with this contention, the Supreme Court observed the following on the doctrine of merger (p. 149):

“But the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior tribunal and the other by a superior tribunal, passed in an appeal on revision, there is a fusion or merger of two orders irrespective of the subject matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, 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.”

9. We have, therefore, to consider the scope of the doctrine of merger in the light of the particular statutory provisions. In the present case, the Commr. of Agrl. I.T having been vested with wide powers of revision subject only to ce???tain restrictions which do not apply here, we consider that the doctrine of merger has no application over the aspects which had not been touched by the Tribunal in its order. The doctrine of merger would operate here only on matters decided by the Tribunal and, therefore, in a case where the particular matter which was the subject matter of revision had not been placed before the Tribunal for its decision, the matter would be at large so as to be subject to the exercise of the powers of revision. We, therefore, see no substance in the contention of the learned counsel for the assessee that the order ultimately revised is only the order of the Appellate Tribunal. What was actually revised is only the order of the Assistant Commissioner so far as it gave certain reliefs to the assessee. For the above reasons, we hold that the order of the Commr. of Agrl. I.T is proper and does not require any interference. The revision petition is accordingly dismissed. The respondent will be entitled to his costs. Counsel's fee Rs. 250.