S.L.Saraf, J. - (1.) THE petitioner is a registered partnership-firm and is a regular assessee under the Income-tax Act, 1961. In the instant case, by an order dated March 31, 1989, the Deputy Commissioner of Income-tax, Guwahati, levied a sum of Rs. 28,351 as penalty under Section 271(1)(c) of the Income-tax Act, 1961, for furnishing inaccurate particulars of income. As against the said order of penalty, the petitioner went in appeal before the Commissioner of Income-tax (Appeals), Guwahati. THE said Commissioner heard the appeal and confirmed the imposition of penalty, vide its order dated December 21, 1989, holding that : "I am of the opinion that the penalty has correctly been levied by the Deputy Commissioner of Income-tax (Assessment), Special Range, in view of Explanations 1(A) and (B) to Section 271(1)(c) and thus I confirm the imposition of penalty and dismiss the appeal of the appellant". Subsequent to the passing of the said order by the appellate authority, the Deputy Commissioner of Income-tax (Assessment), Range-1, purportedly exercising the powers under Section 154 of the Act rectified the order of penalty dated March 31, 1989, holding that there was mistake apparent from the record. THE assessing authority imposed a further sum of Rs. 36,618 treating the petitioner as an unregistered firm under Section 271(2) of the Act. THE petitioner has challenged the said rectification order by the writ application filed before this court on the ground that the respondents have no authority or jurisdiction to rectify the order under Section 154 since the order imposing penalty was appealed against and the appellate authority had considered and decided the issue of penalty. According to the petitioner, after the passing of the aforesaid order on the question of imposition of penalty, the Income-tax Officer sought to rectify the order of penalty relating to the same matter, i.e., imposition of penalty under Section 271(2) of the Act. Dr. Saraf, appearing for the petitioner, submits that such an attempt by the Income-tax Officer is not permissible under the provision of Section 154 of the Act. If, in a matter in appeal or revision, the authority passing the said order has considered and decided a particular matter, the assessing authority can no longer pass an order by way of rectification under Section 154 of the Act. Section 154(1) and (1A) of the Act reads as follows : "154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in Section 116 may,-- (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation sent by it under Sub-section (1) of Section 143, or enhance or reduce the amount of refund granted by it under that Sub-section. (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."
(2.) ON the basis of the aforesaid provisions, Dr. Saraf submits that the matter of penalty under Section 271(1)(c) was fully considered and decided by the appellate authority, vide its order dated December 21, 1989, and the appeal filed by the petitioner was dismissed, holding that the penalty was correctly imposed. In that view of the matter, the rectification order passed by the Income-tax Officer subsequently on October 31, 1990, was without jurisdiction and illegal. In support of his contention, Dr. Saraf referred to the decision of the Madras High Court in CIT v. Indian Auto Stores, 1981 129 ITR 554 where a similar question arose before the Madras High Court. According to Dr. Saraf, the present case falls squarely within the parameters of the Madras judgment wherein also an assessment was made and the penalty imposed under Section 271(1)(c) which was appealed against and the appeal was dismissed. Subsequently, the assessing authority wanted to rectify the quantum of penalty of Rs. 706 to Rs. 8,588 treating the firm as an unregistered firm under Section 271(2). The Madras High Court, after consideration of several other judgments, held as follows (at page 558) : "In the present case, the Appellate Assistant Commissioner could have gone into the question of the quantum of penalty that was levied. The quantum of penalty was involved in the appeal. He could have examined the quantum of penalty in the light of the provisions contained in Section 271(2) of the Act. He has confirmed the penalty. In such a case, we consider that the question of the amount of penalty leviable is a matter which has been considered and decided, as any other view would involve the assumption that the Assistant Commissioner did not exercise his powers properly. This would be wrong. There could have been no other ground in the appeal against the order of penalty. For instance, in the case of assessment, there may be a number of additions made in the assessment. But the assessee may object to only a few of them. In such a case with reference to the matter not touched upon by the assessee in the memorandum of appeal, the Income-tax Officer will have jurisdiction to consider and determine the question of rectification in the light of Section 154(1A) of the Act. But in the case of penalty, there is no possibility of any other ground being left out of consideration by the assessee in the memorandum of appeal especially where the assessee objects to the levy of penalty, What the Income-tax Officer has virtually done by the order under consideration is to enhance the penalty as sustained by the Appellate Assistant Commissioner. This he had no power to do." The facts of this case are exactly similar to those of the Madras case and, in my opinion, the same principle and reasoning of the Madras High Court are applicable in the present case. On the question of merger of the order of the Income-tax Officer in the appellate order, the Supreme Court in State of Madras v. Madurai Mills Co. Ltd., 1967 19 STC 144 has laid down as follows : "The principle of this decision is that the doctrine of merger will have to be taken into account in the light of what was in controversy before the appellate authority or what could have been considered by the appellate authority." Mr. Joshi, appearing for the Revenue authority, has urged that the income-tax authority has rectified the order under Section 154 of the Act, as there was an error apparent and the Income-tax Officer by mistake did not notice that Section 271(2) was applicable in the instant case and penalty imposed under Section 271(1)(c) would have been higher than the amount imposed. There was an omission and the same could be rectified under the provisions of Section 154 of the Act. Mr. Joshi relies on a Calcutta High Court decision in Rahmat Development and Engineering Corporation v. CIT, 1981 130 ITR 602 where the Calcutta High Court held that inasmuch as there were two parts of Section 271(1)(c), one relating to income concealment of particulars and the other relating to furnishing of inaccurate particulars of such income. The offence relating to one part does not preclude the Department to proceed for other offence being committed regarding the other part. The High Court held that there were two charges and the exclusion of one of the charges does not mean that the other charge is also excluded. The Calcutta High Court in that decision held that the appellate authority could go into both the matters and uphold or vary the imposition under Section 271(1)(c) of the Act. In my opinion, the said case does not help the Department ; on the contrary, it goes against the Department. According to the Calcutta High Court, all the charges under Section 271(1)(c) could be decided by the appellate authority, the assessee in appeal cannot say that since the charge on account of one part has failed so the charge on the basis of the other part could not be raised or would automatically fail. Such submission of the assessee was negatived. Quoting the decision of the Supreme Court in D.M. Manasvi v. CIT, 1972 86 ITR 557 the Division Bench of the Calcutta High Court held that "the Income-tax Appellate Tribunal, in disposing of an appeal, was obliged to dispose of the appeal in accordance with the law even though the assessee did not press the appeal or was not present at the time of assessment". The above observation of the Supreme Court supports the proposition that the appellate authority was obliged to dispose of all aspects of the matter and to act in accordance with the law even though a particular point has not been raised. Even if not raised, the same is taken to have been considered and decided by the appellate authority. The Calcutta High Court decision related to the powers of the appellate authority and it held that the other facets of the section not raised before the court below could be agitated before the appellate authority. In my opinion, the appellate powers under Section 250 and Section 251 of the Act in appeal and rectification powers under Section 154 of the Act are two different categories and the Income-tax Officer cannot get any sustenance from the other. The powers of the Income-tax Officer under Section 154 of the Act flow from the provisions of that section only. In the present case, the authorities have imposed penalty on the assessee and the assessee had gone in appeal before the appellate authority and the appellate authority has considered all the aspects of the matter or should be taken to have considered all the aspects of the matter and found penalty imposed was rightly and correctly imposed. According to me, the appellate authority under the provisions of Section 251(1)(b), had the power to alter or amend or even to enhance or reduce the penalty and deal with other aspects of the same matter, i.e., the imposition of penalty as it would find it proper. The language of Section 154(1)(a) makes it abundantly clear that the matter which is considered or decided by the appellate authority cannot be reopened or rectified. I am of the view that matter means all facets of the matter which come within the scope of the appeal. If the appeal is filed relating to a matter and the same was considered and decided or be treated to have been considered or decided by the appellate authority, it is no longer open for the assessing authority to reopen or reagitate or rectify the said issue or matter. In the instant case, an appeal was filed against the imposition of penalty. Under Section 251, the appellate authority considered and decided the matter and confirmed the penalty imposed under Section 271(1)(c) of the Act. Thereafter it was no longer open for the income-tax authority to pass an order of rectification. I am of the view that the assessing authority cannot sit in judgment on the appellate authority which has decided the matter of imposition of penalty holding the same to be correct and justified. In the premises, the rule is made absolute and the order dated October 31, 1990, and the notice dated November 14, 1990, are quashed and set aside. The case is disposed of and there will be no order as to costs.;