SENGUPTA, J. - (1.) IN this reference under s. 256 (1) of the IT Act, 1961 ('the Act') at the instance of the Revenue, the Tribunal has referred the following question common for all of three assessment years from 1980- 81 to 1982-83 for our opinion:-- "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the order of the ITO had merged with the order of the CIT (A) though the issue involving the subject-matter of Commissioner's order was not before the CIT (A) for consideration and, therefore, the CIT had no further jurisdiction to revise the assessment under s. 263 of the IT Act, 1961?" Shortly stated, the facts giving rise to the question as found by the Tribunal, are as follows:--
(2.) FOR the assessment years under consideration 1980-81, to 1982-83 the ITO allowed weighted deduction on account of export market development allowance under s. 35B (1) (b) of the Act at Rs. 1,15,401 being one-third of Rs. 3,46,223, Rs. 9,45,644 being one-third of Rs. 28,36,932 and Rs. 1,76,779 being one-third of Rs. 5,30,337. The said deductions were allowed without any detailed discussion in the assessment orders. The assessee preferred appeals against the said assessment orders before the CIT (A) . These appeals, however, did not relate to the question of weighted deduction under s. 35B (1) (b) . The appeals were disposed of by the CIT (A) by his order dt. 21st Nov., 1984. The CIT was, however, of the prima facie opinion that the ITO wrongly allowed relief/deduction under s. 35B (1) (b) and initiated proceedings under s. 263 of the Act. The assessee contended before the CIT that the CIT had no jurisdiction to pass an order under s. 263 because the ITO's order was subject of an appeal before the CIT (A) who disposed of the appeals by his order dt. 21st Nov., 1984. This contention was rejected by the CIT who was of the opinion that he was empowered to invoke the provision of s. 263. The CIT was of the opinion that the ITO erred in completing the assessments which were clearly erroneous and prejudicial to the interests of the Revenue. So, he restored the assessments to the file of the ITO for fresh assessments in accordance with the provisions of law. Being aggrieved, the assessee preferred those appeals.
(3.) THE authorised representative for the assessee reiterated before the Tribunal his original objection that in view of the appellate order of the CIT (A) dt. 21st Nov., 1984 the CIT had no jurisdiction to pass order under s. 263. This contention was strongly opposed by the Departmental Representative who contended that the CIT had jurisdiction to pass the impugned order under s. 263. In dealing with the contentions of the parties, the Tribunal held as follows :-- "There is no doubt that the decision in the case of R. S. Benwari Lal (supra) and some other decisions from certain other High Courts support the contention of the Departmental Representative that the CIT is empowered to revise that aspect of the assessment order which was not directly in appeal. But, it is settled law that the Tribunal is bound by the decision of the jurisdictional High Court. In our opinion, the decisions in the cases of Jeewanlal (1929) Ltd. (1977) 108 ITR 407 (Cal) and General Beopar Co. (P) Ltd. (1987) 167 ITR 86 (Cal) are fully applicable to the facts involved in the appeals before us. In both these cases, the CIT sought to revise the aspect of the assessment order which was not disputed in appeal. In spite of these facts, in both these cases, the Hon'ble Calcutta High Court definitely laid down that in such circumstances also the CIT could have no further jurisdiction to revise the assessment under s. 263 of the Act. These two decisions are directly on the point in dispute before us. On the strength of these two decisions we hold that in the present case also the CIT had no jurisdiction to revise the assessment order which were in appeal and disposed of by the order dt. 21st Nov., 1984 under s. 263 of the Act. " At the hearing before us, the counsel reiterated what was contended before the Tribunal. The learned counsel for the assessee in the first instance emphasised the scope and ambit of the power of the first appellate authority and brought home the principle that the first appellate authority's powers are co-extensive with the powers of the AOs. Therefore, when the assessment as made by the AO is brought in appeal before the first appellate authority, the latter is invested with jurisdiction not only to decide the grounds of appeal but also the other matters contained in the assessment order not appealed against. This power arises from the power of the first appellate authority to enhance the assessment. For this proposition numerous decisions have been cited in CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) and Jute Corporation of India Ltd. vs. CIT (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC) .;