Mrs. Sujata Manohar, J.
1. This is an application under section 256(2) of the Income-tax Act, 1961, made by the Revenue asking us to direct the Tribunal to frame the following question and refer it to us for adjudication :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that passing of an order by the Commissioner of Income-tax (Appeals) in the appeal filed against the order passed by the Inspecting Assistant Commissioner (Assessment) has resulted in the complete merger of the order appealed against with the appellate order, thereby ousting the jurisdiction of the Commissioner of Income-tax from exercising his power under section 263 of the Income-tax Act, even though the issue considered under the section 263 were not the subject-matter of appeal before the Commissioner of Income-tax (Appeals) ?'
2. The relevant facts are as follows :
The assessee is a company and the year relevant to this application is the assessment year 1980-81. The assessment order which is passed by the Inspecting Assistant Commissioner (Assessment) is dated July 29, 1982. The Commissioner of Income-tax (Appeals) passed an order in appeal from this order which is dated March 26, 1983. Thereafter, the Commissioner of Income-tax was of the opinion that the assessment order of the Inspecting Assistant Commissioner (Assessment) was erroneous and was prejudicial to the interests of the Revenue. Hence, in exercise of his powers under section 263 of the Income-tax Act, 1961, he set aside the assessment order and directed the Inspecting Assistant Commissioner (Assessment) to make a fresh assessment. This was done by his order dated July 26, 1984.
3. Being aggrieved by the order of the Commissioner of Income-tax, the assessee filed an appeal before the Tribunal. the Tribunal held that the assessment order of July 29, 1982, had merged with the order of the Commissioner of Income-tax (Appeals) on March 26, 1983, and hence the Commissioner of Income-tax did not have jurisdiction to exercise his powers under section 263 of the Income-tax Act after that date. The Tribunal followed the ratio of the decision of this court in the case of CIT v. P. Muncherji and Co. : [1987]167ITR671(Bom) . The Tribunal has declined to refer the above question to us as the same is covered by the above decision.
4. In the case of CIT v. P. Muncherji and Co. [1987] 167 ITR, a Division Bench of this court has taken the view that once the order of assessment is affirmed by the appellate Assistant Commissioner, that order becomes the final order of assessment and the only right the Department has is the right of appeal to the Appellate Tribunal. The Commissioner of Income-tax cannot thereafter exercise his powers under section 263 as the assessment order has merged with the appellate order.
5. It is pointed out by Mr. Jetley, learned counsel for the Revenue, that section 263 has since been amended in the following manner :
The Explanation to section 263(1) as it stood prior to June 1, 1988, did not contain clause (c) which is the material clause for our purposes. Clause (c) was added to the Explanation to section 263(1) for the first time with effect from June 1, 1988. It provided that where any order referred to in section 263(1) and passed by the Assessing Officer had been the subject-matter of any appeal, the powers of the Commissioner under section 263(1) shall extend to such matters as had not been considered and decided in such appeal. Thereafter, by the Finance Act of 1989, certain words were added to clause (c) of the Explanation with retrospective effect from June 1, 1988. as a result, clause (c) of the Explanation now reads as under :
'263. (1) :
Explanation. -..... (c) where any order referred to in this sub section and passed by the Assessing Officer had been the subject-matter of any appeal, filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal.'
6. It is submitted by Mr. Jetley that, by virtue of this clause in the Explanation, it is open to the Commissioner to pass an order under section 263(1) of the Income-tax Act in cases where appeals are filed or decided from original orders of assessment even prior to June 1, 1988. The submission which is made by Mr. Jetley cannot be accepted. In the present case, the assessment order, the order in appeal as well as the order under section 263(1) have all been passed long prior to June 1, 1988, when clause (c) came to be inserted in the Explanation. Clause (c) to the Explanation came up for consideration before a learned single judge of this court in the case of Ritz Ltd. v. Union of India : [1990]184ITR599(Bom) . The learned judge, while considering the Explanation, observed that the Explanation as such was inserted in section 263 by the Taxation law (Amendment) Act, 1984 with effect from October 1, 1984. The Explanation had only two clauses (a) and (b) at that time. Clause (c) was inserted in the Explanation by the Finance Act, 1988, with effect from June 1, 1988. However, clause (c) of the Explanation did not have the words 'filed on or before or after the 1st day of June, 1988', after the words 'of any appeal', nor the words 'and shall be deemed always to have extended', between the words 'shall extend' and 'to such manner' These words were introduced by the Finance Act of 1989 with retrospective effect from June 1, 1988.
7. The learned judge held that the fact that the insertion of these words in clause (c) was made retrospective from the date on which clause (c) to the Explanation itself was inserted clearly indicates that clause (c) of the Explanation will have effect only from June 1, 1988. the amendment cannot have retrospective effect from a date earlier to the date on which the provision sought to be amended itself was brought on the statute. Hence, any order passed under section 263(1) prior to June 1, 1988, will not be covered by clause (c) to the explanation. this view of the learned judge has been approved by a Division Bench of this court (to which one of us, Mrs. Sujata V. Manohar J., was a party), in the case of CIT v. International Computers Indian . : [1991]187ITR580(Bom) . Clause (c) to the Explanation, therefore, can have no application to the present case where the assessment order, the order in appeal as well as the order under section 263 have all been passed long prior to June 1, 1988. Under the law as it stood at the relevant time, the Commissioner had no jurisdiction to pass an order of revision under section 263(1) when the order sought to be revised had merged in the appellate order.
8. It was next urged by Mr. Jetley that, from the judgment in the case of CIT v. P. Muncherji and Co. : [1987]167ITR671(Bom) , a special leave petition is pending in the Supreme court. There are, however, no interim orders passed by the Supreme Court. So that, as far as our High court is concerned, we are bound by the judgment of the Division Bench in the case of CIT v. P. Muncherji and Co. : [1987]167ITR671(Bom) . In view of that decision, the answer to the point at issue which is before us becomes self-evident.
9. In the case of CIT v. Desai Brothers Ltd. : [1991]189ITR88(Bom) , a Division Bench of this court (to which one of us, Mrs. Sujata V. Manohar J., was a party) held that, when a question has been decided in favour of the assessee or the Department by the High Court, the mere fact that a special leave petition from the judgment of the High Court is pending before the Supreme Court, will not, by itself, be a ground for allowing an application under section 256(2) of the Income-tax Act, 1961. Because, until the question is finally decided by the Supreme Court, the High Court would be ordinarily bound by its own earlier decision.
10. It was pointed out to us that in Income-tax Application No. 277 of 1991 and Income-tax Application No. 274 of 1991, a rule which was issued under section 256(2) has been made absolute. These, however, are not speaking judgment and, therefore, it is difficult for us to treat them as precedents. In fact, Income-tax Application No. 277 of 1991 was decided ex parte as the assessee did not appear at the hearing of the application.
11. In the premises, the rule is discharged.
12. There will be no order as to costs.