JUDGMENT : ( 1. ) BY this reference under section 256 (1)of the Income tax Act, 1961 (hereinafter referred to as the act), the Income Tax Appellate Tribunal, jabalpur Bench has referred the following question of law to this Court for its opinion : "whether on the facts and in the circumstances of the case, the Appellate tribunal was justified in law in holding that the I. T. O. s order had merged with the order of the A. A. C. and, therefore, the Commissioner was not competent to revise the order under section 263 of the Income Tax Act, 1961." ( 2. ) THE material facts giving rise to this reference briefly are as follows : The assessee who is assessed in the status of an individual, carries on the business of a contractor. The assessee also derives income from plying trucks. While framing assessment for the assessment year 1973-74 the I. T. O. estimated the income of the assessee from P. W. D. contracts by applying a net profit rate of 15%. The I. T. O. also allowed depreciation on the cost of the truck purchased on hire purchase basis. Aggrieved by the order passed by the I. T. O. , the assessee preferred an appeal before the A. A. C. In that appeal, the assessee assailed the adoption of net profit rate of 15% and computation of income the on the basis of estimate of receipts. The A. A. C. upheld the computation of the assessee and held that the receipts should not have been estimated when the assessee had produced certificates from Government Department showing receipts. The A. A. C. also held that the net profit rate of 12. 5% should have been applied by the I. T. O. The order of assessment was accordingly modified thereafter the Commissioner of Income Tax exercising powers under section 263 of the Act, found that the assessee was not entitled to depreciation on the cost of truck, purchased on hire purchase bask The Commissioner of Income Tax, therefore, by order dated 18-3-1978, set aside the order of the assessment and directed the I. T. O. to make a fresh assessment according to law. Aggrieved by the order passed by the commissioner, the assessee preferred an appeal before the Tribunal. Aggrieved by the order passed by the commissioner, the assessee preferred an appeal before the Tribunal. It was urged on behalf of the assessee before the Tribunal that the order of the I. T. O. had merged with the order of the A. A. C. and the Commissioner had, therefore, no jurisdiction to revise the order of assessment This contention was upheld by the Tribunal. Aggrieved by the order passed by the Tribunal, the Revenue sought a reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this Court for its opinion. ( 3. ) WHEN this reference came up for hearing before a Division Bench of this Court on 7-4-1983, it was urged by learned counsel for the parties that there was a conflict between the two Full Bench decision of this Court reported in Commissioner of Income tax, M. P. II, Bhopal vs. R. R. Banwarilal, 1982 M. P. L. J. 296 and Commissioner of income Tax, M. P. vs. Mandsaur Electric Supply Co. Ltd. , 1983 M. P. L. J. 88. It was in these circumstances that a larger Bench was constituted for hearing this reference. That is how the matter has come up before us for consideration. ( 4. ) AT the time of hearing, learned counsel for the parties conceded that on the question of the applicability of the doctrine of merger to the power of the Commissioner under section 263 of the Act to revise the order of the I. T. O. when that order was the subject matter of an appeal before the A. A. C. , there was no conflict in the two Full bench decision of this Court in 1982 M. P. L. J. 296 and 1983 M. P. L. J. 88. Both these decision lay down correctly, if we may say so with respect, that the Commissioner has jurisdiction under section 263 of the Act to revise that part of the order of assessment which was not the subject matter of appeal before the A. A. C. and was hot touched by him in appeal It has further been held in 1983 M. P. LJ. 88 that when the Commissioner in exercise of revisional powers, set aside the entire order of assessment which has been the subject matter of an appeal preferred before the A. A. C. , the effect of the order of the Commissioner is to set aside the order of the A. A. C. which the Commissioner has no jurisdiction to do. We are in full agreement with this view. ( 5. ) IN 1982 M. P. L. J. 296, the Full Bench correctly enunciated the following principle as regards the applicability of the doctrine of merger to the power of the commissioner under section 263 of the Act: "the result, therefore, is that the doctrine of merger applies to income tax proceedings but the extent of its application depends on the scope and subject matter of the appeal and the decision rendered by the appellate authority. Where an appeal has been preferred by the assessee to the A. A. C. from an order of assessment made by the I. T. O. in respect of only some of the items covered by the I. T. O. s order and the remaining items forming part of the I. T. O. s assessment order were not agitated by either party, though it was open also to the revenue to agitate them or the A. A. C. to consider them suo motu and no decision of the A. A. C. is, therefore, made in respect of the remaining items, the I. T. O. s order merges with the appellate order of the A a. C. only to the extent it was considered and decided by the A. A. C. but the matters which are not covered by the appellate order of the A. A. C. are left untouched and to that extent, the I. T. Os assessment order survives permitting exercise of revisional jurisdiction by the Commissioner under section 263 of the Income Tax Act, 1961. It necessarily follows that the items considered and deckled by the A. A. C. in his appellate order are beyond the scope of the revisional power of the C. L T. under section 263 inasmuch as the i. T. O. s order merges to that extent with that of the A. A. C. and the commissioner has no revisional power over the A. A. C. The question whether the I. T. O. s order has merged with that of the A. A. C. has to be answered on this basis. " It seems that after correctly enunciating the aforesaid principle, the Full Bench, with respect, failed to notice that in that case, the Commissioner had set aside the entire order of assessment, a part of which had been modified by the A. A. C. on appeal In such a case, in our opinion, the Commissioner is not competent to set aside the entire order of assessment, because in doing so, the Commissioner, in effect, disturbs the order of the A. A. C. which he has no jurisdiction to do. In our opinion, therefore, whenever a question arises as to whether a Commissioner is not competent to revise under section 263 of the Act, the order of assessment framed by the L T. O. which has been the subject, matter of appeal before the A. A. C. it has to be ascertained as to whether the commissioner has set aside the entire order of assessment or only that part of the order of assessment which was not the subject matter of appeal either because the A. A. C. had no jurisdiction to consider that matter or because A. A. C. though having jurisdiction to examine that subject matter did not do so. If the Commissioner has set aside the entire order of assessment, then it could not be held that he has exercised power conferred upon him because he has no power under section 263 of the Act to revise the order of the A. A. C. In this view of the matter, the decision in 1982 MPLJ 296 , does not lay down correct law insofar as it impliedly holds that the Commissioner could in exercise of revisional powers, set aside the entire order of assessment passed by the I. T. O. though it had been the subject matter of an appeal before the A. A. C. ( 6. ) IN the instant case, the question framed by the Tribunal is too wide and it does not bring out the real issue which arose before the Tribunal for consideration. We, therefore, reframe that question as follows. "whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Commissioner was not competent under section 263 of the Act to set aside the entire order of assessment passed by the i. T. O. when that order was the subject matter of appeal preferred by the assessee before the A. A. C. " ( 7. ) THE learned counsel for the Revenue contended that the Tribunal had jurisdiction to modify the order passed by the Commissioner so that only that part of the order of assessment passed by the I. T. O. which was not touched by the A A C would be set aside. This aspect of the matter, however, as to whether in the circumstance of the case, the Tribunal could or could not modify the order passed by the Commissioner, does not arise out of the order passed by the Tribunal and a question in that behalf has not been referred to us. We, therefore, refrain from expressing any opinion in that behalf. The only question that arose before the Tribunal and that arises in this reference is whether in the circumstances of the case, the Tribunal was right in holding that the commissioner was not justified in setting aside the entire order of assessment passed by the I. T. O. in exercise of revisional powers under section 263 of the Act when the order of assessment passed by the I. T. O. was subject matter of appeal before the A A C In our opinion, on the facts and. in the circumstances of this case the Tribunal was justified in holding that the Commissioner was not competent to set aside the entire order of assessment passed by the I. T. O. For the aforesaid reasons, our answer to the question framed by us is in the affirmative and in favour of the assessee. ( 8. ) IN the circumstances of the case, parties shall bear their own costs of the reference. Reference answered accordingly.