JUDGMENT judgment of court was delivered by A. M. Sapre J. This is appeal filed by Commissioner of Incometax (Revenue) under section 260A of Income-tax Act, 1961, against order, dated September 30, 2003, passed by learned Members of Income-tax Appellate Tribunal in I. T. A. No. 26/Ind/97. This appeal was admitted for final hearing on following substantial questions of law: 1. Whether Income-tax Appellate Tribunal was justified in setting aside of finding recorded by Commissioner of Incometax in section 263 proceedings by deleting sum of Rs. 6,83,304 in relation to penalty imposed upon assessee under sales tax law? 2. Whether benefit of deletion amounting to Rs. 6,83,304 granted to assessee by Tribunal can be said to be justified and is allowable deduction and if so under what head? dispute pertains to assessment year 1989-90. It is in relation to deduction claimed by assessee (respondent herein) amounting to Rs. 6,83,304 paid towards penalty under sales tax law. In assessment year in question, question arose as to whether assessee can be granted benefit of this sum (Rs. 6,83,304) for claiming deduction from computation of their gross income. According to assessee, they were so entitled to claim its benefit because it formed part of total sum of Rs. 55 lakhs which they had voluntarily surrendered to Department for being taxed in their hands during assessment year in question. In other words, contention of assessee before Assessing Officer was that since in year in question, assessee has voluntarily surrendered total sum of Rs. 55 lakhs and, hence, impugned sum, i.e., Rs. 6,83,304 being part of surrendered sum and not over and above Rs. 55 lakhs for taxing purpose, same cannot be taxed again. It is on this reasoning, assessee contended before Assessing Officer that sum of Rs. 6,83,304 be not brought to tax and assessee be allowed to deduct said sum from computation of gross total income of assessee for year in question as part of Rs. 55 lakhs. In support of this contention, assessee also placed reliance on their two letters dated April 19, 1990, and March 3, 1992, which they had sent to Department while surrendering sum of Rs. 55 lakhs to show that sum of Rs. 6,83,304 was part of Rs. 55 lakh. Assessing Officer by order dated March 27, 1992, accepted explanation of assessee and, accordingly, granted them benefit of Rs. 6,83,304 by deleting same from computation of their gross total income. In other words, it was held that amount of Rs. 6,83,304 is part of Rs. 55 lakhs which was voluntarily surrendered by assessee and hence, same cannot be now again brought to tax for year in question. Commissioner of Income-tax was not satisfied with this deletion made by Assessing Officer in favour of assessee and hence, (Commissioner of Income-tax) invoked his powers under section 263 of Act and called upon assessee to show as to why sum of Rs. 6,83,304 be not included in total income of assessee. According to Commissioner, order of Assessing Officer granting benefit of Rs. 6,83,304 to assessee was not only erroneous but was equally prejudicial to interests of Revenue and hence, required to be corrected by taking recourse to provisions of section 263 ibid. explanation of assessee was sought by granting them opportunity of hearing. By order, dated March 30, 1994, Commissioner set aside order of Assessing Officer, dated March 27, 1992, in so far as it related to aforementioned impugned deletion. He held that amount of Rs. 6,83,304 was not part of Rs. 55 lakhs as contended by assessee and hence, it has to be brought within tax net of assessee during period in question. According to Commissioner, order of Assessing Officer was erroneous as also prejudicial to interests of Revenue within meaning of section 263 ibid, and hence, cannot be sustained. It was accordingly, set aside by giving consequential direction to make fresh assessment in light of observations made in order by adding said sum in total gross amount of assessee s income. assessee felt aggrieved filed appeal to Tribunal. By order, dated September 24, 1998, Tribunal dismissed appeal in so far as it related to this issue. Rather, Tribunal went into issue more in detail and finding no merit in it, upheld order of Commissioner. This is what Tribunal held in paragraph 9 of order: 9. As to revision of assessment order on issue of sales tax penalty, letter dated April 19, 1990, of assessee filed during assessment proceedings makes it abundantly clear that assessee had made false claim of deduction in return, as amount(s) of sales tax penalty had been claimed and allowed in earlier years. It was in this back-drop that assessee had requested Assessing Officer to increase returned income by amount of sales tax penalty of Rs. 6,83,304. If that be so, question of including this sum in surrendered amount of Rs. 55 lakhs does not arise, as fact of inclusion of said sum being sales tax penalty in conspicuous by its absence in assessee s letter of surrender dated March 3, 1992, relating to assessment year 1989-90. Paragraphs 3 and 4 thereof do not refer to sales tax penalty. In sharp contrast, letter of surrender of same date does make mention of sales tax penalty in paragraph 3 thereof in clear terms. This conduct of assessee itself negatives assessee s claim of inclusion of impugned sum of sales tax penalty in surrendered amount of Rs. 55 lakhs in assessment year 1989-90. Since Assessing Officer had erroneously not increased income originally returned by amount of sales tax penalty of Rs. 6,83,304 as requested by assessee, vide letter dated April 19, 1990, while framing assessment, assessment was erroneous due to non- inclusion of this sum in total income causing prejudice to interests of Revenue. Commissioner was justified in invoking his revisionary powers in respect of this issue. assessee accepted this order of Tribunal because they did not pursue this issue further in appeal to this court under section 260A ibid. In this view of matter, order passed by Tribunal attained finality. As sequel to order passed by Commissioner, dated March 30, 1994, and later having been upheld by Tribunal on September 24, 1998 (referred supra) Assessing Officer passed fresh consequential assessment order, dated January 25, 1996, and, accordingly, added sum of Rs. 6,83,304 in gross income of assessee for period in question. Indeed while giving effect to order passed by Commissioner, Assessing Officer had to add this sum while computing total income of assessee. assessee felt aggrieved of this assessment filed appeal to Commissioner of Income- tax (Appeals). By order, dated November 29, 1996, Commissioner of Income-tax (Appeals) dismissed appeal and upheld assessment order including addition of Rs. 6,83,304. Aggrieved, assessee filed further appeal to Tribunal. By impugned order, Tribunal allowed appeal filed by assessee and deleted addition of Rs. 6,83,304 made by Assessing Officer pursuant to order of Commissioner. It is against this order of Tribunal, Commissioner of Income-tax (Revenue) has felt aggrieved and filed this appeal. As stated supra, appeal was admitted for final hearing on aforementioned substantial questions of law. Heard Shri R. L. Jain, learned senior counsel with Ku. V. Mandlik, learned counsel for appellant (Revenue) and Shri Vijay Asudani, learned counsel for respondent (assessee). Shri Jain, learned counsel for appellant (Revenue) while assailing legality and propriety of impugned order, contended that Tribunal was in error in deleting addition made by Assessing Officer pursuant to order of Commissioner passed in section 263 proceedings. It was his contention that issue regarding addition/deletion of Rs. 6,83,304 had already attained finality when order of Commissioner, dated March 30, 1994, was upheld by Tribunal by order dated September 24, 1998. He, therefore, urged that once issue attained finality against assessee then in such event, Tribunal had no jurisdiction in same proceedings arising out of consequential order of assessment to take different view in favour of assessee. It was, therefore, his submission that Tribunal should have upheld addition of Rs. 6,83,304 made by Assessing Officer as same was in conformity with direction issued by Commissioner in suo motu revisionary proceedings. In reply, learned counsel for assessee supported impugned order and urged for its upholding. Placing reliance on decisions in Mewa Ram v. Deo Prakash, AIR 1954 All 770; Ram Autar v. State, AIR 1954 All 771; Kochu Pennu Appi Pennu v. Kalyambi Nanan, AIR 1985 Ker 66; V. E. Vasudevan v. Pennu Appi Pennu v. Kalyambi Nanan, AIR 1985 Ker 66; V. E. Vasudevan v. State of Kerala, AIR 1985 Ker 69 [FB]; Damodhar Rao v. Bhima Rao, AIR 1965 Mysore 290 ; Rajani Kumar Mitra v. Ajmaddin Bhuiya, AIR 1929 Cal 163, Addl. CIT v. Mukur Corporation [1978] 111 ITR 312 (Guj) CIT v. Seshasayee Paper and Boards Ltd. [2000] 242 ITR 490 (Mad); P. V. Doshi v. CIT [1978] 113 ITR 22 (Guj), Sri Sri Kubereswar Mahadeva Thakur v. CIT [1992] 196 ITR 649 (Cal) and CIT v. South India Shipping Corporation Ltd. [1998] 233 ITR 546 (Mad) learned counsel contended that finding recorded by Commissioner and later upheld by Tribunal against assessee would not be bar in subsequent proceedings arising out of appellate orders to again decide issue on merits. It was his submission that, firstly, order of Commissioner passed in section 263 proceedings is not final and, secondly, it would not operate as res judicata. Having heard learned counsel for parties and having perused record of case, we are inclined to allow this appeal and set aside impugned order passed by Tribunal. In our considered opinion, issue regarding addition of Rs. 6,83,304 having attained finality in earlier proceedings, which travelled from suo motu revisionary order of Commissioner, dated March 30, 1994, to that of order dated September 24, 1998, passed by Tribunal, against assessee, same had to be decided against assessee in consequential proceedings for giving effect to said orders. Indeed, neither Assessing Officer nor Commissioner of Income-tax (Appeals) nor Tribunal had jurisdiction to decide this issue again on its merits contrary to earlier finding of Tribunal. Once issue was decided in hierarchical system in same year against any party, then it could not be allowed to be reagitated in collateral proceedings arising in same year by any party. In our considered opinion, Tribunal was bound by finding recorded by Tribunal in its earlier order, dated September 24, 1998, quoted supra. It is not in dispute that Commissioner had jurisdiction to invoke powers conferred under section 263 ibid for recalling of order passed by Assessing Officer on ground of its being erroneous and prejudicial to interests of Revenue. It is also not in dispute that Commissioner did find that these two grounds did exist in order of Assessing Officer and accordingly, recalled same. It is also not in dispute that Tribunal too concurred with finding of Commissioner when it proceeded to dismiss appeal filed by assessee. It is also not in dispute that assessee though had opportunity to challenge appellate order of Tribunal in further appeal under section 260A ibid but for reasons best known to them, they did not prefer to challenge and accepted appellate order of Tribunal. In situation emerging from undisputed facts taken note of supra, we are clearly of view that Tribunal had no jurisdiction to deal with same issue in appeal arising out of consequential order of assessment. What is unfortunate is that Tribunal did not even refer to its earlier order dated September 24, 1998, and hence, failed to consider its legal effect in proceedings arising out of consequential assessment orders thereby committing error of law. In our considered view, it is case where issue regarding addition of Rs. 6,83,304 was debated inter se parties on merits and eventually merged into appellate order of Tribunal which attained finality against assessee. It could only be examined on its merits by High Court in appeal filed by assessee under section 260A ibid against said order (September 24, 1998). If for any reasons, assessee gave up challenge then issue attained finality. only thing that survived in such circumstance was implementation of finding which attained finality by passing consequential order by Assessing Officer, if necessary, so as to make order in conformity with final order passed in case. We have gone through several decisions cited at Bar by learned counsel for assessee mentioned supra. We are afraid, none of them are on issue involved. They are distinguishable on facts. We, therefore, need not take trouble of dealing with each and every case to show as to how they are distinguishable. It will, in our opinion, only increase length of our judgment with no utility and hence, we refrain from undertaking this exercise. Accordingly and in view of foregoing discussion, appeal succeeds and is allowed. impugned order in so far as it relates to deletion of Rs. 6,83,304 in computation of gross income of assessee for assessment year in question is set aside. As consequence, order passed by Commissioner of Income-tax (Appeals) which confirmed order of Assessing Officer on this issue is restored. No costs. *** Commissioner of Income-tax v. D and H Secheron Electrodes Ltd