I don’t recall anyting from the text but is there any reason why Ned asked Robert to give mercy to Balon instead of execution after his failed rebellion?

Ned didn’t, as far as I can tell. Robert pardoned him out of his own sense of mercy:

“Robert could be merciful. Ser Barristan was scarcely the only man he had pardoned. Grand Maester Pycelle, Varys the Spider, Lord Balon Greyjoy; each had been counted an enemy to Robert once, and each had been welcomed into friendship and allowed to retain honors and office for a pledge of fealty. So long as a man was brave and honest, Robert would treat him with all the honor and respect due a valiant enemy.” (Eddard XII, AGOT)

“You may take my head,” he told the king, “but you cannot name me traitor. No Greyjoy ever swore an oath to a Baratheon.” Robert Baratheon, ever merciful, is said to have laughed at that, for he liked spirit in a man, even in his foes.

“Swear one now,” he replied, “or lose that stubborn head of yours.” (WOIAF)