Jurisdictional validity of reassessment notice must be decided first; merits appeal remains pending until threshold issue is resolved.

The High Court held that a remand in a reassessment dispute must be confined to the jurisdictional validity of the reassessment notice under sections 147 and 148 of the Income-tax Act, because that issue goes to the root of the assessment's validity. If the reassessment itself is invalid, the merits of the addition do not survive; if the threshold issue is decided in favour of either side, the consequential merits appeal can then be considered afresh. To avoid an academic exercise and preserve appellate sequence, the remand was limited to that question alone and the Revenue's appeal was treated as pending until its determination by the Commissioner (Appeals).

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Issues: Whether the remand directed in the earlier order should be confined to the validity of the reassessment proceedings under sections 147 and 148 of the Income-tax Act, 1961, so that the Revenue's appeal remained pending until that issue was decided.

Analysis: The earlier remand was found to be too wide because the question of validity of the reassessment notice went to the root of jurisdiction. If the reassessment itself was invalid, the merits of the addition would not survive; if the assessee or the Revenue succeeded on that threshold issue, the consequential appeal on merits would then arise for consideration afresh. To avoid futility and preserve the proper appellate sequence, the remand had to be restricted to the jurisdictional question alone, with the Revenue's appeal treated as pending until that issue was decided by the Commissioner (Appeals).

Conclusion: The remand was modified into a limited remand confined to the validity of the reassessment proceedings, and the Revenue's appeal before the Tribunal was held to remain pending until that question was determined.

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