Territorial jurisdiction and reassessment validity were remitted for fresh adjudication, with no automatic annulment of assessment.

Territorial jurisdiction objections under section 124(2) were treated as procedural, so the assessment was not automatically void merely because no reference was made for jurisdictional determination; the matter was remitted for a fresh decision on the correct assessing authority. Reopening under sections 147/148 was also not invalidated at this stage, because the Assessing Officer had recorded reasons himself and the sufficiency of the escapement material required reconsideration on remand. Both jurisdiction and reassessment questions were therefore sent back for fresh adjudication rather than finally annulled.

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Issues: (i) Whether the assessment framed by the Assessing Officer was liable to be annulled for want of territorial jurisdiction in the absence of a reference under section 124(2); (ii) Whether the reassessment proceedings under sections 147/148 were vitiated for want of proper reasons and satisfaction by the Assessing Officer.

Issue (i): Whether the assessment framed by the Assessing Officer was liable to be annulled for want of territorial jurisdiction in the absence of a reference under section 124(2).

Analysis: The objection to territorial jurisdiction had been raised by the assessee during the proceedings, and the matter was not referred for determination by the higher jurisdictional authority contemplated by section 124(2). The omission, however, was treated as one of procedure. The absence of such reference did not by itself render the assessment void, and the issue required a fresh determination by the Assessing Officer after considering the assessee's claim as to the correct assessing authority.

Conclusion: The assessment was not liable to be annulled merely on the ground of jurisdictional objection; the matter was remitted for fresh decision on jurisdiction.

Issue (ii): Whether the reassessment proceedings under sections 147/148 were vitiated for want of proper reasons and satisfaction by the Assessing Officer.

Analysis: The reopening was challenged as mechanical and based on superior authority directions. It was, however, noticed that the reasons had been recorded by the Assessing Officer himself and that the question whether income had escaped assessment still required reconsideration on the material available. The validity of the reopening was therefore not finally adjudicated and was to be examined afresh in accordance with the governing principles for reassessment.

Conclusion: The challenge to the reopening did not succeed at this stage, and the issue was sent back for fresh adjudication by the Assessing Officer.

Final Conclusion: The appellate challenge succeeded only to the extent of setting aside the order of annulment and restoring both jurisdiction and reassessment questions to the Assessing Officer for a fresh decision, with the revenue appeals treated as allowed for statistical purposes.

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