Binding Tribunal directions must guide later assessments; earlier findings remain relevant despite no strict res judicata.

A prior Tribunal direction setting aside an assessment and requiring fresh disposal in accordance with law was treated as binding for the later assessment year. The assessing authority could not ignore that mandate, and the earlier order remained a relevant and cogent factor even though income-tax proceedings are not governed by strict res judicata. The analysis also notes that a statutory remedy was futile where the same foundational issue had already been decided in the assessee's favour by the Tribunal. The assessment and appellate orders were therefore set aside and the matter required fresh reconsideration after notice to the assessee.

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Issues: Whether the assessment and appellate orders disallowing exemption under section 4(1)(b) of the Agricultural Income-tax Act, 1950 were liable to be set aside for failure to follow the earlier Tribunal directions and for not considering those directions as binding and relevant in the subsequent assessment year.

Analysis: The earlier Tribunal order had expressly set aside the assessment and directed fresh disposal in accordance with law and in the light of its observations. That direction was clear and unambiguous, and no revised order had been passed in compliance with it. In such circumstances, the assessing authority could not ignore the Tribunal's mandate while making the later assessment. The earlier order, though relating to a different assessment year, constituted cogent evidence and a relevant factor for the subsequent year. The doctrine of res judicata did not strictly apply to income-tax assessment proceedings, but that did not permit disregard of binding appellate directions or justify repetitive adjudication in defiance of a superior order. The alternative statutory remedy was treated as futile because the matter had already been decided in the assessee's favour by the Tribunal on the same foundational issue.

Conclusion: The assessment and appellate orders were liable to be set aside and the matter was required to be reconsidered afresh in accordance with the Tribunal's earlier directions, after notice to the assessee.

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