Consistency across assessment years guided remand for fresh income-tax examination where differential treatment lacked material support.

In income-tax proceedings, a consistent position accepted in earlier and subsequent assessment years should ordinarily not be disturbed absent a material change in facts or law, even though res judicata does not strictly apply. The record showed no material explaining why the assessee, an NBFC, was treated differently for the year in question, and the allegation that it was bogus lacked supporting material. As the issue had not been fully examined on the relevant facts, the matter was remanded to the Assessing Officer for de novo adjudication, with the Revenue's appeal succeeding only for statistical purposes.

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Issues: Whether the Revenue's challenge to the order directing acceptance of the return of income could be sustained, and whether the matter required fresh examination by the Assessing Officer in light of the consistent treatment in earlier and subsequent assessment years.

Analysis: The assessee, an NBFC, had its returns accepted in later assessment years and refunds were also granted. In income-tax proceedings, res judicata does not strictly apply, but where a fundamental aspect has been consistently accepted across assessment years, a divergent view should not ordinarily be taken unless there is a material change in facts or law. The record indicated that the Assessing Officer had not explained why the assessee was treated differently only for the year in question, and the finding that the assessee was bogus was not supported by material. At the same time, the issue had not been fully examined by the Assessing Officer on the relevant factual basis.

Conclusion: The matter was sent back to the Assessing Officer for de novo adjudication. The Revenue's appeals succeeded only for statistical purposes.

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