1977 (8) TMI 29 - HC - Income Tax

High Court allows assessee to challenge reassessment, finding Tribunal's views incorrect.

The High Court ruled in favor of the assessee, finding the Tribunal's views on the finality of its order, the scope of the remand order, and the ... Assessment Of Income Issues Involved:1. Finality of Tribunal's order.2. Scope of remand order by Tribunal.3. Re-agitation of jurisdictional issues by the assessee.Issue-wise Detailed Analysis:1. Finality of Tribunal's Order:The Tribunal held that once it passed a final order, the matter became final regarding the point settled by the Appellate Assistant Commissioner and not agitated before the Tribunal unless taken up to the High Court. The Tribunal's view was that the assessee, having given up the contention regarding the validity of the notice under section 148 read with section 147 before the Appellate Assistant Commissioner, could not revive the point. However, the High Court found this view erroneous, emphasizing that jurisdictional issues cannot be waived and must be addressed whenever raised, as they go to the root of the matter. The High Court concluded that the Tribunal's view on the finality of its order was incorrect.2. Scope of Remand Order by Tribunal:The Tribunal interpreted its earlier remand order as limiting the scope of reassessment to the addition of Rs. 19,421 and not extending to the legal or jurisdictional aspects of whether the reassessment proceedings were correctly initiated under section 147/148. The High Court disagreed, stating that the Tribunal's interpretation was incorrect. The remand order did not preclude the assessee from challenging the jurisdictional validity of the reassessment proceedings.3. Re-agitation of Jurisdictional Issues by the Assessee:The Tribunal held that the assessee, having initially raised and then given up the point about the validity of the reassessment notice before the Appellate Assistant Commissioner, could not re-agitate this issue. The High Court found this view erroneous, reiterating the principle that jurisdictional issues cannot be waived and can be raised at any stage. The Court emphasized that the conditions for initiating reassessment under sections 147 and 148 are mandatory and cannot be waived by the assessee. The High Court answered this question in favor of the assessee, allowing the re-agitation of the jurisdictional issue.Conclusion:The High Court answered all three questions against the revenue and in favor of the assessee. The Tribunal's views on the finality of its order, the scope of the remand order, and the re-agitation of jurisdictional issues were found to be incorrect. The Court emphasized the mandatory nature of jurisdictional conditions under sections 147 and 148, which cannot be waived, and allowed the assessee to challenge the validity of the reassessment proceedings. The reference was disposed of accordingly, with costs awarded to the assessee.