Section 153C notice rendered the departmental challenge academic as fresh assessment proceedings were initiated for the same year.

A departmental appeal against deletion of income treated as taxable under Section 56 became infructuous after the department issued a notice under Section 153C for the same assessment year, requiring a fresh true and correct return. The Tribunal noted that this subsequent action initiated a new assessment process following the High Court decision relied on below, so the earlier challenge to the Section 250 order no longer had practical effect. The contested proceedings were treated as academic because the assessment could be revisited through the fresh Section 153C proceedings.

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Issues: Whether the departmental appeal against deletion of income is rendered infructuous by issuance of a notice under Section 153C of the Income-tax Act, 1961, following the High Court decision relied upon.

Analysis: The appeal challenged an order under Section 250 of the Income-tax Act, 1961, which had set aside an assessment and deleted income treated as taxable under Section 56. The tribunal noted that subsequent to the High Court decision relied upon before the lower authority, the department issued a notice under Section 153C of the Income-tax Act, 1961 for the same assessment year requiring the assessee to furnish a true and correct return, thereby initiating fresh proceedings. In view of the departmental action invoking Section 153C, the earlier departmental appeal no longer retained practical efficacy and the contested proceedings became academic as there existed an alternative and operative process for revisiting the assessment for the year in question.

Conclusion: The departmental appeal is dismissed as having become infructuous.

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