Exemption application and reassessment procedure: pending tax exemption claim required decision, while ex parte orders were set aside and remitted.

A pending exemption application under Section 10(46) was required to be considered and decided by the competent income-tax authority in accordance with law. In reassessment matters, where notices were issued after the amended Section 148A procedure became operative, proceedings had to follow that statutory framework. Ex parte assessment orders passed without proper participation and under the wrong procedural stage could not be sustained, and the consequential penalty orders also fell. The assessment and penalty orders were therefore set aside and remitted for fresh adjudication from the appropriate stage under the reassessment regime applicable to each assessment year.

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Issues: (i) Whether the petitioner's application seeking exemption under Section 10(46) required consideration by the income-tax authorities. (ii) Whether the ex parte assessment and consequential penalty orders arising out of reassessment proceedings were liable to be set aside and remitted for fresh consideration, including the stage from which proceedings had to be recommenced for the different assessment years.

Issue (i): Whether the petitioner's application seeking exemption under Section 10(46) required consideration by the income-tax authorities.

Analysis: The application for exemption under Section 10(46) had remained pending, and the Court followed the existing approach that such applications require consideration and an appropriate decision by the competent authority in accordance with law.

Conclusion: The application for exemption was directed to be considered and decided in accordance with law.

Issue (ii): Whether the ex parte assessment and consequential penalty orders arising out of reassessment proceedings were liable to be set aside and remitted for fresh consideration, including the stage from which proceedings had to be recommenced for the different assessment years.

Analysis: For the assessment years where notices were issued after the amendment to Section 148A became operative, reassessment had to proceed under the amended procedure. The ex parte character of the assessment orders, coupled with the petitioner's inability to participate and the need to follow the correct statutory stage, justified setting aside the assessment orders and the consequential penalty orders, with remand for fresh adjudication from the appropriate procedural stage.

Conclusion: The ex parte assessment orders and consequential penalty orders were set aside, and the matters were remitted for fresh consideration from the appropriate stage under the reassessment regime applicable to each assessment year.

Final Conclusion: The petition succeeded in part, with directions for consideration of the exemption application and fresh reassessment proceedings in accordance with law, while the impugned assessment and penalty orders were annulled and remitted.

Ratio Decidendi: Where reassessment proceedings are required to conform to the amended statutory procedure, an ex parte order passed without proper participation and under an incorrect procedural stage cannot be sustained and must be set aside with remand for fresh proceedings under the correct provision.

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