Appeal allowed, Tribunal's order set aside, remand for fresh decision.

The appeal was allowed, setting aside the Tribunal's order and remanding the matter for a fresh decision on the merits in accordance with the law, with further proceedings scheduled for January 14, 2010. The Tribunal was found unjustified in directing to wait for the Excise Tribunal decision, emphasizing the independence of finalizing reassessment regardless of excise proceedings. The judgment in CIT v. K. S. Bhatia was deemed inapplicable, and the assessing authority was not required to delay proceedings based on the Excise Tribunal decision, as it could lead to time-barred proceedings.

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Issues:
1. Appeal against order of the Income-tax Appellate Tribunal for assessment year 2004-05.
2. Justification of setting aside Assessing Officer's order for fresh assessment based on Excise Tribunal decision.
3. Applicability of judgment in CIT v. K. S. Bhatia [2002] 257 ITR 614.
4. Relevance of proceedings under Central Excise Act in reassessment.
5. Decision on whether Tribunal was justified in directing to wait for Excise Tribunal decision.

Analysis:

Issue 1: The appeal was filed by the Revenue against the order of the Income-tax Appellate Tribunal for the assessment year 2004-05, proposing a substantial question of law regarding the validity of setting aside the Assessing Officer's order for fresh assessment based on the Excise Tribunal decision.

Issue 2: The Assessing Officer initiated reassessment proceedings based on findings under the Central Excise Act regarding clandestine removal of stocks. The Commissioner of Income-tax (Appeals) deleted the additions, considering the higher authority's decision under the Central Excise Act. The Tribunal directed a fresh assessment after the Excise Tribunal's decision, citing the judgment in CIT v. K. S. Bhatia [2002] 257 ITR 614.

Issue 3: The Revenue contended that the judgment in CIT v. K. S. Bhatia was not applicable as the finding relied upon had been set aside by the higher authority in that case. The Revenue argued that the assessing authority should not have to wait for the Excise Tribunal decision, as it could lead to time-barred proceedings. The Tribunal's direction to wait for the Excise Tribunal decision was deemed unjustified.

Issue 4: The relevance of proceedings under the Central Excise Act in reassessment was discussed, emphasizing that such proceedings were only relevant for forming an opinion on income escapement. The authorities were required to independently finalize reassessment, irrespective of the final decision in excise proceedings.

Issue 5: The judgment concluded that the Tribunal was not justified in directing to keep the matter pending until the Excise Tribunal's decision. The appeal was allowed, the Tribunal's order was set aside, and the matter was remanded for a fresh decision on the merits in accordance with the law, with further proceedings scheduled for January 14, 2010.

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