Reassessment jurisdiction and unexamined additions led to de novo remand, with cross-objections restored for fresh adjudication.

Reassessment disputes under the Income-tax Act were treated as requiring fresh examination where the first appellate relief had been granted only on jurisdictional grounds and the additions on merits had not been adjudicated. The Tribunal indicated that a direction to withdraw the reassessment notice was not sustainable in that posture, particularly where factual questions such as alleged accommodation entries and transaction genuineness remained unresolved. Both assessment years were therefore sent back for de novo reassessment with an opportunity of hearing, and the connected cross-objections were restored for decision along with the reassessment proceedings.

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Issues: (i) Whether the order of the first appellate authority directing withdrawal of reassessment notices and allowing the assessee's appeals without adjudicating the additions on merits could be sustained; (ii) whether the matters arising from the two assessment years should be sent back for fresh reassessment and reconsideration of the connected cross-objections.

Issue (i): Whether the order of the first appellate authority directing withdrawal of reassessment notices and allowing the assessee's appeals without adjudicating the additions on merits could be sustained.

Analysis: The appeals involved reassessment notices issued under the Income-tax Act, 1961 and challenges based on the faceless assessment regime and the jurisdiction of the Assessing Officer. The Tribunal noted that the first appellate authority had granted relief only on the jurisdictional aspect and had not examined the merits of the additions. It further held that the direction to withdraw the notice was not in accordance with law and that the controversy required reconsideration in the light of the subsequent legislative amendment and the factual disputes surrounding the alleged accommodation entries and genuineness of the transactions.

Conclusion: The order of the first appellate authority was not sustained on this footing, and the matter was required to be reopened for fresh consideration.

Issue (ii): Whether the matters arising from the two assessment years should be sent back for fresh reassessment and reconsideration of the connected cross-objections.

Analysis: Since the additions and the related jurisdictional objections depended on factual verification, the Tribunal considered it appropriate to set aside the appellate orders and remit both assessment years to the Assessing Officer for de novo reassessment. The assessee was to be afforded a reasonable opportunity of hearing, and the connected cross-objections were also restored for decision along with the reassessment proceedings. No final adjudication on the merits of the additions was recorded.

Conclusion: The appeals and cross-objections were remanded for fresh adjudication with opportunity to both sides.

Final Conclusion: The dispute was not finally decided on the tax additions, and both assessment years were sent back for fresh reassessment, leaving the merits open for reconsideration.

Ratio Decidendi: Where the appellate relief rests only on a jurisdictional objection and the merits of the additions remain unexamined, the appropriate course is to set aside the order and restore the matter for de novo adjudication with due opportunity of hearing.

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