Law: Income Tax Act, 1961

Section: 147

Income-tax--Assessment---Appeal to A.A. C.---I.T.O.---Fresh assessment pursuant 'to appellate order---Only issues which have not attained finality can be considered---Appeal from such a fresh assessment can only be on issues which have not attained finality ---AAC holding reassessment to -be valid and directing ITO to re-compute income from hundi loans---It is not open to ITO while making fresh assessment pursuant -to AAC's order to re-examine legality of initiation of proceedings under S.147---In appeal against fresh assessment AAC cannot examine the legality of initiation of proceedings under 5.147, Indian Income Tax Act, 1961. In proceedings before the Income-tax Officer for making a fresh assessment pursuant to the directions contained in an appellate order, only such issues, can be agitated which have not attained finality. Similarly, in an appeal against the fresh order, only such issues which have not become final by the earlier orders of the appellate authority can be agitated. The assessee cannot be allowed to challenge the findings of the appellate authority collaterally before the Income-tax Officer in the proceedings for the fresh assessment. Hardillia Chemicals Ltd. v. CIT (1996) 221 ITR 194 (Bom.); Pulipati Subbarao & Co. v. AAC (1959) 35 ITR 673 (AP) and Kathar Jute Mills (P.) Ltd. v, CIT (1979) 120~ITR 861 (Cal.) fol. Held, that in the instant case, the legality of the proceedings under section 147(a) of the Income Tax Act, 1961, having been considered by the Appellate Assistant Commissioner in his earlier order and the same having been held to be legal and valid and the assessment having been set aside and remitted to the Income-tax Officer only for the limited purpose of computing the additions and disallowances afresh by re-examining the evidence in respect of the hundi loans after giving reasonable opportunity of hearing to the assessee, it was not open to the Income-tax Officer. while making fresh assessment pursuant to the directions to the Appellate Assistant Commissioner to re-examine the legality of the initiation of the proceedings for reassessment, when the assessee sought to challenge again in the fresh assessment proceedings the…

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