1. For the two assessm ent years 1975-76 and 1976-77, a composite statement of case has been submitted and the following questions of law have been referred by the Income-tax Appellate Tribunal, Ahmedabad Bench "C", arising out of its decision in Income-tax Appeals Nos.2240 and 2241/Ahd. Of 1981 as required by the Commissioner of Income-tax, Ahmedabad: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the order, dated February 8, 1979, passed by the Commissioner of Income-tax under section 263 of the Act was liable to be set aside?
(2) Whether, the Tribunal was right in law and in facts and circumstances of the case in coming to the conclusion that since they had found that the order under section 263 itself was bad, there was no question of upholding the consequential orders of the Income-tax Officer to give effect to the order of the Commissioner under section 263?"
2. The facts relevant for the present purposes and out of which reference has been made may be noticed.
3. For the two assessm ent years in question, the Income-tax Officer has completed the original assessm ents on December 4, 1977. Those assessments were set aside by the Commissioner in exercise of his powers under section 263 by holding the same to be prejudicial to the interest of the Revenue by his order, dated February 8, 1979, and the Income-tax Officer was directed to make fresh assessm ents. The order under section 263 was ultimately set aside by the Tribunal. Against the order of the Tribunal setting aside the order under section 263 passed by the Commissioner of Income-tax, the order of the Tribunal was made the subject-matter of reference before this Court, and the Income-tax Officer made fresh assessments in accordance with directions contained in the order of the Commissioner of Income-tax which had been set aside. On appeal against the assessm ent orders, the Commissioner of Income-tax (Appeals) set aside the fresh assessm ent orders on the ground that the order of the Commissioner of Income-tax under section 263 having been cancelled, the consequential orders could not have been passed in pursuance of those directions. On appeal, the Revenue failed before the Tribunal also. The only ground raised before the Tribunal was that since reference application is pending before the High Court, the order passed by the Income-tax Officer ought not to be set aside, until the decision of those reference applications.
4. The order of the Tribunal setting aside the order under section 263 was the subject-matter of Income-tax Reference No.113 of 1982. The same has been decided by this Court on October 8, 1993, answering the questions in favour of the assessee and against the Revenue.
5. There cannot be any doubt about the proposition that once the original assessments have come into force unless the same are set aside in accordance with law in appropriate proceedings, they hold the field and there cannot be, two operative assessments at the same time. The effect of the order under section 263 made by the Commissioner of Income-tax was that the original assessm ent stood set aside. However, once an order under section 263 was set aside it resulted in restoration of the original assessm ents on record, there cannot be any room for fresh assessment orders even if the same have come into existence in pursuance of a direction issued under section
263. It cannot be said that by complying with the direction under section 263, the remedy of appeal or getting determination of the question by way of further proceedings in accordance with the provisions of the Income-tax Act become redundant. The consequence of setting aside of an order under section 263 must follow, namely, the order passed in consequence thereof, must also fail. As has been noticed above, the order passed by the Commissioner under section 263 was set aside by the Tribunal and on further reference, the High Court has found the order of the Tribunal to be justified in that regard.
6. We, therefore, have no hesitation in answering the questions referred to us in the affirmative, that is to say, in favour of the assessee and against the Revenue.
7. No one appeared on behalf of the assessee. There shall be no order as to costs. .