- (1.) THIS is an income-tax reference under S. 256 (1) of the IT Act, 1961 ('the Act') in which three questions have been referred to this Court but we have reframed them into an single question on the orders sheet which is in the following terms: "Whether, when the CIT has set aside the assessment under S. 263, the appeal filed by the assessee before CIT (A) becomes infructuous?"
(2.) WE have heard Shri Vikram Gulati, the learned counsel for the assessee, and Shri Shekhar Srivastava for the Department. The relevant year for the assessment year is 1972-73 and for this year an assessment order was passed on 23rd Sep., 1978. Against this order, the assessee filed an appeal before the CIT (A) whereas the CIT took proceedings under S. 263 of the Act and passed an order under S. 263 on 1st Feb., 1980 while the appeal was still pending. By the said order of the CIT under S. 263 the assessment order has been set aside and the case was remanded. Subsequently, the CIT (A) by his order dt. 15th Feb., 1993 also allowed the appeal on merits. The CIT (A) in para 10 of its order rejected the contention of the appellant that the appeal had become infructuous in view of the order under S. 263 of the CIT (A) . Thereafter, the assessee went in Second Appeal before the Tribunal but the said appeal has been dismissed. Aggrieved, he filed an application under S. 256 (1) in which the question has been referred to us. In our opinion, since the CIT had set aside the assessment by his order dt. 1st Feb., 1980 under S. 263 the appeal of the assessee became infructuous. As such, the CIT (A) and the Tribunal wrongly held that the appeal has not become infructuous. In view of the above, we answer the question in affirmative in the favour of the assessee and against the Department. No order as to costs.;