SENGUPTA,J. - (1.) IN this reference under s. 256(2) of the IT Act, 1961 ('the Act'), the following question of law has been referred to by the Tribunal : "Whether, the Tribunal is justified in law in holding that once the assessment was reopened and completed on 31st December, 1983, the original assessment order dt. 28th Nov., 1978 did not exist and consequently the CIT(A) did not have any jurisdiction to pass any order of the appeal preferred against the assessment order dt. 28th Nov., 1978 completed under s. 143(3) of the IT Act, 1961 for the asst. yr. 1977-78?"
(2.) THE facts giving rise to the question are that in the original assessment for the asst. yr. 1977-78 made under s. 143(3) of the Act, the ITO added a sum of Rs. 1,500 being the legal expenses and further disallowed the loss of Rs. 28,854 representing share of loss from partnership business with Industrial Plastic India Ltd. The carry forward of the losses of earlier years was also disallowed, inter alia, on the ground that the provisions of s. 79 of the Act are attracted. The said additions and dis-allowances were challenged in appeal before the CIT(A). The CIT(A) deleted the addition of legal expenses of Rs. 1,500 and also directed the ITO to allow the carry-forward of losses of the previous years. But meanwhile before the disposal of the appeal reassessment proceedings were initiated by issue of notice under s. 148, r/w s. 147(a) of the Act for the said assessment year on the ground that the income chargeable to tax for the said year had escaped assessment within the meaning of s. 147(a). In pursuance of said notice, the assessee filed a return disclosing therein the total in at Rs. 40,620. The reassessment was completed under s. 143(3) r/w s. 148 and the taxable income was computed at Rs. 41,392 as against the return income of Rs. 40,620. The Revenue was aggrieved by the order of the CIT(A) on the appeal from the original assessment. According to the Revenue, the original assessment became non-existent in the wake of the reassessment proceedings and, therefore, no appealable matter from such non-existent assessment could survive for decision by the CIT(A). Thus in view of the Revenue the CIT(A) did hot have any jurisdiction to adjudicate on the said appeal. The matter was taken by the Revenue to the Tribunal in second appeal raising therein the aforesaid contentions. The Tribunal by its order dt. 8th Aug., 1989 concluded that as the reassessment was made on 31st Oct., 1983 the CIT(A) was not justified in entertaining the appeal of the assessee which arose out of the original assessment order passed on 28th Nov., 1978. Thus, the contentions of the Revenue succeeded before the Tribunal.
(3.) WE have heard the rival contentions of the parties. The learned counsel for the Revenue reiterated before us the same contention that once the reassessment proceedings is initiated, the original assessment gets effaced and the entire assessment becomes open at large. Therefore, the assessee's grievance in the original assessment loses relevance and materiality and could not form the basis of an appeal. Therefore, there could be no question of giving relief to the assessee on an appeal from such non-existent assessment. The CIT(A) fell into error in not dismissing the appeal in limine. For this purpose reliance was placed on behalf of the Revenue upon the decision of the Supreme Court in V. Jaganmohan Rao vs. CIT (1970) 75 ITR 373.;