ASHIM KUMAR BANERJEE, J. - (1.) THE subject of controversy relates to the asst. yr. 1994 -95. During the said period the appellant/assessee purchased electric meters on different dates from the Gujarat Electricity Board and at the same time they let out those meters to the State Electricity Board on lease and thereby earned the rental income. The assessee submitted its return, inter alia, claiming depreciation on the value of the said meters estimated at Rs. 35.10 crores approximately. On 19th May, 1997, the (AC) passed an order disallowing the depreciation as claimed by the assessee. According to the AC), the subject transaction was nothing but a camouflage as it was nothing but a financial agreement by which money was lent and advanced by the assessee to the State Electricity Board on the said electric meters. Accordingly, the AO disallowed assessment on the rental income. The AO calculated the notional interest on the principal sum as and by way of interest income and assessed tax on the said basis. The assessee preferred an appeal before the CIT(A).The appellate authority asked the AO to determine the market, value of the said electric meters and submit a report. Accordingly, the AO submitted his report. On the basis of the said report the appeal was allowed by allowing depreciation on Rs. 11.38 crores being the book value of the said meters and not Rs. 35.10 crores as prayed for by the assessee. The assessee approached the Tribunal. The Tribunal by an order dt. 31st Dec., 2001, set aside the order of the CIT(A) as well as the order of the AO and remanded the matter back to the AO for deciding the issue afresh on the basis of the materials so produced by the assessee not only on the depreciation but also on the issue of foreign travel allowance claimed by Mrs. J. Thapper, director of the assessee -company. The said order was duly served upon the AO. At that time the AO was also considering the issue of exemption as claimed by the assessee on account of sales -tax under Section 147 of the said Act.
(2.) THE AO after receipt of the order of the Tribunal issued a notice asking the assessee to furnish various details and information with regard to the other two issues being depreciation and foreign travel allowance. The assessee duly replied to the said letter. While the said issues were pending, the AO passed an order on 12th Feb., 2002, deciding the issue of sales -tax. While doing so the concerned officer also took into account the order of the Tribunal dt. 31st Dec., 2001, and allowed depreciation as claimed by the assessee to the extent of Rs. 35.10 crores. Accordingly, a refund voucher was issued. The assessee was given appropriate refund in terms of the said order dt. 12th Feb., 2002. On 15th May, 2002, the AO issued a further notice asking for details and information regarding the issue of depreciation and foreign travel allowance. Challenging the said notice the assessee approached the learned Single Judge by filing a writ petition. According to the assessee, once the issue was concluded by order dt. 12th Feb., 2002, there was no occasion for the AO to ask for further details in terms of the notice dt. 15th May, 2002. The assessee prayed for quashing of the said notice. Initially, the learned Single Judge passed an order of stay with regard to giving effect to the said notice dt. 15th May, 2002. Ultimately, the learned Single Judge by judgment and order dt. 15th Oct., 2004, Karam Chand Thapar and Brothers v. Asstt. CIT : [2005]276ITR105(Cal) , dismissed the writ petition by holding that the AO was within his power to issue such notice. The relevant finding of the learned Single Judge is quoted below: Having heard the respective contentions of learned Counsel in this matter, I think the issue is whether the AO is justified in issuing the impugned notice in the context of the order dt. 12th Feb., 2002. Mr. Murarka says that the aforesaid order is a final one, as the question of depreciation has been taken care of and after considering everything a refund order has been passed, so it reaches its finality. I have examined the order carefully and I hold Mr. Ghosh is right in saying the order does not relate to any decision on the issue of depreciation or the expenditure on account of the foreign tour of Mrs. J. Thapar. I have already quoted the direction of the Tribunal upon the AO. It is clear that the AO is to decide upon fresh hearing on these two issues/Therefore, the contention of Mr. Murarka that this order being a final one and on fresh decision of the aforesaid two issues is not correct. From the order dt. 12th Feb., 2002, it does not appear the AO has heard the assessee/petitioner or touched the issue not to speak of deciding the same. So, I hold that irrespective of the effect and implication of the order dt. 15th Feb., 2002, the AO has to decide afresh, pursuant to the direction of the Tribunal and this cannot be left outstanding in any manner whatsoever. According to him, if it is not done the same that amounts to gross breach of discipline in the quasi -judicial proceedings. It is a settled position of law that the principle of maintaining hierarchical discipline is equally and vigorously applicable in the quasi -judicial proceedings. This Court is duty bound to see such discipline is followed in the strict sense. The decisions cited by Mr. Murarka, namely, Debt Prasad Malviya v. CIT : [1952]22ITR539(All) ; M.M.A.K. Mohideen Thumby & Co. v. CIT : [1955]28ITR252(AP) ; T. Manavedan Tirumalpad v. CIT : [1955]28ITR615(Mad) , were rendered on the established principle of law that the assessment has to be in complete sense except in the case of escapement of assessment. The scheme of the old Act as well as the new Act in the matter of assessment is 'that the Revenue authorities will try as far as practicable to complete the assessment in one go not in piecemeal manner. But sometimes for some reason or other, this may not be possible. In the case of escapement of assessment for various reasons to safeguard against evasion and dodging of payment of revenue the legislature in its wisdom for the welfare of the country, has provided for reassessment on given conditions and situations with preconditions for exercise of jurisdiction in the case of reassessment. Here the notice impugned was sought to be issued not in relation to any reassessment, but to implement the direction of the Tribunal and the same stands on a different footing. I agree with the contention of Mr. Ghosh that the order dt. 12th Feb., 2002, has nothing to do in relation to the aforesaid two issues of the computation of income and the reference to deduction on account of depreciation is in consonance with the direction of the Tribunal as a first step to rehear the matter on these two issues. I do not think, therefore, that the AO has exceeded his jurisdiction or has improperly exercised jurisdiction, The order dt. 12th Feb., 2002, substantially relates to the reassessment under Section 147 of the said Act in relation to the payment of sales -tax. Therefore, I dispose of the writ petition having found no merit in the contention upon deep and close scrutiny. I direct the AO to complete the rehearing pursuant to the direction of the Tribunal as early as possible and the same shall be done within two months from the date of receipt of this order.
(3.) BEING aggrieved by and/or dissatisfied with the judgment and order of the learned Single Judge the assessee preferred the instant appeal. The Division Bench while admitting the appeal permitted the Revenue to proceed with the assessment in terms of the order of the Tribunal so directed by the learned Single Judge. Accordingly, the AO passed an order on 3rd Aug., 2005, allowing depreciation to the extent of Rs. 11.38 crores and thereby disallowing Rs. 23.71 crores. The AO also disallowed the claim on account of foreign travel expenses to the extent of Rs. 2,00,746. The said order was, however, not officially communicated to the assessee in view of pendency of this appeal.;