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Issues:
1. Validity of reassessment for the assessment year 1975-76 under section 143(a) of the Income-tax Act, 1961. 2. Validity of reassessment for the assessment year 1976-77 under section 143(3) of the Income-tax Act, 1961. 3. Entertaining additional ground of objection at the stage of second appeal. 4. Requirement of valid service of notice under section 148 for reassessment. Analysis: Issue 1: Validity of reassessment for the assessment year 1975-76 In MCC No. 218 of 1991, the assessee was initially assessed as HUF, but later filed a fresh return in the status of HUF for the same assessment year. The Tribunal set aside the assessment, stating that the notice under section 148 was not served on the proper person. The High Court observed that the Tribunal's finding on the absence of valid service of notice was based on an appreciation of facts, which does not give rise to a question of law. Referring to relevant case law, the Court upheld the Tribunal's decision, emphasizing the importance of proper reasons for reopening assessment proceedings. Issue 2: Validity of reassessment for the assessment year 1976-77 In MCC No. 217/1991, the non-applicant assessee filed a return showing a loss for the assessment year 1976-77. The Tribunal found that the notice under section 148 was not validly served, and the reassessment was without jurisdiction due to the absence of reasons on record. The High Court concurred with the Tribunal's decision, highlighting the requirement of proper reasons for reopening assessment proceedings as a condition precedent for exercising jurisdiction under section 147(a) of the Income-tax Act, 1961. Issue 3: Entertaining additional ground of objection The Tribunal entertained an additional ground of objection at the stage of second appeal, which the applicant-revenue contended was an error of law. However, the High Court held that there was no error in entertaining a ground that was fundamental to the matter, citing relevant legal provisions and case law to support this conclusion. The Court emphasized that the party affected had a sufficient opportunity to contest the case on the additional ground. Issue 4: Requirement of valid service of notice under section 148 Both cases revolved around the validity of the notice served under section 148 for reassessment. The High Court upheld the Tribunal's findings that the notices were not validly served, leading to the reassessments being declared invalid and without jurisdiction. The Court emphasized the importance of proper service of notices and the need for valid reasons to support reopening of assessment proceedings. In conclusion, the High Court dismissed the cases, stating that the common question proposed was not referable as a question of law. The Court also mentioned that the Tribunal's decisions were supported by the record and legal principles, emphasizing the significance of proper procedures and reasons in assessment proceedings.
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