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Issues involved: The issue involves whether the assessee could raise a new ground in appeals against fresh assessments made according to the directions of the Appellate Assistant Commissioner, which had not been raised in the appeals against the original assessments for the assessment years 1948-49, 1949-50, and 1950-51.
Summary: The assessee, a jute milling company, had its original assessments set aside on appeal with a direction to make fresh assessments. During the appeals before the Appellate Assistant Commissioner, the assessee raised a new ground for the first time, contending that the sale proceeds of loom hours were not revenue receipts and should not be taxed. This claim was based on a Supreme Court decision. The department objected to this new plea, arguing that the earlier assessment orders were final and that the sale proceeds were already shown as income in the returns. However, the Appellate Assistant Commissioner allowed the new plea, treating the sale proceeds as capital gains based on the Supreme Court decision. The department appealed to the Tribunal, challenging the admission of the new plea and the treatment of the sale proceeds as capital gains. The Tribunal rejected these arguments and upheld the decision of the Appellate Assistant Commissioner. The High Court held that the fresh assessment orders superseded the previous orders, and it was the duty of the revenue authorities to assess tax in accordance with the provisions of the Act. As capital gains can only be assessed under a specific section of the Act, the appellate authorities were justified in allowing the assessee to raise the new plea regarding the nature of the sale proceeds. The High Court answered the question in the affirmative, against the revenue. No costs were awarded as no one appeared for the assessee. Judge Hazra agreed with the judgment.
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