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 1.Principle of Res Judicata


It is generally practiced that each assessment year is unit in itself and thus not affected by what is held in the preceding or succeeding year. In the case of Gestetner (India) Ltd. v. DCIT (108TAX250) the Calcutta Bench of the Tribunal held that though res judiciata does not apply to income tax proceedings, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging that order it would not be at all appropriate to allow the position to be changed in a subsequent year. In this case full enquiry was done by the assessing officer before allowing the claim of the assessee In this case the Commissioner took a new/fresh ground which the bench held is against the principles of natural justice.  Following the Supreme Court ruling in the case of Radhasoami Satsang v. CIT (193ITR321) the Bench held that the assessments are certainly quasi-judicial where restricted res judicata is applicable in a subsequent year and accordingly cancelled the orders passed by the commissioner.


  1. Jurisdiction

In exercising the powers u/s 127(2) the Commissioner of Income –tax transferred the case from Delhi to Faridabad on the ground of administrative convenience and/or coordinated investigation. In a writ filed against such orders the Delhi High Court in the case of Power Controls v. CIT (109TAX27) held that some basic and broad summary of facts must be indicated in the show cause notice itself to facilitate the assessee to make an effective representation as well as to prevent unnecessary harassment to the assessee. Further the Supreme Court ruling in the case of Ajantha Industries v. CBDT (102ITR281) held that the requirement of recording reasons even in the context of transfer of a case from one officer to the other officer subordinate to the same commissioner, is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. The Apex Court further held that in such a case it ceases to be a mere administrative order and the vice of violation of the principles of natural justice thus enabling the assessee to seek justice under article 226 or article 136 of the constitution, as the case may be. Also the Andhra Pradesh High Court in the case of Vijayasanthi Investments (P) Ltd. v. CCIT (187ITR405/56TAX190) held that a personal hearing must be given to the aseessee in such cases. The Division Bench of the AP High Court in the case of Saptagiri Enterprises v. CIT (189ITR705) held that precise and specific reasons must be communicated to the assessee who can put forth his objections effectively.

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