The effect of reopening the assessment is to vacate or set aside the initial order of assessment and substitute in its place the order made in reassessment proceedings. The original assessment order cannot survive in any manner or to any extent.

1. At the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following two questions of law for the decision of this Court.

"1. Whether cm the facts and in the circumstances of the case and also in view of the fact that the original assessment has not been set aside, the Commissioner of Income-tax (Appeals) has only deleted the addition of Rs. 90,000/- made, the Tribunal is justified in not considering the case on merits?

2. Whether on the facts and in the circumstances of the case the Tribunal is right in law and fact in holding that the question of restoration of the addition made in the gross profit does not arise at present and is not the 'order' of the Tribunal vitiated for not considering the issue on merits?"

The respondent is this reference is an assessee to income-tax. We are concerned with the assessment year 1975-76.

2. The assessee is a whole-sale dealer in textiles. For the year 1975-76 the book results were rejected and a gross profit wan estimated by the Income-tax Officer. He made an addition of Rs. 90,000/- to the income returned. The assessment order is dated 7-e-1978. In appeal the Commissioner of Income-tax (Appeals) (in short, the C.I.T.) by order dated 15-e-79 held that the Income-tax Officer did not really make out a case for rejection of the accounts and so the addition of Rs. 90,000/-to the income returned was uncalled for. The addition made by the Income-tax Officer was directed to be deleted. The Revenue filed an appeal. I.T.A. 251/Coch/79, before the Income-tax Appellate Tribunal (in short, the Tribunal). It was pending. While so, the Income-tax Officer initiated proceedings under S.147(b) of the Income-tax Act for the very same year, 1975-76. Notice in this regard was issued to the assessee on 12-5-1979. The assessee filed his return of income on 17-8-1979. The draft assessment order under S.144B was issued to the assessee on 22-5-1980 proposing an addition of a sum of Rs. 4,12,092/- to the income originally assessed. The assessee filed his objections. The draft assessment order and the records were forwarded to the Inspecting Assistant Commissioner of Income-tax on 13-6-1980, who by his proceedings dated 28-10-1980 directed that the proposed addition of Rs. 4,12,092/- may be deleted. In view of the directions of the Inspecting Assistant Commissioner of Income-tax aforesaid, the Income-tax Officer passed an order under S.143(e) of the Act, read with S 147 (b) and S.144B, dated 31-10-1980, closing the reassessment proceedings as 'N.A.'. In other words, a nil assessment order was passed dated 31-10-1980. Thereafter when the appeal filed by the Revenue-I.T.A. 251/ Coch/ 79-from the original assessment proceedings, came up for hearing, the Tribunal held, that in view of the proceedings initiated under S.147(b) of the Act and the revised assessment order dated 31-10-1980, the original assessment (dated 7-e-1978), against which the Revenue bad filed I. T. A. 251/Cocb/79, has been annulled, there is no question of restoration or deletion of the addition to the gross profit; and in this view of the matter, concluded that the original assessment having been set aside, there was no necessity to go into the merits of the case. The appeal filed by the Revenue was dismissed. Thereafter the Revenue filed an application to refer certain questions of law, which according to it, arose out of the order passed by the Tribunal in I.T.A. 251/Cocb/79 dated 4-6-1981. Accordingly, the Tribunal has referred the two questions, extracted hereinabove, for the decision of this court.

5. We beard counsel for the Revenue, Mr. P.K.R. Menon. The respondent-assessee was not represented before us. The short facts in this case are these. Originally, the Income-tax Officer passed an assessment order dated 7-e-1978. He added a sum of Rs. 90,000/- to the income returned by the assessee. It was directed to be deleted by the C. I. T. by order dated 15-e-1979. The Revenue filed an appeal from the above said