JUDGMENT (Per T. D. Sugla, J.) The question of law referred to this Court by the Income-tax Appellate Tribunal under section 256(1) of the Income-tax Act, 1961 is : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in taking the view that the Appellate Assistant Commissioner was not justified in entertaining the ground regarding the validity of initiation of re-assessment proceedings under section 147(a) of the Act when the assessee had not challenged the same at the time of filing first appeal against the order of the Income-tax Officer passed on 28.3.1970 ?" The assessee is a company. The proceedings relate to its assessment year 1958-59. The assessment was originally completed under section 23(3) of the Income-tax Act, 1922 on 27th August 1959 computing Nil income after setting off loss brought forward for 1953-54. Declared income was Rs. 688/-. The assessment was thereafter re-opened under section 147(a) by serving notice under section 148 on the assessee on 17th March 1967. Re-assessment was completed under section 143(3) read with section 147(a) on 18th March 1970. Total income therein was determined at Rs. 1,16,184/-. The amount added in the re-assessment was Rs. 1,16,184/-. This represented a number of cash credits. According to the Income-tax Officer the nature and source thereof was not satisfactorily explained and that amount, was therefore, added was Rs. 1,16,184/- as income from undisclosed sources. In the appeal against the above order of re-assessment the pleading was that the assessee was in a position to prove the genuineness of the parties and that it could not do so at the time of hearing before the Income-tax Officer as the creditors were from far away places. The Income-tax Officer was present at the time of hearing, it appears that with the consent of the parties, the Appellate Assistant Commissioner set aside the re-assessment so that opportunity could be Even to the assessee to prove its case. The appellate order is dated 28th November 1970. In pursuance of the above order of the Appellate Assistant Commissioner, the Income-tax Officer passed fresh re-assessment order on 4th January 1972 of course, after giving the assessee opportunity to prove the genuineness of the credits. However, he again held that the cash credits were not satisfactorily proved and treated the amount of Rs. 1,16,184/- as the assessee's income from undisclosed sources. However, he again held that the cash credits were not satisfactorily proved and treated the amount of Rs. 1,16,184/- as the assessee's income from undisclosed sources. The assessee again filed appeal there against. The grounds taken in appeal memo were : "1. The learned Income-tax Officer has erred in adding an amount of Rs. 1,16,184/- as the income of the assessee for the Assessment year 1958-59. 2. The learned Income-tax Officer has further erred in stating that the assessee has not produced any evidence or additional information in the matter." At the time of hearing, however, a new ground was taken for the first time challenging the validity of the initiation of the proceedings under section 147(a). For reasons given in paragraphs 7 and 8 of the order the Appellate Assistant Commissioner accented the assessee's submission following Calcutta High Court decision in the case of Textile Mills Agents (P) Ltd. v. Income-tax Officer and Ors., 1972 TLR 1133, Karnataka High Court decision in the case of CIT, Bangalore v. Hajee C. R. Abdul Rahim Khan, 1972 TLR 869, Gauhati High Court decision in the case of M/s. Assam Cane Suppliers, Dibrugarh v. Income-tax Officer, Dibrugarh 1972 TLR 1055, Supreme Court decisions in the case of Calcutta Discount Company v. CIT, 41 ITR 191, CIT v. Gillandars Albutnot & Co. since reported in 87 ITR 407 and Gujarat and Madras High Court decisions in the cases of CIT v. Dhanji Ravji, 70 ITR 502 and S. Nastimal v. CIT Madras, 49 ITR 273. It was held that the Income-tax Officer was not justified in invoking the provisions of section 147(a). It was in substance held that the initiation of reassessment proceedings was without jurisdiction. The assessment order was accordingly cancelled. This appellate order is dated 1st June 1973. The department filed appeal. The ground of challenge was that the Appellate Assistant Commissioner had no jurisdiction to entertain the ground about validity of re-assessment raised before him for the first time in appeal arising from re-assessment made in pursuance of the appellate order dated 28th November 1970 which had become final. The Tribunal agreed with the department that the Appellate Assistants Commissioner was not justified in entertaining the ground regarding the validity of initiation of the re-assessment proceedings under section 147(a) as the assessee had not challenged the re-assessment in the appeal filed for the first time against the order of re-assessment. The Tribunal agreed with the department that the Appellate Assistants Commissioner was not justified in entertaining the ground regarding the validity of initiation of the re-assessment proceedings under section 147(a) as the assessee had not challenged the re-assessment in the appeal filed for the first time against the order of re-assessment. The only contention raised in that appeal was that the assessee was in a position to prove the genuineness of the parties but was not able to before the Income-tax Officer for certain reasons. That contention was accepted and the re-assessment order was set aside, for the purpose of giving the assessee full opportunity to prove its case. The scope of fresh re-assessment made in pursuance of the appellate order as well as appeal against such a re-assessment, according to the Tribunal, was limited The Tribunal accordingly set aside the order of the Appellate Assistant Commissioner on this ground and restored the appeal to his file directing him to decide the appeal on merit as regards the addition of the cash credits. The facts are not in dispute. Shri Sathe, the learned counsel for the assessee has contended that the Tribunal ought to have appreciated that a ground which goes to the root of the matter can be taken at any stage of the proceedings. Challenge to the validity of the initiation of proceedings under section 147(a), he stated, goes to the root of the matter. In support he placed reliance on Gujarat High Court decisions in the cases of CIT, Gujarat II v. Nanalal Tribhovandas and Anr. 100 ITR 734 and P. V. Doshi v. CIT, Gujarat, 113 ITR 22 and recent Supreme Court decision in the case of Jute Corporation of India Ltd. v. CIT and Anr. AIR 1991 (SC) 241 , he stated that the order of the Tribunal must be set aside. Shri Jetley and Dr. Balasubramanian for the department, on the other hand, reiterated that the assessee had not challenged the initiation of re-assessment proceedings under section 147(a) before the Income-tax Officer. Nor was the initiation of reassessment proceedings challenged before the Appellate Assistant Commissioner in the appeal filed against the reassessment order on earlier occasion before passing of order of remand dated 28th November 1970. Nor was the initiation of reassessment proceedings challenged before the Appellate Assistant Commissioner in the appeal filed against the reassessment order on earlier occasion before passing of order of remand dated 28th November 1970. Validity of initiation of reassessment proceedings was also hot challenged in the reassessment proceedings before the Income-tax Officer in pursuance of the appellate order of the Appellate Assistant Commissioner. Even in the memo of appeal filed before the Appellate Assistant Commissioner for the second time against the fresh re-assessment, no such ground was taken. It was contended by the learned counsel for revenues that the assessee was, therefore, precluded from taking such a ground before the Appellate Assistant Commissioner as an additional ground in these proceedings. It was pointed out that the ground raised though goes into the root of the matter was not in the nature of pure question of law. The contention now raised required examination of the reasons recorded by the Income-tax Officer for initiation of reassessment proceedings with a view to consider whether the reasons so recorded have reasonable or direct nexus with the formation of belief about the concealment of income. In the two Gujarat High Court decisions, it was pointed out, the fact that the assumption of jurisdiction was not proper and valid was evident on the face of record. In one case 15 days time was given for filing return in the notice as against the statutory requirement of not less than 30 days. In another case the reasons for initiation of re-assessment proceedings were not recorded at all which again was in violation of statutory provisions of section 148(2). So far as the Supreme Court decision in AIR 1991 (SC) 241 , it was stated, the observations made therein were general observations. It was submitted that the general observations made by the Supreme Court in the above case regarding wide powers of the Appellate Assistant Commissioner could be applied to a situation only when the Appellate Assistant Commissioner was seized of the appeal for the first time and not to the proceedings against fresh reassessment made in pursuance of the order of remand passed by the Appellate Assistant Commissioner in the earlier appeal. In order to answer the question of law referred to us it is first necessary to consider the nature of the new ground raised i.e., whether it really questions the jurisdiction of the Income-tax Officer to make re-assessment. In other words whether it goes to the very root of the matter. We will then have to consider whether such a ground can be raised for the first time before the Appellate Assistant Commissioner Jurisdiction to make re-assessment having not been challenged before the Income-tax Officer himself. Lastly we will have to consider whether the fact of such a ground having not been raised in the earlier appeal against the order of re-assessment completed under section 147/143(3) would make any difference in the legal position. For this purpose it is desirable to refer to the new ground urged by the assessee In appeal in the words of the Appellate Assistant Commissioner himself : "Mr. Mehta attended before he has first challenged the validity of the initiation of the proceedings u/s. 147(a) of the Act. In his view, the said provisions of sec. 147(a) can be invoked only in a case where the ITO had reason to believe that by reason of the omission or failure on the part of the assessee to make a return u/s. 139 for any assessment year to the ITO or to disclose fully and truly all material facts for the assessment for that year, income chargeable to tax had escaped assessment for that year. ....." Having regard to the following observations of the Supreme Court in the case of Commissioner of Income-tax v. Kurban Hussain Ibrahimji Mithiborwala, 82 ITR 821 at page 823 : "It is well-settled that the Income-tax Officer's jurisdiction to reopen an assessment under section 34 depends upon the issuance of a valid notice. ....." Having regard to the following observations of the Supreme Court in the case of Commissioner of Income-tax v. Kurban Hussain Ibrahimji Mithiborwala, 82 ITR 821 at page 823 : "It is well-settled that the Income-tax Officer's jurisdiction to reopen an assessment under section 34 depends upon the issuance of a valid notice. If the notice by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction." and the following observations of the Supreme Court in Johri Lal (HUF) v. Commissioner of Income-tax, 88 ITR 439 at page 441 : "Before proceedings under section 34(1)(a) could be validly initiated, the Income-tax Officer must have reasons to believe that by reason of the omission or failure on the part of the assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits and gains chargeable to income-tax have escaped assessment for that year, or have been under assessed, or assessed at too low a rate, or have been made the subject-matter of excessive relief under the Act, or excessive loss or depreciation allowance have been computed. The formation of the required opinion by the Income-tax Officer is a condition precedent. Without formation of such an opinion he will not have jurisdiction to initiate proceedings under section 34(1)(a). The fulfilment of this condition is not a mere formality but it is mandatory. The failure to fulfil that condition would vitiate the entire proceedings. ...." we hold that the formation of belief by the Income-tax Officer to the effect that income of the assessee had escaped assessment is one of the conditions precedent for the assumption of jurisdiction to make re-assessment. Placing reliance on section 21 of the Code of Civil Procedure and the Supreme Court decision in the case of Director of Inspection of Income-tax (Investigation) v. Pooran Mall & Sons, 96 ITR 390. It was suggested on behalf of the revenue that all cases of challenge to jurisdiction did not result in making order of re-assessment a nullity. Placing reliance on section 21 of the Code of Civil Procedure and the Supreme Court decision in the case of Director of Inspection of Income-tax (Investigation) v. Pooran Mall & Sons, 96 ITR 390. It was suggested on behalf of the revenue that all cases of challenge to jurisdiction did not result in making order of re-assessment a nullity. There was marked distinction between want of basic or inherent jurisdiction and irregular exercise of jurisdiction and that in the present case the Income-tax Officer had basic and/or inherent jurisdiction to make order of reassessment on the assessee and the assessee was merely questioning the initiation of the re-assessment proceedings. With respect we do not see any merit in this submission on behalf of the revenue for more than one reason. In the first place in view of the Supreme Court judgments referred to in the earlier paragraph, it must be shown by the revenue that the material relied on had nexus to the information of belief that the assessee's income had escaped assessment and formation of requisite belief must be considered as one of the conditions precedent for the assumption of jurisdiction to make assessment u/s. 148. Secondly, it has also been held by the Supreme Court in a number of judgments that assessment made under section 148/143(3) without the valid formation of belief as to the assessment of income is void ab initio or nullity. For this purpose it is desirable to refer to another Supreme Court decision in the case of Superintendent of Taxes v. Onkarmal Nathmal Trust, AIR 1975 (SC) 2055 where in the context of the provisions of section 7 of Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act (10 of 1961) it was held that the provision which confers jurisdiction for assessment and reassessment could never be waived for the simple reason that the jurisdiction could neither be waived nor created by consent. His Lordship Beg J. as he then was, pointed out in his concurring judgment at page 1077 that if the notice under section 7(2) was a condition precedent to the exercise of jurisdiction to make the best judgment assessment, the doctrine of waiver could never confer jurisdiction so as to enable parties to avoid the effect of violating a mandatory provision on a jurisdictional matter even by agreement. Accordingly, the ground raised before the Appellate Assistant Commissioner, in our judgment questioned the very jurisdiction of the Income-tax Officer to make reassessment and was as such a ground that went into the root of the matter. This taken us to the second aspect of the questions, namely, whether such a ground could be taken before the Appellate Assistant Commissioner, the assessee having not challenged the jurisdiction of the Income-tax Officer to make re-assessment before the Income-tax Officer himself. This aspect in our view does not present any difficulty at all in view of the recent judgment of the Supreme Court in the case of Jute Corporation of India Ltd. v. CIT (supra) which is specifically on the question of jurisdiction of the Appellate Assistant Commissioner or Commissioner of Income-tax (Appeals). The Supreme Court, it may be Stated, in that case referred to its earlier decision in Addl. Commissioner of Income-tax v. Gurjargravures P. Ltd., 111 ITR 1 explained and distinguished the same. The law in this regard is, thus, to be taken as settled. The powers of the first appellate authority whether Appellate Assistant Commissioner or Commissioner of Income-tax (Appeals) are co-terminus with that of the Income-tax Officer, subject to the limit that these authorities could do all that the Income-tax Officer could do or have done. It is a different thing whether in a given case these authorities might or might not entertain a ground not urged before the Income-tax Officer in the exercise of their judicial discretion. It cannot, however, be said that they have no jurisdiction to do so. Accordingly we hold that the Appellate Assistant Commissioner had jurisdiction to entertain the impugned ground urged before him by the assessee even though the jurisdiction to make reassessment as such was not challenged before the Income-tax Officer. Coming now to the third and the last aspect of the question, pertinent facts may be stated once again. What has been held by us so far is applicable to a case in which a ground is taken for the first time before the Appellate Assistant Commissioner in appeal against the original assessment or re-assessment. In the present case in the appeal against the original or the first order of reassessment the order of the assessment was not challenged on the ground of jurisdiction. In the present case in the appeal against the original or the first order of reassessment the order of the assessment was not challenged on the ground of jurisdiction. The only ground taken was that the Income-tax Officer was not Justified in rejecting the assessee's explanation as regards genuineness of certain cash credits and that if proper opportunity was given, the assessee could prove the genuineness of the cash credits. The Appellate Assistant Commissioner accepted the assessee's contention and he with the consent of the Income-tax Officer who was present set aside the assessment for the purpose. The assessee had not even challenged the jurisdiction of the Income-tax Officer to make reassessment when he was making reassessment after giving the assessee an opportunity in pursuance of the aforesaid order of the Appellate Assistant Commissioner. In the appeal filed by the assessee second time before the Appellate Assistant Commissioner against an order of reassessment on remand, the ground challenging the jurisdiction of the Income-tax Officer to make reassessment was not taken. This was taken as an additional ground at the time of hearing of appeal against fresh order of reassessment passed on remand. It is in this background that it was strongly urged on behalf of the revenue that the jurisdiction of the Income-tax Officer to make fresh reassessment in pursuance of the order of the Appellate Assistant Commissioner itself being limited, the jurisdiction of the Appellate Assistant Commissioner in an appeal against such an order of reassessment must necessarily be limited and therefore the Tribunal justifiably held that the Appellate Assistant Commissioner had no jurisdiction to admit such a ground. Great emphasis was laid on the fact that in both the Gujarat High Court decisions relied upon by Shri Sathe the fresh or new ground was taken in the same or original proceedings and not in the second round of proceedings unlike the case before us. The question, to be considered, is as to whether assessee has to urge the plea of lack of jurisdiction before the Income-tax Officer would make any material difference qua ground challenging the jurisdiction to initiate reassessment proceedings. The question, to be considered, is as to whether assessee has to urge the plea of lack of jurisdiction before the Income-tax Officer would make any material difference qua ground challenging the jurisdiction to initiate reassessment proceedings. For this purpose it is necessary to refer to our Court's judgment in Commissioner of Income-tax v. N. A. Harielwalla, 126 ITR 344, referring to with approval the Punjab and Haryana High Court decision in the case of Vijay Kumar Jain v. Commissioner Income-tax, 99 ITR 349 our Court held that a ground by which the jurisdiction of the Income-tax Officer to make assessment is challenged can be allowed to be taken in an appeal before the Tribunal even though such a ground was not taken before the Income-tax Officer or the Appellate Assistant Commissioner. The facts in that case were that for the assessment year 1961-62, the Wealth-tax Officer had acting under section 19A assessed the wealth of the deceased in the hands of executor. On appeal the Appellate Assistant commissioner confirmed the assessment. On appeal to the Tribunal a new ground was taken for the first time that section 19A was introduced in the Wealth-tax Act with effect from 1st April and the assessment was, therefore, without jurisdiction. The Tribunal entertained the ground and our Court upheld the order of the Tribunal. In Ugar Sugar Works Ltd. v. Commissioner of Income-tax, 141 ITR 326 our Court was faced with a similar problem. In this case the question of Tribunal's jurisdiction was considered at length. It was held that the Tribunal's jurisdiction under section 254 was restricted to the passing of order on the subject-matter of appeal though within the four corners of subject-matter of appeal, the Tribunal was clothed with almost the same powers as those of the Appellate Assistant Commissioner except that of enhancement. The judgment in 126 ITR 344 was noticed and not adversely commented upon. The judgment in 126 ITR 344 was noticed and not adversely commented upon. It was distinguished observing that - "The question as to the initial jurisdiction in making an order would stand on a different footing, as in such cases the question of jurisdiction of the ITO would always be present as a part of the subject-matter of the appeal at all stages of the appeal, either before the AAC or the Tribunal, as, such jurisdiction is always presumed to be existing in an authority before the passing of the order." In Commissioner of Income-tax v. Belapur Sugar and Allied Industries Ltd., 141 ITR 404 our Court followed the decision in 126 ITR 344 and held : "that the earlier notices issued under sec. 148 of the IT Act, 1961, that is, the three notices issued on March 31, 1965, March 31, 1965, and December 10, 1965, respectively, were invalid, because by that time the determination under sec. 163 of the said Act had not properly taken place. Since these notices were invalid, the reassessment done in pursuance thereof was also invalid." Thus so far as our Court is concerned, it can be taken to be a settled law that a point which goes to the jurisdiction of the assessment can be" allowed to be taken in an appeal before the Tribunal even though it was not taken before the Income-tax Officer or the Appellate Assistant Commissioner. We find that the Supreme Court also in the case of R. J. Singh Ahluwalia v. The State of Delhi, AIR 1971 (SC) 1552 at page 1553 held in the context of new ground raised before it for the first time : This ground of challenge had, of course, not been raised in either of the two courts below but since it went to the root of the case, being a jurisdictional point we considered it just and proper to allow it to be raised." Again in the case of C.M. Contractor etc. v. Gujarat Electricity Board and Ors., AIR 1972 (SC), 792 the Supreme Court held at page 793 as under : "It is stated that this ground goes to the very root of the matter but was not raised before the High Court. v. Gujarat Electricity Board and Ors., AIR 1972 (SC), 792 the Supreme Court held at page 793 as under : "It is stated that this ground goes to the very root of the matter but was not raised before the High Court. The appellants objected to this fresh ground being allowed to be taken up, but we consider that as this ground goes to the very root of the matter it should be allowed after the appellants are compensated by costs." Gujarat High Court has, of course., taken the very view in its two decisions in Commissioner of Income-tax v. Nanalal Tribhovandas and Anr., 100 ITR 734 and P. V. Joshi v. Commissioner of Income-tax, 113 ITR 22. Indirectly Allahabad High Court in CIT v. Hari Raj Swarup & Sons, 138 ITR 362 has also taken the same view. We, therefore, hold that a ground by which the jurisdiction to make assessment itself is challenged can be urged before any authority for the first time. This, however, does not solve the problem before us. In all the cases referred by us above are the cases of same round of litigation. In the case before us the new ground was raised for the first time not in appeals arising out of the same proceedings. It was taken in collateral proceedings. Re-assessment under sec. 147 was made on 27th August 1959. More or less a consent order was obtained in appeal there against as a result of which the order of reassessment stood set aside for the purpose of giving opportunity to the assessee to prove the genuineness of certain cash credits. The ground questioning jurisdiction to reassess was not raised even in the second round of proceedings before the Income-tax Officer who completed reassessment afresh on 28th March 1970. No such ground was taken originally even in appeal filled against the second reassessment. The ground in dispute was taken at the time of hearing before the Appellate Assistant Commissioner. In view of the latest decision of the Supreme Court in the case of Jute Corporation of India (supra) it cannot be disputed that the assessee could have raised this ground before the Appellate Assistant Commissioner in his appeal against the first order of reassessment. The pertinent question is whether the new ground could be taken in reassessment proceeding after remand. The pertinent question is whether the new ground could be taken in reassessment proceeding after remand. This takes us to another aspect of question, namely, whether the assessee could have taken such a ground before the Income-tax Officer himself in these proceedings because if he could have done so, the powers of the Appellate Assistant Commissioner being co-terminus, it would be open for him to do so before the Appellate Assistant Commissioner as well. The other aspect would be whether being a ground challenging the very jurisdiction to make reassessment such a ground could be taken before any authority and at any stage of the proceedings. In this context it will be necessary in the first instance to ascertain the scope of fresh assessment to be made by an Income-tax Officer when the Appellate Assistant Commissioner sets aside the assessment and directs and Income-tax Officer to make fresh assessment with some directions. The legal position does not appear to be very clear on the subject. One view is that while making a fresh assessment the Income-tax Officer has, subject to the Appellate Assistant Commissioner's directions, the same powers which he had while making the original assessment he is entitled to disregard his own previous findings. He can take into account materials not previously existing and tax income not originally assessed. Likewise, it may be open to the assessee to raise objections to the assessment or about quantum which he had not raised originally before him or the Appellate Assistant Commissioner. The other view is that the Income-tax Officer is, while passing orders in pursuance of the orders of the appellate authority, required to consider only those matters about which there was a dispute before the appellate authority and directions had been given. Even where the appellate order does not contain such specific directions, under certain circumstances, it may have to be read as remitting the case only on the issues in appeal, and in that event also the Income-tax Officer cannot re-examine other issues. Consequently, the assessee may not be able to raise contentions which were not raised by him in the original proceedings. However, in this case it is not really necessary to go into this question. The impugned ground raised before the Appellate Assistant Commissioner admittedly goes to the very root of the Income-tax Officer's jurisdiction to make reassessment. Consequently, the assessee may not be able to raise contentions which were not raised by him in the original proceedings. However, in this case it is not really necessary to go into this question. The impugned ground raised before the Appellate Assistant Commissioner admittedly goes to the very root of the Income-tax Officer's jurisdiction to make reassessment. In our view the jurisdiction of the Income-tax Officer to initiate reassessment proceedings under section 34 of the Act depends solely on existence of conditions precedent prescribed by law and the jurisdictional defect, if any, cannot be made good by relying on order of remand passed by the Appellate Assistant Commissioner. In fact, the Appellate Assistant Commissioner has no jurisdiction under section 31 of the 1922 Act to issue directions so as to the extent of conferring jurisdiction upon the Income-tax Officer which he is not lawfully seized of. This view was taken by Madras High Court in the case of N. Naganath Ayyer v. CIT, 60 ITR 647. The said decision was followed by Gujarat High Court in 100 ITR 734 (supra). We are in respectful agreement with the view taken by Madras and Gujarat High Courts in this regard. If it is found that the Income-tax Officer had no jurisdiction to make an order of reassessment, it is irrelevant that the jurisdiction of the Income-tax Officer to reassess was not challenged at any of the earlier stages. The assessee was entitled to challenge the jurisdiction of Income-tax Officer to initiate reassessment proceedings before the Appellate Assistant Commissioner in the second round of proceedings even though he had not raised it earlier before the Income-tax Officer or in the earlier appeal. The Calcutta High Court has taken a view in the case of Commissioner of Income-tax v. Shree Ganesh Jute Mills Ltd., 109 ITR 562 that any new ground, not necessarily a ground pertaining to jurisdictional aspect, could be taken for the first time before the Appellate Assistant Commissioner in the second round of proceedings. But for the present we need not go that far. We leave this question open. In the light of the discussion above, we answer the question in the negative and in favour of the assessee. No order as to costs.