1. The questions, in this reference under Section 256(2) of the I.T. Act, 1961, are as follows:
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that notwithstanding the assessment made for the earlier assessment years the ITO was entitled to reject the assessee's explanation based on the findings for the earlier assessment years and on that ground to come to his own conclusion regarding the deposits involved in the present assessment year ?
2. Whether, on the facts and in the circumstances of the case, there is material to sustain the finding of the Tribunal that the amount of Rs, 1,00,000 was income of the assessee from undisclosed sources?'
2. The assessment year is 1960-61. The previous year ends on March 31, 1960. The return was filed by the assessee showing an income of Rs. 5,944. In the course of the assessment proceedings it was found by the ITO that the assessee had an account in the names of two firms and in that account she had shown deposits of Rs. 1 lakh made by her in those two firms. She was asked to explain the source of these two deposits but she has refused to do so by saying that the ITO has no jurisdiction to call for such explanation. The ITO, on the materials before him, has added this sum as her income from undisclosed sources.
3. It was contended in the first appeal on her behalf that this sum was saved by her from her earnings in the earlier years and the assessments made in those earlier years were binding on the tax officer. The AAC has allowed the appeal by holding that the earlier assessments cannot be disturbed, but it has been set aside by the Tribunal on appeal filed by the department. It has been held by the Tribunal that the assessment orders of the earlier years, have no evidentiary value inasmach as those assessments were made practically on the same day the returns were filed by the assessee in the same manner as was done in the cases of all the female members of the same family who had also shown deposits of large sums of money in the names of fictitious firms and the same thing has been done by the assessee. The Tribunal has also rejected the explanations offered by the assessee.
4. It has been contended by Dr. Pal, for the assessee, that the ITO has no power to go behind the earlier assessment orders, for, according to him, an order of assessment is an order quantifying the amount of income for the relevant year and the computation of tax upon such quantification. By accepting the legal position that the findings in the earlier assessment years cannot operate as res judicata in a subsequent year of assessment he has argued that the findings in the earlier assessment years are completely different from the assessment of income for those years and those earlier assessment orders are final and cannot be disturbed in a subsequent year of assessment. But we are not impressed by his contentions.
5. The Tribunal has rejected the assessee's case that Rs. 1,00,000 was saved or accumulated by her in the earlier years, which has not been questioned in this reference. Further, the earlier assessment orders do not throw any light on the question of saving of this amount. Assessment order is final so far and as far as the particular year of assessment is concerned but it is merely a piece of evidence in a subsequent year of assessment. An earlier assessment order, like any other piece of evidence, may be accepted or rejected in a subsequent year of assessment depending on the facts and circumstances of a particular case, but at the same time the findings in the earlier assessment orders should not be ignored on flimsy grounds.
6. In the case of Parimi Venkatasubba Rao v. CIT : 85ITR145(AP) , a similar question arose before the Andhra Pradesh High Court and it was decided at page 150 of the report in the following terms :
'The next submission of Shri Sastry was that the ITO himself had accepted the claim of the assessee that a sum of Rs. 80,000 alone was available as capital of the money-lending business during the assessment proceedings of the assessment year 1955-56, and it was, therefore, incompetent for the ITO to go back upon his previous finding and make a higher estimate during the years in question. We are not prepared to agree with the learned counsel. It is now well settled that the principle of res judicata is not applicable to decisions of the I.T. authorities. 'The assessment is final and conclusive between the parties only in relation to the assessment for the particular year for which it is made. No doubt, a decision reached in one year would be a cogent factor in the determination of a similar poiqt in a following year, but I cannot think that it is to be treated as an estoppel binding upon the same party for all the years.' Per Hanworth M.R. in IRC v. Sneath  17 TC 149 . We do not expect the I.T, authorities to arbitrarily and capriciously depart from the findings arrived at in past years. If they do so we will certainly interfere in appropriate cases when the matters come to us. But that is not to say that the I.T. authorities can never depart from their previous findings. If new facts come to light or if an ITO finds that his predecessor failed to take into consideration some material facts though available he would certainly be entitled to arrive at his own decision unhampered by the decision of his predecessor, of course, after giving due weight to what was said by him.'
7. We respectfully agree with the above decision and accordingly the sub-missions of Dr. Pal must fail.
8. Dr. Pal did not press question No. 2 before us and, therefore, we decline to answer it.
9. In this view of the matter, we return our answer to question No. 1 in the affirmative and against the assessee.
10. In the facts and circumstances of the case, we make no order as to costs.
Dipak Kumar Sen, J.
11. I agree.