The Commissioner Of Income Tax v. M/S Satpal Pandit & Co

ITA No. 60 of 1999 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 60 of 1999 Date of Decision: 30.9.2010 The Commissioner of Income Tax Versus ....Appellant. M/s Satpal Pandit & Co. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Vivek Sethi, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.The instant appeal has been filed by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 26.2.1999 passed by the Income Tax AppellateTribunal, Amritsar Bench, Amritsar (hereinafter referred to as “theTribunal”) in ITA No. 515(ASR)/1985 for the assessment year 1981-82,proposing the following substantial question of law:- “Whether, on the facts and in the circumstances ofthe case, the Ld. Tribunal was right in law in allowingthe Misc. Application of the assessee and recallingits order holding that the remaining grounds andissues are to be decided in order to give justice to the assessee as well as the revenue particularlywhen neither there is any ground/issue of therevenue having remained undecided nor there is anycross objections etc. having been filed by theassessee?” 2. Briefly the facts necessary for deciding the present appealare that the assessee following the calendar year as its previous yearfiled return declaring total income of Rs.1,35,550/- for the assessmentyear 1981-82 on 30.6.1981. The assessment was completed on24.9.1984 and a total income of Rs.3,32,035/- was assessed by theAssessing Officer. Against the said assessment, the assesseeapproached the Commissioner of Income Tax (Appeals) [in short “theCIT (A)”] by way of appeal and the CIT (A) vide order dated 17.5.1985while allowing the appeal annulled the assessment order being barredby limitation. Against the order of the CIT (A), the revenue filed anappeal and the Tribunal vide order dated 8.11.1994 upheld the order ofthe CIT (A). Against the order of the Tribunal, the revenue filedreference application for drawing the statement of the case andreferring the question of law to this Court. The Tribunal vide orderdated 17.10.1995 referred the question of law to this Court. This Courtvide order dated 29.9.1997 passed in ITR No. 142 of 1996 decided thequestion of law in favour of the revenue and against the assessee. Inpursuance to the judgment of this Court, the Tribunal allowed theappeal of the revenue vide order dated 23.12.1997. Thereafter, onassessess's application, the Tribunal vide order dated 26.2.1999recalled its order holding that the remaining grounds and issues were to be decided. Hence, the present appeal by the revenue. 3.We have heard learned counsel for the revenue. be decided. Hence, the present appeal by the revenue. 3.We have heard learned counsel for the revenue. 4.It is undisputed that the assessee had filed an appealagainst the assessment order dated 30.6.1981 before the CIT(A) raisingchallenge to the additions made by the Assessing Officer. It was duringthe course of hearing of appeal that the assessee moved an applicationdated 20.5.1985 challenging the validity of the assessment order for theassessment year in question on the ground of limitation. The CIT(A)had accepted the aforesaid plea of the assessee and had annulled theassessment. However, the CIT(A) had not adjudicated the controversyon merits. Revenue had challenged the order of the CIT(A) andultimately as noticed earlier, this court in ITR No. 142 of 1996 (TheCommissioner of Income-Tax, Jalandhar v. M/s Sat Pal Pandit &Co. Chahar Bagh, Jalandhar) decided on 29.9.1997, had adjudicatedthe legal issue in favour of the revenue whereupon the Tribunal passedorder allowing the appeal of the revenue under Section 260 of the Act.Since the Tribunal had decided the appeal on legal ground of limitationin consonance with the order of this Court, the order that was requiredto be passed was to remand the case to the CIT (A) to decide theappeal of the assessee on merits which had remained untouched whilepassing order dated 17.6.1985 by the CIT(A). The assessee noticedthe aforesaid mistake apparent on the record of the Tribunal in its orderdated 23.12.1997 and filed an application under Section 254(2) of theAct for rectification which was rectified vide order dated 26.2.1999 byrecalling order dated 23.12.1997 and fixing the case for deciding theother issues in the appeal. 5.After the reference was answered by the High Court, theTribunal was required to pass an order under Section 260(1). It order todiscern the scope of Section 260(1), it would be material to reproduceSection 260 which at the relevant time existed as under:- “260. Decision of High Court or Supreme Court onthe case stated.- (1) The High Court or the SupremeCourt upon hearing any such case shall decide thequestions of law raised therein, and shall deliver itsjudgment thereon containing the grounds on whichsuch decision is founded, and a copy of the judgmentshall be sent under the seal of the Court and thesignature of the Registrar to the Appellate Tribunalwhich shall pass such orders as are necessary todispose of the case conforming to such judgment. (2)The costs of any reference to the High Court orthe Supreme Court which shall not include the fee formaking the reference shall be in the discretion of thecourt.” 6.According to the aforesaid provision, the High Court or theSupreme Court after deciding the question of law referred to it, isrequired to deliver its judgment containing the grounds on which suchdecision is founded and a copy is to be sent to the Registrar of theappellate Tribunal so that necessary orders to dispose of the case inconformity with the judgment is passed. When the Tribunal disposes ofthe appeal conforming to the decision of the High Court or the SupremeCourt, the Tribunal exercises its appellate powers. In other words, the Tribunal retains all the powers which are there at the time of hearing ofthe original appeal. In the present case, the CIT (A) had only decidedthe question of limitation and had not touched the merits of the additionsmade by the Assessing Officer while disposing of the appeal, aggrievedagainst which, the revenue had approached the Tribunal. The questionof law was answered in favour of the revenue and, thereafter, theTribunal was required to remand the case to the CIT (A) for adjudicationon merits. However, this was not done by the Tribunal while passingthe order on 23.12.1997. Accordingly, the Tribunal while passing orderunder Section 254(2) of the Act had revived the appeal in order to dojustice between the parties and to pass appropriate orders thereon. Tribunal retains all the powers which are there at the time of hearing ofthe original appeal. In the present case, the CIT (A) had only decidedthe question of limitation and had not touched the merits of the additionsmade by the Assessing Officer while disposing of the appeal, aggrievedagainst which, the revenue had approached the Tribunal. The questionof law was answered in favour of the revenue and, thereafter, theTribunal was required to remand the case to the CIT (A) for adjudicationon merits. However, this was not done by the Tribunal while passingthe order on 23.12.1997. Accordingly, the Tribunal while passing orderunder Section 254(2) of the Act had revived the appeal in order to dojustice between the parties and to pass appropriate orders thereon. 7.No illegality or perversity could be pointed out in the orderpassed or the approach of the Tribunal which may call for interferenceby this Court. The substantial question of law as proposed is answeredagainst the revenue. 8.Accordingly, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE September 30, 2010gbs (ADARSH KUMAR GOEL)JUDGE