KARAN AND CO Vs. INCOME TAX APPELLATE TRIBUNAL

JUDGEMENT

(1.) By this petition under Articles 226 and 227 of the Constitution of India, 1950 ( in short the Constitution), the petitioner, hereinafter referred to as the assessee, calls in question legality of order dated 31/1/2001 passed by a Bench of Income-tax Appellate Tribunal, New Delhi ( in short the Tribunal) in purported exercise of powers under Section 254(2) of the Income-tax Act, 1961 (in short the Act).

(2.) Factual position which is almost undisputed is as follows: The assessee had filed an appeal before the Tribunal primarily challenging the reopening of assessment under Section 147(a) for assessment year 1985-1986. By order dated 24/11/1993, a Bench of the Tribunal consisting of the President Shri Ch.G. Krishnamurhty and Shri Vimal Gandhi, Member allowed the appeal. We are not very much concerned with various issues which were examined by the Tribunal for allowing the appeal in view of certain factual aspects with which we shall deal infra. Subsequently, the Revenue filed an application for reference under section 256(1) of the Act praying for a reference to this Court which was numbered as RA 915/Del/1996. An application for rectification under Section 254(2) was also filed on 20/10/1994. Assessee filed an objection to the prayer made in the said application on the ground that the nature of relief sought for cannot be granted in an application under Section 254(2) of the Act. The application was numbered as MA 163-D/94 and was disposed of by a Bench consisting of Shri MA Bakshi and Miss. Moksh Mahajan by order dated 25/7/1995. The relevant portion of the order reads as follows:

(3.) Revenue filed an application under Section 256(1) of the Act in respect of the said order passed in RA/915/Delhi/96. This was stated to be a modified reference application. Assessee also filed an application for reference under Section 256(1) in respect of the order in misc. application 163/Del/94. Revenue again filed another application under Section 254(2) of the Act on 10/4/1997. Prayer, inter alia, was to recall/review the original order dated 24/11/1993 passed in ITA 1356/Del/63 in the light of the aforesaid quoted portion of the order in MA 163/Del/94 Same was originally heard by a Bench consisting of M/S. Nathu Ram and UBS. Bedi. Though a copy of the order passed is available on record, one of the members Mr Bedi did not sign the order and noted as follows: "There are certain reservations and other member had since retired, it may be fixed before a bench". File was released on 1/6/1999. Therefore, the D.R. placed the matter before the Vice President to consider whether it was to be treated as de-heard and fixed for fresh hearing or to be treated as a case of difference of opinion between the two members. Vice President observed that the Accountant Member to whom the case was allotted had dictated the order and if the Judicial Member had a difference of opinion on any point, he was to express it judicially and in a proper manner. He further observed that the remarks of the Judicial Member cannot be said to be judicial order in terms of Section 255(4) and therefore the case was not to be referred to President for disposal. The file was directed to be placed before Judicial Member for passing judicial order by him for taking necessary action. Finally the matter was heard by a bench consisting of M/S UBS Bedi and Sikander Khan and the impugned order was passed, by which the order passed- in appeal has been recalled and registry has been directed to put up the appeal for fresh adjudication. Direction so far as relevant read as under: