CITIBANK N A Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the behest of the assessee, the Tribunal has referred the following three questions under S. 256 (1) of the IT Act, 1961, to this Court. The three questions are as follows :

(2.) AT the outset, it may be mentioned that the Tribunal did not refer to this Court the first two questions. That, the Tribunal referred to this Court only the third question vide IT Ref. No. 44 of 1986. Therefore, the assessee bank made an application to this Court under S. 256(2) of the Act for issuance of a writ of mandamus to the Tribunal to forward to this Court statement of case on question Nos. 1 and 2 reproduced hereinabove. The said Application No. 413 of 1983 was granted by the Division Bench of this Court as far back as 13th Feb., 1984. Thereafter, the present reference came before the earlier Division Bench of this Court on 1st July, 1998, when the present reference was adjourned to enable the Tribunal to refer the question Nos. 1 and 2 to this Court so that all the three questions could be disposed of together. The present reference once again came before the earlier Division Bench on 13th July, 1999, when once again the present matter was adjourned in order to enable the Tribunal to refer the questions to this Court. Till today, the order passed by the earlier Division Bench has not been complied with. However, both the learned advocates appearing before me stated that we need not wait for the Tribunal to forward the statement of case. That, the matter can be disposed of on the paper book in this IT Ref. No. 44 of 1986. Accordingly, question Nos. 1 and 2 have been framed by the Court and with consent of all sides, the matter is proceeded with.

(3.) BEING aggrieved, the Department carried the matter in appeal to the Tribunal. The Tribunal confirmed the order of CIT(A) with certain modifications. Under the modifications the demand under S. 156 was set aside and the IAC was directed to pass fresh orders, after giving opportunity to the assessee to prove its case viz., that the said sums have been taxed in the hands of the recipients of the interest amounts. The IAC was also directed to verify whether Coca Cola Export Corporation had paid the tax on the interest income by including the same in their estimate of advance payment of tax. The Tribunal directed the IAC to raise the demand once again only after making appropriate enquiries as directed by the Tribunal. Being aggrieved by this order of the Tribunal dt. 10th March, 1980, the matter has come before us by way of reference under S. 256(1) of the Act.