COMMISSIONER OF INCOME TAX Vs. HUKUMCHAND MILLS LIMITED

JUDGEMENT

(1.) ON perusing exhibit "E" which is the order of the Tribunal rejecting the application under S. 256(1) of the IT Act, 1961, we find that the Tribunal has not indicated the basis of the rejection in the said order. In para 3 of the order, however, the Tribunal has referred to its earlier order for the asst. yr. 1972 73 and stated : AHEX"for the reasons given in the earlier order for the asst. year 1972 73, the present application is also rejected." We must, therefore, have before us the reasoning process of the Tribunal in refusing a reference under S. 256(1) of the IT Act, before we can hold that the process is erroneous and direct a reference under S. 256(2) of the IT Act. The Department ought to be in the know of the earlier order and indeed should have annexed it to the IT application. That was not done and for four years thereafter the same state of affairs has continued. This clearly indicates that the CIT is not serious about prosecuting the IT application. In the result, the rule will stand discharged.

(2.) WE may observe that, in our opinion, this method of disposal adopted by the Tribunal both in the principal appeal as well as in the reference application does not appear to be satisfactory. If the Tribunal chooses to rely on its earlier order, it must annex the relevant portion thereof or summarise the reasoning in that earlier order in the subsequent order. If the latter course is followed, then of course, the party moving the High Court will have to produce the earlier order if it is an earlier order in the party's own case. A mere reference to an earlier order without reference to any portion thereof or a summary of the reasoning does not appear to be a sound practice. We make these observations since we were invited by both Mr. Bhatia and Mr. Jetley to say so, as considerable difficulty is felt by the Court in deciding income tax applications where the Tribunal has merely referred to its earlier decision without indicating even briefly the basis of the earlier decision which is applied. Subject to these observations, the rule is discharged but the parties are directed to bear their own costs.