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2017 (1) TMI 1456 - HC - Income TaxProcedure followed by the Tribunal in deciding appeals, pending before it, filed by the Revenue, as well as the assessee - difference of opinion between two Members of the Bench - change of accounting system - Held that:- Having gone through the record, we find that the dissenting opinion were rendered by the Accountant Member and the Judicial Member of the Tribunal on October 16, 1996 and thereafter both the Members stated points on which they differed which we have noticed above. The Third Member, i.e., Senior Vice-President, Sri V. Dongzathang, rendered his opinion vide order dated March 26, 1998. It answered question No. 1 by observing, when the assessee and Revenue both are aggrieved by an order of the Commissioner of Income-tax (Appeals) it is incumbent upon the Tribunal to adjudicate issue raised before it and pass such order thereon as it thinks fit. Question No. 1, therefore was answered in the affirmative. Question No. 2 was answered stating that there is no need of changing entire system of accounting adopted by the assessee as the entries in accounts are correct and complete on the basis of which correct income chargeable to tax can be computed. We find that the Third Member instead of answering questions has looked into the correctness of decision of two differing Members and observed that they have not looked into the relevant circumstances and should re-decide ground of appeal after giving opportunity to both the sides. The Third Member, it appears, forgot his position that he was not sitting in appeal over the opinion rendered by two Members of the Tribunal since jurisdiction of Third Member was co-ordinate and it was his duty to hear the two sides and decide question referred for its opinion in one or other way and not to make comments in the manner in which two differing Members have rendered their opinion for deciding certain issues. Unfortunately, Third Member has looked into question No. 5 as if he was sitting in appeal over different opinions recorded by two Members and this approach on the part of the Third Member is clearly erroneous. Whether any purpose would be served by answering question No. 5 or not was not within the domain of the Third Member for the reason that it was under a statutory duty to answer questions referred for its opinion in one or other way. Some of the observations made by the Third Member of the Tribunal commenting upon differing Members of the Bench are clearly beyond his authority. As already said, he was not hearing an appeal of judgment of two Members of the Tribunal but was under an obligation to render his own opinion after hearing the parties on specific points rendered by two differing Members. Interestingly, this strange approach and manner of functioning of the Third Member has put the Regular Bench in a difficult situation. In the order dated December 31, 2003, the Division Bench found it a rare case wherein judgment was not possible in the manner in which it was required by section 255(4). The Bench, however, found itself obliged to comply with the Third Member's opinion of reopening issues and requiring re-hearing of appeals of the assessee/Department as well as cross-objection on the points of difference. This situation was created by the Third Member who appears to have forgotten its own duty and statutory obligation that it has to decide specific points referred for its opinion and not to sit in appeal over the entire matter and take its own decision independently and bereft of points formulated by different Members and referred for opinion of the Third Member. We have no option but are constrained to observe that the order and approach of the Third Member is patently erroneous, illegal, impermissible and constitutionally unsustainable in law rendering the order dated December 31, 2003, passed by the Regular Bench, unsustainable. We answer in favour of the appellants and accordingly set aside not only the order passed by the Regular Bench on December 31, 2003 but also the Third Member's order dated March 26, 1998 and remand the matter to the President of the Tribunal to nominate another Bench constituting one or more Members to consider and decide the seven points formulated by differing Members in their order dated October 16, 1996 for giving opinion thereon and thereafter the Regular Bench may decide the matter in the light of the majority opinion as contemplated in section 255(4) of the Act, 1961.
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