TMI Blog2017 (1) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Wasiquddin Ahmad and Amit Shukla JUDGMENT 1. After hearing Sri Alok Mathur, learned counsel for the appellant and Sri Wasiquddin Ahmad, learned counsel for the respondents, we find that only substantial question of law, which has arisen in these appeals, is, whether it was open to Third Member, to whom certain specific points of dissents were referred for opinion, to answer those questions in his own way or decline to answer some of those questions, and due to lack of clear answers given or some questions remained unanswered by Third Member, was it open to the Regular Bench to hear the matter and decide the appeal afresh, in the manner it likes without deciding the matter in the light of majority of opinion of the Bench ? 2. Since we are considering the procedure followed by the Tribunal in deciding appeals, pending before it, filed by the Revenue, as well as the assessee, we are not entering into merits of the matter. 3. There appears to be a difference of opinion between two Members of the Bench as a result whereof the following seven questions were referred to the Third Member for his opinion. (1) Whether on the facts and circumstances of the case partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals by means of impugned judgment dated May 31, 2005 taking its own view. 5. The question is whether this procedure followed by the Tribunal render the judgment in question invalid ? 6. Section 255(4) of the Act, 1961 deals with the situation when there is a difference of opinion in two Members of Bench and provides a procedure to be followed in such a contingency. It reads as under : Procedure of Appellate Tribunal.- . . . (4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it. 7. The aforesaid provision makes it clear that if two Members equally divide or differ on certain point or points, such points sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as the entries in accounts are correct and complete on the basis of which correct income chargeable to tax can be computed. 11. Question No. 4 was also answered in affirmative. 12. Questions Nos. 3 and 7 were taken together and without giving any answer deciding the same in one or other way, it observed that both these questions are decided in the light of observations. The entire observations made in respect to Questions Nos. 3 and 7 read as under : Questions Nos. 3 and 7 20. These questions are again closely related. The assessee in this case received a deposit of ₹ 2,500 out of which ₹ 1,000 was given to the account holder in the form of N.S.C. The balance of ₹ 1,500 has been treated as revenue receipt by the Assessing Officer and the Commissioner of Income-tax (Appeals). Out of this amount of ₹ 1,500, it is an admitted fact that the assessee has to conduct 144 monthly draws and 48 bumper draws in which the subscribers are entitled to participate. A subscriber to the scheme who did not win a prize in any draw held during the tenure of the scheme also is entitled to a minimum guarantee prize of ₹ 2,500 at the termination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The awkward situation in which the Regular Bench was placed by strange order passed by the Third Member is writ large from what has been said in para 9 of order dated December 31, 2003, which reads as under : 9. This is one of the rarest case in which the Bench is unable to pass final order under section 255(4) of the Act. We are supposed to pass the final order as per majority but we are having three orders out of which the two initial orders are of Members, which constituted the Bench and naturally both of them were having their reservations/differences on some points ..... X X X X Extracts X X X X X X X X Extracts X X X X
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