TMI Blog1981 (10) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ess was carried on, the income arising from the business comprised in Shri Mahabir Rice Mills is not properly assessable in the case of the assessee HUF? (ii) Whether the Tribunal was justified in deciding the appeal filed by the department in the case of the assessee-HUF merely relying on the findings and directions of the Tribunal given in another case, without having regard to the rights and titles of the assessee-HUF over the income, business and properties with which the business comprised in Shri Mahabir Rice Mills was carried on ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the deletion of the entire income arising from Shri Mahabir Rice Mills from the total income of the assessee-HUF merely relying on its orders in respect of the protective assessment in the case of M/s. Gangadhar Sikaria Family Trust when those orders have not reached finality being subject-matter of reference application u/s. 256(1) ?" The petitioner states that Shri Satyanarayana Sikaria, as karta of his HUF, is the owner of the rice mills named and styled as " Sri Mahabir Rice Mills ". He was carrying on rice milling business in partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties had to be allotted amongst the beneficiaries according to their respective shares and the inclusion of the income in the total income of the HUF was not justified and dismissed the appeals. The petitioner filed an application under s. 256(1) of the Act for drawing up a statement of the case and to refer the very same questions set out, but the learned Tribunal, by a common order, turned down the prayer. The grounds for refusal to refer are as follows: (1) that it would be unnecessary waste of time and effort by the High Court as the questions had already been referred to the High Court; (2) that the questions set out in the application for reference do not followed its own decisions in the case of the trust. There was no other question to be decided besides the validity of the trust which was already before the High Court; (3) it would be merely a duplication of the questions already referred in the case of the trust and it would be redundant in view of the provisions contained in s. 260(1) read with s. 153(3), Expln. 3, of the Act. Dr. Saraf, learned counsel for the assessee, supports the order of the Tribunal. We have heard Civil Rule No. 6(M) to 15(M) of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee, that the trust was valid. It follows, therefore, that it had held earlier on the facts of the cases and having had the trust deed before it that the trust was valid. It applied the decisions of the earlier cases in the appeals. Instead of detailed discussions of the facts in the judgment, it dismissed the appeals upon holding that the liabilities of the assessee vis-a-vis the trust had been decided in the earlier appeals. It was held that the trust was an independent and distinct entity having separate status. The Tribunal, however, held that the act of reliance on its earlier decisions was no decision, either on law or on facts. This is seeming contradiction, a paradox. Admittedly, there is a decision by the Tribunal. Can it be said it was neither a decision on law nor decision on facts ? Can such a decision exist? The issue involved in the appeals could not have been decided without resolving the questions of facts and/ or law. It is a misgiving to assume that issues can be decided without determination of the questions of facts and/or law. An appeal cannot be decided on abstract law severed from the facts of the case. A precedent is an authority for the propositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw of the previous decisions were applied in the appeals surely upon holding that the principles of law were fit to be applicable in the appeals as well. The Revenue claims that in the previous decisions the Tribunal had referred the very same questions of law to this court upon holding that they had arisen out of the decisions. The assessee has not controverted the claim of the Revenue. It is indubitable that the aforesaid questions of law are pending in this court, in several Income-tax Reference Cases, including Income-tax Reference Nos. 3 of 1978, 4 of 1978 and 10 of 1978. These were off-shoots of income-tax assessment proceedings and the questions referred were the same as in the present appeals. As such, we find that in the earlier appeals there were two segments of the appeal proceedings. Fir-St, the decision in appeal which went against the Revenue. Secondly, the order of the Tribunal under s. 256(1) of the Act making a reference of the very questions to this High Court for its decision. The learned Tribunal dismissed the appeals in view of its decisions in the former appeals and accepted the first part of the said appeal proceedings. However, it did not follow the order pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of each reference of the trust, the Tribunal is competent to pass such orders as are necessary to dispose of the case conformably to such judgment. The decision empowers the Tribunal to pass an order in respect of the case conformably to the judgment of the High Court. Nothing could be shown by the counsel for the assessee that the Tribunal has ancillary powers to pass necessary orders in respect of the present assessee-HUF, in different assessment proceedings although somewhat connected. Be that as it may, the party in the trust case is different entity and the present assessment is against a different entity in a different status. The present assessee is an HUF whereas in the trust case it is a different entity in a different status. The fresh assessment under s. 153 can be done afresh on the same entity in the same status. Therefore, it is a doubtful proposition whether s. 153(3), Expln. 3, can be attracted in the instant case. The proceedings are different and the parties are also different. Therefore, the applicability of s. 153(3), Expln. 3, is obscured in doubt or at least debatable. This apart, it is uncertain whether the petitioner has a right to claim reassessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using the references, the learned Tribunal should have stated the cases and referred the, questions of law for the decision of the High Court in exercise of its power under s. 256(1) of the Act. We hold that the grounds for rejection of the application under s. 256(1) are not good grounds for such refusal. Now, having disposed of the reasons of the Tribunal as unacceptable grounds, let us turn to consider whether the questions fashioned by the Tribunal are questions of law or not. The questions are prima facie questions of law they are live questions of law. These questions were referred by the Tribunal as questions of law in its earlier decisions. This is a strong factor to hold that these are questions of law. We ire of the view that the questions of law do arise out of the decisions of the Tribunal. We have already stated that the Revenue raised the questions for the decision of the Tribunal but the Tribunal summarily rejected them on the score that it had negatived the contentions earlier. The assessee has not filed any return to the Rules stating that the questions of law were never raised by the Revenue in their memorandum of appeal or orally. In our opinion, the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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