2000 PLP 727 (PTD)

In compliance of the direction issued by this Court on August 4, 1988, on application presented by the assessee (Iqbal & Co., Unhel) arising out of the common order, dated May 8, 1986, passed by the Tribunal in I.T.As. Nos.563 to 567/Ind. of 1983, the Tribunal stated the case and referred the under noted questions for our opinion: "(i) Whether, on the facts and in the circumstances of the case, the Tribunal, in view of the grounds of appeal taken before it, erred in law in setting aside the findings given by the Appellate Assistant Commissioner that the assessee was a separate entity and the assessment made in the case of the assessee should be treated as substantive? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal, in view of the grounds of appeal taken before it, erred in law in setting aside the order passed by the Appellate Assistant Commissioner, whereby the order of the Income-tax Officer cancelling registration/continuation of registration of the assessee firm was set aside?" Miscellaneous Civil Case No. 61 of 1989: In compliance with the direction issued by this Court on August 4, 1988, on application presented under section 256(2) of the Act filed by the assessee (Chetan Swaroop Omprakash & Co., Nagda) arising out of the order, dated May 8, 1986, passed by the Tribunal in I. T. A. No. 616/Ind of 1983 for the assessment year 1979-80, the Tribunal stated the case and referred the under noted question of law for our opinion: "Whether, on the facts and in the circumstances of he case, the Tribunal, in view of the grounds of appeal taken before it, erred in setting aside the entire order passed by the Commissioner of Income-tax (Appeals)?" Miscellaneous Civil Case No. 386 of 1991: At the instance of the -assessee (Chetan Swaroop Omprakash & Co., Nagda), the Tribunal has stated the case and referred the under question of law, arising out of the order, dated November 6, 1990, passed by the Tribunal in I.T.A. No. 1084/Ind of 1985 for the assessment year 1981-82, for our opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal., in view of the grounds of appeal taken before it, erred in setting aside the entire order passed by the Commissioner of Income-tax (Appeals)?" We have heard Shri G. M. Chaphekar, learned senior counsel, with Shri S. S. Samvatsar and Shri H. C. Sarda, for the applicant/assessee, and Shri A. M. Mathur, learned senior counsel, with Shri A. K. Shrivastava, for the non-applicant/Department, in all these cases. Shri Chaphekar, submitted that against the assessee, Kamal Kishore. & Co., Khachrod (Miscellaneous Civil Case No. 60 of 1989), the Department filed no appeal yet the Tribunal interfered with the order passed by the lower appellate Court and disturbed the order passed in favour of the assessee despite the fact that the order so disturbed had attained finality. Shri Chaphekar, therefore, submitted that the Tribunal erred in law in setting aside the order passed by the Appellate Assistant Commissioner without there being any 4ppeal by the Department. - Shri Chaphekar with regard to Miscellaneous Civil Case No. 66 of 1989 submitted that the Tribunal committed a grave error of law in upsetting the finding with regard to entity in the absence of any ground in the appeal in that regard. He also submitted that the second question could not arise in the absence of the first question and the first question arose because the Tribunal set aside the favourable finding despite the absence of a ground in the memorandum of appeal. He submitted that the status was not challenged and the litigation was restricted only to the quantum. He, therefore, submitted that both the questions in this miscellaneous civil case deserve to be answered in favour of the assessee. As regards Miscellaneous Civil Cases Nos. 61 of 1989 and 386 of 1991, counsel for the applicant submitted that the orders passed by the Tribunal are consequential in nature and if the answers in Miscellaneous Civil Cases Nos.60 of 1989 and 66 of 1989 go in favour of the assessee, then the answers in these two miscellaneous civil cases deserve to be answered in favour of the assessee ipso facto being consequential in nature. Counsel for the non-applicant/Department was unable to point out as to how the Tribunal had the jurisdiction to set aside the finding in the absence of the appeal so far as Miscellaneous Civil Case No. 60 of 1989 is concerned and was also unable to explain as to how the question of status was disturbed in the absence of any challenge by the' Department in that regard. He was also unable to point out as to how the orders relating to Miscellaneous Civil Cases Nos. 61 of 1989 and 386 of 1991, consequential in nature, are sustainable independent of the orders passed in Miscellaneous Civil Cases" Nos. 60 of 1989 and 66 of 1989. Section 253 of the Act permits appeals to the Appellate Tribunal. Under subsection (2) of this section, the Commissioner may, if he objects to any order, direct the Assessing Officer to appeal to the Appellate Tribunal against the order. It is, thus, clear that there has to be an appeal and there has to be a specific objection. Under Order 41, rule 2, of the Civil Procedure Code also it is clear that the appellant shall not, except by leave of the Court, urge or be heard in support of any ground of objection not set forth in the memorandum of appeal. Admittedly, the ground of status was not taken by the Department in appeal in terms of section 253(2) of the Act, so far as Miscellaneous Civil Case No.66 of 1989 is concerned. It is also irrefragable that no appeal was filed in terms of section 253(2) of the Act so far as Miscellaneous Civil Case No.60 of 1989 is concerned. No leave was obtained to urge the ground in regard to the status as regards the liability to tax. It is further luculent that the orders passed related to Miscellaneous Civil Cases Nos.61 of 1989 and 386 of 1991 are consequential in nature. In view of the aforesaid peculiar position, we answer the questions referred in the aforesaid four miscellaneous civil cases in the affirmative, i.e., in favour of the assessee and against the Department, in the light of the infirmity as pointed out above. These miscellaneous civil cases are, thus, disposed of in terms indicated above. We, however, grant liberty to the non-applicant/Department to resort to appropriate remedy, if permissible under the law, so far as the orders in the aforesaid appeals referred to are concerned. In case of such proceedings for remedy, the applicant/assessee shall have freedom to contest the same in conformity with law. These miscellaneous civil cases are, thus, disposed of with no orders as to costs. Counsel fee for each side in each case is, however, fixed at Rs.750, if certified. Transmit a copy of the order in each case to the Tribunal. Retain this order in the records of Miscellaneous Civil Case No.60 of 1989 and place its copy each in the records of connected miscellaneous civil cases, as particularised above, for ready reference. M.B.A./3272/FC Order accordingly.