Commissioner of Income Tax vs Rane (Madras) Ltd.

Ismail, J.—The Income Tax Appellate Tribunal, Madras Bench, at the instance of the Commissioner of Income Tax, Madras II, Madras, u/s

256(1) of the Income Tax Act, 1961, has referred the following question of law said to arise out of the order of the Tribunal dated March 18,

1970, made in I.T.A. No. 249 (Madras) 1968-69 :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in restoring the appeal to the file of the

Appellate Assistant Commissioner without limiting the scope of enquiry before him on the basis of the grounds of appeal preferred before it ?

This reference arises out of a very simple order of remand made by the Tribunal. The following is the order of the Tribunal :

The facts necessary for a proper determination of the issues involved are not brought on record by the Appellate Assistant Commissioner. He is

directed to go into the matter in detail, consider all the aspects of the matter and he should consider all the contentions that may be raised by the

parties, and dispose of the matter afresh in accordance with law. The Appellate Assistant Commissioner may consider all the materials including

the earlier orders to the extent they are relevant and also other orders if they have any relevance in the matter.

For statistical purposes, this appeal will be deemed to be allowed."" We are unable to see any error of law in this order of the Tribunal. The

Tribunal as appellate authority has jurisdiction to set aside the order appealed against and to direct the lower authority to dispose of the appeal

afresh. The law does not impose any restriction on this power of the appellate authority except for the discretion vested in it as to in what cases it

will remand the matter for fresh disposal and in what cases it will itself consider all the materials and dispose of the appeal preferred before it. Mr.

Jayaraman, learned counsel for the department, contended that by the impugned order the Tribunal has enlarged the scope of the enquiry before

the Appellate Assistant Commissioner. We are unable to share this view. The scope of enquiry before the Appellate Assistant Commissioner will

be exactly the same as it was before the Appellate Assistant Commissioner originally passed his order and that will certainly depend upon the

nature of the order against which the appeal itself was preferred before the Appellate Assistant Commissioner. Consequently, we are unable to

agree with the contention that the Tribunal has in any way enlarged the scope of the enquiry by the Appellate Assistant Commissioner.

Mr. Jayaraman then contended that the Tribunal has directed the Appellate Assistant Commissioner to take into account earlier orders, that one

such order of the Tribunal has been the subject-matter of a reference to this court, namely, T.C. No. 267 of 1970 [Commissioner of Income Tax

v. Rane (Madras) Ltd. [1978] 112 ITR 244 (Appendix)] in which this court by judgment dated January 5, 1976, remanded the matter to the

Appellate Tribunal for fresh disposal and that, therefore, the previous order of the Tribunal should not be taken into account by the Appellate

Assistant Commissioner. Certainly this contention is well founded. But there does not appear to be any warrant for such apprehension because the

Appellate Assistant Commissioner cannot take into account the order of the Appellate Tribunal which has ceased to exist as a result of the orders

of this court remanding the matter to the Income Tax Appellate Tribunal for fresh disposal and, therefore, it is certainly open to the Income Tax

Officer to bring this to the notice of the Appellate Assistant Commissioner when he seeks to dispose of the matter afresh pursuant to the order of

remand made by the Income Tax Appellate Tribunal.

We may also point out that the appeal before the Tribunal was filed by the department and if in that appeal the Tribunal has passed an order

setting aside the order of the Appellate Assistant Commissioner and remanding the matter to the Appellate Assistant Commissioner for fresh

disposal, it is rather difficult to see what grievance the department can have against such an order which in effect is in favour of the department

itself.

We may further point out that the question that has been referred to this court has not even been properly framed. The question reads as if there

was any restoration of the appeal to the file of the Appellate Assistant Commissioner. All that has happened is that the Tribunal has set aside the

order of the Appellate Assistant Commissioner and remanded the appeal itself to the Appellate Assistant Commissioner for fresh disposal. Under

these circumstances, we reframe the question as follows :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in remanding the entire matter to the Appellate

Assistant Commissioner for fresh disposal without limiting the scope of enquiry before the Appellate Assistant Commissioner on the basis of the

grounds of appeal preferred before it ?

and answer that question in the affirmative and against the department. The assessee will be entitled to its costs. Counsel''s fee is fixed at Rs. 500

(five hundred only).