1. All these miscellaneous applications involve common issue, therefore, these are being taken up together and are being disposed of by this composite order.
2. In all these cases, the assessments were cancelled by the orders of the Tribunal on the ground that the assessment orders were passed beyond limitation provided by the IT Act, when the AO passed orders under s. 143(3) r/w s. 144B of the IT Act. While deciding the appeals, filed before the Tribunal, the Tribunal decided the appeals only on the issue of limitation and did not discuss each and every ground filed by the appellants or Revenue separately. The matter was referred to the Punjab & Haryana High Court in all these cases and the High Court decided the issue that the order passed by the AO was well within time and vacated the finding of the Tribunal and decided the issue in favour of the Department.
3. While giving the effect to the orders of the Tribunal consequential orders were passed by the Bench in all the cases one of which is reproduced as follows : "The following question of law was referred to the High Court for its esteemed opinion vide R.A. No. 17/Asr/1995 : 'Whether, on the facts and circumstances of the case, the Tribunal is right in law in holding that order made under s. 144B of the IT Act was bad in law and the assessment made on 26th May, 1984 is barred by limitation ?' The High Court vide its order dated 29th September, 1997 decided the question in favour of the Department and against the assessee.
Respectfully following the order of the High Court, the appeal of the Revenue stands allowed." 4. After the decision of the consequential order, the appellant filed miscellaneous applications requesting that the appellants should have been allowed an opportunity of being heard before passing the consequential order. The submissions of the learned counsels of the appellants were accepted and miscellaneous applications were entertained and cases were listed for hearing.
5. The first issue decided by us relates to the finding whether an opportunity of being heard is required to be granted to the parties while passing orders under s. 260(1) of the IT Act. Sec. 260(1) of the IT Act reads as follows : "260(1). The High Court or the Supreme Court upon hearing any such case shall decide the questions of law raised therein, and shall deliver its judgment thereon containing the grounds on which such decision is founded, and a copy of the judgment shall be sent under the seal of the Court and the signature of the registrar to the Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment." 6. If one goes through the plain reading of the section, there is no provision for providing an opportunity of being heard. However, abnormal situations may arise where care is not taken by the legislature and therefore various Courts have intervened and given their observations and interpretations of s. 260(1) of the IT Act. One of the thinking which consistently prevailed with the Tribunal and the Courts, was that in case the order of the Tribunal is reversed or disturbed by the High Court then before giving effect to such directions under s. 260(1), the appellant should be allowed opportunity of being heard. This issue is discussed by the Supreme Court in the case of Esthuri Aswathiah vs. CIT (1967) 66 ITR 478 (SC). The Supreme Court was dealing with the similar issue. The point before the Supreme Court is 'guidance and procedure' which should be followed by the Tribunal consistently. No doubt, the Tribunal has not followed the guidance and procedure of the Supreme Court while giving this judgment.
The Supreme Court decided the issue which is reproduced as follows : "For the reasons already recorded, we agree with the answers recorded by the High Court on the two questions.
But it is necessary to give certain effective directions, lest a bald order of dismissal of the appeal may result in injustice, especially when the assessee had not a fair trial of his case before the Tribunal. Sec. 66(5) of the Indian IT Act, 1922, requires the Tribunal on receiving a copy of the judgment of the High Court to pass such orders as are necessary to dispose of the case conformably to such judgment. This clearly imposes an obligation upon the Tribunal to dispose of the appeal in the light of and conformably with the judgment of the High Court. Before the Tribunal passes an order disposing of the appeal, there would normally be a hearing.
The scope of the hearing must of course depend upon the nature of the order passed by the High Court. If the High Court has agreed with the view of the Tribunal, the appeal may be disposed of by a formal order : if the High Court disagrees with the Tribunal on a question of law, the Tribunal must modify its order in the light of the order of the High Court : if the High Court has held that the judgment of the Tribunal is vitiated, because it is based on no evidence or that it proceeds upon conjectures, speculation or suspicion or has been delivered after a trial contrary to rules of natural justice, the Tribunal would be under a duty to dispose of the case conformably with the opinion of the High Court and on the merits of the dispute. In all cases, however, opportunity must be afforded to the parties of being heard." 7. We are of the opinion that this judgment is to be read with the decision of Bombay High Court in case of ITAT vs. S. C. Cambatta & Co.
Ltd. (1956) 29 ITR 118 (Bom), where Justice Chagla has given following observations : "... when a reference is made to the High Court either under s.
66(1) or s. 66(2) the decision of the Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of. It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of ... it is clear that what the Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under s. 33 ... The shape that the appeal would ultimately take and the decision that the Tribunal would ultimately give would entirely depend upon the view taken by the High Court ...." 8. The other view was brought to our notice by the learned Departmental Representative which is available in CIT vs. P. Krishna Warrier (1994) 208 ITR 823 (Ker), East India Corpn. Ltd. vs. CIT (1975) 99 ITR 287 (Mad) and Paul Mathews & Co. vs. ITO (1984) 148 ITR 629 (Ker).
9. The proper procedure available with the Tribunal while deciding the appeal of the appellant was to decide the appeal of the appellant in full. Sec. 254 deals with the powers of the Tribunal to pass their judgments. Sec. 254(1) gives power to Tribunal to pass such orders as it thinks fit and if there is any mistake apparent from record then the Tribunal can amend such order after the mistake is brought to its notice either by the appellant or by the Revenue. Apart from the interpretations regarding power of the Tribunal we are restricting ourselves to the point regarding the duty casted upon the Tribunal to decide the issue. The Tribunal is final fact-finding authority.
Therefore, it is the duty of the Tribunal to consider and decide all the issues that are agitated before it by the Revenue or by the assessees. It will be miscarriage of justice, if the Tribunal decides some of the issues arising out of many issues and decline to decide the other issues raised before it, based on its observation that the other issues or grounds become irrelevant because they become ineffective after the decision is taken on some other issues. This will really cause harassment to the system and will also cause long drawn process of litigation. In all these cases, matters are as old as 18 years old.Now the Tribunal will decide the issues after 18 years and another 10 to 15 years will take for agitated matters to get settled. This to our mind will be total miscarriage of justice. The Gujarat High Court was dealing with the situation while deciding the case of CIT vs. Kartikey V. Sarabhai (1981) 131 ITR 42 (Guj). In the abiter dictum in this case, the Gujarat High Court has observed that if two questions arise before the Tribunal and one of which interlocking with other, it is better for the Tribunal to decide the both. The Andhra Pradesh High Court and the Madras High Court in CIT vs. Srinivasa Pitti & Sons (1988) 173 ITR 306 (AP) and CIT vs. Ramdas Pharmacy (1970) 77 ITR 276 (Mad) and High Court of Andhra Pradesh in the case of CIT vs. Hyderabad Secunderabad Foodgrains Association Ltd. (1989) 175 ITR 574 (AP) has held that the Tribunal should decide all the issues agitated before it. The Bombay High Court in the case of CIT vs. Ganesh Builders (1979) 116 ITR 911 (Bom) has given finding that if the assessee takes alternate argument the Tribunal should decide both original as well as alternate argument.
We do not find any judgment which talks otherwise that the Tribunal should decide the issues in piecemeal manner.
10. Now what happens, if the Tribunal decides issue in piecemeal manner then to our mind the Tribunal has committed a mistake and the remedy allowed to the appellant is provided by s. 254(2) of the IT Act.
Because not to decide all the issues is a mistake apparent on record and it is the duty of the aggrieved party which may be either Revenue or assessee to file an application within time-limit prescribed under s. 254 and ask the Tribunal to give the decision on other issues. The Tribunal has no power to review order but can only modify order, if either assessee or Revenue files an application. Suo motu, the Tribunal cannot invoke s. 254(2) of the IT Act. The Andhra Pradesh High Court in the case of CIT vs. Trustees of H.E.H. The Nizam's Charitable Trust (1981) 131 ITR 497 (AP) has held that the Tribunal under s. 254(2) has power to dispose of the issues which were not decided when the original appeal was disposed of.
11. The Supreme Court in the case of CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC), has discussed the issue regarding power of withdrawal. It is consistent view that after the appellant has filed an appeal, the appeal has to be followed with a judgment. The appellant has no power to withdraw the appeal.
12. Now, if the appellant or Revenue has not followed the proper procedure, we have to take note as to what is the remedy on this peculiar situation. We are faced with the situation where there may be miscarriage of justice because both the Revenue as well the appellant has not invoked s. 254(2) of the IT Act. The Supreme Court has decided the issue in the case of CIT vs. Jubilee Mills Ltd. (1968) 68 ITR 630 (SC). The Supreme Court has held that High Court should give effective direction so that mere order of dismissal may not result in injustice.
The Supreme Court has given following finding which are reproduced as follows : "If the High Court agrees with the view of the Tribunal, the appeal may be disposed of by a formal order. But if the High Court disagrees with the Tribunal on a question of law, the Tribunal must modify its order in the light of the order of the High Court. If, for example, the High Court has held that the judgment of the Tribunal is vitiated, because it is based on no evidence or because the judgment proceeds upon a misconstruction of the statute, the Tribunal would be under a duty to dispose of the dispute, and rehear the appeal after giving notice to the parties and redetermine it in accordance with law. In ITAT vs. S. C. Cambatta & Co. Ltd., the Bombay High Court explained the procedure to be followed as under : "... when a reference is made to the High Court either under s.
66(1) or s. 66(2) the decision of the Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of. It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of ... it is clear that what the Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under s. 33 ... The shape that the appeal would ultimately take and the decision that the Tribunal would ultimately give would entirely depend upon the view taken by the High Court." 13. The learned counsels have relied on various case laws which are related to similar issues : (4) CIT vs. Malayalam Plantations (India) Ltd. (1993) 204 ITR 735 (Ker); (6) CIT vs. Hyderabad Deccan Liquor Syndicate (1974) 95 ITR 130 (AP); and 14. We are also of the opinion that the ratio of the decision of East India Corpn. Ltd.'s case (supra) has to be understood in its proper perspective. The issue decided by the Madras High Court was regarding remand powers of the Tribunal. The High Court has held that before the Tribunal passes an order, disposing of the appeal, there should clearly be a hearing and the scope of the hearing must, of course, depend upon the nature of the order passed by the High Court. We are deciding the issue based on judicial proprietary and on the principles of natural justice. The appellant and the Revenue as the case may be failed to invoke provisions of s. 254(2) of the IT Act. However, we are of the opinion that till the pending matter gets resolved by the decision of either High Court or Supreme Court, the decision of the Tribunal achieves finality only after such decision on the issue is received back from the High Court and Supreme Court. It would have been legally correct if appellant or Revenue would have utilised its right by filing an application under s. 254(2) of the IT Act compelling the Tribunal to decide all the issues. But in these cases, we feel a strict decision in accordance with these observations may lead to miscarriage of justice.
We, therefore, recall the order passed under s. 254(2) of the IT Act so that remaining grounds and issues are now decided in order to give justice to the appellant as well as the Revenue as the case may be.