2005 (4) TMI 34 - HC - Income Tax

Question of law - Whether Tribunal was justified in setting aside the order of the Assessing Officer and the CIT (Appeals) for both the years when the reference application under section 256(1) filed on questions of law against the quashing of order under section 263, is still undecided? appellant contend that the finding recorded by the Tribunal about the protective assessment is not correct - In our considered view we cannot entertain this submission for want of any basis. - In our considered opinion we are not called upon to examine the merits of the case decided by the Tribunal because no question of law is framed on any of the findings recorded by the Tribunal against the appellant on the merits. In this view of the matter it is not necessary for us to examine the merits of the case which has been decided by the Tribunal against the appellant

Summary

Issues:
- Appeal filed by the Commissioner of Income-tax under section 260A against an order passed by the Income-tax Appellate Tribunal.
- Question of law regarding the justification of the Tribunal in setting aside the order of the Assessing Officer and the Commissioner of Income-tax.
- Whether the Tribunal was justified in deciding the appeal on the merits when an identical issue was pending in reference under section 256(1) of the Income-tax Act.
- Examination of whether the question of law framed by the appellant arises out of the impugned order as required under section 260A(4) of the Act.

Analysis:
The judgment delivered by A.M. Sapre J. pertained to an appeal filed by the Commissioner of Income-tax against an order passed by the Income-tax Appellate Tribunal. The primary question of law raised was whether the Tribunal was justified in setting aside the orders of the Assessing Officer and the Commissioner of Income-tax. The court emphasized that for a question of law to be valid in an appeal under section 260A, it must arise from the impugned order. In this case, the court found that the question framed did not arise from the Tribunal's order, as there was no adverse finding against the appellant. Therefore, the appellant had no right to challenge the order based on the question raised.

Regarding the issue of the Tribunal deciding the appeal on the merits while an identical issue was pending in reference under section 256(1) of the Act, the court noted that the appellant did not raise this issue before the Tribunal. Additionally, no details of the pending reference were provided to the court. As a result, the court held that without a stay granted by any court or a specific prayer from the appellant, the Tribunal was justified in proceeding to decide the appeal on its merits.

The court further highlighted that since no question of law was framed on the findings of the Tribunal against the appellant, there was no need to examine the merits of the case decided by the Tribunal. The appellant did not request the court to formulate additional questions of law on the merits. As a result, the court concluded that the appeal lacked merit and did not involve any substantial question of law as required under section 260A.

In conclusion, the court dismissed the appeal, stating that no costs were to be awarded. The court did not delve into the merits of the controversy as it was not the subject of the appeal. The court also rejected the appellant's attempt to challenge the Tribunal's finding on "protective assessment" due to the absence of a framed question of law or a relevant prayer from the appellant during the appeal proceedings.