2022 (10) TMI 364 - SCH - Income Tax

Order passed by President, Income Tax Appellate Tribunal (ITAT) to constitute a special Bench to decide the appeal preferred in the case of the respondents - SLP preferred against the impugned judgment and order passed by the High Court of Judicature by which the High Court has set aside the Order passed by Income Tax Appellate Tribunal (ITAT) - as submitted that the issue touches the jurisdiction and/or authority of the President to constitute a special Bench in exercise of the powers under Section 255(3) of the Income Tax Act, 1961 HELD THAT - As the appeal which was to be heard by the Special Bench has already been now decided and disposed of by the ITAT, Hyderabad and, as such, the present Special Leave Petition has become infructuous and/or academic. Therefore, without expressing anything on merits on the legality and validity of the impugned judgment and order passed by the High Court and the powers of the President to constitute a Special Bench in exercise of powers under Section 255(3) of the Income Tax Act and keeping the question of law open, we dispose of the present Special Leave Petition as having become academic. However, the strictures passed against the Vice- President, ITAT in the impugned judgment and order are expunged.Special Leave Petition stands disposed of accordingly.

Issues:
1. Jurisdiction and authority of the President to constitute a special Bench under Section 255(3) of the Income Tax Act, 1961.
2. Infructuous nature of the Special Leave Petition due to the appeal being decided by the regular Bench of ITAT.
3. Expunging of strictures passed against the Vice-President, ITAT in the impugned judgment.

Analysis:
1. The Supreme Court heard a Special Leave Petition challenging a High Court judgment that set aside the Order passed by the President of the Income Tax Appellate Tribunal (ITAT) to form a special Bench. The issue revolved around the President's jurisdiction and authority to constitute such a Bench under Section 255(3) of the Income Tax Act, 1961. The Respondents argued that the appeal had already been decided by the regular Bench of ITAT, rendering the Special Leave Petition infructuous. The Court acknowledged this development but refrained from expressing any opinion on the legality and validity of the High Court's judgment. The Court disposed of the Petition, leaving the question of law open for future consideration.

2. As the appeal in question had been resolved by the ITAT's regular Bench during the pendency of the Special Leave Petition, the Court deemed the matter academic. Despite the Petition becoming infructuous, the Court refrained from delving into the merits of the impugned judgment and the President's powers to constitute a special Bench. The Court's decision to dispose of the Petition without a detailed examination of the legal issues highlighted the practicality of the situation where the primary subject matter had already been resolved, leading to the academic nature of the Petition.

3. Additionally, the Court expunged the strictures passed against the Vice-President of the ITAT in the impugned judgment. This action indicated the Court's commitment to ensuring fairness and justice in the legal process, even when disposing of a matter that had become academic. By addressing this aspect of the judgment, the Court demonstrated its attention to detail and commitment to upholding the integrity of the judicial system. The disposal of the Special Leave Petition and the expunging of the strictures marked the conclusion of the legal proceedings, ensuring all relevant aspects of the case were duly addressed and resolved.

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