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TMI Blog2004 (7) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... racts in respect of which mobilisation fees were being received from time to time. Initially, the assessee used to maintain accounts on the basis of the completion of the contracts; but from the assessment year 1988-89, the assessee had changed the mode of accounting and started showing receipt of mobilisation fee on the basis of the pro rata performance of the contract in that particular assessment year and offered it to tax. In respect of the assessment years 1988-89 and 1989-90, the Commissioner of Income-tax (Appeals) had held that the amount would become taxable on the completion of the contract when the bank guarantee would be released and thus postponed the taxability till the completion of the contract. Against these two orders of the Commissioner of Income-tax (Appeals), the assessee preferred appeal before the learned Tribunal. The learned Tribunal by a consolidated order passed in these two appeals had laid down the principle of pro rata receipt of the mobilisation fees on the basis of the pro rata performance of the contract and did not agree with the postponement of the taxability till the completion of the contract and had allowed these two appeals with regard to thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen relied on the decision in CIT v. Assam Travels Shipping Service [1993] 199 ITR 1 (SC) in which it was held that even if the appeal could not have been allowed then the Tribunal had power to remand the matter to the Commissioner of Income-tax (Appeals). In support of the appeal against the rectification order Mr. Khaitan relied on Neeta S. Shah v. CIT [1991] 191 ITR 77 (Karn) to contend that when an earlier order of the Appellate Tribunal appeared to have been founded on a mistaken assumption and the error was discovered, the power of rectification under section 254(2) of the Income-tax Act, 1961, could be invoked because the very basis of the earlier order required rectification. He then relied on Bata India Ltd. v. Deputy CIT [1996] 217 ITR 871 (Cal) to contend that the Tribunal is supposed to correct the mistake or error or omission and it is its bounden duty to set such mistake right if the said order would affect the assessee resulting into a prejudice. He then relied on CIT v. Ballabh Prasad Agarwalla [1998] 233 ITR 354 (Cal) to contend that though the Tribunal has no power of review but yet it can correct the mistake since it is the duty of the court to do justice and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn the principle of law without applying the same to the facts and circumstances of the case at hand, even though it might go in favour of the assessee who had not preferred any appeal. When the appeal is before the learned Tribunal, it is the whole appeal that is before it and in such appeal the exercise of power flows from the appellate authority vested in the Tribunal. The Tribunal has to discharge its function as an appellate authority and passing of appropriate order is the sine qua non for the exercise of such function. It is the bounden duty of the Tribunal, particularly when it follows a particular principle of law or lays down a law. Inasmuch as when a law is laid down in connection with an appeal, it has to apply the same in the facts and circumstances of the said case irrespective of the fact whether it would grant relief to the assessee or the Department. When an appeal is preferred before the Tribunal by any of the parties, the whole appeal is before the Tribunal. The Tribunal is supposed to pass appropriate order as it may deem fit in the appeal preferred by any of the parties. It is immaterial whether such order will benefit one or the other of the parties or in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case following the order passed by the learned Tribunal in respect of the earlier two assessment years 1988-89 and 1989-90, the Tribunal had passed the main order under appeal dismissing the same and purporting to affirm the order of the learned Commissioner of Income-tax (Appeals). These two cannot go together. In respect of the earlier two years, the proportionate pro rata taxability has been accepted on principle overruling the postponement theory held by the Commissioner of income-tax (Appeals). When this principle is being followed, if the order of the Commissioner of Income-tax (Appeals) is upheld in respect of the assessment year 1990-91, in that event, it would uphold the postponement theory while following the principle of pro rata theory. Thus, the Tribunal was wrong, while following the principle laid down in respect of the earlier two years, in affirming the decision of the Commissioner of Income-tax (Appeals) for the assessment year 1990-91. This appears to be wholly anomalous and incongruous. Therefore, the order cannot be sustained. Conclusion: In any event, even if it is assumed that the Tribunal could not have passed any order since no appeal was prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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