THE INCOME TAX APPELLATE TRIBUNAL, HYDERABAD SPECIAL BENCH, HYDERABAD versus THE DEPUTY COMMISSIONER OF INCOME-TAX (ASSTTS.) III , HYDRABAD , ANDHRA PRADESH AND ORS.

Citation: [1996] 1 S.C.R. 630 · Decided: 17-01-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Disposed off
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Judgment (excerpt)

y 
L
J. -
A 
THE INCOME TAX APPELLATE TRIBUNAL, HYDERABAD 
SPECIAL BENCH, HYDERABAD 
v. 
THE DEPUTY COMMISSIONER OF INCOME-TAX (ASSTTS.) 
III, HYDERABAD, ANDHRA PRADESH AND ORS. 
B 
JANUARY 17, 1996 
...-
[B.P. JEEVAN REDDY ANDS. B. MAJMUDAR, JJ.] 
• 
Income Tax Act, 1961 : 
c 
S.255 and Regulation 98-A of Regulations framed under s.255(5)-ln-
come Tax Appellate Tribunal-President-Power to constitute Special Bench 
Held, Power of President to co1utitute Special Bench wider sub-sec(l) read 
j 
with sub-section (3) of s.255 is an administrative power which can be veer-
~
cised even suo motu in appropriate cases-This power is independent of 
D reference by Judicial order of a Bench of Tribunal under Regulation 98-A. 
Constitution of India 
Article 226-Held, in writ furisdiction High Court cannot sit in appeal 
over administrative decision of the President of the Income Tax Appellate 
E T1ibu11a/ to constitute a Special Bench crcept in crtraordinary cases wherein 
the order is shown to be a ma/a fide one. 
Practice and Procedure : 
Income Tax Appellate Tribunal-Grant of adjoumments to parties and 
F 
accepting their written submissions-Pmpeiiety of-Explained. 
The assessee-companies, respondents no. 2 is each of the instant 
appeals, filed three tax appeals before the Hyderabad Bench of the Income 
Tax Appellate Tribunal. A common issue of interpretation of s. 115-J of 
the Income Tax Act, 1961 was involved in the said appeals which were 
] 
G placed for hearing before a S1iecial Bench of the Tribunal. The Special 
Bench decided the appeals in favour of the assessees. The Revenue chal· 
lenged the said judgment by filing three writ petitions before the High 
Court. The High Court, while allowing the writ petitions of the Revenue, 
held that in the absence of a reference by a judicial order by the Bench of 
.. 
• 
H the Tribunal, the President of the Tribunal was not justified in constituting 
630 
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l.T. APPLT. TRBL. v. DY. COMMR. OF!. TAX (ASSTTS.) lII 
631 
the Special Bench for deciding the appeals of the respondent-assessees; A 
and that the Tribunal was not justified in refusing adjournment as was 
prayed for by the Revenue. The Tribunal filed the present appeals against 
the decision of the High Court on the aforesaid two points whereas the 
assessees also filed separate appeals against the decision of the High 
Court on construction of s. 115-J of the Act. The appeals filed by the 
assessees were delinked and were directed to be dealt with separately from 
the present appeals filed by the Tribunal. 
B 
In the present appeals, the Tribunal as also the Revenue filed 
affidavits indicating the manner in which the three appeals of the respon-
dents-assessees came to be listed before the Special Bench of the Tribunal. C 
It was stated that the Tax Bar Association of Andhra Pradesh addressed 
a letter dated 25.7.1992 to the President of the Income Tax Appellate 
Tribunal requesting him to refer to a Special Bench the question of correct 
interpretation of s.115-J of the Income-Tax Act. Thereafter two Senior 
Members of the Tribunal, by a D.O. Letter dated 25.9.1992, requested D 
President of the Tribunal to constitute a Special Bench to decide the four 
matters enumerated in the said letter involving the common issue of 
interpretation of s.115-J of the Act. The President agreed with the Mem-
bers of the Tribunal and constituted a Special Bench, before which nine 
matters, including the four matters enumerated in the D.O. letter dated 
25.9.1992 and the tax appeals of the three respondents-assessees giving rise E 
to the instant appeals, were placed for hearing. When the arguments were 
concluded and jndgment was reserved, the counsel for the four matters 
enumerated in D.O. letter dated 25.9.1992 prayed for releasing those cases, 
on the ground that the same involved some additional issnes which were 
not specifially covered by the reference. The Special Bench released those F 
four matters observing that it was not necessary for the Bench to go into 
other points and once the main questions referred to in the matters were 
decided the said judgment would abide the other cases also, and delivered 
the judgment in the tax appeals of the respondents-assessees. 
Disposing of the appeals preferred by the Income Tax Appellate G 
Tribunal, this Court 
HELD 1.1. The High Court erred in holding that a Special Bench 
can be constituted by the President of the Income Tax Appellate Tribunal 
only pursuant to a judicial order and
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