ORDER
ITA Nos. 376/2003 & 385/2003
At the request of learned advocates, we are taking these matters for final disposal.
2. The question of law raised in these appeals is as under:
“(1) Whether in terms of section 255 of the Income Tax Act, 1961, when there is a dis-agreement between the members, subsequently, one of them can change his opinion agreeing with the other member ?”
3. For the assessment years 1993-94 and 1994-95 ITAT was hearing the appeal Nos. 3900 & 4517/Delhi/1997 (respectively). The Accountant Member expressed his opinion and by an order dismissed both the appeals preferred by the revenue. After going through the order of the Accountant Member the Judicial Member passed an order dated 3-6-2003 to the extent of allowing the appeals of the revenue partly for statistical purpose. This amounted to a dis-agreement between the two members who heard the appeals. Accordingly, the procedure prescribed under section 255(4) of the Income Tax Act, 1961 ought to have been followed and the matter ought to have been placed before the President for reference to one or more members, as deemed fit. This was not done.
4. Strangely, the Accountant Member who expressed opinion earlier, changed his views and agreed with the ultimate findings of the Judicial Member on 4-6-2003. This could not be done. Firstly the Accountant Member had become functus officio after he passed his initial order. Secondly, the procedure prescribed by the statute had not been followed. As mentioned above in such a situation, the procedure indicated in sub-section (4) of section 255 is required to be followed. The sub-section (4) of section 255 reads as under:
“(4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.”
5. It is in view of this, it was incumbent upon the members to state the points on which they differed and the case was required to be referred to the President of the Tribunal for appropriate orders. In these circumstances, the Accountant Member could not have subsequently changed his opinion and the order that was required to be passed was one for stating the point or points of difference as prescribed by sub-section (4) of section 255.
6. The question is answered accordingly. The effect is that the order made by the Accountant Member on 4-6-2003 is liable to be set aside and is so set aside. That being the case, it leaves us with two conflicting orders; one passed by the Accountant Member and one passed by the Judicial Member. Thus, there being an unresolved difference of opinion, we send the matter back to the Tribunal, to pass an appropriate order in terms of sub-section (4) of section 255 of the Income Tax Act for a resolution of the difference in the manner prescribed.
7. The appeals are allowed to the extent indicated.
ITA No. 386/2003
In respect of the assessment year 1995-96, the Tribunal was hearing ITA No. 338/Delhi/1998. Submissions were made by the counsel for the assessed that the appeal may be disposed of by directing the assessing officer to follow the decision of the Tribunal for earlier two years (in appeals ITA Nos. 3900 and 4517/Delhi/ 1997) involving the same assessed. This was done. In respect of the said earlier decisions of the Tribunal, two appeals being ITA Nos. 376/2003 & 385/2003 were filed before this court. Those appeals have been allowed and disposed of by this court by a judgment and/or order made today. Since the present case was disposed of in view of the order made by the Tribunal earlier and as the other appeals have been remitted to the Tribunal for deciding the same, after following the procedure prescribed under section 255(4) of the Income Tax Act, 1961, the impugned order is also required to be quashed and set aside. The matter is remanded to the Tribunal for a fresh decision. Consequently, the appeal is allowed.