ORDER
Per Shri M. A. Ajinkya, Accountant Member – This is an application u/s. 256(1) of the Income-tax Act, 1961, arising out of M. A. Nos. 321/Bom/87 and 95/Bom/88 which in terms arise out of ITA No. 3573/Bom/84. The Commissioner of Income-tax, Central-II, Bombay requires the Tribunal to refer the following two questions, said to be of law and said to arise out of the aforementioned order of the Tribunal.
“1. Whether the Hon. ITAT was correct in law in holding that during pendency of the case before the Settlement Commission which has exclusive jurisdiction u/s. 245F (2), the ITAT had jurisdiction in the matter.
2. Whether the Hon. ITAT was correct in law in holding that section 245F (2) does not apply to appeal filed before it against order of Revision made u/s. 263 ?”
Since, in our opinion, no referable question of arises, we decline to grant reference for the following reasons :-
2. The Department has sought to frame these question from and out of the order of the Tribunal dated 27-7-1988, dismissing the two Misc. applications filed by the department. The first miscellaneous application was filed on 22-2-1987 and was marked M. A. No. 321 and the second was filed on 8-6-1988 and was marked M. A. No. 95/Bom/88. These Misc. Applications were filed against the order passed by the Tribunal on 14-9-1987 in ITA No. 3573/Bom/1984. By this order, the Tribunal allowed the assessees appeal against the order of the CIT u/s. 263. Against this order, the Department had filed a reference application on 17-9-1987. This application was rejected by the Tribunal in R. A. No. 2932/Bom/87 on 17-11-1988.
3. Now by this fresh reference application, the Department wants the Tribunal to refer certain questions, said to arise out of the order of the Tribunal, dismissing the Misc. application. The first question framed by the department, does not arise out of the order of the Tribunal. While disposing of the Misc. Application dated 27-7-1988, the Tribunal in para 5 of the order, had observed as under :-
“Now, the term “income-tax authority” is defined in section 245A (b) (as it existed prior to the amendment of the section brought about by Finance Act 1987 with effect from 1-6-1987) as under :
“(b) “income-tax authority” means a Director of Inspection, a Commissioner, a Commissioner (Appeals), an Appellate Assistant Commissioner, an Inspecting Assistant Commissioner or an Income-tax Officer.”
Even after the amendment, the term “income-tax authority” is defined in clause (d) of section 245A as income-tax authority specified in section 116. In both these sections, Income-tax Appellate Tribunal is not regarded as an income-tax authority which would mean that the Settlement Commission cannot exercise or supersede the powers of the ITAT. This has been well settled by a decision of the Supreme Court in the case of CIT v. B. N. Bhattachargee [1979] 118 ITR 461. Therefore it is in our opinion, presumptuous for the department to say that the Tribunal had no jurisdiction to deal with this appeal when the CIT himself had rejected the assessees objection on similar lines and proceeded to pass an order u/s. 263 and when the assessee had filed an appeal before the Tribunal against that order, well before the case was admitted by the Settlement Commission.”
Further, as has been pointed out, while dismissing the Reference Application against the original order of the Tribunal, the manner in which the question is framed would indicate that an argument was advanced on behalf of the Department that the Tribunal had no jurisdiction to entertain the appeal, in view of the fact that the Settlement Commissioner had already passed an order u/s. 245D (1) of the Act allowing the assessees application. No such argument was advanced, at the time of hearing before the Tribunal and therefore, the Tribunal had no occasion to deal with it. Therefore, the Department is no manoeuvring to raise a question, which can never be said to arise out of the original order of the Tribunal and which had been sought to be raised through a miscellaneous application.
4. The second question also does not arise out of the order of the Tribunal. The Tribunal has not given any finding that section 245 does not apply to an appeal filed before it against the order of revision made u/s. 263. In the Misc. Application, the Tribunal dealt with the expression “case” as defined u/s. 245A of the Act. After reproducing the definition of the term “case” in that section, the Tribunal held that “case” means proceedings for assessment or reassessment which are pending before the income-tax authority on the date on which an application u/s. 245C (1) is made. The Tribunal referred to the decision of the Supreme Court in the case of B. N. Bhattachargee (supra) and held that revision proceedings will not fall within the definition of the term “case”. The Tribunal has also taken note of the fact that the assessee has withdrawn the appeal filed before the Tribunal against the CIT (A)s order on 20-3-1983. Finally, the question regarding the jurisdiction of the Tribunal was never raised by the Department at the time of hearing of the appeal. The Misc. Application was dismissed because such application was filed to reargue the points which were not raised at the time of the original hearing. Therefore, in our opinion, the questions framed by the Revenue are not referable questions of law.
5. The Reference Application is therefore, rejected.