Appellate tribunal must decide appeals on merits and cannot remand matters merely to enable settlement proceedings.

An appellate tribunal must confine itself to the subject-matter of the appeal and decide it on merits; it cannot avoid adjudication by remitting the matter for settlement proceedings when the appeal has not been withdrawn. The Tribunal's power extends only to orders relating to issues arising in the appeal, so a remand made merely to facilitate settlement proceedings outside the appeal is impermissible. The reference was answered against the assessee and in favour of the Department.

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Issues: Whether the Tribunal was right in setting aside the order of the first appellate authority and restoring the matters to the Assessing Officer to enable recourse to settlement proceedings instead of deciding the appeals on merits.

Analysis: The Tribunal's jurisdiction in appeal is confined to the subject-matter of the appeal and extends to passing such orders as it thinks fit only in relation to the issues arising in the appeal. It is not open to the Tribunal to avoid deciding the appeal by remitting the matter for settlement proceedings when the appeal itself has not been withdrawn. The Tribunal must adjudicate the appeal one way or the other.

Conclusion: The Tribunal was not right in law in setting aside the order and restoring the issues for settlement proceedings; the question was answered in the negative, against the assessee and in favour of the Department.

Final Conclusion: The references were disposed of by holding that the Tribunal cannot bypass adjudication of the appeal on merits by remitting matters for settlement proceedings.

Ratio Decidendi: An appellate tribunal must confine itself to the subject-matter of the appeal and decide the appeal on merits, and it cannot remand the matter merely to facilitate settlement proceedings outside the appeal unless the appeal is withdrawn.

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