Appeals Procedure Clarified: Majority Opinion Must Prevail

The Court addressed the issue of the procedure followed by the Tribunal in deciding appeals with dissenting opinions. It ruled that the Third Member must answer questions referred in a specific manner and not independently re-decide the matter. The Court found the Third Member's actions erroneous and beyond authority, leading to the setting aside of previous orders. The matter was remanded for reconsideration by another Bench to ensure decisions are made based on the majority opinion, as required by law. The Tribunal was directed to expedite the hearing and decide the appeals within a specified timeframe.

---

---

Issues:
Procedure followed by Tribunal in deciding appeals involving dissenting opinions.

Analysis:
1. The primary issue in this judgment revolves around the procedure followed by the Tribunal in deciding appeals where there is a difference of opinion between the Members of the Bench. The crux of the matter is whether the Third Member, to whom specific points of dissent were referred for opinion, had the authority to answer those questions in his own way or decline to answer some questions, and whether the Regular Bench could decide the appeal afresh based on the lack of clear answers or some unanswered questions by the Third Member.

2. The Tribunal referred seven questions to the Third Member for opinion due to a difference of opinion between two Members of the Bench. The Third Member declined to answer questions 5 and 6 and provided vague answers to the remaining questions. This led to the Regular Bench finding it difficult to decide the appeals based on the majority opinion of the Members, as required by the Income-tax Act, resulting in the Regular Bench deciding the appeals independently.

3. The judgment delves into the legal framework provided by Section 255(4) of the Income-tax Act, 1961, which outlines the procedure to be followed when Members of a Bench differ in opinion. The provision mandates that if Members are equally divided, the case shall be referred to one or more other Members of the Tribunal for a decision based on the majority opinion.

4. The Court emphasized that when specific points of dissent are referred to the Third Member, it is not within the Third Member's purview to sit in appeal over the matter and decide questions selectively. The Third Member is obligated to answer the questions referred in a specific manner, enabling the Regular Bench to decide based on the majority opinion of the Bench.

5. The judgment scrutinizes the actions of the Third Member, highlighting that the Third Member's duty was to render an opinion on the specific points referred and not to re-decide the entire matter independently. The Court found the Third Member's approach erroneous and beyond the scope of its authority, leading to a situation where the Regular Bench faced difficulties in passing a final order as mandated by the law.

6. Ultimately, the Court set aside the orders passed by the Regular Bench and the Third Member, remanding the matter to the President of the Tribunal to nominate another Bench to consider and decide the points formulated by the differing Members. The Court directed the Tribunal to expedite the hearing and decide the appeals within a specified timeframe.

In conclusion, the judgment emphasizes the importance of following the prescribed legal procedure in cases of dissenting opinions within the Tribunal, ensuring decisions are made based on the majority opinion of the Bench as mandated by the law.

---