Binding judicial directions constrain tribunal remand powers; fresh enquiry beyond the reference mandate was not permitted.

The Tribunal was bound to act strictly in conformity with the High Court's earlier reference directions and could not expand the remit into a fresh enquiry or collection of evidence. By directing verification of new matters and recomputation of profits on a notional basis, it exceeded the mandate already fixed by the court. The remand order was therefore quashed, and the consequential order rejecting rectification also failed. The matter was required to be reconsidered afresh only within the limits of the earlier High Court judgment.

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Issues: Whether the Tribunal's remand order and the consequential rejection of the rectification application were valid when the Tribunal failed to act in conformity with the High Court's earlier directions on reference.

Analysis: The High Court had earlier directed the Tribunal to examine whether the Appellate Assistant Commissioner's conclusion was justified on the facts already on record and had not authorised a fresh enquiry or collection of evidence. The Tribunal, instead of addressing that conclusion, proceeded on its own view of its remand powers and directed the Income-tax Officer to verify fresh matters and recompute profits on a notional basis. The Tribunal thus did not comply with the binding mandate of the earlier reference decision. Since statutory authorities are bound to act strictly in accordance with judicial directions, the first order could not stand. The second order, being consequential to the first, also fell.

Conclusion: The Tribunal's remand order was quashed and the order rejecting rectification was also set aside; the matter was to be dealt with afresh in strict conformity with the earlier High Court judgment.

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