1991 (3) TMI 122 - HC - Income Tax

High Court allows single application under Income-tax Act for multiple years or assessees

The court held that a single application under section 256(1) and/or 256(2) of the Income-tax Act is maintainable when the Income-tax Appellate Tribunal ... Reference Issues Involved:1. Whether a single application under section 256(1) and/or 256(2) of the Income-tax Act, 1961, is maintainable when the Income-tax Appellate Tribunal disposes of, by a common order, appeals pertaining to more than one year and/or of different assessees.Detailed Analysis:1. Maintainability of a Single Application under Section 256(1) and/or 256(2):The core issue addressed in this judgment is whether a single application under section 256(1) and/or 256(2) of the Income-tax Act, 1961, is maintainable when the Income-tax Appellate Tribunal (ITAT) disposes of appeals pertaining to multiple assessment years or different assessees by a common order.The petitioner filed returns for the assessment years 1982-83, 1983-84, and 1984-85, claiming rental income under 'Income from house property.' The Income-tax Officer assessed the income under 'Income from other sources,' leading to three separate appeals by the petitioner, which were allowed by the Commissioner of Income-tax (Appeals). The ITAT, however, upheld the Income-tax Officer's assessment under 'Other sources' through a common order for all three years. The petitioner then filed three applications under section 256(1), which were dismissed by a single common order. Subsequently, a single application under section 256(2) was filed, which led to the present legal question.When the application came up for hearing, the respondent raised a preliminary objection, arguing that separate applications should have been filed for each assessment year. The Division Bench referred this question to the Full Bench due to conflicting decisions.The respondent relied on the cases of Nawal Bihari Lal Goel v. CIT [1983] 140 ITR 979 and Kwality Restaurant and Ice Cream Co. v. CIT [1986] 158 ITR 188, suggesting that separate applications are required for each assessment year. Conversely, the petitioner cited CIT v. ITAT [1975] 99 ITR 552 and the Supreme Court decision in K. G. Khosla and Co. (P.) Ltd. v. Dy. Commr. of Commercial Taxes [1966] 17 STC 473, arguing that a single application is maintainable when a common order is passed by the Tribunal.The court examined the relevant provisions of the Income-tax Act, including sections 253, 254, 256, 259, and 260. It noted that section 256 refers to the order passed by the Tribunal and not to specific assessment years. The language of section 256 suggests that a single application is maintainable when a common order is passed, even if it pertains to different assessment years or assessees. The advisory jurisdiction of the High Court is to address questions of law arising from the Tribunal's order, irrespective of the number of assessment years or parties involved.The court found support from the decision in CIT v. ITAT [1975] 99 ITR 552, where it was held that a single application is maintainable when a common order disposes of multiple appeals. The court also referenced K. G. Khosla's case, where the Supreme Court allowed two appeals against a common order disposing of four revision petitions.The Madhya Pradesh High Court in Union of India v. ITAT [1987] 164 ITR 600 also supported the view that a consolidated reference application is permissible when a common order is passed by the Tribunal.The decisions in Nawal Bihari Lal Goel and Kwality Restaurant and Ice Cream Co. were distinguished. In Nawal Bihari Lal Goel, the court observed that separate applications were the settled practice but did not address the maintainability of a single application directly. In Kwality Restaurant, the court suggested that one application could suffice if a common order covers multiple years, although the assessee had filed separate applications under section 256(1).Ultimately, the court concluded that the ratio of CIT v. ITAT [1975] 99 ITR 552 is the correct law. When common questions of law arise from a single order passed by the Tribunal, whether for different assessment years or different parties, one application under section 256(1) or 256(2) is maintainable. The court emphasized that the advisory jurisdiction of the High Court and the consolidated nature of the Tribunal's order support the maintainability of a single application.Conclusion:The court answered the reference by holding that a single application under section 256(1) and/or 256(2) is maintainable when the ITAT disposes of appeals for multiple years or different assessees by a common order.