TaxTMI 
TaxTMI 
2011 (8) TMI 657
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....43 crore and offered the equal amount as capital gain arising out of sale of slump sale. The Auditors determined negative net worth of the business transferred at Rs. 157.19 crore. The Assessing Officer held that the sale consideration should have been taken at Rs. 300 crore (declared sale consideration of Rs. 143 crore + additional liabilities taken over amounting to Rs. 157 crore) and as such the entire amount was liable to be treated as long term capital gain on slump sale. Before the first appellate authority the assessee relied on two decisions of the Tribunal in Zuari Industries Ltd. vs. ACIT [(2007) 105 ITD 569 (Mum.)] and Paperbase Co. Ltd. vs. CIT [(2008) 19 SOT 163 (Del.)] in which it has been held that the negative net worth has to be treated as zero in the context of the provisions of section 50B. The learned CIT(A), following the said decisions, came to hold that the action of the Assessing Officer in determining the sale consideration as well as long term capital gain u/s.50B at Rs. 300 crore was not sustainable. He reversed the assessment order on this point. 3. When the matter came up before the Tribunal in an appeal filed by the Revenue, the Division Bench ....
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....lar to those before the Special Bench. Taking us through the orders of the President in these two cases withdrawing reference to the Special bench in view of the Hon'ble High Court initiating the process of deciding the similar questions, the learned Senior A.R. pleaded that the instant reference be also withdrawn. He also referred to the order of the Division Bench in the case of Harsha Achyut Bhogle vs. ITO [(2008) 114 TTJ (Mum.) 266] in which the earlier year was decided by the Tribunal against the assessee and when the subsequent year came up for hearing, the assessee relying on a contrary order in some other case, contended that the matter be referred to the Hon'ble President for the constitution of Special Bench to resolve the diametrically opposite views expressed by different Benches on the issue. The Tribunal rejected the assessee's prayer for constitution of Special Bench on the ground that the assessee's own appeal against the earlier order of the Tribunal was pending before the Hon'ble High Court. In this backdrop of the facts, the learned Senior A.R. requested that the reference to the Special Bench in the instant case be withdrawn as the Hon'bl....
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....e of Zuari Industries Ltd. (supra). At the request of the assessee, the reference was made to the Hon'ble President for the constitution of Special Bench. On the fixation of hearing of the case by the Special Bench, the assessee approached the Hon'ble President through his letter dated 20.07.2001 urging him to withdraw the reference to the Special Bench as the question of law in the case of Zuari Industries Ltd. (supra) has been admitted by the Hon'ble Bombay High Court. The Hon'ble President has placed the assessee's request before us for consideration and decision. As such the short question before us, at this stage is: Whether the reference to the Special Bench be withdrawn in the wake of the Hon'ble High Court admitting the identical question of law in the case of Zuari Industries Ltd. (supra). 8. Before we venture to delve into this question, it will be imperative to go through the judgments relied on by the parties, which are germane to the issue in question. The Hon'ble Supreme Court in the case of Paras Laminates (P) Ltd. (supra) observed that a Bench of two Members must not lightly disregard the decision of another Bench of the Tribunal ....
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....lier year requires reappraisal either because the appreciation in its view was not quite correct or inequitable or some new facts came to light justifying reappraisal or reappreciation of the evidence on record, it should have the matter placed before the President of the Tribunal so that the case could be referred to a Larger Bench of the Tribunal for adjudication. 11. A survey of the above judgments divulges that there should be consistency in the approach of various Benches of the tribunal. Once a case has been decided by an earlier Bench, the subsequent Bench should respect such decision and should not endeavor to make departure there from unless the facts are different or the legal position appreciated by the earlier Bench has undergone change because of some statutory amendment or enunciation of law by the Hon'ble Supreme Court or the Hon'ble jurisdictional High Court. Consistency in the judicial approach removes the sword of uncertainty hanging over the heads of litigants. The Income-tax Appellate Tribunal is an all India Body working through its Benches across the country. The judicial discipline requires that the view taken by one Bench should be respected ....
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.... the case of the parties that any judgment has been delivered on merits by the Hon'ble Bombay High Court on the point. 14. We are unable to accede to this request made on behalf of the assessee for the manifest reason that the Hon'ble High Court has neither decided the point on merits nor blocked hearing of cases involving identical question of law by the Tribunal till the disposal of appeal pending before it. The mere fact that a superior authority is seized of an issue identical to the one before the lower authority, there cannot be any impediment on the powers of the lower authority in disposing off the matters involving such issue as per prevailing law. The first appellate authorities in all subsequent cases shall be debarred from hearing the matters involving a question against which either the Revenue or the assessee have preferred appeal before the Tribunal and the matter is still undecided. The same consequences will follow if the Tribunal is proscribed from hearing the matters on the admission of identical question of law by the Hon'ble High Court till a final decision is rendered, which may take a couple of years. It can be seen that the substantial qu....
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....sition expressed by the Hon'ble Supreme Court and other Hon'ble High Courts prohibiting adopting such a course of action. Disposal of appeal against the earlier order by the Hon'ble High Court may take several years and during the currency of these years the Tribunal would become defunct on such issues. 16. In order to come out of such a tricky situation, the legislature has provided a solution by enshrining section 255(3) empowering the President of the Tribunal to constitute the special bench, which reads as under:- "255(3) The President or any other member of the Appellate Tribunal ............., and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. 17. A bare perusal of the relevant part of sub-section (3) of section 255 transpires that the President may for the disposal of any particular case constitute a Special Bench consisting of three or more members. The President is empowered to constitute a Special Bench u/s. 255(3) on his own volition if he considers any issue of a greater signific....
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.... Court until the final judgment is rendered by the Hon'ble Supreme Court. 19. The Hon'ble Delhi High Court in the case of CIT vs. Asian Hotels Limited [(2010) 323 ITR 490 (Del.)] held that notional interest on refundable interest free deposit received from the tenant is neither taxable as business income u/s.28(iv) nor as income from house property u/s.23(1)(a). Subsequently similar issue came up before the Hon'ble Delhi High Court in CIT vs. Moni Kumar Subba [(2010) 235 CTR (Del.) 132] in which the question was whether notional interest on interest free security deposit was to be taken in the consideration to arrive at final value of the property. The Hon'ble Court considered the earlier judgment in the case of Asian Hotels Limited (supra) and on observing that certain relevant aspects were not considered in the afore-said earlier judgment, the matter was referred to the Hon'ble Chief Justice for constituting Full Bench. Thereafter the matter came up before the Larger Bench of the Hon'ble Delhi High Court in CIT vs. Moni Kumar Subba [(2011) 333 ITR 38 (Del.)]. From the above discussion it can be seen that the subsequent Bench of the Hon'ble Delh....
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....arlier bench in assessee's own case, the tribunal refused to accede to the request of the assessee that special bench be proposed. 22. At the cost of repetition we reiterate that consistency in the approach of the tribunal in the sense of following the earlier view is a rule but doubting its correctness is an exception. No fault can be found with the tribunal following the view taken by it in an earlier case/year when it is satisfied with its correctness. So what the tribunal did in the case of Harsha V Bhogle (supra) was to follow the rule of consistency. Obviously no exception can be found in the way in which the tribunal proceeded with the matter in that case. When an issue is decided in favour of one party, the aggrieved party may seek to get it reviewed through the route of the Special Bench. Unless the Bench really doubts the correctness of the earlier view, it does not recommend the making of a Special Bench. Whereas the case of Harsha A Bhogle (supra) fell in the domain of the rule of consistency, the case of the present assessee has fallen in the ambit of exception inasmuch as the Division Bench was hesitant to follow the earlier view in the case of Zuari Indus....
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....#39;s decision in their favor pending for adjudication before the Hon'ble High Court, now is the turn of the assessee to take similar objection in seeking the un-constitution of the Special bench because the earlier decision given by the Tribunal in its favour is awaiting adjudication by the Hon'ble High Court. As the facts and circumstances are similar in the present case, we are not persuaded to accept the assessee's preliminary objection for withdrawal of the reference to the Special bench by following the view taken by the Special bench in the case of Daks Copy Services Pvt. Ltd. (supra). 25. There is one more additional reason for not accepting the assessee's preliminary objection. We have noticed from the reference made by the Division Bench to the Hon'ble President for the constitution of the Special Bench that when the Division Bench expressed its disagreement with the earlier decision in the case of Zuari Industries Ltd. (supra), the assessee took a plea that if the Division bench was not agreeable with the view taken by the Tribunal in Zuari Industries Ltd. (supra), then it should make a reference to the Hon'ble President for the constituti....
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....bench on the ground that similar issue is pending for adjudication before the Hon'ble High Court would apply with full force even to the matters pending before the Division Bench. Tomorrow someone will come out with a similar plea requesting the keeping of the subsequent appeals in the Division Bench also on hold till the earlier decision of the co-ordinate bench is examined and finally decided by the Hon'ble High Court. Accepting such logic would mean making the tribunal non-operational. We cannot accept such a contention. 27. The ld. AR failed to draw our attention towards any provision of the Act which forbids the tribunal from going ahead with the hearing of the case in the circumstances as are presently prevailing, which in other words implies sanction to dispose of the cases notwithstanding the pendency of the matter before the Hon'be High Court. This inference gains strength from the section 158A, which reads as under:- "158A. (1) Notwithstanding anything contained in this Act, where an assessee claims that any question of law arising in his case for an assessment year which is pending before the [Assessing] Officer or any appellate authority (suc....
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....mes final, it shall be applied to the relevant case and the [Assessing] Officer or the appellate authority, as the case may be, shall, if necessary, amend the order referred to in clause (a) of sub-section (4) conformably to such decision. (6) An order under sub-section (3) shall be final and shall not be called in question in any proceeding by way of appeal, reference or revision under this Act. Explanation: In this section, - (a) "appellate authority" means the [Deputy Commissioner (Appeals)] the Commissioner (Appeals) or the Appellate Tribunal; (b) "case", in relation to an assessee, means any proceeding under this Act for the assessment of the total income of the assessee or for the imposition of any penalty or fine on him. 28. A careful analysis of section 158A, to the extent we are concerned here, makes it palpable that where an assessee claims that any question of law arising in his case for an assessment year which is pending before the Tribunal is identical with the question of law arising in his case for other earlier case which is pending before the High Court, he may make an application to the Tribunal giving his consent for apply....
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....nch on a particular issue, the only course open before it is to make a reference to the Hon'ble President for the constitution of Special bench so that the issue may be finally decided by a Larger Bench. Notwithstanding the fact that the substantial question of law raised in the order of the earlier Bench has been admitted by the Hon'ble High Court, there are no fetters on the Tribunal in hearing the case in Special Bench and rendering the decision which would prevail upon and become a binding precedent for the other Benches of the Tribunal. The learned Counsel for the assessee could not point out even a single judgment in which the Hon'ble High Court abstained the Tribunal from deciding the issue through Special bench during the pendency of appeal before it. With utmost humility there cannot be such a decision for the manifest reason that the justice delivery system has to take its own course and cannot wait in eternity for a higher judicial body to decide the issue first. Here it is important to mention that we are dealing with a situation in which only a substantial question of law has been admitted by the Hon'ble High Court. It is not as if the said question of ....