In Tivoli Investment & Trading the question whether notional income can be taken into account for computing annual value was referred to the Special Bench. However, as the High Court has already admitted the assessee’s appeal on the issue for earlier years, the Hon’ble President has withdrawn the reference to the Special Bench on the ground that it is not proper to continue with the Special Bench when the same issue is pending adjudication for the earlier years before the High Court. It was held that such continuance would not be in conformity with judicial discipline, propriety and decorum.
ITA Nos. 2808 & 2809/MUM/1996 – Tivoli Investment & Trading Co. Pvt. Ltd.
I have gone through carefully the note dated 6-9-2010 signed by the Members of the Special Bench suggesting the withdrawal of the reference to the Special Bench on the ground that the assessee’s appeals against the order of the Tribunal in the assessee’s own case for the AYs 1990-91 & 1991-92 have been admitted by the Hon’ble Bombay High Court and are pending for final disposal. Substantial question of law has been framed. Copies of the order of the Hon’ble High Court passed on 2.12.2004 have been placed on record.
I have also gone through carefully the earlier communication dated 23.6.2009 written by the Members who at that time constituted the Special Bench to the then Hon’ble President, ITAT containing a similar suggestion. On the communication, the President had passed the following note:
“Let S.B. consider whether case it is necessary to adjourn hearing of the case till the matter is disposed by the Hon’ble H/C”. (Date: 28-7-2009)
The Special Bench need to be reconstituted thereafter due to transfer of two of the Members. The Members of the Special Bench as constituted thereafter reiterated the earlier suggestion in their note dated 6-9-2010. They have held that the same reasons given in the earlier communication dated 23.6.2009 continue to hold good.
The situation as of now is that the earlier orders of the Tribunal for the AY’s 90-91 & 91-92, which are against the assessee, are pending in appeal before the Hon’ble High Court awaiting adjudication of the substantial question of law. For the AYs 92-93 & 93-94, a Special Bench has been constituted to decide the same question. I agree with the point made by the Members that it is not proper to continue with the Special Bench when the same issue is pending adjudication for the earlier years before the Hon’ble Bombay High Court. I am of the humble opinion that such continuance will not be in conformity with judicial discipline, propriety and decorum. The appropriate course will be to disband the Special Bench and allow the regular Bench to decide the issues in accordance with law.
I am in respectful agreement with the view expressed by the then President, ITAT on the question of constituting/continuing with a Special Bench when the issue is pending before the Hon’ble jurisdictional High Court in his order in the case of Star Limited, Hongkong, dated 26-11-2006 and also by the Bench in its order in the case of Harsh Achyut Bhogale by which the Bench refused to suggest the constitution of a Special Bench when the earlier order of the Tribunal was pending adjudication before the Hon’ble Bombay High Court.
Adjourning the hearing before the Special Bench till the decision of the Hon’ble Bombay High Court for the earlier years will hold up a number of appeals involving the identical issue, in which the Division Benches are adjourning the appeals coming up before them on the ground that the issue is pending before the Special Bench.
I accordingly withdraw the reference to the Special Bench in the case of Tivoli Investment and Trading Co. Pvt. Ltd (AYs: 1992-93 & 1993-94) in ITA Nos.2808 & 2809/MUM/1996. The appeals will go before the regular bench for disposal in accordance with law.
Mumbai Dated: 07.09.2010