S.B.MAJMUDAR - (1.) LEAVE granted in all these petitions.
(2.) BY consent of learned advocates of parties the appeals are heard finally and are being disposed of by this common Judgment. These appeals are taken out by Income-tax Appellate Tribunal (referred to as 'the Appellate Tribunal') which is up in arms against the Income-tax Department. In a way these are unusual cases wherein the Tribunal has to voice a grievance against the Income-tax Department in connection with its functioning as such. A few relevant background facts are required to be noted at the outset to highlight the grievance of the appellant-Appellate Tribunal. M/s. Surana Steels Pvt. Ltd. M/s Binjusaria Ltd. who are respondent Nos.2 in each of these appeals are the concerned assessee. They were appellants in three income-tax appeals before the Income-tax Appellate Tribunal, Hyderabad. The Special Bench thereof disposed of all the three appeals by common order dated 4/02/1993 as they involved consideration of common question of law relating to the construction of Section 115-J of the Income-tax Act, 1961 (hereinafter referred to as'Income -tax Act') This decision of the Special Bench resulted in three writ petitions moved by the Deputy Commissioner of Income-tax, Hyderabad before the High Court of Andhra Pradesh. The assessee-respondents Nos. 2 in each of these appeals had succeeded before the Special Bench of the Appellate Tribunal on the construction of Section 115-J of the Income-tax Act. However, Income-tax Reference No. 126 of 1992 which was pending in the High Court also pertained to the very same question centering round the construction of Section 115-J and was, therefore, clubbed with the aforesaid three writ petitions moved by the Deputy Commissioner of Income-tax against the common order of the Special Bench dated 4/02/1993. All these matters were heard by a Division Bench of the High Court consisting of V. Sivaraman Nair and S. V. Maruthi. JJ. The Division Bench of the High Court by its common order dated 31/12/1993 allowed the three writ petitions moved by the Deputy Commissioner of Income-tax and answered the Reference in favour of the Revenue and against the assessees. The Appellate Tribunal being aggrieved by the findings reached by the High Court in the writ petition has filed the aforesaid appeals before this Court on obtaining leave under Article 136 of the Constitution of India. The dissatisfied assessee have filed separate Special Leave Petitions Nos. 12446 and 12835 of 1994. By an order dated 8/08/1994 in the special leave petition moved by the appellate Tribunal a bench of this Court onsisting of one of us, Jeevan Reddy, J. and Sen, J.,issued notice and directed that pending further orders, the judgment, in so far as it holds that constitution of a Special Bench consisting of three or more members by the President of Income-tax Appellate Tribunal can be done only and by virtue of a judicial order, is suspended, while notice was also issued and interim relief was granted on condition in the assessee's Special Leave Petition No. 12446 of 1994 arising from the very same common judgment of the High Court.
(3.) BY a later order dated 3/04/1995 however, Special Leave Petition Nos. 12054-56 of 1994 moved by the Income-tax Appellate Tribunal were delinked from other matters. That is how the asessee's Special Leave Petitions are now no longer a part of the present group and we are concerned, in the present proceedings, with the three appeals arising out of Special Leave Petitions Nos. 12054-56 of 1994 moved by the Income-tax Appellate Tribunal against the common order of the Division Bench of the High Court in the aforesaid three writ petitions. Consequently we will not be concerned, in these proceedings, with the question of construction of Section 115-J of the Income-tax Act and the merits of the decision of the High Court on this point. We will, therefore, only consider, in these proceedings the grievances voiced on behalf of the Appellate Tribunal by its learned counsel Shri Subba Rao. Shri Subba Rao, learned counsel appearing for the appellant-Tribunal contented that the High Court has patently erred in law in taking the view that the President of the Income-tax Appellate Tribunal had no jurisdiction to constitute a Special Bench for hearing the appeals of the respondent-assessee. He submitted that the Division Bench of the High Court had misconstrued and misinterpreted the relevant statutory provisions of the Income-tax Act as well as the regulations in this connection. According to Shri Subba Rao the High Court had wrongly assumed that Special Bench can be constituted by the President only on the basis of a judicial order and not in exercise of his powers under sub-section (3) of Section 255 of the Income-tax Act. According to the learned counsel the High Court had equally erred in taking the view that on the facts of the present case the Special Bench was constituted on the whims and fancies of the President and there was no reason for constituting such a bench. He also further contended that the High Court was equally in error when it held that the Tribunal had committed a breach or the principle of natural justice in not granting adjournment as asked for by learned counsel for the Revenue. That on the facts of the present case enough latitude was shown by the Tribunal in adjourning the matters at the instance of the learned counsel for the Revenue on 11 past occasions and, therefore, there was no violation of principle of natural justice when further adjournment was refused and the matter was heard by the Special Bench.;