- (1.) REFERENCE Under Section 255(4) OF THE INCOME-TAX ACT, 1961 Since there is a difference of opinion between the Members, the following questions are referred to the Hon'ble President of the Tribunal Under Section 255(4) of the Income-tax Act, 1961: "1. Whether on facts and in law the Income-tax Appellate Tribunal committed an apparent mistake by including the following in the directions given by the Tribunal in para 22 of Us order dated 31.1.01 while disposing the issue Under Section 43B: "........ and after due verification of the accounting method followed by the assessee with regard to the aforesaid items."
(2.) Whether on facts and in law. the Tribunal committed an apparent mistake in upholding the addition of Rs. 79,99,706 - in para 26 of the impugned order by ignoring the Special Bench decision in the case of Food Specialities, 49 ITD 21, though inadvertently, which was cited and relied upon by the assessee's counsel? Whether on facts and in law, the Tribunal committed an apparent mistake in not adjudicating upon the issue regarding the disallowance of Rs. 17.17.965/- raised by the assessee in Ground No. 6(b)? The following points of difference between the Learned Members constituting the Division Bench were referred to me as Third Member by the Hon'ble President acting Under Section 255(4) of the I.T.Act, 1961: - "1. Whether on facts and in law, the Income-tax Appellate Tribunal committed an apparent mistake by including the following in the directions given by the Tribunal in para 22 of its order dated 31.1.01 while disposing the issue Under Section 43B " ..... and alter due verification of the accounting method followed by the assesses with regard to the aforesaid items." 2. Whether on facts and in law, the Tribunal committed an apparent mistake in upholding the addition of Rs. 79,99,706/- in para 26 of the impugned order by ignoring the Special Bench decision in the case of Food Specialities, 49 ITD 21, though inadvertently, which was cited and relied upon by the assessee's counsel? 3. Whether on facts and in law, the Tribunal committed an apparent mistake in not adjudicating upon the issue regarding the disallowance of Rs. 17,17,965/- raised by the assessee in Ground No. 6(b)? 2. Before the actual points of difference are considered, it may be mentioned that pursuant to the appeal being decided by the Division Bench, the assessee filed an M.A. running into 38 pages but at the time of hearing the counsel sought to press only the points raised in some of the paras { see para 2 of the order of the ld. AM on the M.A.} withdrawing the rest. The ld. Accountant Member vide para 3 of his order on the M.A. referred to a number of items which included the claim for deduction on account of provision for leave encashment amounting to Rs. 4,75,458/- but in conclusion he directed the AO to allow deduction for the said provision and thereafter in para 5, his observations were to the effect that there was no other mistakes apparent from the record within the meaning of Section 254(2) and the assessee in fact had tried to obtain a review of the order and which was not permissible Under Section 254(2) of the Act. 3. The ld. Judicial Member on the other hand passed a separate order considering some of the issues on which the ld. AM had not given any decision. The subsequent view expressed by the ld. JM was in the direction of rectifying certain mistake which according to him were those apparent from the record and therefore rectifiable Under Section 254(2). The first of these was the observation in para 22 of the order of the Division Bench whereby the matter pertaining to the applicability of Section 43B had been restored back to the file of the AO for deciding the same on merits but with the observation that the accounting method followed by the assessee be verified. As already observed by me the ld. AM in deciding the M.A. did not make any observation on the aforesaid issue but the ld. JM proceeded to discuss the relevant provisions of law and applying thereby the judgment of the Hon'ble Supreme Court in the case of Allied Motors 224 ITR 677 substituted the earlier directions of the Division Bench with the following directions: - "After hearing both the sides and considering the materials on the file, we are of the view that in the interest of justice and fair play the matter should be set aside and restored to the AO, who shall decide the matter afresh in accordance with the provisions of the proviso to Section 43-B."
(3.) THE ld. counsel for the appellant contended before me that vis-a-vis the relevant provisio of law, there was no necessity to examine the method of accounting adopted by the assessee and therefore, the return of the matter back to the file of the AO to be decided afresh without any such observations was the correct view to be taken as had been done by the ld. JUDICIAL MEMBER. This according to the ld. counsel was also in conformity with the judgment of the Hon'ble Supreme Court in 224 ITR 677 supra THE ld. DR on the other hand supported the order passed by the ld. AM.;