B. S. Saluja, J. M. - (1.) THE assessee has filed these two appeals against separate orders of CIT(A), Patiala on the following common ground : "THE learned CIT(A) has erred in having held that the AO could raise demand on the basis of the additions which were restored by the Tribunal to the file of the first appellate authority for fresh adjudication even before such adjudication by that authority, inasmuch as the Tribunal had not confirmed such additions made by the AO".
(2.) The brief facts relating to these appeals are that the Tribunal had set aside certain findings of the CIT(A) where relief had been allowed to the assessee. The said issues were restored back by the Tribunal to the file of the learned CIT(A) for fresh adjudication. The AO passed orders dt. 10th October, 1991 in relation to asst. yrs. 1981-82 and 1982- 83 for giving effect to the order of the Tribunal dt. 22nd August, 1991. While giving appeal effect to the order, the AO also revived income-tax demand of Rs. 4,37,098 in relation to asst. yr. 1981-82 and of Rs. 1,36,899 in relation to asst. yr. 1982-83 with reference to the issues which are restored by the Tribunal to the learned CIT(A). The assessee felt aggrieved and filed appeal. On first appeal the learned counsel for the assessee submitted that while giving effect to the order of the Tribunal, the AO has revived the demand against the assessee in respect of these issues which were restored to the learned CIT(A), as if the findings of the AO were revived after setting aside the findings of the learned CIT(A). The learned counsel contended that the demand could not be revived by the AO on the impugned issues till the same were disposed of afresh by the learned CIT(A). The submissions made by the learned counsel were considered by the learned CIT(A) and he found no force in them. He observed that once the findings of the learned CIT(A) were set aside by the Tribunal and restored back to his file, the only surviving order of the impugned issues would be that of the AO, who was clearly justified in reviving the demand against the assessee on these issues.
(3.) THE learned counsel for the assessee invited our attention to the order of the Tribunal dt. 22nd August, 1991 in ITA Nos. 570 and 571/Chd/1986 for asst. yrs. 1981-82 and 1982-83. In para 7 of the said order, the Tribunal considered the issue relating to claim made by the assessee at Rs. 4,37,098. THE Tribunal observed that the said issue was discussed by the first appellate authority in order for asst. yr. 1982-83. THE Tribunal had set aside the impugned order and restored the issue to the file of the learned CIT(A) for fresh hearing after hearing the assessee and the AO. THE Tribunal noted that the first appellate authority had only said that "I have carefully considered the submissions made before me and find that the claim of the assessee is in order and thus, entitled to further relief of Rs. 4,73,635 which is allowed". THE Tribunal directed the first appellate authority to pass a speaking order on the issue. Similarly directions were given in relation to asst. yr. 1982-83 with reference to deduction of expenditure of Rs. 4,73,635. THE next issue considered by the Tribunal related to bad debt which had been allowed by the learned CIT(A). THE Tribunal observed that while the accounting period of the assessee in relation to assessment year ended on 30th June, 1981, most of the bills had been made in 1974, 1976, 1979 and also on 14th June, 1980. THE Tribunal set aside the said issue and restored it to the file of the learned CIT(A) for bringing on record the material with which the assessee supported its case. THE Tribunal observed that the assessee and the AO should be heard and a speaking order be passed. THE learned counsel stressed that the AO could not have received the demand in relation to the impugned issues unless the learned CIT(A) passed order in the second round. He emphasised that there was a vacuum in the absence of fresh orders passed by the learned CIT(A) and that the AO could not have revived the demand in relation to the said issues, while giving appeal effect to the order of the Tribunal. On a query from the Bench as to what is the distinction between the appeal pending before the learned CIT(A) and the issues pending before him after being restored by the Tribunal, the learned counsel referred to the facts in the case of the assessee. Shri Subhash Aggarwal, Advocate, intervened and submitted that if demand could be revived by the AO in such situation, it would amount to a situation as if the Tribunal had rejected the appeal of the assessee.;