Case: Income-Tax Appellate Tribunal, Bombay &amp; Others Vs. S.C. Cambatta &amp; Company, Limited

be final."Therefore it is clear that except in cases which may go up to the High Court on, a reference, the decision of the Appellate Tribunal under S. 33 is final. But where a reference does go up to the High Court, no finality attaches to the decision of the Appellate Tribunal because by reason of the decision of the High Court the decision given by the Appellate Tribunal is liable to be reopened and it will be the duty of the Appellate Tribunal to give effect to whatever decision the High Court gives. When we turn to S. 66, Sub-S. (5) provides :"The High Court upon hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send a copy of such judgment under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment."Mr. Joshi has laid great emphasis on the expression used in this sub-section that the Appellate Tribunal has to dispose of the case and he says that the Legislature does not provide that the Appellate Tribunal has to dispose of the appeal which has already been disposed of under S. 33. It is clear that the expression "case" used in the latter part of Sub-S. (5) has not the same connotation as the expression used in the earlier part of that sub-section.The case that the High Court hears is the case stated to it under S. 66 by the Tribunal. The case that the Appellate Tribunal has to dispose of is the matter before it or the appeal which has lost its finality by reason of S. 33(6).Therefore, reading S. 33(6) and S. 66(5) together, the scheme is fairly clear that when a reference is made to the High Court either under S. 66(1) or S. 66(2) the decision of the Appellate Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of.It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides ,it, that the appeal is finally disposed of.In one sense, as the learned Judge rightly points out, it may be said that on the High Court giving its decision there is a continuation of the appeal under S. 33 in another sense it may be said that there is a rehearing of the appeal by the Appellate Tribunal, but it is clear that what the Appellate Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under S. 33.Any other construction which might be put upon S. 66(5) will lead to absurdities. For instance, under S. 33(4) an obligation is cast upon the Appellate Tribunal to hear both the parties and to communicate any order that it has passed to the assessee and to the Commissioner.It is Suggested that when the Appellate Tribunal disposes of the matter after the reference has been heard by the High Court, the obligation cast upon it under S. 33(4) does not attach to the further hearing contemplated by S. 66(5).Take this very case where pursuant to the directions of the High Court the Tribunal had to value the goodwill and it put a value of Rs. 2,00,000/- upon the goodwill. Can it be seriously suggested that in computing the value of the goodwill the Appellate Tribunal was under no obligation to give an opportunity to both the parties to be heardIt is clear therefore that the appeal has not been finally disposed of whenever there is a reference to the High Court. The shape that the appeal would ultimately take and the decision that the Appellate Tribunal would ultimately give would entirely depend upon the view taken by the High Court.The High Court may accept the view of the law taken by the Tribunal, in which case the decision of the Appellate Tribunal would stand. The High Court may reverse the decision of the Appellate Tribunal on a question of law, in which case the appeal would have to be disposed of in accordance with the opinion of the High Court.Therefore, in all cases where S. 66 comes in to play the final decision in appeal has only to be given by the Appellate Tribunal after the reference has been made and that decision can only be given under S. 33(4).It would indeed be curious that if questions of law were to arise when the Appellate Tribunal was giving effect to the directions of the High Court that those questions of law could not be referred to the High Court and that the Appellate Tribunal would only be subject to the control of the High Court up to a particular stage of the appeal and that control would disappear as soon as the reference was disposed of.We wish to make it clear that the questions of law which can be agitated in what we might for convenience describe as the second reference, could only be those questions which do not arise out of the first order passed by the Appellate Tribunal and which have not been considered by the Appellate Tribunal in its first order.If a question has been considered and no reference is sought, then it is not open to the assessee or the Commissioner to seek a reference at a subsequent stage because that reference would be barred. But if in giving effect to the decision of the High Court, the Tribunal passes an order out of which a question of law arises, which question never arose out of the first order, then there is no reason why the assessee or the Commissioner should not have the right of coming to the High Court under S. 66(1) or S. 66(2).

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]2. Mr. Joshi who appears for thes is perfectly right when he contends that the power of reference is a limited power conferred upon the High Court under S. 66 and that we should not extend the ambit of that power. He is equally right when he contends that a reference only lies under S. 66 provided that a question of law arises out of an order passed by the Tribunal under) of S. 33, and his whole attempt has been to satisfy us that the second order passed by the Tribunal was not an order passed under S.reading S. 33(6) and S. 66(5) together, the scheme is fairly clear that when a reference is made to the High Court either under S. 66(1) or S. 66(2) the decision of the Appellate Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of.It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides ,it, that the appeal is finally disposed of.In one sense, as the learned Judge rightly points out, it may be said that on the High Court giving its decision there is a continuation of the appeal under S. 33 in another sense it may be said that there is a rehearing of the appeal by the Appellate Tribunal, but it is clear that what the Appellate Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under S. 33.Any other construction which might be put upon S. 66(5) will lead tothis very case where pursuant to the directions of the High Court the Tribunal had to value the goodwill and it put a value of Rs. 2,00,000/upon the goodwill. Can it be seriously suggested that in computing the value of the goodwill the Appellate Tribunal was under no obligation to give an opportunity to both the parties to be heardIt is clear therefore that the appeal has not been finally disposed of whenever there is a reference to the High Court. The shape that the appeal would ultimately take and the decision that the Appellate Tribunal would ultimately give would entirely depend upon the view taken by the High Court.The High Court may accept the view of the law taken by the Tribunal, in which case the decision of the Appellate Tribunal would stand. The High Court may reverse the decision of the Appellate Tribunal on a question of law, in which case the appeal would have to be disposed of in accordance with the opinion of the High Court.Therefore, in all cases where S. 66 comes in to play the final decision in appeal has only to be given by the Appellate Tribunal after the reference  has been made and that decision can only be given under S. 33(4).It would indeed be curious that if questions of law were to arise when the Appellate Tribunal was giving effect to the directions of the High Court that those questions of law could not be referred to the High Court and that the Appellate Tribunal would only be subject to the control of the High Court up to a particular stage of the appeal and that control would disappear as soon as the reference was disposed of.We wish to make it clear that the questions of law which can be agitated in what we might for convenience describe as the second reference, could only be those questions which do not arise out of the first order passed by the Appellate Tribunal and which have not been considered by the Appellate Tribunal in its first order.If a question has been considered and no reference is sought, then it is not open to the assessee or the Commissioner to seek a reference at a subsequent stage because that reference would be barred. But if in giving effect to the decision of the High Court, the Tribunal passes an order out of which a question of law arises, which question never arose out of the first order, then there is no reason why the assessee or the Commissioner should not have the right of coming to the High Court under S. 66(1) or S. 66(2).