ORDER
1. We have heard Sri Shambhu Chopra for the appellant. Sri P. J. Pardiwala assisted by Sri S.D. Singh appears for the respondent-assessee.
2. This Commissioner of Income Tax has preferred this Income Tax Appeal under Section 260-A of the Income Tax Act, 1961 (the Act) against the order dated 7.4.2000, passed by the Income Tax Appellate Tribunal, Allahabad Bench 'A', Allahabad, as well as the order of Commissioner of Income Tax (Appeals), Lucknow in respect of assessment years 1987-88 to 1992-93.
3. The appellant has raised the following questions of law in the memo of appeal:-
"(1)
Whether in law as well as on facts, the Hon'ble Third Member was justified in directing the other members to reconsider the matters in the light of directions as if he was an appellate authority?
(2)
Whether on the facts and in the circumstances of the case the Hon'ble Third Member was justified in answering some questions and not answering other questions referred to him?"
4. From the statement of case, we find that in respect of assessment years in question, the Assessing Officer reduced the net loss to Rs.1,30,586/- as against the return of loss claimed by the assessee at Rs.1,53,289/-. In the appeal filed by the respondent assessee, the CIT (Appeals) recorded a finding that the system of accounting followed by the assessee, and are neither mercantile nor cash. He accordingly recomputed the income on cash basis. Aggrieved both the revenue and the assessee filed appeals before the Income Tax Appellate Tribunal, Allahabad. The Members of the Tribunal differed on some of the questions of law raised before them, and referred seven questions (four questions arising from their opinion and three more questions framed by them), to the Third Member of the Tribunal. The Vice Chairman of the Tribunal (the Third Member), by his order dated 26.03.1998, expressed his opinion with regard to question Nos. 1, 2, 3, 4 and 7, and returned question Nos. 5 and 6 unanswered. Aggrieved by the order dated 26.03.1998, the department filed a rectification application, which was dismissed by the Tribunal on 7.4.2000, giving rise to this appeal.
5. Sri Pardiwala, learned counsel appearing for the respondent-assessee has raised a preliminary objection regarding maintainability of the appeal. He submits that an appeal under Section 260-A of the Act, is provided against final order of the Tribunal. The department has not challenged the order of the Third Member of the Tribunal dated 26.03.1998. The order dated 7.4.2000, is not a final order of the Tribunal. It is an order passed on the rectification application of the department, to rectify the order, which is the opinion of the Third Member. He submits that the order dated 26.03.1998, is the opinion of Third Member of the Tribunal on which consequential order was required to be passed by the Members of the Tribunal, who had referred the matter. The consequential order was passed by the bench of the Tribunal on 31.5.2005, against which the department has filed Income Tax Appeal, which is pending at Lucknow Bench of the High Court.
6. Sri Shambhu Chopra, learned counsel appearing for the department-appellant submits that under Section 260-A of the Act every order passed by the Appellate Tribunal can be challenged in Appeal to High Court. The order passed on the rectification application is an order passed by the Tribunal, which is appealable to the High Court. He submits that the order dated 7.4.2000, rejecting the rectification application is an independent order. The application for rectification was filed on the ground that on the basis of the opinion of the Third Member of the Tribunal, the assigned Members would have faced difficulty in making the consequential orders and thus appeal against the order rejecting the application for rectification of the order is maintainable.
7. An appeal under Section 260-A of the Act lies to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. The order passed in the rectification application to rectify an order, which is the opinion of the Third Member, to which the matter was referred by the bench of Tribunal of two Members , would not fall within the meaning of order passed by the Appellate Tribunal, in appeal. It is an opinion, and not a final order of the Tribunal, which was required to be framed on such opinion.
8. Since the final order of the Tribunal dated 31.5.2005, is under challenge in which the department may take the grounds, which have been taken in this appeal. This appeal as against the order dated 7.4.2000, rejecting the rectification application of the department is held to be not maintainable.
9. The appeal is accordingly dismissed with observations that in case the department has not taken the grounds, urged in this appeal, in the appeal filed against the order dated 31.05.2005, in Lucknow Bench of the Court. It will be open to the appellant to make an application to the Court hearing the appeal, to consider the appeal on such grounds.