Law:

Section:

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1989-90 - In an appeal before Commissioner (Appeals) assessee contended that once Assessing Officer had granted refund under section 143(1)(a)(ii), no notice under section 143(2) could legally be issued and cited a decision of Tribunal in support of its contention - Commissioner (Appeals) observed that decision in said case did not lay down correct proposition of law and declined to follow said decision - Tribunal (consisting of same Members who had rendered decision in abovesaid case) also upheld view taken by Commissioner (Appeals) - Whether orders passed by Tribunal are binding on all revenue authorities functioning under jurisdiction of Tribunal - Held, yes - Whether, therefore, Commissioner (Appeals) not only committed judicial impropriety but also erred in law in refusing to follow order of Tribunal - Held, yes - Whether Tribunal was wrong in reviewing its own decision and it was proper for it to have referred matter to larger Bench - Held, yes - Whether, therefore, matter was to be restored back to Tribunal for doing needful - Held, yes FACTS The Assessing Officer, having first granted refund to the assessee-company under section 143(1)(a)( ii) subsequently issued notice under section 143(2) and completed the assessment. In appeal before the Commissioner (Appeals), the assessee cited a decision of the Tribunal rendered in the case of Arihant Builders, Developers & Investors (P.) Ltd. v. Asstt. CIT [IT Appeal No. 1014 (Indore) of 1993] on 19-7-1994 wherein the Tribunal had held that where refund has been granted under section 143(1)(a)( ii), no notice under section 143(2) can legally be issued. However, the Commissioner (Appeals) declined to follow the said decision and was of the view that the decision in said case did not lay down the correct proposition of law. The appeal was dismissed. On further appeal before the Tribunal, the assessee-company contended, inter alia, that the Commissioner (Appeals) was bound by the decision of the Tribunal. The Tribunal, however, dismissed the appeal and upheld the view taken by the Commissioner (Appeals). On reference :…

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