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2008] 304 ITR 350 [2008] 171 TAXMAN 486 (MAD.) HIGH COURT OF MADRAS Dynavision Ltd.* v. ITAT K. RAVIRAJA PANDIAN & P.P.S. JANARTHANA RAJA, JJ. W.P. NOS. 7060 OF 2000 AND 2281, 2282 AND 3135 OF 2008 WMP NO. 10483 OF 2000 MISC. PETITION NOS. 2 OF 2008â-  APRIL 9, 2008 Section 255 of the Income-tax Act, 1961 - Appellate Tribunal - Procedure of - Assessment year 1990-91 - Whether Third Member must confine himself to order of reference; he has no right to go beyond scope of reference in a matter of difference of opinion between Members of Bench and has no right to enlarge, restrict, modify and/or formulate any question of law on his own on difference of opinion referred to by Members of Tribunal - Held, yes FACTS The assessee-company was engaged in manufacturing and selling of television sets and audio equipments. It had made provision on accrual basis in the accounts towards custom duty and bond interest in respect of materials lying at the customs bonded warehouse and included the same in the value of closing stock. While scrutinizing the accounts, the Assessing Officer found that the customs duty so debited in the accounts had not been paid to the customs authorities in its entirety and the same had been shown as liability in the balance-sheet. He, by invoking provisions of section 43B, allowed deduction of the amount paid and disallowed the balance amount. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer. On second appeal, there being difference of opinion between the two Members, the matter was referred to the Third Member. As according to the Third Member, there was no uniformity even in identifying the points, he formulated the points of difference between two Members of the Tribunal and decided the case on merits against the assessee. The assessee filed writ petitions contending that the Third Member had no right to go beyond the scope of reference in a matter of difference of opinion between the Judicial Member and the Accountant Member and, therefore, sought to quash the order of the Third Member as beingultra vires the provisions of section 255(4). HELD The order of reference to the Third Member shall contain the…

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