This order shall dispose of the miscellaneous application filed by the assessee against the order of the Tribunal, Agra Bench dt. 11 th Oct., 2011 in ITA No. 55/Agra/2007 for the asst. yr. 2003-04, thereby the appeal of the assessee was dismissed by majority view.
2. Briefly, the facts of the case are that the assessee preferred appeal before the 'l)-tbunal against the order of learned Crr(A)-I, Agra dl. 28th Nov., 2006, raising several grounds of appeal. However, at the time of hearing of appeal, the other grounds were not pressed and the assessee agitated the addition of Rs. 4,00,000 on account of two gifts allegedly received from Shri Jai Singh Yadav and Shri Gajanand Goyal in a sum of Rs. 2,00,000 each on ground Nos. 4 and 5. The then learned JM, considering the submissions of the parties was of the opinion that s. 68 of the IT Act is attracted only when any credit is found in the books of account of the assessee and since the gift amounts were received in the bank passbook of the assessee in individual capacity and the assessee did not maintain books of account in his individual capacity, therefore, no addition could be made under s. 68 of the IT Act. The appeal of the assessee was decided only on that point without deciding the appeal on merits of these two gifts and appeal of the assessee was accQrdingly allowed. The proposed order of the learned JM was not agreeable to the then learned AM. The learned AM also observed that for clarification even the deposits in the assessee's bank account would stand to be covered under s. 69 or 69A of the IT Act and, therefore, he did not agree with the view of the then learned JM and passed a separate dissenting order on 13th Feb., 2009, dismissing the claim of assessee of genuine gift. The matter was, therefore, referred to the Hon'ble President, Tribunal under s. 255(4) of the IT Act. There being the difference of opinion on the matter in issue, Hon'ble Vice President, Delhi ZOne, New Delhi was appointed as Third Member to resolve the controversy. The learned Third Member (Vice President) did not approve the view of the then JM and entirely agreed with the opinion of the learned AM on the matter in issue and passed an order on 30th Aug., 2011. The matter was fixed before the Division Bench of Tribunal, Agra for giving effect to the majority view and the Division Bench of Tribunal, Agra vide order dt. 11 th Oct., 2011 in view of the majority decision, dismissed the appeal of the assessee.
3. The assessee has now preferred the miscellaneous application against the final order of the Tribunal dt. 11th Oct., 2011 and it is stated that the appeal of the assessee has not been decided on merit, therefore, there is a mistake apparent on record and appeal of the assessee shall have to be decided in toto. Therefore, the mistake apparent on record may be rectified. The learned counsel for the assessee reiterated the facts narrated in the miscellaneous application.
4. On the other hand, the learned Departmental Representative submitted that the Division Bench of the Tribunal was bound by the majority view and as such could not have decided the appeal on merit and relied upon the decision of Hon'ble Supreme Court in the case of T.S. Balaram, ITO us. Volkart Bros. & Ors. (1971) 82ITR 50 (Se), in which it was held:
"A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record."
5. We have considered the rival submissions and the material on record. Sec. 254(2) of the IT Act provides as under:
''The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-so (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the AO :
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard :
Provided further that any application filed by the assessee in this subsection on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees."
Sec. 255(4) of the IT Act provides as under:
"If the Members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which they differ, and the case shall be referred -by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other Members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal who have heard the case, including those who first heard it."
5.1 Tribunal, Special Bench, Mumbai in the case of Dy. CIT us. Oman International Bank SAOG/Spectrum Business Support Ltd. us. Dy. CIT (2006) 102 TfJ (Mumbai)(SB) 207 : (2006) 286 ITR 8 (Mumbai)(SB)(AT), considering its other decisions held that sanctity of a Third Member decision and the Special Bench decision is of the same nature. Third Member decisions are binding on Special Bench.
5.2 Tribunal, Special Bench, Mumbai in the case of Tulip Hotels (P) Ltd. us. 'Dy. CIT (2012) 146 TfJ (Mumbai)(SB) 257 : (2012) 70 DTR (Mumbai)(SB)(Trib) 217 : (2012) 136 ITD 1 (Mumbai)(SB)held as under:
"However, it is found that while giving effect to the opinion of the Third Member, the AM has again formulated three questions. According to the AM since the additional evidence has not been filed before the AO, the Third Member cannot decide the issue based on fresh evidence filed
before the Tribunal, rather the Third Member is required to restore the same to the file of the AO for fresh adjudication after examining the said evidence and after providing reasonable opportunity of being heard to the assessee.
From the reading of the above, there is no doubt that the AM while agreeing with the questions formulated at the time of the original reference to the President of the Tribunal has again framed three new questions at the time of giving effect to the opinion of the majority de hors the provisions of s. 255(4) as he had become functus oijkio after he passed his initial draft order.
The opinion expressed by the Third Member was very much binding on the AM. The AM who is in minority was bound to follow the opinion of the Third Member in its true letter and spirit. It was necessary for judicial propriety and discipline that the Member who is in minority must accept as binding opinion of the Third Member.
In this view of the matter, the questions framed by the AM while giving effect to the opinion of majority are outside the purview of S. 255(4) and, hence, have no relevance.
For the reasons discussed above it is held that on a difference of opinion among the two Members of the Tribunal, the Third Member was called upon to answer two questions on which there was difference of opinion among the two Members who framed the questions and the Third Member in a well considered order, answered the reference by giving sound and valid reasons agreeing with the views of the JM. Thus, the majority view was in favour of assessee. It is further held that the proposed order dt. 18th Feb., 2010 of the AM who is in the minority and had become functus o.fJko wherein he has expressed his inability to give effect to the opinion of the majority and proceeded to frame three new questions to be referred to the President, Tribunal again for resolving the controversy cannot be said to be a valid or lawful order passed in accordance with the provisions of s. 255(4); hence, the said order dt. 18th Feb., 2010 proposed by the AM is not sustainable in law. Accordingly, the question referred to is answered in the negative, i.e., in favour of the assessee."
5.3 The facts noted above are not in dispute. The learned JM held that since the assessee did not maintain any books of account, therefore, no addition could be made on account of gift received in the bank account of the assessee under S. 68 of the 'IT Act. The appeal of the assessee with regard to gift was not decided on merits. The learned AM, however, did not agree with the view of learned JM and has held that the addition could be made in the circumstances of case of assessee and in alternative, the provisions of s. 69 would also apply against the assessee. The learned Third Member agreed with the view of the learned AM by giving his opinion that the addition could be made against the assessee in facts and circumstances of case. The Division Bench of Tribunal, Agra vide order dt. 11th Oct., 2011 (supra) decided the issue in view of majority decision and dismissed the appeal of the assessee. We, therefore, do not find any mistake apparent on record of Tribunal because the subsequent Division Bench of the Tribunal who has ultimately dismissed the appeal of the assessee vide order dt. 11 th Oct., 2011 (supra) shall have to decide the points in issue according to the opinion of the majority of Members of the Tribunal as per s. 255(4) of the IT Act. The view of Third Member is thus binding upon the Division Bench of the Tribunar'as they have only to decide the appeal as per majority view: The majdrity view in this case was that addition has been rightly made on account of unexplained gift. Therefore, jurisdiction of the subsequent Division Bench of the Tribunal was confined to pass the order as per the majority view of the Members of the Tribunal. The subsequent Division Bench of the Tribunal has no alternative except to follow the decision of majority view. Thus, there is no mistake apparent on record of the Tribunal while giving effect to majority view in the order dt. 11th Oct., 2011 (supra). The point raised by the learned counsel for the assessee is highly debatable and as such, it would not be appropriate for the succeeding Bench to review the earlier order already passed by the Tribunal in view of the majority decision in the matter. Hon'ble Calcutta High Court in the case of Hindustan Lever Ltd. VS. Jt. CIT (2006) 204 CTR (Cal) 125 : (2006) 284 ITR 42 (Cal) held that mistake must be so obvious that it can be easily corrected, to wit an arithmetical mistake, a wrong quotation of section, etc., but not on debatable issue. Hon'ble Bombay High Court in the case of CIT VS. Earnest Exports Ltd. (2010) 230 CTR (Bom) 527 : (2010) 36 DTR (Bom) 274 : (2010) 323 ITR 577 (Bom) held that the order passed after considering the material and the decisions cited, cannot be recalled. It is also well-settled law that the Tribunal has no power to review its orders. Further, since in this case, the order is passed after referring the matter to the Third Member, therefore, it is a decision like the decision passed by Special Bench of three Members. Therefore, subsequent Division Bench is not competent to comment upon the order passed by the Third Member. Therefore, we do not find any justification to interfere with the order of the Tribunal dt. 11th Oct., 2011 (supra) passing the consequential order as per majority view of the Members in view of the facts and circumstances mentioned above. Miscellaneous application of the assessee is accordingly dismissed.
6. In the result, the miscellaneous application of the assessee IS dismissed.