Hon. Aditya Nath Mittal, J.
1. We have heard learned counsel for the revenue. Shri S.K. Garg appears for the respondent.
2. The Income Tax Appellate Tribunal has made a reference under Section 256 (1) of the Act arising out of order of the Income Tax Appellate Tribunal dated 17.11.1997 in I.T.A. No.2086/Alld/96 and I.T.A. No.395/Alld/97 for the assessment year 1993-94, on the substantial question of law as follows:-
"Whether in law and in the circumstances of the case the Hon'ble ITAT was justified in putting restrictions on the Assessing Officer while setting aside the case to be made afresh. While the Hon'ble Bench had directed the A.O. to examine the witness and also examine the issue of fake manufacturing by unscrupulous manufacturer, is it justified to restrict the A.O. not to use any fresh evidence so collected to improve upon its order as mentioned in clause I, II and IV of paras 23 of its order (page nos.33 & 34) so as to enable him to pass a fair assessment order both to revenue and the assessee?"
3. The assessee manufactures pan masala under the brand name of Pan Parag. In the assessment year 1993-94 the assessee declared income of Rs.6,45,69,790/-.. The assessment was completed on total income of Rs.9,35,22,000/-.
4. The addition of Rs.3,38,50,040/- was on the result of the search conducted by the Director General, Anti Evasion, Central Excise on 18.7.1994, which revealed on the scrutiny of the materials seized by the Customs and Central Excise Department that the assessee indulged in transportation of Pan Masala on the strength of canceled CNS challans.
5. The A.O. on the basis of the show cause notice issued by the Central Excise Department worked out the quantity of Pan Parag at 89.040 kg., which was sold outside the books of accounts. The A.O. valued it at Rs.3,38,50,040/-. The A.O. rejected the books of accounts and estimated the income under Section 145. The CIA (A) upheld the order. However, he restricted the addition to Rs.1,97,76,393/-. Both the assessee and the department filed appeals in the Tribunal. The Tribunal allowed the appeal and remanded the matter. The Tribunal set aside the order of CIT (A) and restored the matter to A.O. for fresh assessment with certain directions namely that the A.O. will be legally debarred from collected any fresh material or evidence to improve the case or injecting new life in it; he will call for cross-examination only those witnessed, of which statement was used by the A.O. during original assessment. Shri S.N. Tiwari,, EITA in view of his retracted statement would be summoned by the A.O. for examination. The A.O. will ascertain whether any actual nexus exist between the dispatch of the impugned goods. The A.O. may consider the records for reconciliation, if any, and would also examine the concerned witnesses as per whom some unknown person sued to represent the assessee in dispatch of goods on cancelled CNS and GRS. The A.O. will also examine the assessee's plea about the existence and role played by fake Pan Masala manufacturers and the extent to which it had a bearing on the dispatch of the impugned goods.
6. It is alleged that the Tribunal was not justified in debarring the A.O. and from collecting fresh material, which will frustrate the purpose of assessment.
7. On behalf of the assessee it was argued that ITO placed reliance only on the material collected by the customs and central excise authorities. He did not make any independent enquiries in the course of original assessment and therefore the Tribunal was justified in restricting the enquiry.
8. During the course of hearing Shri S.K. Garg appearing for the assessee pointed out that after the order of the Tribunal setting aside the order of CIT (A) and restoring the matter to A.O., the A.O. has passed the assessment order on 3.3.2000 and thereafter the assessee has preferred an appeal, which was allowed by CIT (A) in favour of the assessee vide order dated 24.10.2000. The ITAT has upheld the order of CIT (A) vide its order dated 30.4.2001 in ITA No.394 and 395/LUC/ 2000, 435/A/98; 549/A/98 and 486/A/99, whereby the department's appeal against the order of CIT (A) was dismissed by the Tribunal, and thus there is no force in the reference application, which is only of academic interest. Inspite of objections raised on behalf of the asseessee the Tribunal referred the matter on the aforesaid question as according to the Tribunal issue involved pertains to the scope of enquiry jurisdiction of the A.O. while making fresh assessment and which is purely legal issue.
9. We find that the reference made by the Tribunal has been rendered infructuous, as any decision on merits on the question of law framed as above will not have any bearing upon the orders passed for the assessment in the relevant years.
10. The only question involved is the restriction put by the Tribunal on the Assessing Officer while setting aside his order in framing fresh assessment. The A.O. passed an order, which was set aside by CIT (A) and against which the appeals filed by the department have been dismissed.
11. We do not find any justification for reference. If the department was aggrieved, it could have field income tax appeals against the order of the Tribunal upholding the order of CIT (A) under Section 260A of the Act.
12. The reference made by the Tribunal has been rendered wholly academic. The question is thus returned unanswered as it will have no bearing on the assessment.
Dt.16.10.2012 SP/