B.S. Dhillon, J.
1. Two persons, namely, Shri Om Parkash and Shri Bidhi Chand entered into an agreement dated April 1, 1970, purporting to create a partnership. The said partnership firm applied to the ITO for its registration for the assessment year commencing on April 1, 1971. The registration was refused by the ITO by observing that the assessee had also divided the loss of individual business of Om Parkash and thus the firm was not genuine. The ITO, however, proceeded to order protective assessment. Appeal filed by the assessee before the AAC was dismissed. The AAC endorsed the findings of the ITO and further observed as follows :
' I am afraid, I cannot agree with the contention of the learned counsel. This is supposed to be a case of sub-partnership, which has been constituted to have the business of only holding shares in different firms in the name of Shri Om Parkash. Now, Shri Om Parkash was already a partner in various firms. For creating a sub-partnership, there must be some purpose or commercial expediency. In the instant case, no evidence has been brought on record to show that there was any business necessity for creating a sub-partnership, in respect of the shares held by Shri Om Parkash in his name. The whole thing appears to be a fake and the cat was out of the bag when the ITO found that even the result of individual business has been incorporated in the' profit and loss account, along with the shares held by Shri Om Parkash in various firms. This shows that Shri Om Parkash continued to be a partner in various firms in his individual capacity and maintained one set of books where he consolidated the results of individual business as well as shares from various firms. In my opinion, the accounts show the real state of affairs, i. e., Shri Om Parkash continued to hold shares in various firms in his individual capacity and the creation of a sub-partnership was only a fake device to avoid taxes. Under the circumstances, the order of the ITO refusing registration to the firm is confirmed and the appeal is dismissed.'
2. The assessee filed an appeal before the Tribunal, which appeal has been accepted by the Tribunal. On the application made at the instance of the Revenue, the following question of law was referred to this court for its opinion:
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the assessee was entitled to registration for the assessment year 1971-72 ?'
3. This court, vide its order dated February 12, 1981, answered the question referred to in the affirmative. Subsequently, a petition having been filed on behalf of the Revenue that the question whether the firm was a genuine firm or not, on the facts and circumstances of the case, was a question of law which was covered in the question which has been referred to this court for its opinion and the said question having not been gone into in the order of the Bench referred to above, the order of the Bench be recalled and the matter be reheard. Notice of this application was given to the assessee and after hearing both the parties, the Bench, vide order dated April 2, 1981, recalled its earlier order dated February 12, 1981, and thus the reference has been listed for rehearing.
4. We have reheard the arguments addressed by the learned counsel for the parties and have also gone through the records of the case. On reconsideration of the whole material, we have come to the conclusion that the order of the Tribunal is based on no reasoning and is, on that account, speculative. The ITO held the firm to be not genuine on the sole ground that the assessee also divided the loss of individual business of Shri Om Parkash which could be done only through a partnership and not through a sub-partnership. The AAC reinforced the finding that the firm was not genuine, holding that there must be some purpose or commercial expediency for creating a sub-partnership and since no evidence had been brought on the record to show that there was any commercial expediency or any business necessity for creating a sub-partnership, therefore, also the firm was held not to be genuine. The Tribunal repelled the argument of the assessee that the loss in question was from a sub-partnership of business and hence the sub-partnership did not stand violated. The Tribunal, however, disagreed with the finding of the ITO and observed that merely by incorporation of loss of Om Parkash from his individual business in the assessee's accounts, it cannot lead to the conclusion that the relevant instrument dated April 1, 1970, was not intended by the parties to be really effected. In para. 6 of the order, the Tribunal further observed that lack of evidence as to the existence of commercial expediency or business necessity for the purpose of creating the sub-partnership in question was also, in their view, not a relevant consideration for deciding the application for a sub-partnership's application for registration as firm. The Tribunal, after making the above-mentioned observations, nowhere recorded a finding that the firm was genuine. In other words, even though the Tribunal disagreed with the reasons given by the ITO and the AAC for coming to the conclusion that the firm was not proved to be genuine, it did not record any finding that the firm was genuine. On the other hand, in para. 7 of the order, the Tribunal itself observed that in the instant case a close perusal of the recital and clause 4 of the instrument suggests that in the sub-partnership in question there is no element of agency and thus it is no better than an association of persons and thus there should have arisen no question of its registration as a firm under Section 185(1) of the I.T. Act. It was further observed by the Tribunal that even the names and addresses of the firms, the share income of which was intended to be shared by Om Parkash with Shri Bidhi Chand, have not been specified in the deed of sub-partnership. Both these findings arrived at by the Tribunal led to the same conclusion that the assessee could not be held to be a sub-partnership. However, the Tribunal proceeded to observe that in the absence of any finding in that regard by the ITO, it was not open to them at that stage to hold that the assessee was not a firm but merely an association of persons as, in the view of the Tribunal, the ITO had proceeded to assess the assessee as a registered firm. From what has been stated above, it is obvious that even though the Tribunal repelled the grounds on which the ITO and the AAC held the firm to be not genuine, yet the Tribunal did not specifically record a finding that the firm was genuine nor did it advance any reason for holding the firm to be genuine. On the other hand, the Tribunal in para. 7 of its order has observed that the sub-partnership was not entitled to get registration. Keeping in view the provisions of r, 11 of the Income-tax (Appellate Tribunal) Rules, 1963, the Tribunal could at that stage point out the grounds for non-registration to the assessee to afford him an opportunity and could have pronounced upon the merits of the case, but the Tribunal refrained to do so on the plea that the assessee had already been assessed as a registered firm. As regards the assessment made by the ITO of the assessee firm, it may be observed that the assessment was made merely as a protective assessment. Since the assessee had a right to appeal against the order of the ITO, therefore, the ITO had to make a protective assessment so as to watch the interest of the Revenue. The learned Tribunal filed to take notice of this fact that the assessment made against the assessee was a protective assessment and thus no adverse inference could be drawn in this regard against the Revenue. The powers of the Tribunal to pronounce upon the matter in issue are very wide. If on the material on record more than one argument is available for recording a same or similar finding and if any of the arguments was not found mentioned in the order of the ITO or the AAC, the Tribunal is always entitled to record such a finding, subject however to the assessees having been given an opportunity of being heard in that regard.
5. It has been contended by Shri Gupta, the learned counsel for the asses-see, that even though the Tribunal has not specifically recorded a finding that the firm may be genuine, still the said finding is implied. The learned counsel contends that the judgment of the Tribunal in fact ended with para. 6 of the order and the observations made in para. 7 of the order are not to be read as a part of the judgment. We are unable to agree with this contention. Merely because in the statement of the case it has been recorded that the Tribunal recorded a finding that the firm was genuine, would not entitle us to read in the order of the Tribunal the said finding when it has not been recorded in the order. In fact, in para. 7 of the order, the Tribunal came to the conclusion that in Clause 4 of the instrument there is no element of agency and further that the share income which was intended to be shared by the partnership having not been specified in it, the firm was not likely to be registered. In view of what has been stated above, we are of the opinion that the order of the Tribunal is based on no reasoning and in fact the same, to a great extent, is self-contradictory.
6. It is well settled that when a reference is made to the High Court, the decision of the Appellate Tribunal cannot be looked upon as final. In other words, the appeal is not finally disposed of. It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of. Reference in this connection may be made to the decision of their Lordships of the Supreme Court in Esthuri Aswathiah v. CIT  66 ITR 478. In view of what has been stated above, we, therefore, refuse to answer the question referred to us and send the case back to the Tribunal for passing a fresh order, and re-decide the appeal of the assessee after hearing the parties, in accordance with law. However, there will be no order as to costs.