TMI Blog1997 (11) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Income Tax Act, 1961 (hereinafter `The Act , for short). They filed their returns of income as under : Name Date of filing Income declared (1) (2) (3) Shri Lalit Suri 21-8-1992 Rs. 89,490/- including salary from Bharat Hotels Ltd. (Rs. 1,13,400/-) Mrs. Jyotsna Suri 28-8-1992 Rs. 1,01,460/- including salary from Bharat Hotels Ltd. (Rs. 1,15,200/-) Miss Divya Suri 28-8-1992 Rs. 91,993/- including income from other sources (Rs. 98,993/-) Miss Deeksha Suri 28-8-1992 Rs. 80,778/- including income from other sources (Rs. 87,777/-) 4. The assessments were framed on 28-3-1995 under Section 143(3) of the Act. There were additions made under Section 68 of the Act, also keeping in view the provisions of Section 69A. In their statements of income attached with the returns, the petitioners by way of note indicated the following amounts received and deposited in their accounts in Hong Kong and Shanghai Banking Corporation Ltd. on 22-11-1991 under the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities Exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 46A of the Income Tax Rules, 1962 seeking admission by way of additional evidence of a set of documents mostly originating from the custody of the bank. The CIT (Appeals) rejected the application under Rule 46A as also the appeals. He also formed an opinion that the requirements of Rule 46A enabling admission of additional evidence in appeal were not satisfied. 7. The petitioners preferred further appeal to the ITAT. One of the grounds taken inter alia before the ITAT was illegal rejection of the application under Rule 46A by the CIT (Appeals). The petitioners also moved applications dated 6-3-1996 and 10-5-1996 both under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 seeking admission by way of additional evidence before the ITAT of the very same set of documents which formed subject matter of application under Rule 46A before the CIT (Appeals). 8. The appeals came up for hearing on 23-10-1996 before Bench B of the Tribunal consisting of two members. On that day the Bench passed the following order : Application under Rule 29 of the Income Tax Rules is to be disposed of first. Thereafter the matter was adjourned. The appeals again came up for hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application was made and the jurisdiction of the Tribunal which was sought to be invoked by moving this application. However, on 2-4-1997, the petitioners moved yet another application wherein they have referred to the application filed on 5-2-1997 having been made under Section 254(2) of the Act. It was further stated that the earlier application was got drafted by the appellant without seeking any legal guidance and hence yet another application accompanying the application dated 2-4-1997 may be brought on record treating it as amending/modifying/substituting the previous application. The application accompanying is titled as one under Section 254(2) of the Act read with Section 151 of the CPC. In this application a grievance is raised that the order dated 3-1-1997 having been passed by overlooking the earlier order dated 23-10-1996 of the Tribunal, the order dated 3-1-1997 deserves to be recalled. Grievance as to the applicability of Sections 68 and 68A of the Act was also raised. These were stated to be very serious error or mistake having crept into the appellate order of the Tribunal resulting in manifest injustice. Para 10 of the application deserves to be reproduced whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee for perusing our Log Books and satisfy himself of this position. This was declined. On the contrary the argument now is that because at an earlier hearing before a different combination of the Bench, it was pressed and an order made that the same be taken up first and even though the said application was not argued but because of the noting of the earlier combination, it was to be disposed of first. Its pendency gives rise to a mistake apparent from record, as is canvassed by the applicants. The fact that no arguments were addressed is also admitted in the resume of arguments filed on 21-5-1997 after the conclusion of hearing under the signature of Mr. Anoop Sharma, Advocate. 13.1 Here we consider it appropriate to mention in brief the procedure for hearing before the Tribunal. In the Tribunal traditionally every week Benches are constituted with an Accountant Member and a Judicial Member who in combination hear the appeal listed for hearing. Since the combination is changed almost every week, different Benches hear the appeal in different combination. The appeals which are heard but hearing remained inconclusive are marked Part-Heard for the sake of continuity by the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no basis for the submission that arguments were not adduced on merits. In view of the above facts, the non-disposal of the application under Rule 29 would indeed not be a mistake much less one apparent from the record. Our notes indicate beyond doubt that the learned Counsel was asked to and actually addressed us on the merits of the case (para 5.6), he was replied to (para 6.5/6.5) and in rejoinder merits were again referred to (para 7) and dealt with by the Bench (paragraphs 10 and 10.2) xxx xxx xxx 13.5 The events from filing of the first miscellaneous petition in February, 1997 and substitution thereof by miscellaneous application dated 2nd April, 1997 (the subject matter of this order) and to the filing of written submissions on 21-5-1997 after conclusion of the hearing indicate a shift of stand on the part of the assessee. Originally the assessee submitted that no submissions on merits were made as it was announced in open Court. The stand later was that the Counsel was not allowed to address on merits (implying that he wanted to do so). Mr. Sharma, the learned Counsel in rejoinder, on instructions took a stand that since evidence was not to be relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and restricting the appellant to the material on record, sans additional evidence, was in order and not a mistake apparent from record. We, therefore, find no merit in these applications and dismiss the same. 13. The learned Counsel for the petitioners has submitted that by order dated 23-10-1996, the Tribunal had categorically expressed its opinion that the application under Rule 29 would be disposed of first. That order regulated the subsequent course of hearing, even jurisdiction of the Tribunal hearing the appeals. It was obligatory on the part of the Tribunal to have taken note of the said application and decided it judicially which having not been done the order dated 3-1-1997 cannot be said to have judicially and effectively disposed of the appeals. This has occasioned grave injustice to the petitioners. The appeals must be deemed to be pending for the failure of the Tribunal to dispose of the application under Rule 29. The order dated 3-1-1997 deserved to be recalled followed by a hearing afresh and then decision in the appeals. 14. The prayer made on behalf of the petitioners has been vehemently opposed on behalf of the respondent. It is to be noted the Mr. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1997 so as `to amend/modify/substitute proper questions of law on the basis of which reference was being sought to the High Court. A perusal of the questions which are suggested on behalf of the petitioners before the Tribunal goes to show that the merits of the plea raised by the petitioners touching the placing of the onus, acceptance of the explanation given by the assessee and the assessability as income under Sections 68/69A of the impugned sum which was received as gift according to the assessee, all form subject matter of questions suggested by the petitioners themselves. The following questions are also sought to be referred which are pertinently relevant for the purpose of the present petitions and hence are reproduced verbatim : 1(a) Whether the order of the Tribunal dated 3-1-1997 is in violation of the principles of natural justice and consequently null and void in law? 1(b) Whether the Tribunal did not erred in law in not considering the evidence filed before the CIT(A) specified below before proceeding to adjudicate on grounds of appeal and thus committing a breach in the realm of natural justice. (description of documents not reproduced) 3. Whether the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring on the question of admission before the Division Bench of the High Court on 21-3-1997. The Counsel for the respondent had also made appearance. The Division Bench held as under : In our view the remedy under Section 256 of the Income Tax Act is available to the petitioner against the order dated 3rd January, 1997 and in this view we decline to entertain this petition in exercise of our jurisdiction under Article 226 of the Constitution. Dismissed 17.2 The petitioner Smt. Jyotsna Suri filed an SLP before the Supreme Court feeling aggrieved by the abovesaid order. Their Lordships dismissed the SLP by a speaking order which reads as under : High Court has rejected the writ petition of the petitioner on the ground that she has an alternative remedy under Section 256(1) of the Income Tax Act. We do not see any reason to interfere. The Special Leave Petition is dismissed. 18. When the present petitions came up for hearing before this Court, on behalf of the respondent a preliminary objection was raised to the maintainability of the petitions submitting that an alternate efficacious remedy by filing an application under Section 256(1) being available to the petitioners an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 23. We may place on record that at the first blush we were inclined to grant some relief to the petitioners in view of the fact that the genuineness of the documents sought to be filed by the petitioners before the CIT (Appeals) and the ITAT by way of additional evidence, is not in dispute. The learned Counsel for the respondent very frankly admitted that the Department was not disputing the genuineness of the documents. We were tentatively of the opinion that if the genuineness of the documents was not in dispute, why not permit the petitioner-assessees bringing the documents on record and thereafter the authorities deciding on the legal plea of the petitioner-assessees. We put across our view point to the learned Counsel for the respondent but the learned Counsel clearly gave vent to the stand firmly taken by the Revenue that it was not agreeable to the document being admitted in additional evidence inasmuch as the jurisdiction of the Appellate Authorities was circumscribed by statutory rules excluding admission of additional evidence unless and until the pre-requisites for exercise of such jurisdiction were satisfied which were not in the cases at hand, even by barely perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitioners therein were not bound by the abovesaid order. The concept of consistency is a reflection of the rule of law. We can safely assume that the High Court would have passed the same order as was passed in the case of Mrs. Jyotsna Suri if other three assessees would also have filed their own writ petitions. In Vishnu Trader v. State of Haryana Ors., 1995 Supple (1) SCC 461, their Loardships have held the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment requires that all similar matters should receive similar treatment. 25. We are, therefore of the opinion that so far as the order dated 3-1-1997 is concerned the only remedy available to the petitioners is by invoking jurisdiction of the Tribunal under Section 256 of the Income Tax Act which the petitioners have already done. That remedy eclipses all the pleas available to the petitioners against the order dated 3-1-1997 from being raised before this Court in exercise of its writ jurisdiction. 26. The abovesaid being the position of law, we would confine ourselv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal which should be treated as still pending in the eyes of law. The Tribunal should have held so on the petitioner s applications dated 5-2-1997 and 4-4-1997 and then should have posted the appeals for hearing and disposal afresh. No specific provision of law is required for conferring such jurisdiction on the Tribunal. Every Court and every Tribunal vested with judicial functions has an inherent power to recall its order so as to relieve an aggrieved party from the consequences flowing from its own mistake or failure. Such a power to recall is distinct from the power to review; (ii) Disposal of an appeal without dealing with a pending application for admission of additional evidence and overlooking an earlier order of the Tribunal forming an opinion that the application for admission of additional evidence shall be dealt with first, amounts to a mistake apparent from the record which should have been rectified by the Tribunal in exercise of the jurisdiction conferred by sub-section (2) of Section 254 of the Act. 30. As held by their Lordships of the Supreme Court in A.R. Antuley v. R.S. Naik, AIR 1988 SC 1531 (para 130), motions to set aside the judgment are permitted w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Tribunal dated 3-1-1997 is not even suggested to be an outcome of fraud or collusion. None of the grounds which according to the well settled legal principles vitiate a judgment rendering it void or a nullity, have been alleged much less shown to exist. Merely because the Tribunal overlooked an interim order of its own while deciding the appeal finally (assuming it to be so) it will not render the judgment void or a nullity. At worse it may be an order vitiated by an irregularity of procedure or an illegality. Such an order cannot be `recalled . The aggrieved party must have remedy provided by law to get rid of the order. 34. In para 12 above, we have extensively reproduced excerpts from the order of the Tribunal so as to show how the proceedings before the Tribunal had taken place and what had actually transpired before it. That statement of fact is not disputed. Mr. Syali, learned Counsel for the respondent who had participated in the proceedings before the Tribunal was accompanied by his contemporaneous notes of proceedings before the Tribunal and he made a statement at the bar subscribing to the correctness of the record of the proceedings as narrated by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art Bros. and Ors., 1997 (82) ITR 50 (SC) their Lordships have held that 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 debatable point of law is not a mistake apparent on the record. (Also see K.M. Shanmugam v. SRVS (P) Ltd., AIR 1963 SC 1626, Satya Narain v. Mallikarjun, AIR 1960 SC 137 and a recent Division Bench decision of this Court in CIT v. M/s. Eurasia Publishing House (P) Ltd., ITR 52/80, decided on 28-10-1997. 38. In the case at hand the documents in which the order dated 23-10-1996 came to be passed, is a matter of controversy. According to the petitioners, it was the opinion of the Tribunal that it shall first hear the application for additional evidence. According to the respondent the petitioners were trying to create a procedural mess, by insisting on arguing the appeal first on merits and strategically reserving submissions on the application to be made in the event of their failing on merits; that was the effort of the petitioners which was sought to be stalled by the Tribunal. In the late ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal but has not filed any application against the order dismissing the application under Section 254. Merely because the petitioner has chosen not to file an application under Section 256 against the order passed under Section 254 can be no ground for this Court to exercise its discretionary jurisdiction under Art. 226. The petitioner had adequate remedy against the orders passed under Section 254 by moving an application under Section 256(1) and, if the said application was dismissed, by filing a further application under Section 256(2) to this Court. If the petitioner has not been diligent enough and has allowed the period of limitation to expire that by itself can be no ground to persuade this Court to exercise its jurisdiction under Art. 226. When an adequate alternate remedy is provided to a citizen under the statute it is an exercise of sound discretion that the Court should refrain from exercising its extraordinary jurisdiction under Article 226 of the Constitution. 42. Even if the petitioners are aggrieved by the order dated 27-6-1997 rejecting their applications under Section 254(2) of the Act, that remedy of the petitioners lies in filing applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are being dismissed on the simple ground of availability of alternate remedy under the Statute in view of the judgments of this Court which view is contrary to the view of other High Courts I would like to stress a few facts. 45. Assuming that there has been some omission on the part of the Counsel or the assessee or neglect on the part of the Tribunal itself not to refer to its previous order, the same should not have stood in the way of imparting justice and undoing the wrong, which resulted from a combination of the aforesaid situations. The argument that a combination of the persons who constitute the Bench, had undergone a change, therefore, new combination was not bound by the order passed by the earlier combination of Presiding Officers on the previous date of hearing to say the least is perverse and frivolous. Change in the personnel of the Bench does not obliterate or in any manner do away with the order passed on the file on the previous date of hearing. 46. Admittedly in this case, the notice under Section 68 of the Act was issued by the Assessing Officer only on 22-2-1995 and he was informed by the assessee that the amount was received as a gift. Even the photocopi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on the part of the assessee and these were the factors which could have been considered by the Appellate Authority. In the present case although no application under Section 256(1) was filed against the impugned order but in the face of a DB decision of this Court in the case of Punjab National Bank v. ITAT, 1990 (87) CTR 122, even when the application under Section 254(2) is rejected and even if it cannot be taken to have merged with the order passed under Section 254(1) petition, the remedy is by way of an application under Section 256(1). However, it cannot be a case for examination in a writ petition if a verdict is returned that there is no question of law involved in the impugned order. This I consider necessary to so state because it could not be the intention of law to leave the party remedyless and it will be open in such circumstances for the party to invoke the jurisdiction of this Court under Articles 227/226 which could be considered on its own merits if and when such an occasion arises. What is stated hereinabove by me, will not, however, be taken to be expression of opinion on the merits of the application under Section 256(1) of the assessee already pending or t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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