1988 (2) TMI 144 - AT - Income Tax

Tribunal dismisses appeal on grounds 4 & 5, orders rehearing due to error.

The Tribunal dismissed the appeal regarding grounds of appeal Nos. 4 & 5, as the applicant failed to establish that the assessments were unjustified ... - Issues Involved:1. Whether the grounds of appeal Nos. 4 & 5 were appropriately addressed.2. Whether the Tribunal erred in affirming the findings of the ITO and CIT(A) based on Diary No. 10.3. Whether the Tribunal failed to examine Diary No. 10, constituting an error apparent from the record.Detailed Analysis:1. Grounds of Appeal Nos. 4 & 5:The applicant contended that the Revenue authorities were unjustified in proceeding with the assessments while the application for settlement was pending before the Settlement Commission. The Tribunal acknowledged that it had omitted to address these grounds of appeal initially. Upon hearing both sides, the Tribunal concluded that the applicant failed to establish that the ITO was not justified in proceeding with the assessments. The Tribunal noted that there is no statutory bar preventing the ITO from continuing with assessments during the pendency of a settlement application before the Commission. Additionally, the applicant did not provide evidence of pursuing the application after filing it, leading to the inference that the application was either not admitted or allowed to lapse. Consequently, the Tribunal dismissed the appeal regarding grounds of appeal Nos. 4 & 5.2. Affirmation of Findings Based on Diary No. 10:The applicant argued that the Tribunal misled itself by affirming the findings of the ITO and CIT(A) that the liquor business belonged to the applicant individually, based on Diary No. 10, without examining the diary itself. The ITO had assessed the entire profit of the liquor business in the applicant's hands and reopened the firm's assessments for protective assessments. The CIT(A) and the Tribunal upheld this finding. The applicant contended that the Tribunal erred by not independently examining the diary to verify the correctness of the lower authorities' findings.3. Examination of Diary No. 10:The applicant's counsel, Mr. K.N. Jain, filed an affidavit stating that Diary No. 10 was not produced before the Tribunal. The Revenue objected, arguing that the Tribunal had no power to review its order and that the affidavit did not comply with CPC O. 19, r. 3. The Tribunal, however, accepted the affidavit, noting that the Revenue failed to file a counter affidavit or cross-examine Mr. Jain. The Tribunal found that the absence of any conclusive finding about the diary's content in its earlier order indicated that the diary was not examined. Consequently, the Tribunal concluded that there was an error apparent from the record and ordered the recall of its order for rehearing.Separate Judgment by B. NATH, A.M.:B. NATH disagreed with the decision to reopen the Tribunal's order, arguing that the affidavit of Mr. K.N. Jain was not acceptable under CPC O. 19, r. 3, and should be rejected. He emphasized that the Tribunal does not have the power to review its decisions and that the miscellaneous petition amounted to a review. He argued that even if the Tribunal did not examine the diary, it was within its discretion to decide based on the facts on record and the arguments presented. Therefore, he concluded that there was no mistake apparent from the record and the miscellaneous petition should be rejected.Order of Third Member (T. VENKATAPPA, V-P.):T. VENKATAPPA was called to resolve the difference of opinion between the Judicial Member and the Accountant Member. He held that there was no mistake apparent from the record in the Tribunal's order. He emphasized that a mistake apparent on the record must be obvious and patent, not something requiring a long-drawn process of reasoning. He concluded that the miscellaneous petition amounted to a review, which the Tribunal has no power to conduct. Therefore, he rejected the miscellaneous application.Conclusion:The Tribunal ultimately decided to recall its order for rehearing regarding the examination of Diary No. 10, acknowledging an error apparent from the record. However, the separate judgment by B. NATH and the final decision by T. VENKATAPPA highlighted the limitations on the Tribunal's power to review its decisions and the necessity for clear, patent errors to justify such actions.