Third Member overrules Tribunal decision on miscellaneous applications, cites overlooked evidence and treaty

The Third Member overruled the Tribunal's decision to reject the miscellaneous applications, finding that the Tribunal had overlooked relevant evidence and the Indo-Portugal Treaty. The Tribunal was directed to recall its order and reconsider the appeals, considering all pertinent material and legal provisions.

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Issues Involved:
1. Admissibility of Miscellaneous Applications (M.A.s)
2. Consideration of New Evidence
3. Valuation of Foreign Debts
4. Application of Section 31(7) of the Wealth-tax Act
5. Treaty Between India and Portugal
6. Tribunal's Duty to Consider All Relevant Evidence and Arguments

Detailed Analysis:

1. Admissibility of Miscellaneous Applications (M.A.s):
Shri Srinivasan raised a preliminary point about the admissibility of M.A.s, arguing that they were attempts to induct new evidence by the back-door and seek a review rather than rectification. The M.A. should be confined to rectification of glaring and obvious mistakes of facts and/or law based on records at the time of hearing. Shri Dastur contended that he was not seeking a review but a recall of the order for proper adjudication of the points. The Tribunal allowed Shri Dastur to proceed.

2. Consideration of New Evidence:
Shri Dastur argued that it is not an infallible rule that no fresh evidence should be looked into during an M.A. He cited cases such as CIT v. Nopany Education Trust and CIT v. Shakuntala Rajeshwar, where new evidence was considered to rectify mistakes. The Tribunal, however, held that there was no justification for considering new evidence like the Indo-Portugal Treaty or the opinion of Mr. Periera, as the assessee had not mentioned the names or locations of the debtors with the required precision.

3. Valuation of Foreign Debts:
The Tribunal found that the assessee had not provided sufficient evidence to prove that the debts were irrecoverable or that there were restrictions on remittance. The Tribunal noted that the assessee's claim of debts being 'frozen' was not substantiated with clear evidence. The Tribunal allowed a 20% discount for post-1976 assessments but did not find grounds for a similar discount for earlier years due to lack of evidence.

4. Application of Section 31(7) of the Wealth-tax Act:
Shri Dastur argued that the Tribunal should have considered the WTO's acceptance that the conditions of Section 31(7) were fulfilled, which implied restrictions on remittance. The Tribunal, however, found that the application of Section 31(7) did not automatically convert the asset's value to NIL and that the Tribunal had ample powers to determine the correct application of Section 31(7).

5. Treaty Between India and Portugal:
Shri Dastur contended that the Indo-Portugal Treaty, which resumed diplomatic and economic relations between the two countries, constituted law and should have been considered by the Tribunal. The Tribunal, however, did not find justification for considering the Treaty as it was not part of the original records.

6. Tribunal's Duty to Consider All Relevant Evidence and Arguments:
The Tribunal was criticized for not considering the correspondence between the assessee and the Government of India, which indicated that the assets were 'frozen.' The Tribunal's failure to consider this evidence and the WTO's application of Section 31(7) was seen as an apparent mistake. The Tribunal was also criticized for not giving proper opportunities to the assessee to produce additional evidence.

Separate Judgments:
The Judicial Member, Shri T.A. Bukte, disagreed with the Accountant Member's decision, arguing that the Tribunal should have recalled the order and given the assessee an opportunity to be heard on merits. He highlighted that the Tribunal's findings were contrary to the evidence on record and that the Tribunal had overlooked the Indo-Portugal Treaty, which was law.

The Third Member, Shri Chander Singh, agreed with the Judicial Member, stating that the Tribunal had committed apparent mistakes by not considering relevant evidence and the Indo-Portugal Treaty. He concluded that the prayers made in the miscellaneous applications deserved to be accepted and that the Tribunal should recall its order for reconsideration.

Conclusion:
The Tribunal's decision to reject the miscellaneous applications was overruled by the Third Member, who found that the Tribunal had committed apparent mistakes by not considering relevant evidence and the Indo-Portugal Treaty. The Tribunal was directed to recall its order and reconsider the appeals, taking into account all relevant material and legal provisions.

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