TaxTMI 
TaxTMI 
1997 (11) TMI 295
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....the four petitioners are individuals, the status as contemplated by 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 & Exemptions)....
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.... 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....
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....ion of law under which the 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 dese....
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..... All the same, we did make an offer to the learned Counsel for the assessee 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 remain....
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....by the assessees themselves, who were not present in the Court at the time of hearing of the appeals, there is 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 i....
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....rgued on merits, not having highlighted/argued petition under Rule 29 and the Tribunal in its order having dealt with in extenso with the letter dated 21-2-1995, there is no mistake apparent from record calling for rectification u/sec. 254(2) of 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....
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....accompanied by a statement of case arising out of the order of the Tribunal dated 3-1-1997. 16. On 4-4-1997, yet another application was filed on behalf of the petitioners wherein they have sought for leave of the Tribunal to amend the application dated 5-2-1997 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 no....
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....peal on merits? C. Whether on the facts and in the circumstances of the case the Tribunal did not err in not holding that the first Appellate Authority acted illegally in not allowing the petitioner appellant to lead evidence under Rule 46A of the Income Tax Rules?" 17.1 The petition came up for hearing 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....
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.... the petitions do not lie at all. The petitioners have an alternate efficacious remedy by filing an application under Section 256(1) which now is the only remedy available to the petitioners in the light of the order dated 12-9-1997 even in CWP 1255/97 by this Court and maintained by the Supreme Court. The impugned order was also defended on merits. 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 ....
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....3-1997 passed by High Court in CWP 1255/97 filed by Mrs. Jyotsna Suri would bind all the four assessees not only as a precedent but also on principle of propriety and consistency. The three assessees other than Mrs. Jyotsna Suri cannot be permitted to wriggle out of the effect of the order dated 21-3-1997 passed in CWP 1255/97 on the plea that they being not 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 i....
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.... the petitioners being allowed relief by the Tribunal by exercising either of the following two jurisdictions : (i)  Section 254 of the Act obliges an Appellate Tribunal to dispose of an appeal, an order purportedly disposing of an appeal oblivious of its own earlier order and without disposing of a pending application for admission of additional evidence cannot be said to be disposal of an 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 applicatio....
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....e of a statutory provision and the like, and for the application of that rule the class of the Tribunal was not a material matter but what was of substance and material was the nature of the proceedings before it : if the proceedings were in the nature of judicial proceedings, then irrespective of the class of the Tribunal the rule applied." Obviously "and the like" has to be read ejusdem generis. 33. In the cases at hand, the 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 ....
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....d does not contemplate a rehearing which would have the effect of re-writing an order affecting the merits of the case. Else there would be no distinction between a power to review and a power to rectify a mistake. What is not permitted to be done by the statute having deliberately omitted to confer review jurisdiction on the Tribunal, cannot be indirectly achieved by recourse to Section 254(2) of the Act. 37. In T.S. Balram ITO Company Circle v. Volkart 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. Accordi....
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.... of opinion amongst other High Courts but so far as Delhi High Court is concerned, the law is settled by at least three decisions, namely, Punjab National Bank v. ITAT, 1990 (87) CTR 122, (Del.), CIT v. K.L. Bhatia, (1990) 182 ITR 361 (DL), ITO v. President ITAT (CW 1010/97), decided on 10-3-1997. We may quote only from Punjab National Bank's case (supra) : "In the present case what has happened is that the petitioner had filed an application under Section 256 against the original 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 p....
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....nd dispose of the petitioners' application under Section 256 on its own merits and taking such view of the facts and law as it may deem fit to take unobsessed by any of the findings recorded hereinabove. Subject to this observation the petitions are dismissed though without any order as to costs. 44. [Judgment per : J.K. Mehra, J.]. - I have the benefit of perusing the judgment in the case which reached me last evening and wish I had more time for disposal to deliberate over it. While the petitions 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 b....