DEEKSHA SURI VS INCOME-TAX APPELLATE TRIBUNAL
2000 P T D 905
[232 I T R 395]
[Delhi High Court (India)]
Before R. C. Lahoti and J. K. Mehra, JJ
Ms. DEEKSHA SURI and 3 others
versus
INCOME-TAX APPELLATE TRIBUNAL and others
Civil Writs Nos. 2796 to 2799 of 1997, decided on 05/11/1997.
(a) Income-tax---
----Appeal to Appellate Tribunal---Powers of Tribunal---Review--- Rectification of mistakes---Tribunal cannot review its order---Tribunal can rectify mistakes in its order which are patent and obvious ---Assessee filing application to adduce additional evidence but arguing appeal on merits without referring to its application---Tribunal dismissing appeal---Application for review of order on the ground that failure to deal with application for admission of additional evidence was a jurisdictional error---Tribunal could not review its order---Controversy on the question whether there was any error at all and whether error was jurisdictional or procedural--Tribunal could not rectify its order---Writ petition against order by one of petitioners dismissed by High Court and Supreme Court on the ground that assessee had alternate remedy---Decision was binding on other petitioners---Indian Income Tax Act, 1961, S.254---Constitution of India, Art. 226.
(b) Income-tax---
----General principles---Similar matters should receive similar treatment-- Statement recorded by Court or Tribunal is presumed to be correct.
(c) Writ---
----Alternate remedy available---Writ will not normally issue---Constitution of India, Art. 226.
The Income-tax Appellate Tribunal is a creature of the statute. It has not been vested with the review jurisdiction by the statute creating it. The Tribunal does not have any power to review its own judgments or orders. The grounds on which the Courts may open or vacate their judgments are generally matters which render the judgment void or which are specified in the statutes authorising such actions. A judgment will not be opened or vacated on grounds which could have been pleaded in the original action. A motion to vacate will not be entered when the proper remedy is by some other proceeding, such as by appeal. The right to vacation of a judgment may be lost by waiver or estoppel. Where a party injured acquiesces in the rendition of the judgment or submits to it, waiver or estoppel results.
The language of section 254(2) of the Income Tax Act, 1961, is clear. The foundation for exercising the jurisdiction is "with a view to rectify' any mistake apparent on the record" and the object is achieved .by "amending any order passed by it". 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 a debatable point of law is not a mistake apparent on the record.
The statement of facts recorded by a Court or quasi judicial Tribunal in its proceedings as regards the matters which transpired during the hearing before it would not be permitted to be assailed as incorrect, unless steps are taken before the same forum. It is not open to the parties or counsel to say that the proceedings recorded by the Tribunal are incorrect.
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.
The four petitioners were individuals who had declared in the statement of income attached with their returns, amounts received and deposited in their accounts in the Hong Kong and Shanghai Banking Corporation Ltd. On November 22, 1991, under the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds. (Immunities and Exemptions) Act, 1991, and the scheme framed there under, the Assessing Officer issued noticed under sections 143(2) and 142(1) and noted that the returns filed by the assessee did not contain any evidence in the form of copy of the declaration to be made before the authorised dealer of foreign exchange as prescribed in Notification G. S. R. No. 504, dated September 28, 1991, of the Reserve Bank of India and the return only contained a photo copy of the instrument of remittance. He, therefore, called upon the assessee to file a copy of the prescribed declaration. The assessee failed to do so in spite of several adjournments sought for the purpose. The Assessing Officer wrote a letter to the bank on January 13, 1995, asking for a copy of the declaration. The bank in its reply, dated January 18, 1995, informed the Assessing Officer that no declaration under the scheme had been filed. In the opinion of the Assessing Officer, the assessee had failed to discharge the burden of proof regarding the, source of the remittance. He proceeded to treat the receipts as unexplained cash credits under section 68 of the Act. On appeal to the Commissioner of Income-tax (Appeals), the petitioners also moved an application 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 Commissioner of Income-tax (Appeals) rejected the application under rule 46A as also the appeals. On further appeal the petitioner moved applications under rule 29 of the Income tax (Appellate Tribunal) Rules, 1963, seeking admission by way of additional evidence before the Income-tax Appellate Tribunal of the very same set of documents which formed the subject-matter of application under rule 46A before the Commissioner of Income-tax (Appeals). On October 23, 1996, the Tribunal passed an order stating that it would first deal with the application under rule 29. Therefore, the matter was adjourned. The appeals were argued on the merits and by a common order, dated January 3, 1997, the appeals were dismissed. The petitioners moved on February 5, 1997 and April 4, 1997, applications under section 254(2) of the Act read with section 151 of the Civil Procedure Code, 1908. In this application, a grievance was raised that the order, dated January 3, 1997, having been passed by overlooking the earlier order, dated October 23, 1996, of the Tribunal, the order, dated January 3, 1997, deserved to be recalled. The application was rejected. A writ petition was filed against this order. An application was also moved under section 256(1). Meanwhile, on March 18, 1997, JS, one of the petitioners, had filed a writ petition of her own challenging the order, dated January 3, 1997, passed by the Income-tax Appellate Tribunal and seeking its quashing followed by a direction to rehear the appeal on the merits after recalling the order, dated January 3, 1977. The High Court dismissed the petition on ground that the petitioner had an alternative remedy under the Income-tax Act. On a petition for the special leave to appeal to the Supreme Court, the Supreme Court dismissed the special leave petition by a speaking order which stated that the High Court had correctly rejected the writ petition on the ground of existence of alternate remedy:
Held, that the order of the Tribunal, dated January 3, 1997, was 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 null, had been alleged. Merely because the Tribunal overlooked an interim order of its own while deciding the appeal finally (assuming it to be so) it would not render the judgment void or null. At worst it may be an order vitiated by an irregularity of procedure or an illegality. Such an order cannot be recalled. Moreover, it followed from the statement of facts recorded by the Tribunal that the petitioners had acquiesced in the appeal being decided on the merits without insisting on the application under rule 29 being decided first. The principle of waiver and estoppel would exclude the right of the petitioner seeking a recall of. the order assuming it would have been permissible to invoke the jurisdiction of the Tribunal to recall its order otherwise. The circumstances in which the order, dated October 23, 1996, came to be passed, was a matter of controversy. According to the petitioner, it was the opinion of the Tribunal that it should 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 the merits and strategically reserving submissions on the application to be made in the event of their failing on the merits. It was also a matter of controversy, whether the Tribunal committed a procedural or jurisdictional error in not disposing of the application or the application should be deemed to have been abandoned as not pressed by the petitioners. Thus, the mistake (assuming it was committed) ceased to be an obvious and patent mistake, Section 254(2) of the Act was not, therefore, attracted. There was no jurisdictional error or irregularity in exercise of jurisdiction committed by the Tribunal passing the order, dated January 3, 1997, nor such a failure to exercise the jurisdiction in rejecting the applications under section 254(2), dated February 5. 1997, and April 4, 1997, by order, dated June 27, 1997, as to warrant exercise of writ jurisdiction of the High Court. Moreover, the order, dated March 21, 1977, passed by the High Court in the writ petition filed by JS, dismissing the writ petition as not maintainable on the ground of availability of alternative efficacious remedy would bind all the four assessees not only as a precedent but also on the principle of propriety and consistency.
[The petitioners were at liberty to invoke the Tribunal's jurisdiction under section 256 seeking reference on such questions of law as in their submission arose out of the order, dated June 27, 1997. They could seek condonation of delay in moving the application also seeking exclusion of time lost in the proceedings before the High Court. Such prayer for condonation of delay could be considered by the Tribunal sympathetically.]
Antulay (A.R.) v. Nayak (R. S.) AIR 1988 SC 1531; Balaram (T.S.) ITO v. Volkart Bros. (1971) 82 ITR 50 (SC); Bhagwati Prasad v. Delhi State Mineral Development Corporation AIR 1990 SC 371; CIT v. Bhatia (K.L.) (1990) 182 ITR 361 (Delhi); CIT v. Eurasia Publishing House (P.) Ltd. (1998) 232 ITR 381 (Delhi); CIT v. ITAT (1994) 206 ITR 126 (AP); CIT v. Kannan Kunhi (K.S.) (1973) 87 ITR 395 (SC); CIT (Asst.) v. Ved Pradash (Dr.) (1994) 209 ITR 448 (AP); ITO v. President ITAT (1998) 232 ITR 420 (Delhi); Kashinath G. Jalmi (Dr.) v. The Speaker AIR 1993 SC 1873; (1993) 3 JT 594 (SC); Kuntesh Gupta (Smt.) (Dr.) v. Management of Hindu Kanya Mahavidy Alaya AIR 1987 SC 2186; Mangat Ram Kuthiala v. CIT (1960) 38 ITR 1 (P&H); Manoharlal Verma v. State of Madhya Pradesh AIR 1970 MP ~ 131; Patel Narshi Thakershi v. Pradyumansinghji Arjunsingliji AIR 1970 SC 1273; Popular Engineering Co. v. CIT (1983) 140 ITR 398 (MP); Punjab National Bank v. ITAT (1990) 87 CTR 122 (Delhi); Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137; Shanmugam (K. M.) v. S. R. V.S. (P.) Ltd. AIR 1963 SC 1626 and Vishnu Trader v. State of Haryana (1995) Suppl. 1 SCC 461 ref.
G. C. Sharma with Anoop Sharma for Petitioners.
M. S. Syali, Sanjeev Khanna with Ms. Prem Lata. Bansal for Respondents.
JUDGMENT
R. C. LAHOTI, J.---This common order shall govern the disposal of four civil writ petitions, namely, C.W.P. No.2796 of 1997, Ms. Deeksha Suri v. ITAT, CWP No. 2797 of 1997, Ms. Divya Suri v. ITAT, CWP No.2798 of 1997, Sh. Lalit Suri v. ITAT and CWP No. 2799 of 1997, Smt. Jyotsna v. ITAT. The facts of the four cases and the questions arising for decision therein are common, rather the same, except for a minor deviation on the facts in the case of Smt. Jyotsna Suri which would be taken note of at its appropriate place.
The facts, in brief, for the sake of convenience, are being stated in the succeeding paragraphs from the record of CWP No. 2796 of 1997, Ms, Deeksha Suri v. ITAT.
All 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 |
| 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) |
The assessments were framed on March 28, 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 the Hong Kong and Shanghai Banking Corporation Ltd., on November 22, 1991, under the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991, and the scheme framed there under (hereinafter the Scheme, for short) which were not income:
Shri Lalit Suri US$ 3,00,000 equivalent to Rs.77,33,952
Mrs. Jyotsna Suri US$ 2,00,000 equivalent to Rs.51,55,968
Miss Divya, Suri US$ 1,50,000 equivalent to Rs:38,66,976
Miss Deeksha Suri US$ 1,50,000 equivalent to Rs.38,66,976
The Assessing Officer issued notices under sections 143(3) and 142(1) and noted that the returns filed by the assessee did not contain any evidence in the form of copy of the declaration to be made before the authorised dealer of foreign exchange as prescribed in the Notification GSR No. 594, dated September 28, 1991 of the Reserve Bank of India and the return only contained a photo copy of the instrument of remittance. He, therefore, called upon the assessees to file a copy of the prescribed declaration. The assessees failed to do so in spite of several adjournments sought for the purpose. The Assessing Officer wrote a letter to the bank, on January 13, 1995, asking for a copy of the declaration. The bank in its reply, dated January 18, 1995, informed the Assessing Officer that no declaration under the scheme, had been filed. In the opinion of the Assessing Officer, the assessee having failed to discharge the burden of proof regarding the source of the remittance, he proceeded to treat the receipts as unexplained cash credit under section 68 of the Act.
By letter, dated March 21, 1995, filed before the Assessing Officer, the petitioners had taken the plea that the amount represented personal gifts. However, it appears that a declaration from Jagat Nanda though undated but attested before the Consulate General of India. Dubai, on February 5, 1995, was not filed before the. conclusion of the assessment proceedings but the same was filed on March 31, 1995, with the Assessing Officer of which the Assessing Officer refused to take notice as the assessment had already stood concluded on March 27, 1995, and the assessment framed on March 28, 1995.
The assessees went on appeal before the Commissioner of Income tax (Appeals) contesting the additions made. The submission of the assessees before the Commissioner of Income-tax (Appeals) was that the amount involved did not represent income and the filing of a declaration was a formality, the provision being directory and not mandatory in nature. In appeal, the petitioners also moved an application 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 Commissioner of Income-tax (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.
The petitioners preferred further appeal to the Income-tax Appellate tribunal. One of the grounds taken, inter alia, before the Income-tax Appellate Tribunal was illegal rejection of the application under rule 46A by the Commissioner of Income-tax (Appeals). The petitioners also moved applications, dated March 6, 1996 and May 10, 1996, both under rule 29 of the Income-tax (Appellate Tribunal Rules, 1963, seeking admission by way of additional evidence before the Income-tax Appellate Tribunal of the very same set of documents which formed the subject-matter of application under rules 46A before the Commissioner of Income-tax (Appeals).
The appeals came up for hearing on October 23, 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 (Appellate Tribunal) Rules is to be disposed of first."
Thereafter, the matter was adjourned. The appeals again came up for hearing on December 2, 1996. However, the constitution of the Bench was different in the sense that the two members sitting on the Bench on December 2, 1996, were not the same as were sitting on October 23, 1996.
The appeals were argued on the merits. By a common order, dated January 3, 1997, the appeals were dismissed. .
It is pertinent to note that the order, dated January 3, 1997, does not dispose of the petitioners' applications under rule 29 abovesaid. A bare reading of the order reveals that it does not take note of the said applications or of the order, dated October 23, 1996. It is also clear that learned counsel appearing for the petitioners before the Tribunal did not also invite the attention of the Tribunal to the order, dated October 23, 1996, or to the pendency on record of the applications under rule 29 abovesaid. These facts form the foundation for the controversy arising for decision before this Court in these petitions.
On February 5, 1997, the respective petitioners moved an application before the Tribunal in each of the four appeals. The applications do not mention the provision of law whereunder they were being filed. In the application, the petitioners have pointed out to a grievous mistake having occurred in the order of the Tribunal, dated January 3, 1997, "(i) by discussing the merits of section 68 when no submissions were required to be made by either side, as announced in the open Court, (ii) by ignoring the law laid down by the Supreme Court of India". The petitioners referred to the decision of the Supreme Court in CIT v. Kannan Kunhi (1973) 87 ITR 395 and made the following prayer:
"It is, therefore, respectfully prayed that this Tribunal may be pleased to delete the passage in para. 10 of the order, dated January 3, 1997, of this Tribunal, as extracted hereinabove, and after deleting the same, adjudicate the propriety of inclusion of the Oft in the total income of the appellant by rehearing the matter and render justice to the applicant. Amongst the four assessees, one is a lady and the other two are minor daughters and they cannot possibly have any source of income even on suspicion and so is the position of the male person who is carrying on his activities only in India." (emphasis supplied)
As already stated, in the above-said application, dated February 4, 1997, filed on February 5, 1997, the petitioners do not specifically refer to the provision 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 April 2, 1997, the petitioners. moved yet another application wherein they have referred to the application filed on February 5, 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 April 2, 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 Civil Procedure Code. In this application, a grievance is raised that the order, dated January 3, 1997, having been passed by over-looking the earlier order, dated October 23, 1996, of. the Tribunal, the order, dated January 3, 1997, deserves to be recalled. A grievance as to the applicability of sections 68 and 69A of the Act was also raised. These were stated to be "very serious errors or mistakes" having crept into the application order of the Tribunal resulting in manifest injustice. Para. 10 of the application deserves to be reproduced which is as under:
"10. The appellant being not a person well-versed in legal exercises had moved by herself an application under section 254 of the Act, dated .February, 1997. Now she has been advised by counsel to substitute this application for the one already filed. Therefore, this may kindly be treated as a proper application made under section 254(2) of the Act and be posted for hearing as early as possible and the application; dated February 5, 1997, submitted earlier be treated as withdrawn and this application may be taken up for hearing and passing necessary orders on Mad 2, 1997, a date fixed for hearing the previous application filed---now withdrawn. To sum up, the following prayers are made:
A. The order of the Tribunal be recalled/rectified/modified for the reasons stated in the foregoing paras. that it suffers from errors which are apparent and vitally affect the decision of the Tribunal in ITR No. 475 (Del) 1996, dated January 3, 1997.
B. The finding that the appellant did not discharge the burden that lay upon her under the provisions. of section 68; 69A and the Tribunals finding on the applicability of section 68 may be recalled.
C. This application be treated as the proper application made under section 254(2) of the Act.
Applicant
Place: New Delhi
Dated : 2nd April, 1997. "
The abovesaid applications seeking to invoke the jurisdiction of the Tribunal under section 254 of the Act were vehemently opposed on behalf of the Department. By order, dated June 27, 1997, both the applications filed on February 5, 1997, and April 4, 1997, on behalf of the petitioners have been rejected.
This is the order, dated June 27, 1997, which is impugned in these petitions. It would be useful to extract and reproduce a few excerpts from the order of the Tribunal which is done as under:
" 13. We have very carefully considered the arguments addressed by both learned counsel for the parties. A very careful and detailed perusal of our log books, which lave been compared inter se, indicates that at the time of hearing of the appeals, counsel for the assessee had not addressed any arguments on the application under rule 29. All his arguments were related to admission of additional evidence under rule 46A before the Commissioner of Income-tax (Appeals). There was not a whisper about application under rule 29. This is now an admitted position. All the same, we did make an offer to 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 May 21, 1997, after the conclusion of hearing under the signature of Shri 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 remains inconclusive are marked 'part-heard' for the sake of continuity by the" same combination. Thus, every time an appeal is fixed for hearing and is adjourned there is no continuity. Each time the appeal hearing is treated as fresh and not a continuation of the earlier hearing. The hearing, therefore, is on the case pleaded before a particular combination and it is on those pleadings that the case is to be founded by the Bench.
13.2 Application under rule 29 is undoubtedly on record. The issue of its being disposed of first would have arisen only if the matter was pleaded. As already emphasised not a word was uttered by Darned counsel for the applicants during the course of hearing of the appeals inviting our attention to the application under rule 29 as pending disposal. Rather as noted in paragraph 8 of the order of the Tribunal, counsel for the applicants only argued on the following counts:
(i) Whether the filing of declaration under the Amnesty Scheme was mandatory or declaratory to enable the appellants becoming entitled to the benefit available under the said Act/Scheme:
(ii) If the benefit as in (i) above cannot be availed of by the appellants, whether the learned Commissioner of Income-tax (Appeals) was justified in not admitting the evidence adduced after the framing of the assessment in support of appellant's claim that the amounts represent non-taxable gifts from abroad, and finally,
(iii) If the answer to issue No. (ii) is in the affirmative, then whether on the basis of the material on record the order of the assessment as also of the learned Commissioner. of Income-tax (Appeals) are acceptable.
13.3 Since the disposal of application under rule 29 in the reply to this M. A. has been linked to the arguments and decision on merits, plain reading of the order, our notes, submissions of counsel clearly indicate that the then learned counsel has argued the case on merits. He not only argued but even replied to the counter of Shri Syali, learned Advocate for the Revenue on merits by trying to distinguish the case of D. C. Rastogi as cited. To contend that no arguments were addressed is factually incorrect in view of the various recording of facts, arguments, replies and conclusion, as highlighted by Shri Syali and amounts to an unsuccessful effort on the part of the petitioner to find some issues to salvage their case. But for the bland statement signed 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 learned counsel was asked to and actually addressed us on the merits of the case para.5.6, he was replied to (paras. 6.5/6.5) and in rejoinder merits were again referred to (para.7) and dealt with by the Bench (paragraphs 10-10.2). ,
13.5 The events from the filing of the first miscellaneous petition in February, 1997, and substitution thereof by miscellaneous application, dated April 2, 1997 (the subject-matter of this order), and to the filing of the written submissions on May 21, 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 the open Court. The stand later was that counsel was not allowed to address on merits (implying that he wanted to do so). Shri Sharma, learned counsel it rejoinder, on instruction took a stand that since evidence was not to be relied upon the impression was that no arguments on merits are called for and hence rule 29 application was not argued and now, in the written resume, dated May 21, 1997, it is submitted that since an order of an earlier Bench existed directing disposal of application under rule 29 first (emphasis supplied), therefore, no arguments were addressed. All this and yet not a word in support from counsel who represented the regular appeal.
13.6 Be that as it may, the rule 29 petition was neither highlighted nor argued. Having opted not to highlight or argue the said petition it cannot be now said that its non-disposal suo motu gives rise to a mistake apparent from record. Disposal of a petition under rule 29 before the present combination of the Bench, even if no order existed was a precondition to disposal of appeal provided it was pressed and a request made. It was not so. To understand as to why the earlier combination of the Bench made the order and what was the necessity to do so, a question was raised by the Bench. Shri Syali explained that even on the earlier occasion an endeavour was made to leave the rule 29 application as a last resort. Since the then combination of the Bench objected to the modus operandi sought to be adopted, an order was passed. It was, thus, plausible that on the subsequent occasion, before the present combination of the Bench, the rule 29 application was not thought worthy of argument as the prime argument was that the same evidence rejected by the Commissioner of Income-tax (Appeals) should have been admitted. No reply was forthcoming to this statement of Shri Syali. In the face of the order of the earlier combination of the Bench it was indeed the duty of counsel to address this Bench first on the rule 29 application if at all the same was desired to be pressed or argued. Admittedly not having done so it cannot now be attributed as a mistake apparent from record to the Tribunal. "
The Tribunal formed an opinion that the non-disposal of the application under rule 29 would indeed not be a mistake much less one apparent from the record. Vide para. 14.7 the Tribunal concluded as under:
" 14.7 In the circumstances, the appellants having argued on merits, not having highlighted/argued petition under rule 29 and the Tribunal in its order having dealt with in extenso the letter February 21, 1995, there is no mistake apparent from record calling for rectification under section 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."
Learned counsel for the petitioners has submitted that by order, dated October 23, 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 January 3, 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 from the failure of the Tribunal to dispose of the application under rule 29. The order, dated January 3, 1997, deserved to be recalled followed by a hearing afresh and then decision in the appeals.
The prayer made on behalf of the petitioners has been vehemently opposed on behalf of the respondent. It is to be noted that Mr. G. C. Sharama learned senior counsel appearing for the petitioners and Mr. M S. Syali, learned counsel appearing for the respondents, before this Court are the very same counsel who had appeared before the Tribunal and argued for the parties leading to the decision, dated June 27, 1997. Mr. M. S. Syali was counsel appearing for the Department before the Tribunal during all the proceedings including those leading to the passing of the order, dated January 3, 1997. It is stated in the counter and highlighted with emphasis by Mr. Syali, learned counsel for the respondent, that the order, dated October 23, 1996, is being interpreted with a twist by the petitioners and it must be appreciated and interpreted in the light of the factual background of the cases at hand. It was submitted by Mr. Syali that before the Tribunal, the petitioners were taking time, again and again proposing to argue-the appeals first on merits and reserving arguments on the application under rule 29 to be made only if they did not succeed in the appeals on the pleas raised otherwise. In the background the Tribunal had directed the application under 29 being taken up first. The date on which the appeals carne up for hearing on merits, it was for the appellants and/or their counsel to invite the attention of the Tribunal to the order, dated October 23, 1996, as also, the pendency of the application under rule 29 and press the application for hearing and decision thereon, The very fact that the appellants and their counsel did not even invite the attention of the Tribunal to the application, much less press the same for decision, it must be assumed that the application was either not pressed or was abandoned; it was no longer obligatory on the part of the Tribunal to have suo motu noticed the pendency of the application and then rendered decision there on. This is without regard to the fact whether the constitution of the Bench hearing the appeals on December 2, 1996, was the same or not as on October 23, 1996.
On February 5, 1997, the petitioners moved an application under section 256(1) of the Act seeking reference to the High Court on several questions of law accompanied by a statement of case arising out of the order of the Tribunal, dated January 3, 1997.
On April 4, yet another application was filed on behalf of the petitioners wherein they have sought for leave of the Tribunal to amend, the application, dated February 5, 1997 , so as to amend/modify/substitute proper question 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 section 68/69A of the impugned sum which was received as gift according to the assessee, all form the subject-matter of the question 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 January 3, 1997, is in violation of the principles of natural justice and consequently null and void in law?
(1)(b) Whether the Tribunal did not err in law in not considering the evidence filed before the Commissioner of Income-tax (Appeals) 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 Tribunal was justified in holding that the Commissioner of Income-tax (Appeals) did not err in law in declining to allow the appellants to produce the additional evidence mentioned in her letters, dated July 28, 1995, September 22, 1995, October 26, 1995 and October 27, 1995, which by themselves justified production of the additional evidence?
(4) Whether the Tribunal was justified in law in deciding the appeal on merits without first disposing of the applications made under rule 29 of the Income-tax (Appellate Tribunal) Rules?
(6) Whether the Income-tax Appellate Tribunal exceeded its jurisdiction in deciding the appeal on merits when the sole question was whether the Commissioner of Income-tax (Appeals) should or should not have allowed the assessee to produce the evidence in support of the claim that the impugned amount so received was only a gift not liable to be treated as income?"
In between the filing of the abovesaid two applications yet another important event had taken place. On March 18 1997, Mrs. Jyotsna Suri, the petitioner in C.W.P. No. 2799 of 1997 had filed a writ petition of her own challenging the order, dated January 3, 1997, passed by the Income-tax Appellate Tribunal and seeking its quashing followed by a direction to rehear the appeal on the merits after recalling the order, dated January 3, 1997. We have called for the record of that C.W.P. No. 1255 of 1997 (Mrs. Jyotsna Suri v. ITAT) and perused the same. The contents of the petition show the following question of law having been specifically raised before. the High Court inviting its adjudication (vide para.7 of the said writ petition):
"(a) Whether the order of the Income-tax Appellate Tribunal, dated January 3, 1997, which is passed in negation of the principles of natural justice is liable to be struck down straightaway?
(b) Whether the order of the Income-tax Appellate Tribunal sustaining an addition of Rs.51,55,968 to the total income of the petitioner is not liable to be quashed on merits where it has failed to dispose of first an application filed under rule 29 of the Income-tax (Appellate Tribunal) Rules, (whereby the petitioner-appellant sought to lead evidence before the Tribunal which went to the root of the controversy before the Tribunal) and still had proceeded to decide the appeal 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 46-A of the Income Tax Rules?"
The petition came up for hearing on the question of admission before the Division Bench of the High Court on March 21, 1997. 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."
The petitioner, Smt. Jyotsna Suri filed an SLP before the Supreme Court feeling aggrieved by the above-said order. Their Lordships dismissed the SLP by a speaking order which reads as under:
"The High Court has rejected the writ petition of the petitioner on the ground that she has an alternative remedy under section 156(1) of the Income-tax Act. We do not see any reason to interfere. The special leave petition is dismissed. "
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 and that remedy having also been availed of the present petitions do not lie.
On August 27, .1997, the petitioner filed an additional affidavit pointing out to the Court that the factum of filing of the application under section 256 was not stated in the writ petition by the petitioner as the petitioner did not consider it to be relevant. However, on August 21, 1997, (i.e., during the pendency of the present petition); the petitioner has addressed a letter to the Income-tax Appellate Tribunal seeking question No.4 in the amendment application, dated April 2, 1997, filed on-April 4, 1997, to be deleted. What. has been the fate of such a prayer for deleting question No.4 from the application under section 256 pending before the Tribunal is not known. Obviously, this has been done to defend the petitioners from the very bottom of the maintainability of these petitions being knocked out on the ground of alternative remedy having been not only available but also already availed of by the writ petitioners.
So much about the statement of facts in their chronological order. We would now proceed to notice the contentions raised by learned counsel for the parties and deal with them seriatim.
According to learned counsel for the petitioners, the Tribunal has committed a jurisdictional error in overlooking its own order, dated October 23, 1996, and proceedings to dispose of the appeals on the merits. The order disposing of the appeals on the merits without first disposing of the application for admitting additional evidence is without jurisdiction, at least passed with material irregularity in exercise of jurisdiction and in any case cannot be called 'disposal of the appeals judicially and consciously. The Tribunal has also failed to exercise the jurisdiction vesting in it by not recalling the order, dated January 3, 1997, and rejecting the applications, dated February 5, 1997, and April 2, 1997 by order, dated June 27, 1997. The impugned order, dated June 27, 1997, deserves to be quashed followed by setting aside of the order, dated January 3, 1997 as well.
Learned counsel for the respondent has submitted that the petitioners 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 September 12, 1997, even in C.W.P. No. 1255 of 1997 by this Court and maintained by the Supreme Court. The impugned order was also defended on the merits.
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 Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal by way of additional evidence, is not in dispute. 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 riot in dispute, why not permit, the petitioners assessees to bring the documents on record and thereafter the authorities decide on the legal plea of the petitioners-assessees. We put across our view point to learned counsel for the respondent but learned counsel clearly gave vent to the stand firmly taken by the Revenue that it was not agreeable to the documents being admitted in additional evidence inasmuch as the jurisdiction of the appellate authorities was circumscribed by the statutory rules excluding admission of additional evidence unless and until the prerequisites for exercise of such jurisdiction were satisfied which were not in the cases at hand, even by barely perusing the contents of the applications seeking the admission of additional evidence. Moreover, the admission of documents will be an exercise in futility inasmuch as the petitioners-assessees were not going to succeed in denting the order of the assessment even if the documents were to be taken on record. The order of the Commissioner of Income-tax (Appeals) already reflects an opinion that admission of documents would not result in the order of assessment being altered as the very requirement of the scheme was not satisfied. Learned counsel for the respondent told us plainly that for the forgoing reasons the Department was contesting the petitions on the merits and on all counts and the present ones were not cases fit for showing indulgence to the petitioners guided by equitable considerations merely. We were also reminded of well-settled limitations on the jurisdiction of the High Court under Articles 226-227 of the Constitution whereunder the High Court would not interfere with the orders and proceedings of the statutory Tribunals merely for the asking. We, therefore, proceed to dispose legally, of the legal pleas put forth by the parties before us.
As already stated, the appeals were disposed of by the Tribunal by a common order, dated January 3, 1997. Only Mrs. Jyotsna Suri, one out of the four assessees, filed C.W.P. No. 1255 of 1997 challenging the order, dated January 3, 1997, in the writ jurisdiction of this Court. It was a test case filed. If the petition had been entertained, presumably the other three assessees would have followed the path. Even if Mrs. Jyotsna Suri had succeeded in securing quashing of the order, dated January 3, 1997, of the Tribunal, the benefit of the order would have accrued to all the three other assessee. She failed. All the pleas available to the petitioners on which challenge was laid or could have been laid to the order, dated January 3, 1997, formed the subject-matter of C.W.P No. 1255 of 1997. The petition has been dismissed as not maintainable on the ground of availability of alternate efficacious remedy. In our opinion, the order, dated March 21, 1997, passed by the High Court in C.W.P No. 1255 of 1997 filed by Mrs. Jyotsna Suri would bind all the four assessees not only as a precedent but also on the 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 March 21, 1997, passed in C.W.P. No. 1255 of 1997 on the plea that they being not the writ petitioners therein were not bound by the above-said 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 the other three assessees had also filed their own writ petitions. In Vishnu Trader v. State of Haryana (1995) Suppl. I SCC 461, their Lordships have held "the need of 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".
We are, therefore, of the opinion that so far as the order, dated January 3, 1997, is concerned, the only remedy available to the petitioners is by invoking the 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 petitioner against the order, dated January 3, 1997, from being raised before this Court in exercise of its writ jurisdiction.
The abovesaid being the position of law, we would confine ourselves in this petition to the plea of the petitioners against the order, dated June 27, 1997, only and test the same if the applications, dated February 5, 1997, and April 4, 1997, were so rejected by the Tribunal as to call for interference in exercise of writ jurisdiction of this Court.
As stated earlier, the application, dated February 5, 1997, is not labelled---showing the provision of law under which it was filed. The later application, dated April 4, 1997, calls the application, dated February 5, 1997, as having been filed under section 254(2) of the Act. Without going by the label assigned or not so assigned we would examine the real provisions of law under which the relief could have been claimed by and allowed to the petitioners and in its light assess the worth of the. prayers made in the applications".
At the very outset, let us make it clear that legality or propriety or otherwise of the order, dated January 3, 1997, could not have been considered by the Tribunal by way of review. The Income-tax Appellate Tribunal is a creature of the statute. It has not been vested with the review jurisdiction by the statute creating it. The Tribunal does not have any power to review its own judgment or orders. (See Dr. Kashinath G. Jalmi v. The Speaker, AIR 1993 SC 1873; (1993) 3 JT 594 (SC); Dr Smt. Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, AIR 1987 SC 2186: Patel Narshi Thakershi v. Pradyumansinghji Arjunsindhji, AIR 1970 SC 1273; Manoharlal Verna v. State of MP. AIR 1970 MP 131; CIT v. ITAT (1994) 206 ITR 126 (AP). In the purported exercise of inherent power the Tribunal cannot rehear a case on its merits; CIT v. K. L. Ghotia (1990) 182 ITR 361 (Delhi).
Shri G. C. Sharma, learned senior Advocate, who appeared for the petitioners, did not also dispute the abovesaid proposition. Rightly he did not urge that the Tribunal could have reviewed its order. Eloquently and persuasively he put forth the following two propositions, pressing them alternatively and `submitting that the interest of justice demanded 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: and 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 February 5, 1997 and April 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 the judicial functions had 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 subsection (2) of section 254 of the Act.
As held by their Lordships of the Supreme Court in A. R. Antulay v. R. S. Nayak, AIR 1988 SC 1531 (para. 130), motions to set aside the judgment are permitted where, for instance (i) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all and was wrongly shown as served or in ignorance of the fact that a necessary party had died and the estate was not represented; (ii) a judgment obtained by fraud tending to prejudice a non-party.
In Corpus Juris Secundum (Vol. XIX) under the Chapter "Judgment---Opening and Vacating" (paras. 265 to 284 at pages 487-510)- the law on the subject has been stated. The grounds on which the Courts may open or vacate their judgments are generally matters which render the judgment void or which are specified in statutes authorising such actions., Invalidity of the judgment of such nature as to render it void is a valid ground for vacating it at least if the invalidity is apparent on the face of the record. A material and substantial irregularity which has not been cured or waived is a ground for opening or vacating a judgment if the complaining party is adversely affected thereby. Fraud or collusion in obtaining the judgment is a sufficient ground for opening or vacating it. A judgment secured in violation of an agreement not to enter judgment may be vacated on that ground. However, in general a judgment will not be opened or vacated on grounds which could have been pleaded in the original action. A motion to vacate will not be- entered when the proper remedy is by some other proceedings, such as by appeal. The right to vacation of a judgment may be lost by waiver or estoppel. Where a party injured acquiesces in the rendition of the judgment or submits to it, waiver or estoppel results.
The law hasbeen well-stated by the Punjab High Court in Mangat Ram Kuthiala v. CIT (1960) 38.ITR 1 in the following terms (headnote):
..It was a settled rule that a Judicial Tribunal could recall and quash its own order in exceptional cases when it was shown that it was obtained by fraud or by palpable mistake or was made in utter ignorance 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.
In the cases at hand, the order of the Tribunal, dated January 3, 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 worst 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.
In para. 12 (at pages 404, 405, 406) 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 Tribunal in its order. He stated at the Bar that the petitioner's counsel had neither referred to (much less argued on) the application under rule 29 before the Tribunal nor invited the attention of the Tribunal to the order; dated October 23, 1996, passed by the earlier coram. Learned counsel for the petitioners has also been very fair while not disputing the correctness of the narration of events touching the proceedings as recorded by the Tribunal in its impugned order.
It is now well-settled law that the statement of facts recorded by a Court or quasi judicial Tribunal in its proceedings as regards the matters which transpired during the hearing before it would not be permitted to be assailed as incorrect, unless steps are taken before the same forum. It is not open to the parties or counsel to say that the proceedings recorded by the Tribunal are incorrect (See Bhagwati Prasad v. Delhi State Mineral Development Corporation, AIR 1990 SC 371). That being the law, it necessarily follows from the statement of facts recorded by the Tribunal that the petitioners had acquiesced in the appeal being decided on the merits without insisting on the application under rule 29 being decided first. The principle of waiver and estoppel would exclude the right of the petitioner seeking a recall of the order assuming it would have been permissible to invoke the jurisdiction of the Tribunal to recall its order otherwise. The first contention of learned counsel of the petitioners, therefore, fails.
Could any relief have been allowed to the petitioners in exercise of jurisdiction conferred by section 254(2) of the Act amending the order passed by the Tribunal with a view to rectify any mistake apparent from the record? The language of the provisions is clear. The foundation for exercising the jurisdiction is "with a view to rectify any mistake apparent on the record" and the object is achieved by "amending any order passed by it". The power so conferred 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.
In T. S. Balaram, ITO v. Volkart Bros. (1971) 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 a debatable point of law is not a mistake apparent from the record, (Also see M. Shanmugam v. S. R. V. S. (P.) Ltd. AIR 1963 SC 1626, Satyanarayan Laxminarayan, Hegde v. Mallikarjun Bhavanappa Tirumale, AIR 1960 SC 137, and a recent Division Bench decision of this Court in CIT v. Euraia Publishing House (P.) Ltd. (1998) 232 ITR 381 (ITR No. 52 of 1980, decided on October 28, 1997)).
In the case at hand, the circumstances in which the order, dated October 23, 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 the merits and strategically reserving submissions on the application to be made in the event of their failing on-the merits: that was the effort of the petitioners which was sought to be stalled by the Tribunal. In the latter case it was obligatory on the part of the petitioners to invite the attention of the Tribunal to its earlier order and then press the application for hearing. It is also a matter of controversy whether the Tribunal committed a procedural or jurisdictional error in not disposing of the application or the application should be deemed to have been abandoned as not pressed by the petitioners. Before us learned counsel for the parties have made long-drawn submissions on these aspects highlighting the issue from every angle. One can conceivably have two opinions on these issues. Thus, the mistake (assuming it was committed) ceased to be an obvious and patent mistake. Section 254(2) of the Act was not, therefore, attracted.
As both the contentions raised on behalf of the petitioners have failed, we are of the opinion that there is no such jurisdictional error or irregularity in exercise of jurisdiction committed by the Tribunal passing the order, dated January 3, 1997, nor such a failure to exercise the jurisdiction in rejecting the applications, dated February 5, 1997, and April 2, 1997, by order, dated June 27, 1997, as to warrant exercise of writ jurisdiction of the High Court.
While meeting the preliminary objection raised by counsel for the respondent as to the availability of efficacious alternative remedy -to the petitioners, Shri G. C. Sharma, learned senior counsel for the petitioner, had submitted that remedy under section 256 is not available against an order rejecting an application under section 154 (2). He had invited the attention of the Court to a number of decisions out of which it would suffice to mention a few: Popular Engineering Co. v. CIT (1983) 140 ITR 398 (MP), CIT ITAT (1994) 206 ITR 126 (AP) and Asst. CIT v. Dr. Ved Prakash (1994) 209 ITR 448 (AP).
We have carefully considered all the decisions cited by, learned counsel for the petitioners. There appears to be a divergence of opinion amongst other High Courts, but so far as the Delhi High Court is concerned, the law is settled by at least three decisions, namely, Punjab National Bank v. ITAT (1990) 87 CTR 122 (Delhi), CIT v. K. L. Bhatia (1990) 182 ITR 361 (Delhi), ITO v. President, ITAT (1998) 232 ITR 420 (Delhi) (C. W. No.1010 of 1997), decided do March 10, 1997. We may quote only from Punjab National Bank's case (1990) 87 CTR 122 (Delhi) (page 123):
"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 Article 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 Article 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."
Even if the petitioners are aggrieved by the order, dated June 27, 1997 rejecting their applications under section 254 (2) of the act, the remedy of the petitioners lies in filing an application under section 256(1) of the Act. The petitioners have already moved an application for amending/modifying the questions of law earlier suggested. As brought out by the additional affidavit, dated August 26, 1997, the petitioners have also moved a letter, dated August 21, 1997, seeking withdrawal of question No. 4. What happened to this letter is not known. The petitioners would be better advised not to, press this letter and allow the Tribunal to deal with the suggested question No. 4 as well. The petitioners are at liberty to invoke the Tribunal's jurisdiction under section 256 seeking reference on such questions of law as in their submission arise out of the order, dated June 27, 1997. They may seek condonation of delay in moving the application also seeking exclusion of time lost in the proceedings before this Court. Such prayer for condonation of delay may be considered by the Tribunal sympathetically.
We cannot resist observing that the petitioners are attempting at riding two horses at a time. They are parallel pursuing the remedy under section 256 of the Income-tax Act before the Tribunal and under Article 226/227 of the Constitution before the High Court, agitating the very same issues before two different for a simultaneously. They must thank themselves for creating a proverbial situation of riding two horses at a time and the proverbial resin; has to follow--they must fall. We are constitutionally obliged to deny indulgence in writ jurisdiction to the petitioners on the ground of availability of efficacious alternative remedy to them. By way of abundant caution we place on record that the finding on various questions of law recorded by us in this judgment are for the purpose of holding that the petitioners have an alternative efficacious remedy available under section 256 of the Act. We do not intend to pre-empt the jurisdiction of the Tribunal to hear and dispose of the petitioner's application under section 256 on its own merits and taking such. view of the facts and law as it may deem fit to take un-obsessed by any of the findings recorded hereinabove. Subject to this observation, the petitions are dismissed though without any order as to costs.
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.
Assuming that there has been some omission on the part of 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. A 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.
Admittedly, in this case, the notice under section 68 of the Act was issued by the Assessing Officer only on February 22, 1995, and he was informed by the assessee that the amount was received as a gift. Even the photocopies of the bank drafts received from abroad were produced. Thereafter, the case was adjourned by only six days requiring the assessee to give gift deed. The assessee filed the gift deed alongwith a declaration by the donor duly sworn before the Consulate-General of India at Dubai on March 31, 1995. But, in the meantime, the Assessing Officer had already passed the assessment order on March 27, 1995, and finalised it on March 28, 1995, although he had the time available up to March 31, 1995, to do so. An appeal was filed alongwith the plea under rule 46A of the Income-tax Rules praying for including the documents and certificates regarding remittances which were obtained by the assessee from the banks abroad. In reply to a question, it was not disputed by Mr. Syali that under rule 46A, the documents could be placed and taken on record by the appellate authority. For the reasons to be stated, it is nobody's case that the documents were not relevant or material and necessary for rendering the judgment properly. However, for the reasons already noticed above by my learned brother, the documents were not taken on record and the indulgence in this behalf by the appellate authority was declined by being obsessed with extraneous and procedural considerations. In reply to another question, Mr.. Syali did not dispute the genuineness of the documents produced. He also conceded that in the penalty proceedings, which have since been initiated, the assessee can bring on record these documents and the authority concerned will look into those and the benefit thereof, if available, would be available to the assessee in his defence of penalty proceedings and that the Assessing Officer will not be bound by the impugned decisions. I may further add that the authorities below have not to forget that the rules of procedure are meant to promote the cause of justice and not vice versa. The procedural rules are the handmaiden of justice which is the mistress. In the present case, I find that the authorities at no point of time have cared to consider the relevance, authenticity or desirability of looking into the documents before rendering their decision. Looking to the circumstances and the fact that procurement of the certificates from the banks abroad normally would take time and the fact that from March 21, 1995, till March 31, 1995, the documents were obtained and filed, it shows that there was no lack of diligence on the part of the assessee and these were the factors which would 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 Division Bench decision of this Court in the case of Punjab National Bank's case (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), 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 remedy-less and it will be open in such circumstances for the party to invoke the jurisdiction of this Court under Article 226/227 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 the petition under section 256(1) coupled with application for condonation of delay against the impugned order, if and when so moved, which will be decided by the authority concerned in accordance with law.
M.B.A./3238/FC Order accordingly.