R. C. Lahoti, J.

1. This common order shall govern the disposal of 4 civil writ petitions, namely CWP 2796/97, Ms. Deeksha Suri v. ITAT, CWP 2797/97 Ms. Divya Suri v. ITAT, CWP 2798/97 Sh. Lalit Suri v. ITAT, and CWP 2299/97 Smt. Jyotsna Suri 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 facts in the case of Smt. Jyotsna Suri which would be taken note of at its appropriate place.

2. The facts in brief, which for the sake of convenience are being stated in the succeeding paragraphs from the record of CWP 2796/97, Ms. Deeksha Suri v. ITAT.

3. 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:

NameDate of filingIncome declared

Shri Lalit Suri21.8.1992Rs. 89,490 including salary from Bharat Hotels Ltd. (Rs.1,13,400) .

Mrs. Jyotsna Suri28.8.1992Rs. 1,01,460 including salary from Bharat Hotels Ltd. (Rs.1,15,200)

Miss Divya Suri28.8.1992Rs. 91,993 including income from other sources (Rs.98,993)

Miss Deeksha Suri28.8.1992Rs. 80,778 including income from other sources (Rs. 87,777)





4. The assessments were framed on 28.3.95 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 69-A. 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 22.11.91 under the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (lmmunities & Exemptions) Act, 1991 and the scheme framed thereunder (hereinafter the Scheme, for short) which were not income

Shri Lalit SuriUS $ 3,00,000 equivalent toRs. 77,33,952

Mrs. Jyotsna SuriUS $ 2,00,000 equivalent toRs. 51,55,968

Miss Divya SuriUS $1,50,000 equivalent toRs. 38,66,976

Miss Deeksha SuriUS $ 1,50,000 equivalent toRs. 38,66,976





5. The Assessing Officer issued notices under Sections 143(2) and, 142(1) and noted that the returns filed by the assessees 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 GSF No. 594 dated 28.9.91 of the Reserve Bank of India and the return only contained photo copy of the instrument of remittance. He, therefore, called upon the assessees to file copy of the prescribed declaration. The assessees failed to do so in spite of several adjournments sought for the purpose. The AO wrote a letter to the Bank on 13.1.1995 asking for a copy of the declaration. The Bank in its reply dated 18.1.1995 informed the Assessing Officer that no declaration under the Scheme had been filed. In the opinion of Assessing Officer, the assessee having failed to discharge the burden of proof regarding the source of the remittance, proceeded to treat the receipts as unexplained Cash Credit under Section 68 of the Act.

5.1. By letter dated 21.3.1995 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 5.2.95 was not filed before the conclusion of the assessment proceedings but the same was filed on 31.3.1995 with the Assessing Officer of which the Assessing Officer refused to take notice as the assessment had already stood concluded on 27.3.95 and assessment framed on 28.3.95.

6. The assessees went in appeal before the CIT (Appeals) contesting the additions made. The submission of the assessees before the CIT (Appeals) was that the amount involved did not represent income and the filing of declaration was a formality, the provision being directory and not mandatory in nature. In appeal, the petitioners also moved application under Rule 46-A 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 46-A 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 46-A by the CIT (Appeals). The petitioners also moved applications dated 6.3.96 and 10.5.96 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 hearing on 2.12.96. However, the constitution of the Bench was different in the sense that the two Members sitting on the Bench on 2.12.96 were not the same as were sitting on 23.10.96. The appeals were argued on merits. By a common order dated 3.1.97, the appeals were dismissed.

9. It is pertinent to note that the order dated 3.1.97 does not dispose of the petitioners applications under Rule 29 above said. A bare reading of the order reveals that it does not take note of the said applications or of the order dated 23.10.96. It is also clear that the learned Counsel appearing for the petitioners before the Tribunal did not also invite the attention of the Tribunal to the order dated 23.10.96 or to the pendency on record of the applications under Rule 29 above said. These facts form the foundation for the controversy arising for decision before this Court in these petitions.

10. On 5.2.97, the respective petitioners moved an application before the Tribunal in each of the four appeals. The applications do not mention the provision of law where under 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 3.1.97 (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 Honble Supreme Court of India". The petitioners referred to the decision of the Supreme Court in CIT v. K.S. Kannan Kunhi, 87 ITR 395 [LQ/SC/1972/453] and made the following prayer:

"It is, therefore, respectfully prayed that this Honble Tribunal may be pleased to delete the passage in Para 10 of the order dated 3rd January, 1997 of this Honble Tribunal, as extracted herein above, and after deleting the same, adjudicate the propriety of inclusion of the gift in the total income of the appellant by re-hearing 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)

10.1. As already stated, in the above said application dated 4.2.97 filed on 5.2.97, 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 2.4.97, the petitioners moved yet another application wherein they have referred to the application filed on 5.2.97 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 2.4.97 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 3.1.97 having been passed by over-looking the earlier order dated 23.10.96 of the Tribunal, the order dated 3.1.97 deserves to be recalled. Grievance as to the applicability of Sections 68 and 68A of the Act was also raised. These were stated to be "very serious error or mistake" having crept into the appellate order of the Tribunal resulting in manifest injustice. Para 10 of the application deserves to be reproduced which is as under:

"10. The appellant being not a person well versed in legal exercises had moved by herself a application under Section 254 of the Act dated 5.2.1997. Now she has been advised by the 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 5.2.1997 submitted earlier be treated as withdrawn and this application may be taken up for hearing and passing necessary orders on May 2, 1997a 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 3.1.1997.

(B) The finding that the appellant did not discharge the burden that lay upon her under the provisions of Sections 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

11. The above said applications seeking to invoke jurisdiction of the Tribunal under Section 254 of the Act were vehemently opposed on behalf of the Department. By order dated 27.6.97, both the applications filed on 5.2.97 and 4.4.97 on behalf of the petitioners have been rejected.

12. This is the order dated 27.6.97 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 the learned Counsels for the parties. A very careful and detailed perusal of our Log Books, which have been compared inter se, indicates that at the time of hearing of the appeals, the 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 46-A before the CIT (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 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 remained 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 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 found 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 the learned Counsel of 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 the 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 enabIe 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 CIT (A) was justified in not admitting the evidence adduced after the framing of the assessment in support of appellants 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 material on record the order of the assessment, as also of the learned CIT (Appeals) are acceptable.

13.3. Since the disposal of application under Rule 29 in the reply to this N.A. has been linked to the arguments and decision on merits a plain reading of the order, our notes, submissions of the Counsel clearly indicates that the then learned Counsel has argued the case on merits. He not only argued but even replied to the counter of Mr. Syali, the 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 Mr. 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 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 (paragraph 10-10.2)

xxx xxx xxx

13.4. The events from filing of the first miscellaneous petition in February, 1997 and substitution thereof by miscellaneous application dated 2nd April, 1997 (the subject matter of this order and to the filing of written submissions on 21.5.1997 after conclusion of the hearing indicate a shift of stand on the part of the assessee. Originally the assessee submitted that no submissions on merits were made as it was announced in open Court. The stand later was that the Counsel was not allowed to address on merits (implying that he wanted to do so). Mr. Sharma, the learned Counsel in rejoinder, on instructions took a stand that since evidence was not to be 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 21.5.1997 it is submitted that since an order of 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 the Counsel who represented the regular appeal.

13.5. Be that as it may, 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 pre-condition 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. Mr. Syali explained that even on the earlier occasion an endeavour was made to leave 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 subsequent occasion before present combination of the Bench, Rule 29 application was not thought worthy of argument as the prime argument was that the same evidence rejected by the CIT (Appeals) should have been admitted. No reply was forthcoming to this statement of Mr. Syali. In the face of the order of the earlier combination of the Bench it was indeed the duty of the Counsel to address this Bench first on 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.

13.6. 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:

"13.7. 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 with the letter dated 21.2.1995, 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.

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 3.1.97 cannot be said to have judicially and effectively disposed of the appeals. This has occasioned grave injustice to the petitioners. The appeals must be deemed to be pending for the failure of the Tribunal to dispose of the application under Rule 29. The order dated 3.1.97 deserved to be recalled followed by a hearing afresh and then decision in the appeals.

14. The prayer made on behalf of the petitioners has been vehemently opposed on behalf of the respondent. It is to be noted that Mr. G.C. Sharma, the learned Senior Counsel appearing for the petitioners and Mr. M.S. Syali, the learned Counsel appearing for the respondent before this Court are the very same Counsel who had appeared before the Tribunal and argued for the parties leading to the decision dated 27.6.97. Mr. M.S. Syali was the Counsel appearing for the department before the Tribunal during all the proceedings including those leading to the passing of the order dated 3.1.1997. It is stated in the counter and highlighted with emphasis by Mr. Syali, the learned Counsel for the respondent that the order dated 23.10.96 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 this background, the Tribunal had directed the application under Rule 29 being taken up first. The date on which the appeals came 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 23.10.96 as also to 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 thereon. This is without regard to the fact whether the constitution of the Bench hearing the appeals on 2.12.96 was the same or not as was on 23.10.96.

15. On 5.2.1997, 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 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 68/69 A of the impugned sum which was received as gift according to the assessee, all form subject matter of questions suggested by the petitioners themselves. The following questions are also sought to be referred which are pertinently relevant for the purpose of the present petitions and hence are reproduced verbatim:

1(a). Whether the order of the Tribunal dated 3.1.1997 is in violation of the principles of natural justice and consequently null and void in law

1(b). Whether the Tribunal did not err in law in not considering the evidence filed before the CIT(A) specified below before proceeding to adjudicate on grounds of appeal and thus committing a breach in the realm of natural justice.

(description of documents not reproduced)

3. Whether the Tribunal was justified in holding that CIT(A) did not err in law in declining to allow the appellants to produce the additional evidence mentioned in her letters dated 28.7.1995, 22.9.1995, 26.10.1995 and 27.10.1995 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 CIT(A) 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

17. In between the filing of the above said two applications yet another important event had taken place. On 18.3.1997, Mrs. Jyotsna Suri, the petitioner in CWP No. 2299/97 had filed a writ petition of her own challenging the order dated 3.1.1997 passed by ITAT and seeking its quashing followed by a direction to re-hear the appeal on merits after recalling the order dated 3.1.1997. We have called for the record of that CWP 1255/97 (Mrs. Jyotsna Suri v. ITAT and Ors.) and perused the same. The contents of the petition show the following questions of law having been specifically raised before the High Court inviting its adjudication (vide para 7 of the said writ petition) :

"A. Whether order of the ITAT dated 3.1.1997 which is passed in negation of the principles of natural justice is liabIe to be struck down straightaway

B. Whether the order of the ITAT 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 lncome-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 "

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. Jyotsana 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:

"High Court has rejected the writ petition of the petitioner on the ground that she has an alternative remedy under Section 256(1) of the Income-tax Act. We do not see any reason to interfere. The Special Leave Petition is dismissed."

18. When the present petitions came up for hearing before this Court, on behalf of the respondent a preliminary objection was raised to the maintainability of the petitions submitting that an alternate efficacious remedy by filing an application under Section 256(1) being available to the petitioners and that remedy having also been availed, the present petitions do not lie.

19. On 27.8.1997, 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 21.8.1997 (i.e. during the pendency of the present petition), the petitioner has addressed a letter to the ITAT seeking question No. 4 in the amendment application dated 2.4.1997 filed on 4.4.97 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 by the writ petitioners.

20. So much all out the statement of facts in their chronological order. We would now proceed to notice the contentions raised by the learned Counsel for the parties and deal with them seriatim.

21. According to the learned Counsel for the petitioners, the Tribunal has committed a jurisdictional error in overlooking its own order dated 23.10.1996 and proceeding to dispose of the appeals on merits. The order disposing of the appeal on 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 3.1.1997 and rejecting the applications dated 5.2.1997 and 4.4.97 by order dated 27.6.97. The impugned order dated 27.6.97 deserves to be quashed followed by setting aside of the order dated 3.1.197 as well.

22. The learned Counsel for the respondent has submitted that 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 byway 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 viewpoint to the learned Counsel for the respondent but the learned Counsel clearly gave vent to the stand firmly taken by the Revenue that it was not agreeable to the document being admitted in additional evidence inasmuch as the jurisdiction of the Appellate Authorities was circumscribed by statutory rules excluding admission of additional evidence unless and until the pre-requisites for exercise of such jurisdiction were satisfied which were not in the cases at hand, even by barely 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 petitioner 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 CIT (Appeals) already reflects an opinion that admission of documents would not result in the order of assessment being altered as the very requirement of scheme was not satisfied. The learned Counsel for the respondent told us plainly that for the foregoing reasons the Department was contesting the petitions on merits and on all counts and the present one were not the 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 High Court under Articles 226-227 of the Constitution where under the High Court would not interfere with the orders and proceedings of statutory Tribunals merely for asking. We, therefore, proceed to dispose of legally, the legal pleas put forth by the parties before us.

24. As already stated, the appeals were disposed of by the Tribunal by a common order dated 3.1.1997. Only Mrs. Jyotsna Suri, one out of the four assessees, filed CWP 1255/97 challenging the order dated 3.1.1997 in the writ jurisdiction of this Court. It was a test case filed. If the petition would have been entertained, presumably the other three assessees would have followed the path. Even if Mrs. Jyotsna Suri would have succeeded in securing quashing of the order dated 3.1.1997 of the Tribunal the benefit of the order would have accrued to all the three other assesses. She failed. All the pleas available to the petitioners on which challenge was laid or could have been laid to the order dated 3.1.1997 formed subject matter of CWP 1255/97. The petition has been dismissed as not maintainable on the ground of availability of alternate efficacious remedy. In our opinion, the order dated 21.3.1997 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 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 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 Lordships have held "the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment requires that all similar matters should receive similar treatment.

25. We are, therefore, of the opinion that so far as the order dated 3.1.1997 is concerned the only remedy available to the petitioners is by invoking jurisdiction of the Tribunal under Section 256 of the Income-tax Act which the petitioners have already done. That remedy eclipses all the pleas available to the petitioners against the order dated 3.1.97 from being raised before this Court in exercise of its writ jurisdiction.

26. The above said being the position of law, we would confine ourselves in this petition to the plea of the petitioners against the order dated 27.6.97 only and test the same if the applications dated 5.2.1997 and 4.4.97 were so rejected by the Tribunal as to call for interference in exercise of writ jurisdiction of this Court.

27. As stated earlier the application dated 5.2.1997 is not labelled showing the provision of law under which it was filed. The later application dated 4.4.97 calls the application dated 5.2.1997 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 provision 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.

28. At the very outset, let us make it clear that the legality or propriety or otherwise of the order dated 3.1.1997 could not have been considered by the Tribunal by way of review. The ITAT 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. Kaslinath G. Jalmi & Anr. v. The Speaker & Ors., JT 1993 (3) SC 594 [LQ/SC/1993/312] ; Dr. Smt. Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, Sitapur, AIR 1987 SC 2186 [LQ/SC/1987/674] ; Patel Narshi Thakershi v. Pradumansinghji Arjunsinghji, AIR 1970 SC 1273 [LQ/SC/1970/95] ; Manohar Lal Verma v. State of MP, AIR 1970 MP 131 [LQ/MPHC/1970/7] ; 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. Bhatia, (1990) 182 ITR 361 Del.) [LQ/DelHC/1989/416] .

29. Mr, G.C. Sharma, the learned Sr. Advocate who appeared for the petitioners did not also dispute the above said 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; 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 petitioners applications dated 5.2.1997 and 4.4.97 and then should have posted the appeals for hearing and for disposal afresh. No specific provision of law is required for conferring such jurisdiction on the Tribunal. Every Court and every Tribunal vested with judicial functions has an inherent power to recall its order so as to relieve an aggrieved party from the consequences flowing from its own mistake or failure. Such a power to recall is distinct from the power to review.

ii. Disposal of an appeal without dealing with a pending application for admission of additional evidence and overlooking an earlier order of the Tribunal forming an opinion that the application for admission of additional evidence shall be dealt with first, amounts to a "mistake apparent from the record" which should have been rectified by the Tribunal in exercise of the jurisdiction conferred by Sub-section (2) of Section 254 of the Act.

30. As held by Their Lordships of the Supreme Court in A.R. Antuley v. R.S. Naik, AIR 1988 SC 1531 [LQ/SC/1988/263] (para 130), motions to set aside the judgment are permitted where, for instance, (i) a judgment was rendered in ignorance of the fact that all necessary part 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.

31. In Corpus Juris Secundum (Vol. IXIX) under the Chapter Judgment-Opening and Vacating (paras 265 to 284 at pages 478-510) 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 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.

32. The law has been well settled by Punjab High Court in Mangat Ram Kuthalia v. CIT, 38 (1960) ITR 1 in the following terms:

"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.

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 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 petitioners 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 23.10.1996 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 Triubunal in its impugned order.

35. 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 the Counsel to say that the proceedings recorded by the Tribunal are incorrect (See Bhagwati Prasad v. DSMDC, AIR 1990 SC 371 [LQ/SC/1989/635] ). 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 merits without insisting on the application under Section 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 the learned Counsel for the petitioners, therefore, fails.

36. Could any relief have been allowed to the petitioners in exercise of jurisdiction conferred by Section 254(2) of the Actamending 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 re-hearing 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 [LQ/SC/1963/24] , Satya Narain v. Mallikarjun, AIR 1960 SC 137 [LQ/SC/1959/172] and a recent Division Bench decision of this Court in CIT v. M/s. Eurasia Publishing House (P) Ltd., ITR 52/80 Decided on 28.10.1997).

38. In the case at hand the documents in which the order dated 23.10.1996 came to be passed is a matter of controversy. According to the petitioners, it was the opinion of the Tribunal that it shall first hear the application for additional evidence. According to the respondent the petitioners were trying to create a procedural mess, by insisting on arguing the appeal first on merits and strategically reserving submissions on the application to be made in the event of their failing on merits; that was the effort of the petitioners which was sought to be stalled by the Tribunal. In the later 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 the 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.

39. 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 3.1.1997, nor such a failure to exercise the jurisdiction in rejecting the applications dated 5.2.1997 and 4.4.97 by order dated 27.6.97 as to warrant exercise of writ jurisdiction of the High Court.

40. While meeting the preliminary objection raised by the Counsel for the respondent as to the availability of efficacious alternative remedy to the petitioners, Mr. 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 254(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, 140 (1983) ITR 398 MP, CIT v. ITAT, 206 (1994) ITR 126 AP & ACIT v. Dr. Ved Parkash, 209 (1994) ITR 448 AP.

41. We have carefully considered all the decisions cited by the learned Counsel for the petitioners. There appears to be a divergence 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) CTR122, (Del), CIT v. K.L. Bhatia, (1990) 182 ITR361 (DL), ITO v. President, ITAT (CW 1010/97) decided on 10.3.1997. We may quote only from Punjab National Banks case (supra):

"In the present case what has happened is that the petitioner had filed an application under Sec. 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 persuade this Court to exercise its jurisdiction under Art. 226. When an adequate alternate remedy is provided to a citizen under the statute it is an exercise of sound discretion that the Court should refrain from exercising its extraordinary jurisdiction under Article 226 of the Constitution."

42. Even if the petitioners are aggrieved by the order dated 27.6.1997 rejecting their applications under Section 254(2) of the Act, the remedy of the petitioners lies in filing 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 26.8.1997, the petitioners have also moved a letter dated 21.8.1997 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 Tribunals jurisdiction under Section 256 seeking reference on such questions of law as in their submission arise out of the order dated 27.6.97. 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 limitation may be considered by the Tribunal sympathetically.

43. We cannot resist observing that the petitioners are attempting at riding two horses at a time. They are parallely pursuing the remedy under Section 256 of the Income-tax Act before the Tribunal and under Articles 226/227 of the Constitution before the High Court, agitating the very same issues before two different FORA simultaneously. They must thank themselves for creating a proverbial situation of riding two horses at a time and the proverbial result has to followthey 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 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.

J.K. Mehra, JI 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 judgment 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 the Counsel or the assessee or neglect on the part of the Tribunal itself not to refer to its previous order, the same should not have stood in the way of imparting justice and undoing the wrong, which resulted from a combination of the aforesaid situations. The argument that a combination of the persons who constitute the Bench, had undergone a change, therefore, new combination was not bound by the order passed by the earlier combination of Presiding Officers on the previous date of hearing to say the least is perverse and frivolous. Change in the personnel of the Bench does not obliterate or in any manner do away with the order passed on the file on the previous date of hearing.

44. Admittedly in this case, the notice under Section 68 of the Act was issued by the Assessing Officer only on 22.2.1995 and he was informed by the assessee that the amount was received as a gift. Even the photo-copies 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 declaration by the donor duly sworn before the Consulate General of India at Dubai on 31.3.1995. But in the meantime, the Assessing Officer had already passed the assessment order on 27.3.1995 and finalised it on 28.3.1995 although he had the time available up to 31.3.1995 to do so. An appeal was filed along with the plea under Rule 46-A 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 46-A, the documents could be placed and taken on record by the Appellate Authority. For the reasons to be stated, it is nobodys 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 procedures are meant to promote the cause of justice and not vice-versa. The procedural rules are the hand-maiden 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 21.3.1995 till 31.3.1995, 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 could have been considered by the Appellate Authority. In the present case although no application under Section 256(1) was filed against the impugned order but in the face of a DB decision of this Court in the case of Punjab National Bank v. ITAT, 1990 (87) CTR 122, even when the application under Section 254(2) is rejected and even if it cannot be taken to have merged with the order passed under Section 254(1) petition, the remedy is by way of an application under Section 256(1). However, it cannot be a case for examination in a writ petition if a verdict is returned that there is no question of law involved in the impugned order. This I consider necessary so to state because it could not be the intention of law to leave the party remedyless and it will be open in such circumstances for the party to invoke the jurisdiction of this Court under Articles 227/226 which could be considered on its own merits if and when such an occasion arises. What is stated hereinabove by me, will not, however, be taken to be expression of opinion on the merits of the application under Section 256(1) of the assessee already pending or 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.