1. This writ petition, filed at the instance of the Revenue seeks to challenge the order dated November 11, 1985, passed by the Income-tax Appellate Tribunal, Patna Bench, in M. A. No. 24 (Pat) of 1985. By the impugned order, the Tribunal recalled an earlier order passed by it (with a different set of numbers) in I. T. A. No. 798 (Pat) of 1983 and fixed the matter for rehearing. The material facts can be briefly stated as follows.
2. During the assessment year 1978-79, the assessee was found to have encashed from the Reserve Bank of India 100 pieces of currency notes of Rs. 1,000 denomination on January 24, 1978. As to their source, the assessee took the stand before the Income-tax Officer that those notes were received by it in the course of its business transactions. It was stated that the transactions in the course of which the notes in question were received, were recorded in the Batsari account. By way of explanation for not depositing those high denomination notes at the State Bank of India, it was stated that those notes were sent out to Bhopal, Nanded and other places for making purchases of foodgrains, etc., on behalf of the firm. In this regard, it was further stated that the assessee-firm had given a sum of Rs. 51,151 to Rajendra Sao on January 12, 1978, and a further sum of Rs. 51,051 to Sri Binod Kumar Tebriwal for making purchases of foodgrains, oil seeds, etc., on its behalf from outside the State. The Income-tax Officer found that Rajendra Sao was a petty employee of the firm working on a monthly salary of Rs. 300 and it was, therefore, unlikely that he would be entrusted with such a large sum and would be sent to other States for making purchases on behalf of the firm. He also did not accept the story of money having been given to Binod Kumar Tebriwal for making purchases for the firm. He examined a number of persons having business dealings with the firm as witnesses, who denied having given any 1,000 rupee notes to the firm in the course of their business transactions. As regards the Batsari account, the Income-tax Officer noted that a special survey of the firm's business premises was conducted on February 15, 1978, in the course of which the assessee had not produced the Batsari account before the Officer visiting the shop.
3. Thus, on a consideration of the entire materials before him, the Income-tax Officer added the sum of Rs. 1 lakh in the .assessee's total income holding it to be income from unexplained sources.
4. The assessee appealed before the Commissioner of Income-tax (Appeals) who held that the Income-tax Officer was not justified in rejecting the assessee's explanation as to its possession of those high denomination notes. Relying upon a decision of this court in Lakshmi Rice Mills v. CIT : [1974]97ITR258(Patna) , the Commissioner of Income-tax (Appeals) held that the addition of Rs. 1 lakh in the assessee's total income was unjustified and unwarranted and accordingly directed its deletion.
5. The Revenue preferred a further appeal before the Income-tax Appellate Tribunal, making a grievance that the Commissioner of Income-tax had erroneously admitted for consideration a fresh material, that is to say, the Batsari account which had not been produced before the Income-tax Officer. It was also pointed out before the Tribunal that on February 15, 1978, a special survey was conducted on the assessee's business premises and at that time, the assessee had failed to produce the so-called Batsari account before the visiting officers. The Income-tax Appellate Tribunal allowed the Revenue's appeal holding as under :
'We have considered the submission made before us by both the parties and have gone through the facts brought on record. A perusal of the assessment order would show that the Income-tax Officer categorically stated that the assessee could not produce the Batsari account before the officer visiting the assessee's shop in the course of special survey conducted by the Department. We have examined the assessment record of the assessee but we have not found any such account named Batsari account containing transactions of Rs. 28,151, Rs. 23,000 and Rs. 50,051, respectively, dated January 12, 1978, and January 13, 1978. The Income-tax Officer recorded a finding of fact that at the material time Sri Binod Kumar Tebriwal was neither a partner nor an employee of the assessee and the other person, Shri Rajendra Sao, was a petty employee drawing a salary of Rs. 300 per month. On a consideration of these facts, it can be legitimately presumed that the statement of the assessee in paying about Rs. 50,000 to the aforesaid persons is nothing but a story which does not concur with the human probability. The case of the assessee is also that it received high denomination notes in the course of its business transactions but the assessee miserably failed to produce even a single person from whom it is stated to have received high denomination notes. On the other hand, the Income-tax Officer examined as many as 10 persons who totally denied having paid high denomination notes to the assessee. Even before us learned counsel for the assessee could not improve his case by production of any evidence or material from which it can be inferred that the assessee received high denomination notes in the regular course of its business transactions. Since the assessee miserably failed to explain the nature and source of Rs. 1 lakh, the Income-tax Officer, in our opinion, was justified in including the sum of Rs. 1 lakh in the assessee's total income under the head 'Income from other sources'. We, therefore, set aside the order of the Commissioner of Income-tax (Appeals) on this issue and restore that of the Income-tax Officer.'
6. Thereafter, the assessee filed a petition before the Appellate Tribunal making a prayer to correct the mistake in the order and to pass consequential orders, whereupon the impugned order has been passed. In the impugned order, the Tribunal by an elaborate process of reasoning, observed that the assessee had discharged its onus to prove the source of high denomination notes by showing that they came out of the cash balance available with the firm. How those particular high denomination notes came to the firm was of no consequence and the assessee did not owe any liability or obligation to account for its possession of those high denomination notes. The Tribunal also held that its predecessor members had failed to appreciate the decision of this court in Lahshmi Rice Mills' case : [1974]97ITR258(Patna) and had erred in not applying the ratio of that decision to the facts of this case. It went on to hold as follows :
'Having heard the rival submissions and carefully going through the order of the Tribunal, we have no doubt left in our mind that the order passed by the Tribunal in contravention of the principle laid down by their Lordships of the Patna High Court is erroneous. The order of the Tribunal has proceeded from an erroneous basis contrary to that suggested by their Lordships of the Patna High Court. As the error of law followed in the order is a patent and glaring error of law, we have no hesitation in recalling the said order and posting it for rehearing again in due course. Since we have disposed of the defect pointed out by the petitioner which results in recalling the order passed, consideration of other errors has become infructuous. We, therefore, decline to deal with them.
In the result, the miscellaneous application is allowed.'
7. We have heard Mr. Rastogi, learned counsel appearing on behalf of the petitioner, and we have carefully gone through the two orders passed by the Tribunal. We are of the definite opinion that in passing the impugned order, the Tribunal has veritably sat in appeal over an order passed by its predecessor members, and has plainly exceeded its jurisdiction. Section 254(2) of the Income-tax Act, 1961, empowers the Tribunal to amend any order passed by it under Sub-section (1) with a view to rectify a mistake apparent from the record.
8. It is well-settled that Section 254(2) does not authorise the Tribunal to review its order or even worse, to sit in appeal over its earlier order, (see CIT v. Krishna Rana (Dr.) (Mrs.) [1987] 167 ITR 652. In this case, we are satisfied that the impugned order does not amount to an amendment of an earlier order with a view to rectify a mistake apparent from the record, but it is an order passed on a reappraisal of the material facts and circumstances and on a fresh application of the legal position.
9. In this case, it is not needed nor do we express any opinion as to which of the two orders passed by the Tribunal is founded on the correct legal position. In this case what we are concerned with is whether the Tribunal had any jurisdiction to recall an earlier order passed by it and to fix the case for rehearing. On a careful consideration of the material facts and circumstances of the case, we are of the opinion that the Appellate Tribunal plainly exceeded its jurisdiction in passing the impugned order, which is wholly unsustainable in law. We accordingly set aside the impugned order dated November 11, 1985, passed in M. A. No. 24 (Pat) of 1985.
10. In the result, this application is allowed. No order as to costs.