Dharamchand Surana Vs. Income Tax Officer - Court Judgment

Excerpt:
1. this is a miscellaneous petition filed by the assessee and it arises from the common order of the tribunal dt. 19th november, 1990, for the asst. yrs. 1975-76 and 1976-77. the assessee points out certain mistakes, which are as extracted below, said to be mistakes apparent from record : (a) the opening balance as on date of previous year relevant to asst. yr. 1976-77 has been taken as income for the asst. yr. 1975-76 under s. 69 of the it act. it is erroneous as opening credit found relating to asst. yr. 1976-77, cannot be taken as income of the immediate previous year i.e. 1975-76 alone. (b) the addition of rs. 2,20,096 has been assessed as income under s. 69 when the assessee is maintaining books of account and entries are also recorded in the books of the accounts maintained by the assessee. sec. 69 applies only when the entries are not recorded in the books of accounts, if any, maintained by the assessee. here common book was maintained by the assessee and the entries were entered in the book and, therefore, income cannot be assessed under s. 69 of the it act. this is a mistake apparent from the records. (c) relating to seized account book no. sd 53, the ao himself accepted part of the entries from that book relating to other members. then it is erroneous to say that the book is not a common book. therefore, it is a mistake apparent from the records. (d) as per the draft assessment order originally, the income was assessed amounting to rs. 1,22,611 under the head 'business' whereas in rectification proceedings, this income has been held by officer as under head 'other sources' though no such direction was given by the appellate order. as such the tribunal decision is erroneous and mistake is apparent from the record. (e) the tribunal has erred in holding that the set aside of order was limited purposes but from the order dt. 17th september, 1979, passed by the ito, giving effect to the appellate decision in ita no. 24/79-80 cc iv(8), it will be observed that it was fully set aside order and if not fully set aside order, the ito could not have considered the other matters like changing the head and nature of income, change of previous year, etc. etc. therefore, the order of the tribunal is erroneous and mistake is apparent from the records. (f) the tribunal has erred in not looking into the proceedings of the department wherein it was reported by intelligence wing personnel that sd 53 is common book relating to family members. but this fact was left to be observed by the tribunal. this is also a mistake apparent from the records. (g) no such finding that sd 53 belongs to the assessee in the first mentioned order. the ito raised this question, appellant objected it, but tribunal said the argument is afterthought is not correct. the returns of other family members were filed crediting vds and amount and reflecting all the debtors but this was not verified though available in the records with the department. this is also mistake apparent from the records. (h) in the draft order dt. 17th july, 1979, the previous year relevant to assessment year was adopted by ito on 13th november, 1974, for business income and 31st march, 1975, for undisclosed income.2. we have heard the rival submissions and perused the records. the facts of the case are succinctly stated in paras. 3, 4 and 5 of the tribunal's order dt. 19th november, 1990 and for the sake of brevity they are not reproduced. however, it is necessary to recapitulate that the tribunal has found in para 3 of its order that : "the duplicate account books (sd no. 22) belonged to smt. sundari bai, the mother of the assessee. s.d. no. 27 belonged to smt. soni bai, grandmother of the assessee. s.d. no. 34 belonged to shri prakash chand surana, son of the assessee. s.d. no. 38 belonged to smt. pista bai, wife of the assessee and s.d. no. 47 belonged to the assessee himself and s.d. no. 53 is a ledger maintained by the assessee. all the above documents appear to be ledger books in which posting for period from 14th november, 1974 to 3rd november, 1975 were appearing. a comparison of the regular books, on the basis of which the it returns were filed, and the duplicate books found out in the search revealed two factors, the first being that full amounts of advances made to the eight specified debtors were not fully recorded and secondly that advances made to 29 other debtors were not at all disclosed in the regular books. the advances made to the eight specified debtors were not only obtaining in the duplicate and regular books relating to the assessee but also those standing in the names of the remaining members of the assessee's family. the aggregate of the outstandings due as on 14th november, 1974, from the eight specified debtors, standing in the name of the assessee and his other family members, as per the seized books, was greater than the outstanding balances due from the very same debtors, as disclosed in the regular books maintained by the assessee and his family members for income-tax purposes." the income of the assessee was originally computed on the basis of the difference between the opening balance in all the accounts put together as per books numbered as sd 27, 22, 34, 38, and 47 and the amount of opening balance as per sd 53. the assessees' plea was that it should be assessed only in respect of the amount advanced by it but not on the amount of difference found in the consolidated sd 53. another plea was that the voluntary disclosure made by the other members of his family whose books were seized in the premises of the assessee should also be given credit in its hand if the differences are assessed in its hands.dealing with these pleas, the first appellate authority by his order dt. 21st august, 1979 set aside the assessment with a direction to the ao to examine the case afresh and reframe his assessment on the basis of the evidence that the assessee's representative would produce. the ao understood the said order of the cit(a) in setting aside the assessment as one relating to two specific points as follows : (a) against debts and advances made outside the books towards which the addition was made in the assessment, a deduction should be given for credits, if any, appearing in the duplicate books of accounts, after verification. (b) the assessee and his members of family made a voluntary disclosure of a sum of rs. 2,85,812 under s. 3(1) of the act on 28th december, 1975. out of the said amount credit for rs. 45,000 declared by the assessee should be given in the assessment even though such deduction may not be permissible against disclosure offered by other members of the family.however, on appeal the first appellate authority was of the view that his predecessor's order was an open set aside for the assessment to be done afresh and after looking into the evidence, he reached the conclusion that the concealed income was earned not by the assessee alone but by the assessee and his seven relations mentioned in chart iii of his order dt. 3rd january, 1985, and gave directions to the ao and also computed the percentage of concealed income in para. 22 of his order cited supra and as he found that the assessee's share of concealed income was only rs. 34,270 and as he had disclosed higher amount of rs. 45,000 under the voluntary disclosure scheme, he deleted the addition made in the assessment and thus allowed the appeal. the department appealed against the decision. "the main question which comes up for consideration in the appeal, relating to the asst. yr. 1975-76, is whether the order of the earlier cit(a) dt. 21st august, 1979, does not prevent the learned cit(a) to pass the impugned order; to pronounce upon the very contentions on which there was already a finding by his predecessor, before the matter is remanded for framing fresh assessment." the tribunal was of the view that question was definitely concluded against the assessee in the first appellate order and, therefore, the cit(a) in the second round of litigation could not have reopened the issue for rendering the decision. it also held in para. 11 of its order as follows : "whereas the other members of the assessee family came forward with the voluntary disclosures claiming that they have made undisclosed advances upto the asst. yr. 1975-76 there may be some justification in the absence of other valid constraints for the learned cit(a) to reduce the quantity of undisclosed advances for the asst. yr. 1975-76 taking into consideration the admitted disclosures by the other members of the assessee family, but there is no such justification available, when we come to deal with the appeal for the asst. yr. 1976-77." however, no relief was granted in the order of the tribunal in respect of the asst. yr. 1975-76. for the asst. yr. 1976-77, the assessment was confirmed. it is in this background that we have to consider the points raised by the assessee in the miscellaneous petition.4. the assessee's plea is that the difference with the opening balance as on the date of the previous year relevant to the asst. yr. 1975-76 should not be taken as income for the asst. yr. 1975-76 under s. 69 of the it act, 1961. sec. 69 only deals with investments not recorded in the books of account. the opening balance of one year would depend upon the closing balance of the earlier year, which, in turn, would depend upon the opening balance as at the beginning of the earlier year and so on. therefore, in such circumstances s. 69 cannot be invoked. this aspect was not considered by the tribunal. there is a mistake in the order of the tribunal that sd 53 belonged to the assessee, ignoring the fact that the ao himself had accepted a part of the entries in that book as relating to other members. there is a contradiction in the view taken of sd 53 though it has incorporated the entries in the other books belonging to other members of the family. the contradiction consists in treating the book as a common book in respect of opening balance only and treating the same book as one belonging to the assessee in respect of the closing balance or other intermediate transactions. in the course of the arguments before us, the learned departmental representative could not effectively counter the above objections. he stated that as per his records among others six books were seized out of which four belonged to the relatives of the assessee. the 5th book namely, sd 47 belonged to the assessee. the 6th book namely, sd 53 is a ledger containing not only the balance of the assessee as found in sd no. 47 but also the balance of other books belonging to the relatives of the assessee. he also stated that the relatives of the assessee are assessed to income-tax and have also declared higher income under the voluntary disclosure scheme upto and inclusive of the asst. yr. 1975-76. he could not effectively counter the argument of the assessee that the tribunal in para. 11 of its order, after stating that there was some justification to reduce the quantity of the undisclosed advances for the asst. yr. 1975-76, had not in fact given any reduction for the asst. yr. 1975-76. in view of these facts, we are constrained to say that there are mistakes apparent from record requiring recalling of the order of the tribunal for purposes of rehearing the issue.5. another reason for recalling the tribunal order is whereas the income was assessed under the head 'business', in a rectification proceeding the amount was included under the head 'other sources' even though there was no direction to that effect by the first appellate authority in the first round of litigation and the tribunal erred in confirming the assessment of rs. 1,22,611 under the head 'other sources' in its order cited supra. this appears to be a mistake.6. understanding the order of the first appellate authority dt. 21st august, 1979, as one for a limited purpose, it cannot be gainsaid that the limited purpose was for determining the correct tax liability of the assessee and the specific direction that a trial balance should be made and the excess investments over the credits should be ascertained, is a direction to consider the claim of the assessee in respect of the investment belonging to the relatives of the assessee. this aspect has not been dealt with by the tribunal and this inadvertent omission appears to constitute a mistake apparent on record.7. for the above reasons, the order of the tribunal dt. 19th november, 1990 is recalled.1. i have carefully gone through the order proposed by the learned judicial member in mp no. 28/mad/1991. in my opinion this is not a fit case to allow the miscellaneous petition, whatever be the merits of the grievance of the assessee on the facts stated in the order of the tribunal dt. 19th november, 1990, and the conclusions reached thereon.the reason is that the tribunal has construed the order dt. 21st august, 1979, of the first appellate authority in the first round of litigation as an order setting aside the assessment only for the limited purpose of making enquiry on two specific points and has further held that it was not a case of setting aside the assessment altogether for making a de novo assessment. in this view of the matter, the tribunal has proceeded to consider the facts of the case on the footing that since the assessee had not come on appeal against the appellate order dt. 21st august, 1979, the adverse findings recorded in that order stood concluded as against the assessee and, therefore, the cit(a), who was in seisin of the appeal in the second round of litigation cannot reopen the entire issue and consider the same in all its ramifications. the assessee in this miscellaneous petition pleads that the view held by the tribunal is erroneous and it has mixed up the passing observations of the first appellate authority in his order dt.21st august, 1979, as amounting to findings of facts, etc. it has also been pleaded that the first appellate authority in the first round of litigation has not adduced cogent material to hold that sd 53 contained only the transactions of the assessee and not the transactions of his relatives also. but unfortunately it is stated that the tribunal has gone on the basis of such erroneous findings. all these matters cannot be agitated in a miscellaneous petition as they involve debatable issues requiring further enquiry into the facts. it is settled law that a review of the order of the tribunal cannot be undertaken in a miscellaneous petition and the plea if admitted would amount to a review of the order of the tribunal, which is not legally permissible.therefore, i am unable to agree with the order proposed by the learned judicial member in allowing the miscellaneous petition recalling the order of the tribunal.since there is a difference of opinion between the members, the matter is referred to the president, itat, for enabling him to appoint a third member to decide the following question : "whether on the facts and in the circumstances of the case, the miscellaneous petition is fit to be allowed to recall the order of the tribunal dt. 19th november, 1990 ?" 1. this miscellaneous petition is filed by the assessee under s. 254(2) of the it act, requesting the tribunal to recall its order dt. 19th november, 1990, made in ita nos. 663 & 664/mad/1995, relating to the asst. yrs. 1975-76 and 1976-77, on the ground that certain mistakes apparent from record have crept into the order of the tribunal and that the appeals may be heard afresh and decided according to law.2. as there is a difference of opinion between the members that heard this miscellaneous petition, the following question has been referred under s. 255(4) of the it act for decision by a third member : "whether on the facts and in the circumstances of the case, the miscellaneous petition is fit to be allowed to recall the order of the tribunal dt. 19th november, 1990 ?" 3. in the order passed by the learned judicial member, the alleged mistakes have been extracted in detail. the learned judicial member, having been satisfied that the said mistakes apparent from record, have crept into the order of the tribunal, directed the recall of the tribunal's order dt. 19th november, 1990, made in the appeals. on the other hand, the learned accountant member, who was not inclined to agree with the view expressed by the learned judicial member, felt that in case this petition is allowed, it amounts to review of the order of the tribunal and, therefore, it cannot be allowed. in that way, the difference of opinion cropped up between the two members of the division bench consequent to which the point in dispute has been referred to the third member, for decision.4. for proper appreciation of the rival contentions, it is necessary to state the facts that gave rise to this petition.5. the petitioner/assessee, individual in status, is a jeweller and a money lender. on 29th september, 1975, he filed the return of income for the asst. yr. 1975-76, disclosing an income of rs. 16,744. on 16th september, 1976, search proceedings were conducted under s. 132 at the business premises of the assessee. during the course of the said search, it was found that the assessee was maintaining duplicate set of accounts. among other books, one ledger account numbered as sd no. 53 was also seized from the possession of the assessee. it was found that there was gross under-statement of income in the regular books of accounts maintained for the purpose of income-tax. a comparison of the regular books, on the basis of which the it returns were filed and the duplicate books that were found in the search revealed that advances made to several persons were not at all disclosed in the regular books.further, actual advances that were made to certain persons were not correctly shown in the regular books. on the basis of the seized material, particularly, on the basis of sd no. 53, the assessment was framed on a total income of rs. 2,40,637 which includes the addition of rs. 2,21,096, made under the head "income from other sources". the assessee contended before the ao that the entries appearing in sd 53 relate not only to him but also to seven of his family members, that the amounts mentioned in the said ledger should be distributed and apportioned among all the eight family members and that the said amounts cannot be totally added in the hands of the petitioner only.the ao rejected the said contentions and made the addition. aggrieved by the assessment, the assessee carried the matter in appeal.6. it would appear that the assessee and his family members have made disclosures of their income and wealth under the voluntary disclosure scheme, disclosing some of the amounts mentioned in sd 53. it was contended before the cit(a) that inasmuch as the disclosure had been made in the names of the sons and wife of the assessee, the same should be given a set off in the assessment of the assessee herein concerned.the learned cit(a) by his order dt. 21st august, 1979, rejected the said contention of the assessee holding as follows : "so far as the contention that since the disclosure had been made in the names of the sons and wife of the assessee, the same should be given a set off in the assessment of the assessee concerned, i am not in agreement with the same. it is in the assessee's books that the advances are found to have been given and it is to the extent of the disclosed income by the assessee alone that can be given a set off." 7. an alternate contention was raised before the cit(a) to the effect that certain credits were found recorded in sd 53 and that the said credits should be given a set off. the learned cit(a) accepted the said plea of the assessee that the credits found in the duplicate set of books if proved to be genuine, should be given a set off. inasmuch as the ao has not made any investigation into the aspect as to how many of these credits are genuine, the learned cit(a) chose to remit the matter to the ao, by setting aside the assessments and redoing the same in the light of the directions given in the appellate order. thus, in order to enable the assessee to prove the genuineness of the credits appearing in the seized document and obtain the relief of set off, the learned cit(a) has set aside the assessment and restored the assessment to the file of the ao with a direction to reframe the same. further, the learned cit(a) has directed that the amount of rs. 45,000 disclosed by the assessee himself under the voluntary disclosure scheme should be allowed as deduction in his assessment. thus, the learned cit(a) had set aside the assessment with a direction to the ao to examine the following two specific issues and then reframe the assessments : (1) the debts and advances made outside the books towards which the addition was made in the assessments, a deduction should be given for credits, if any, appearing in the duplicate books of accounts, after verification. (2) the assessee and his family members made a voluntary disclosure of a sum of rs. 2,85,812 under s. 3(1) of the act on 28th december, 1975, and out of the said amount, credit for rs. 45,000 declared by the assessee should be given in the assessment, even though such deduction may not be permissible against disclosure offered by other members of the family.8. thus, the remand order of the cit(a) gave as limited mandate to the ao to examine two specific issues and reframe the assessment. it is only for the limited purpose, the assessment was set aside.subsequently, the assessment was redone, making an addition of rs. 1,67,757 under s. 69 on account of unexplained investment under the head 'income from other sources'. as against the said redone assessment, the assessee carried the matter in appeal once again before the cit(a).9. in this second round of litigation, the assessee again contended before the first appellate authority that the amounts noted in sd 53 related to the assessee and his family members, that the assessee and his family members have disclosed various amounts under voluntary disclosure scheme and that the amounts mentioned in the seized books should be apportioned among the assessee and the family members and it cannot be added in lumpsum in the hands of the petitioner/ assessee only. the learned cit(a) felt that his predecessor's earlier order setting aside the assessment was not for the limited purpose of examining the two specific issues only and that inasmuch as the assessment was set aside, all the issues were wide open and that the question whether the amounts mentioned in sd 53 belong exclusively to the assessee or they have to be distributed proportionately among the assessee and the family members can be considered. he disregarded the earlier findings of his predecessor in office that the gross amount mentioned in sd 53 should be added in the hands of the petitioner/assessee and chose to give the relief prayed for by the assessee. aggrieved by it, the revenue preferred the appeal for the asst. yr. 1975-76.10. the tribunal, on a thorough and careful consideration of the scope and ambit of the first order of the cit(a), held, that setting aside of the assessment and remitting the matter to the ao was only for a very limited purpose viz., to examine and decide the two specific issues mentioned therein and reframe the assessment and that it was not meant for the purpose of making altogether a de novo assessment on all aspects. in that connection the tribunal, in its order dt. 19th november, 1990 held as follows : "therefore, according to as the includibility of the gross amount towards other sources, viz., rs. 2,30,164 (rs. 1,21,611 plus rs. 1,08,553) cannot be reagitated in the appeal before the later cit(a), who had delivered the impugned order. we further hold that the cit(a) having been bound by the findings given by his predecessor cit(a) is incompetent and has no jurisdiction to entertain the appeal regarding the non-includibility of rs. 2,30,164 towards the gross amount of income from other sources in the hands of the assessee." 11. thus, the tribunal construed the first order of the cit(a) as a limited one, authorising the ao to examine the two specific issues only and then frame the assessment and, therefore, the learned cit(a) in the second round of litigation has no jurisdiction to disregard the findings given by his predecessor in office in the earlier order and delete the impugned addition. the tribunal allowed the deduction of rs. 45,000 that was declared by the assessee under voluntary disclosure scheme. aggrieved by the order of the tribunal, the assessee filed this miscellaneous petition.12. the learned counsel for the petitioner placed strong reliance on the reasons given by the learned judicial member for recalling the order, while the learned departmental representative placed strong reliance on the reasons given by the learned accountant member for dismissing the petition. i have duly considered the rival submissions.13. there is no inherent power of review to the tribunal. power of review requires to be conferred specifically by the statute. it is well settled that this tribunal has no power of review since no such power has been specifically conferred on the tribunal by the statute. in cit vs. chelladurai (1979) 118 itr 108 (mad), the madras high court has categorically held that a power to rectify the mistake does not include a power to review. the tribunal could only have rectified the mistake pointed out by the assessee or the department. it has no power or authority to review its own earlier order. sec. 254(2) confers a limited jurisdiction on the tribunal to rectify any mistake apparent from the record or amend any order passed by it under sub-s. (1) of s.254. thus, with a view, to rectify any mistake apparent from record, the tribunal may amend any order passed by it under s. 254(2). the scope of s. 254(2) is very limited. it is restricted to correct the mistakes apparent from record. if reasonably two views are permissible on an issue and a bench of the tribunal follows one such view and makes the order, another bench of the tribunal has no jurisdiction to recall the first order on the mere ground that the other view is more rationale or more reasonable. one bench cannot sit in appeal over the order passed by another bench. in this connection it would be relevant to refer to the observations made by the andhra pradesh high court in the case of cit vs. itat (1994) 206 itr 126 (ap). the high court, while considering the power of the tribunal under s. 254(2), held as under : "we are of the opinion that the tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. it has no inherent power. even otherwise, in cases where specific provision delineates the powers of the court or tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. the power of rectification which is specifically conferred on the tribunal has to be exercised in terms of that provision. it cannot be enlarged on any assumption that the tribunal has got an inherent power of rectification or review or revision." 14. the orissa high court in cit vs. itat 196 itr 590 (ori) held that a mistake which can be rectified under s. 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. a similar view was expressed by the orissa high court in the case of cit vs. itat (1994) 210 itr 397 (ori).15. i have gone through the decision in the case of maharaja martand singh judeo vs. cit (1988) 171 itr 586 (mp) relied on by the learned counsel for the petitioner. i have no quarrel with the ratio laid down in the said ruling but it has no application to the facts on hand.16. thus, it is seen from the decided cases mentioned (supra) that the powers of the tribunal under s. 254(2) are very limited and are circumscribed by the restrictions mentioned therein. under the guise of rectification an order cannot be reviewed or rewritten. in the case on hand, the alleged mistakes referred to by the petitioner radiate from the central issue viz., whether the first order of the cit(a) setting aside the assessment was only for the limited purpose of examining two specific issues or whether it was meant for redoing the assessment de novo on all aspects. the tribunal, after duly and thoroughly considering the first order of the cit(a) came to the conclusion that the learned cit(a) had set aside the assessment for the limited purpose of enabling the ao to examine the two specific issues and reframe the assessment. the view taken by the tribunal in that regard may or may not be correct. it is a different issue. however, the fact remains that the tribunal, after duly considering all aspects and applying its mind, has come to that view. even if the said view is held to be erroneous, it cannot be said to be a mistake apparent from record since the said view having been arrived at, after due application of mind to the facts on hand and the relevant material on record. when once it is held that the first order of the cit(a) was a limited one, giving a limited mandate to the ao to examine two specific issues only, and nothing more, and reframing the assessment, the alleged mistakes pointed out in this petition cannot be said to be mistakes at all. the same can be considered to be mistakes if the first order of the cit(a) setting aside the assessment was not a limited one. however, that is not the case here. the specific finding of the tribunal is that the scope of the said order of the cit(a) is very limited and that the findings given by the cit(a) in the said order which has become final cannot be unsettled by his successor-in-office in the second round of litigation.17. in my considered opinion, the learned accountant member very rightly came to the conclusion that in case this petition is allowed, it amounts to a review of the order of the tribunal which is not permissible under the law. in effect, the petition under the guise of rectification of a mistake apparent from record, is seeking for a review of the order of the tribunal which is not permissible under the law. on a due consideration of the material available on record, i am in agreement with the view taken by the learned accountant member, that this miscellaneous petition deserves to be dismissed.18. for these reasons, i agree with the opinion expressed by the learned accountant member. the matter will now go before the regular bench for the disposal of the petition in accordance with the opinion of the majority.1. in accordance with the order dt. 22nd january, 1997 passed by the third member and in conformity with the majority view, the miscellaneous petition stands dismissed.

Judgment:
1. This is a Miscellaneous Petition filed by the assessee and it arises from the common order of the Tribunal dt. 19th November, 1990, for the asst. yrs. 1975-76 and 1976-77. The assessee points out certain mistakes, which are as extracted below, said to be mistakes apparent from record : (a) The opening balance as on date of previous year relevant to asst. yr. 1976-77 has been taken as income for the asst. yr. 1975-76 under s. 69 of the IT Act. It is erroneous as opening credit found relating to asst. yr. 1976-77, cannot be taken as income of the immediate previous year i.e. 1975-76 alone.

(b) The addition of Rs. 2,20,096 has been assessed as income under s. 69 when the assessee is maintaining books of account and entries are also recorded in the books of the accounts maintained by the assessee. Sec. 69 applies only when the entries are not recorded in the books of accounts, if any, maintained by the assessee. Here common book was maintained by the assessee and the entries were entered in the book and, therefore, income cannot be assessed under s. 69 of the IT Act. This is a mistake apparent from the records.

(c) Relating to seized account Book No. SD 53, the AO himself accepted part of the entries from that book relating to other members. Then it is erroneous to say that the book is not a common book. Therefore, it is a mistake apparent from the records.

(d) As per the draft assessment order originally, the income was assessed amounting to Rs. 1,22,611 under the head 'business' whereas in rectification proceedings, this income has been held by officer as under head 'Other sources' though no such direction was given by the appellate order. As such the Tribunal decision is erroneous and mistake is apparent from the record.

(e) The Tribunal has erred in holding that the set aside of order was limited purposes but from the order dt. 17th September, 1979, passed by the ITO, giving effect to the appellate decision in ITA No. 24/79-80 CC IV(8), it will be observed that it was fully set aside order and if not fully set aside order, the ITO could not have considered the other matters like changing the head and nature of income, change of previous year, etc. etc. Therefore, the order of the Tribunal is erroneous and mistake is apparent from the records.

(f) The Tribunal has erred in not looking into the proceedings of the Department wherein it was reported by Intelligence Wing Personnel that SD 53 is common book relating to family members. But this fact was left to be observed by the Tribunal. This is also a mistake apparent from the records.

(g) No such finding that SD 53 belongs to the assessee in the first mentioned order. The ITO raised this question, appellant objected it, but Tribunal said the argument is afterthought is not correct.

The returns of other family members were filed crediting VDS and amount and reflecting all the debtors but this was not verified though available in the records with the Department. This is also mistake apparent from the records.

(h) In the draft order dt. 17th July, 1979, the previous year relevant to assessment year was adopted by ITO on 13th November, 1974, for business income and 31st March, 1975, for undisclosed income.

2. We have heard the rival submissions and perused the records. The facts of the case are succinctly stated in paras. 3, 4 and 5 of the Tribunal's order dt. 19th November, 1990 and for the sake of brevity they are not reproduced. However, it is necessary to recapitulate that the Tribunal has found in para 3 of its order that : "The duplicate account books (SD No. 22) belonged to Smt. Sundari Bai, the mother of the assessee. S.D. No. 27 belonged to Smt. Soni Bai, grandmother of the assessee. S.D. No. 34 belonged to Shri Prakash Chand Surana, son of the assessee. S.D. No. 38 belonged to Smt. Pista Bai, wife of the assessee and S.D. No. 47 belonged to the assessee himself and S.D. No. 53 is a ledger maintained by the assessee. All the above documents appear to be ledger books in which posting for period from 14th November, 1974 to 3rd November, 1975 were appearing. A comparison of the regular books, on the basis of which the IT returns were filed, and the duplicate books found out in the search revealed two factors, the first being that full amounts of advances made to the eight specified debtors were not fully recorded and secondly that advances made to 29 other debtors were not at all disclosed in the regular books. The advances made to the eight specified debtors were not only obtaining in the duplicate and regular books relating to the assessee but also those standing in the names of the remaining members of the assessee's family. The aggregate of the outstandings due as on 14th November, 1974, from the eight specified debtors, standing in the name of the assessee and his other family members, as per the seized books, was greater than the outstanding balances due from the very same debtors, as disclosed in the regular books maintained by the assessee and his family members for income-tax purposes." The income of the assessee was originally computed on the basis of the difference between the opening balance in all the accounts put together as per books numbered as SD 27, 22, 34, 38, and 47 and the amount of opening balance as per SD 53. The assessees' plea was that it should be assessed only in respect of the amount advanced by it but not on the amount of difference found in the consolidated SD 53. Another plea was that the voluntary disclosure made by the other members of his family whose books were seized in the premises of the assessee should also be given credit in its hand if the differences are assessed in its hands.

Dealing with these pleas, the first appellate authority by his order dt. 21st August, 1979 set aside the assessment with a direction to the AO to examine the case afresh and reframe his assessment on the basis of the evidence that the assessee's representative would produce. The AO understood the said order of the CIT(A) in setting aside the assessment as one relating to two specific points as follows : (a) Against debts and advances made outside the books towards which the addition was made in the assessment, a deduction should be given for credits, if any, appearing in the duplicate books of accounts, after verification.

(b) The assessee and his members of family made a voluntary disclosure of a sum of Rs. 2,85,812 under s. 3(1) of the Act on 28th December, 1975. Out of the said amount credit for Rs. 45,000 declared by the assessee should be given in the assessment even though such deduction may not be permissible against disclosure offered by other members of the family.

However, on appeal the first appellate authority was of the view that his predecessor's order was an open set aside for the assessment to be done afresh and after looking into the evidence, he reached the conclusion that the concealed income was earned not by the assessee alone but by the assessee and his seven relations mentioned in Chart III of his order dt. 3rd January, 1985, and gave directions to the AO and also computed the percentage of concealed income in para. 22 of his order cited supra and as he found that the assessee's share of concealed income was only Rs. 34,270 and as he had disclosed higher amount of Rs. 45,000 under the Voluntary Disclosure Scheme, he deleted the addition made in the assessment and thus allowed the appeal. The Department appealed against the decision.

"The main question which comes up for consideration in the appeal, relating to the asst. yr. 1975-76, is whether the order of the earlier CIT(A) dt. 21st August, 1979, does not prevent the learned CIT(A) to pass the impugned order; to pronounce upon the very contentions on which there was already a finding by his predecessor, before the matter is remanded for framing fresh assessment." The Tribunal was of the view that question was definitely concluded against the assessee in the first appellate order and, therefore, the CIT(A) in the second round of litigation could not have reopened the issue for rendering the decision. It also held in para. 11 of its order as follows : "Whereas the other members of the assessee family came forward with the voluntary disclosures claiming that they have made undisclosed advances upto the asst. yr. 1975-76 there may be some justification in the absence of other valid constraints for the learned CIT(A) to reduce the quantity of undisclosed advances for the asst. yr.

1975-76 taking into consideration the admitted disclosures by the other members of the assessee family, but there is no such justification available, when we come to deal with the appeal for the asst. yr. 1976-77." However, no relief was granted in the order of the Tribunal in respect of the asst. yr. 1975-76. For the asst. yr. 1976-77, the assessment was confirmed. It is in this background that we have to consider the points raised by the assessee in the Miscellaneous petition.

4. The assessee's plea is that the difference with the opening balance as on the date of the previous year relevant to the asst. yr. 1975-76 should not be taken as income for the asst. yr. 1975-76 under s. 69 of the IT Act, 1961. Sec. 69 only deals with investments not recorded in the books of account. The opening balance of one year would depend upon the closing balance of the earlier year, which, in turn, would depend upon the opening balance as at the beginning of the earlier year and so on. Therefore, in such circumstances s. 69 cannot be invoked. This aspect was not considered by the Tribunal. There is a mistake in the order of the Tribunal that SD 53 belonged to the assessee, ignoring the fact that the AO himself had accepted a part of the entries in that book as relating to other members. There is a contradiction in the view taken of SD 53 though it has incorporated the entries in the other books belonging to other members of the family. The contradiction consists in treating the book as a common book in respect of opening balance only and treating the same book as one belonging to the assessee in respect of the closing balance or other intermediate transactions. In the course of the arguments before us, the learned Departmental Representative could not effectively counter the above objections. He stated that as per his records among others six books were seized out of which four belonged to the relatives of the assessee. The 5th book namely, SD 47 belonged to the assessee. The 6th book namely, SD 53 is a ledger containing not only the balance of the assessee as found in SD No. 47 but also the balance of other books belonging to the relatives of the assessee. He also stated that the relatives of the assessee are assessed to income-tax and have also declared higher income under the Voluntary Disclosure Scheme upto and inclusive of the asst. yr. 1975-76. He could not effectively counter the argument of the assessee that the Tribunal in para. 11 of its order, after stating that there was some justification to reduce the quantity of the undisclosed advances for the asst. yr. 1975-76, had not in fact given any reduction for the asst. yr. 1975-76. In view of these facts, we are constrained to say that there are mistakes apparent from record requiring recalling of the order of the Tribunal for purposes of rehearing the issue.

5. Another reason for recalling the Tribunal order is whereas the income was assessed under the head 'Business', in a rectification proceeding the amount was included under the head 'Other sources' even though there was no direction to that effect by the first appellate authority in the first round of litigation and the Tribunal erred in confirming the assessment of Rs. 1,22,611 under the head 'Other sources' in its order cited supra. This appears to be a mistake.

6. Understanding the order of the first appellate authority dt. 21st August, 1979, as one for a limited purpose, it cannot be gainsaid that the limited purpose was for determining the correct tax liability of the assessee and the specific direction that a trial balance should be made and the excess investments over the credits should be ascertained, is a direction to consider the claim of the assessee in respect of the investment belonging to the relatives of the assessee. This aspect has not been dealt with by the Tribunal and this inadvertent omission appears to constitute a mistake apparent on record.

7. For the above reasons, the order of the Tribunal dt. 19th November, 1990 is recalled.

1. I have carefully gone through the order proposed by the learned Judicial Member in MP No. 28/Mad/1991. In my opinion this is not a fit case to allow the miscellaneous petition, whatever be the merits of the grievance of the assessee on the facts stated in the order of the Tribunal dt. 19th November, 1990, and the conclusions reached thereon.

The reason is that the Tribunal has construed the order dt. 21st August, 1979, of the first appellate authority in the first round of litigation as an order setting aside the assessment only for the limited purpose of making enquiry on two specific points and has further held that it was not a case of setting aside the assessment altogether for making a de novo assessment. In this view of the matter, the Tribunal has proceeded to consider the facts of the case on the footing that since the assessee had not come on appeal against the appellate order dt. 21st August, 1979, the adverse findings recorded in that order stood concluded as against the assessee and, therefore, the CIT(A), who was in seisin of the appeal in the second round of litigation cannot reopen the entire issue and consider the same in all its ramifications. The assessee in this miscellaneous petition pleads that the view held by the Tribunal is erroneous and it has mixed up the passing observations of the first appellate authority in his order dt.

21st August, 1979, as amounting to findings of facts, etc. It has also been pleaded that the first appellate authority in the first round of litigation has not adduced cogent material to hold that SD 53 contained only the transactions of the assessee and not the transactions of his relatives also. But unfortunately it is stated that the Tribunal has gone on the basis of such erroneous findings. All these matters cannot be agitated in a miscellaneous petition as they involve debatable issues requiring further enquiry into the facts. It is settled law that a review of the order of the Tribunal cannot be undertaken in a miscellaneous petition and the plea if admitted would amount to a review of the order of the Tribunal, which is not legally permissible.

Therefore, I am unable to agree with the order proposed by the learned Judicial Member in allowing the miscellaneous petition recalling the order of the Tribunal.

Since there is a difference of opinion between the Members, the matter is referred to the President, ITAT, for enabling him to appoint a Third Member to decide the following question : "Whether on the facts and in the circumstances of the case, the miscellaneous petition is fit to be allowed to recall the order of the Tribunal dt. 19th November, 1990 ?" 1. This miscellaneous petition is filed by the assessee under s. 254(2) of the IT Act, requesting the Tribunal to recall its order dt. 19th November, 1990, made in ITA Nos. 663 & 664/Mad/1995, relating to the asst. yrs. 1975-76 and 1976-77, on the ground that certain mistakes apparent from record have crept into the order of the Tribunal and that the appeals may be heard afresh and decided according to law.

2. As there is a difference of opinion between the Members that heard this miscellaneous petition, the following question has been referred under s. 255(4) of the IT Act for decision by a Third Member : "Whether on the facts and in the circumstances of the case, the miscellaneous petition is fit to be allowed to recall the order of the Tribunal dt. 19th November, 1990 ?" 3. In the order passed by the learned Judicial Member, the alleged mistakes have been extracted in detail. The learned Judicial Member, having been satisfied that the said mistakes apparent from record, have crept into the order of the Tribunal, directed the recall of the Tribunal's order dt. 19th November, 1990, made in the appeals. On the other hand, the learned Accountant Member, who was not inclined to agree with the view expressed by the learned Judicial Member, felt that in case this petition is allowed, it amounts to review of the order of the Tribunal and, therefore, it cannot be allowed. In that way, the difference of opinion cropped up between the two members of the Division Bench consequent to which the point in dispute has been referred to the Third Member, for decision.

4. For proper appreciation of the rival contentions, it is necessary to state the facts that gave rise to this petition.

5. The petitioner/assessee, individual in status, is a jeweller and a money lender. On 29th September, 1975, he filed the return of income for the asst. yr. 1975-76, disclosing an income of Rs. 16,744. On 16th September, 1976, search proceedings were conducted under s. 132 at the business premises of the assessee. During the course of the said search, it was found that the assessee was maintaining duplicate set of accounts. Among other books, one ledger account numbered as SD No. 53 was also seized from the possession of the assessee. It was found that there was gross under-statement of income in the regular books of accounts maintained for the purpose of income-tax. A comparison of the regular books, on the basis of which the IT returns were filed and the duplicate books that were found in the search revealed that advances made to several persons were not at all disclosed in the regular books.

Further, actual advances that were made to certain persons were not correctly shown in the regular books. On the basis of the seized material, particularly, on the basis of SD No. 53, the assessment was framed on a total income of Rs. 2,40,637 which includes the addition of Rs. 2,21,096, made under the head "Income from other sources". The assessee contended before the AO that the entries appearing in SD 53 relate not only to him but also to seven of his family members, that the amounts mentioned in the said ledger should be distributed and apportioned among all the eight family members and that the said amounts cannot be totally added in the hands of the petitioner only.

The AO rejected the said contentions and made the addition. Aggrieved by the assessment, the assessee carried the matter in appeal.

6. It would appear that the assessee and his family members have made disclosures of their income and wealth under the Voluntary Disclosure Scheme, disclosing some of the amounts mentioned in SD 53. It was contended before the CIT(A) that inasmuch as the disclosure had been made in the names of the sons and wife of the assessee, the same should be given a set off in the assessment of the assessee herein concerned.

The learned CIT(A) by his order dt. 21st August, 1979, rejected the said contention of the assessee holding as follows : "So far as the contention that since the disclosure had been made in the names of the sons and wife of the assessee, the same should be given a set off in the assessment of the assessee concerned, I am not in agreement with the same. It is in the assessee's books that the advances are found to have been given and it is to the extent of the disclosed income by the assessee alone that can be given a set off." 7. An alternate contention was raised before the CIT(A) to the effect that certain credits were found recorded in SD 53 and that the said credits should be given a set off. The learned CIT(A) accepted the said plea of the assessee that the credits found in the duplicate set of books if proved to be genuine, should be given a set off. Inasmuch as the AO has not made any investigation into the aspect as to how many of these credits are genuine, the learned CIT(A) chose to remit the matter to the AO, by setting aside the assessments and redoing the same in the light of the directions given in the appellate order. Thus, in order to enable the assessee to prove the genuineness of the credits appearing in the seized document and obtain the relief of set off, the learned CIT(A) has set aside the assessment and restored the assessment to the file of the AO with a direction to reframe the same. Further, the learned CIT(A) has directed that the amount of Rs. 45,000 disclosed by the assessee himself under the Voluntary Disclosure Scheme should be allowed as deduction in his assessment. Thus, the learned CIT(A) had set aside the assessment with a direction to the AO to examine the following two specific issues and then reframe the assessments : (1) The debts and advances made outside the books towards which the addition was made in the assessments, a deduction should be given for credits, if any, appearing in the duplicate books of accounts, after verification.

(2) The assessee and his family members made a voluntary disclosure of a sum of Rs. 2,85,812 under s. 3(1) of the Act on 28th December, 1975, and out of the said amount, credit for Rs. 45,000 declared by the assessee should be given in the assessment, even though such deduction may not be permissible against disclosure offered by other members of the family.

8. Thus, the remand order of the CIT(A) gave as limited mandate to the AO to examine two specific issues and reframe the assessment. It is only for the limited purpose, the assessment was set aside.

Subsequently, the assessment was redone, making an addition of Rs. 1,67,757 under s. 69 on account of unexplained investment under the head 'Income from other sources'. As against the said redone assessment, the assessee carried the matter in appeal once again before the CIT(A).

9. In this second round of litigation, the assessee again contended before the first appellate authority that the amounts noted in SD 53 related to the assessee and his family members, that the assessee and his family members have disclosed various amounts under Voluntary Disclosure Scheme and that the amounts mentioned in the seized books should be apportioned among the assessee and the family members and it cannot be added in lumpsum in the hands of the petitioner/ assessee only. The learned CIT(A) felt that his predecessor's earlier order setting aside the assessment was not for the limited purpose of examining the two specific issues only and that inasmuch as the assessment was set aside, all the issues were wide open and that the question whether the amounts mentioned in SD 53 belong exclusively to the assessee or they have to be distributed proportionately among the assessee and the family members can be considered. He disregarded the earlier findings of his predecessor in office that the gross amount mentioned in SD 53 should be added in the hands of the petitioner/assessee and chose to give the relief prayed for by the assessee. Aggrieved by it, the Revenue preferred the appeal for the asst. yr. 1975-76.

10. The Tribunal, on a thorough and careful consideration of the scope and ambit of the first order of the CIT(A), held, that setting aside of the assessment and remitting the matter to the AO was only for a very limited purpose viz., to examine and decide the two specific issues mentioned therein and reframe the assessment and that it was not meant for the purpose of making altogether a de novo assessment on all aspects. In that connection the Tribunal, in its order dt. 19th November, 1990 held as follows : "Therefore, according to as the includibility of the gross amount towards other sources, viz., Rs. 2,30,164 (Rs. 1,21,611 plus Rs. 1,08,553) cannot be reagitated in the appeal before the later CIT(A), who had delivered the impugned order. We further hold that the CIT(A) having been bound by the findings given by his predecessor CIT(A) is incompetent and has no jurisdiction to entertain the appeal regarding the non-includibility of Rs. 2,30,164 towards the gross amount of income from other sources in the hands of the assessee." 11. Thus, the Tribunal construed the first order of the CIT(A) as a limited one, authorising the AO to examine the two specific issues only and then frame the assessment and, therefore, the learned CIT(A) in the second round of litigation has no jurisdiction to disregard the findings given by his predecessor in office in the earlier order and delete the impugned addition. The Tribunal allowed the deduction of Rs. 45,000 that was declared by the assessee under Voluntary Disclosure Scheme. Aggrieved by the order of the Tribunal, the assessee filed this miscellaneous petition.

12. The learned counsel for the petitioner placed strong reliance on the reasons given by the learned Judicial Member for recalling the order, while the learned Departmental Representative placed strong reliance on the reasons given by the learned Accountant Member for dismissing the petition. I have duly considered the rival submissions.

13. There is no inherent power of review to the Tribunal. Power of review requires to be conferred specifically by the statute. It is well settled that this Tribunal has no power of review since no such power has been specifically conferred on the Tribunal by the statute. In CIT vs. Chelladurai (1979) 118 ITR 108 (Mad), the Madras High Court has categorically held that a power to rectify the mistake does not include a power to review. The Tribunal could only have rectified the mistake pointed out by the assessee or the Department. It has no power or authority to review its own earlier order. Sec. 254(2) confers a limited jurisdiction on the Tribunal to rectify any mistake apparent from the record or amend any order passed by it under sub-s. (1) of s.

254. Thus, with a view, to rectify any mistake apparent from record, the Tribunal may amend any order passed by it under s. 254(2). The scope of s. 254(2) is very limited. It is restricted to correct the mistakes apparent from record. If reasonably two views are permissible on an issue and a Bench of the Tribunal follows one such view and makes the order, another Bench of the Tribunal has no jurisdiction to recall the first order on the mere ground that the other view is more rationale or more reasonable. One Bench cannot sit in appeal over the order passed by another Bench. In this connection it would be relevant to refer to the observations made by the Andhra Pradesh High Court in the case of CIT vs. ITAT (1994) 206 ITR 126 (AP). The High Court, while considering the power of the Tribunal under s. 254(2), held as under : "We are of the opinion that the Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the Court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision." 14. The Orissa High Court in CIT vs. ITAT 196 ITR 590 (Ori) held that a mistake which can be rectified under s. 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. A similar view was expressed by the Orissa High Court in the case of CIT vs. ITAT (1994) 210 ITR 397 (Ori).

15. I have gone through the decision in the case of Maharaja Martand Singh Judeo vs. CIT (1988) 171 ITR 586 (MP) relied on by the learned counsel for the petitioner. I have no quarrel with the ratio laid down in the said ruling but it has no application to the facts on hand.

16. Thus, it is seen from the decided cases mentioned (supra) that the powers of the Tribunal under s. 254(2) are very limited and are circumscribed by the restrictions mentioned therein. Under the guise of rectification an order cannot be reviewed or rewritten. In the case on hand, the alleged mistakes referred to by the petitioner radiate from the central issue viz., whether the first order of the CIT(A) setting aside the assessment was only for the limited purpose of examining two specific issues or whether it was meant for redoing the assessment de novo on all aspects. The Tribunal, after duly and thoroughly considering the first order of the CIT(A) came to the conclusion that the learned CIT(A) had set aside the assessment for the limited purpose of enabling the AO to examine the two specific issues and reframe the assessment. The view taken by the Tribunal in that regard may or may not be correct. It is a different issue. However, the fact remains that the Tribunal, after duly considering all aspects and applying its mind, has come to that view. Even if the said view is held to be erroneous, it cannot be said to be a mistake apparent from record since the said view having been arrived at, after due application of mind to the facts on hand and the relevant material on record. When once it is held that the first order of the CIT(A) was a limited one, giving a limited mandate to the AO to examine two specific issues only, and nothing more, and reframing the assessment, the alleged mistakes pointed out in this petition cannot be said to be mistakes at all. The same can be considered to be mistakes if the first order of the CIT(A) setting aside the assessment was not a limited one. However, that is not the case here. The specific finding of the Tribunal is that the scope of the said order of the CIT(A) is very limited and that the findings given by the CIT(A) in the said order which has become final cannot be unsettled by his successor-in-office in the second round of litigation.

17. In my considered opinion, the learned Accountant Member very rightly came to the conclusion that in case this petition is allowed, it amounts to a review of the order of the Tribunal which is not permissible under the law. In effect, the petition under the guise of rectification of a mistake apparent from record, is seeking for a review of the order of the Tribunal which is not permissible under the law. On a due consideration of the material available on record, I am in agreement with the view taken by the learned Accountant Member, that this miscellaneous petition deserves to be dismissed.

18. For these reasons, I agree with the opinion expressed by the learned Accountant Member. The matter will now go before the regular Bench for the disposal of the petition in accordance with the opinion of the majority.

1. In accordance with the order dt. 22nd January, 1997 passed by the Third Member and in conformity with the majority view, the miscellaneous petition stands dismissed.