Income Tax Appellate Tribunal - Pune
Modu Timblo vs First Wealth-Tax Officer on 6 April, 1995
ORDER
V.S. Gaitonde, Accountant Member
1. These petitions have been filed by the assessee as arising out of Wealth-tax Appeals Nos. 334 to 344/ (PN) of 1985, 345/(PN) of 1985 and 346 to 356/(PN) of 1985. As common points are involved in these M. As. they are taken up together and are disposed of by a common order for the sake of convenience.
2. Shri Srinivasan raised a preliminary point about the admissibility of the M. As. which show clearly that an attempt is being made to induct new evidence by the back door and to seek a review rather than rectification. The M. A. is to be confined to rectification of glaring and obvious mistakes of facts and/or of law on the basis of records at the time of hearing. Shri Dastur, in reply, submitted that the question whether any particular evidence is to be looked into will be explained by him in the light of certain High Court judgments. It is not an infalliable rule that in every M.A., no fresh evidence should be looked into. He is not seeking a review but a recall of the order for proper adjudication of the points. In view of this situation, we allowed Shri Dastur to proceed.
3. In the course of his arguments, Shri Dastur made a grievance that in Income-tax Appeal No. 345/(PN) of 1985, there is only an observation in paragraph 10 that the other case law is also clearly distinguishable, but no point of distinction is actually given. We have, however, referred to this aspect in paragraph 8 of Wealth-tax Appeals Nos. 334 to 344/(PN) of 1985. There was no dispute with the principles therein. CWT v. Bhogilal H. Patel [1978] 112 ITR 910 (Bom) is an authority only for the limited proposition that where dividends are declared subject to obtaining remittance from Pakistan conditional declaration does not create a debt due to the assessee and that, consequently, the amount of such dividend is not includible in the net wealth. The ratio of this judgment thus does not touch the issue regarding valuation of a debt Which was being considered by the Tribunal. Similarly, CWT v. Raghubar Narain Singh [1984] 146 ITR 228 (SC) is regarding the valuation of rights to receive zamindari compensation with reference to deduction of arrears of agricultural income-tax and hazards of litigation, etc. The question before the Tribunal thus has no bearing on the ratio of this judgment also.
4. We may also briefly restate the course of hearing before us, as counsel who appeared before us in the above appeals is unfortunately not alive. The assessee, an Indian citizen of Goan origin and residing in Goa declared in 1963 certain foreign assets, as required under the Foreign Regulations. One such asset was as mentioned in paragraph 8 of our decision, described as below :
" Balance with party or parties in Lisbon on account of business deal with party or parties in Lisbon or elsewhere £11,50,750 (at present not realisable). "
5. The Tribunal took note of the fact that this narration is vague in so far as names and addresses of the parties in Lisbon or elsewhere are concerned. The Tribunal thus could not hold that the anonymous debtors are located only in Lisbon or that the debts were contracted to be repaid only in Lisbon or other Portuguese territories. The Tribunal took note of the decision for the earlier years on the same point. The assessee's counsel was good enough to invite our attention to the earlier decision which we would normally follow unless new facts or legal points emerge. Accordingly, counsel brought our attention to the two new aspects. The first one is the legal aspect mentioned in paragraph 7 of our order, in Wealth-tax Appeal No. 345. Out of three judgments only CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 (Guj) was taken as having some bearing on the question and it was explained in paragraph 10 of Wealth-tax Appeal No. 345 how the ratio of that judgment would not be applicable. The other two decisions have been mentioned in paragraph 3 above. It was held that a mere assertion that a debt is irrecoverable without any evidence that the debts are not realisable cannot be accepted. The debtors and their locations were not mentioned with the clarity required for the purposes.
6. The second alleged new aspect mentioned by Shri Joshi was regarding the decision of the Wealth-tax Officer granting stay. This aspect was actually referred to in the earlier years' Tribunal decisions also but Shri Joshi contended that this aspect having an important bearing on the question of valuation has not received adequate attention. The Tribunal, therefore, called upon learned counsel to give his say about the restrictions, if any, regarding remittance to be considered subject to the contention of the Revenue that, neither the debtor nor the situs of the debts were given with the precision required for finding out whether the provisions of Section 31(7) are attracted. As no data whatsoever was produced or sought to be produced, the Tribunal held that even if there might be some difficulty soon after liberation, unless it is shown by some proper evidence that there were real fetters in realisation of the value, difficulties in remittance may not warrant a departure from the conclusion for the earlier years. Our notings also show that no specific request was made for permission to produce additional evidence or that such evidence already existed.
7. The third factual aspect brought out by Shri Joshi was regarding the correspondence between the assessee and the Government of India. This aspect was also duly examined even though the same did not exist on the valuation dates prior to 1971-72. The conclusion emanating from this correspondence was that the debts are still realisable though remittance in the form of cash might be beset with difficulties. The question was examined in the light of the fact that the assessee was himself prepared to bring the entire amount disclosed by him if only he was permitted to import goods of that value. The Government of India was prepared to allow import of goods to the extent of 50 per cent, if the assessee remits the balance. In 1974, the talks between the assessee and the Government of India broke down and the latter gave two years' time to remit the amounts. As it was stated at the Bar that even after the expiry of the two-year period, there has been, in fact, no remittance back to India and that the foreign exchange control authorities have also not taken any further action in the matter in the form of prosecution, etc., taking these aspects into consideration, the Tribunal held that in respect of the years falling beyond 1976, some discounting may be necessary and since the matter was one purely of estimate, instead of setting aside the order, an ad hoc 20 per cent, discounting was permitted.
8. Now, the contention of Shri Dastur is that the Tribunal has not considered the overall factual aspects and legal aspects. Firstly, no letters or other documentation was exchanged between the assessee and the said Portuguese party. Actually the amount was remitted for import of textile machinery but before the import could be made, Goa was liberated in December, 1961. The assessee's declaration of the amount under the FERA regulations were thus subject to these conditions and did not indicate the actual market value of the debts in question. The value was nil. The Wealth-tax Officer did consider the aspect regarding absence of documentary evidence, time-bar serious disability in filing claim in Portugal, an enemy country, and the Government of India not agreeing to the assessee's proposal for importing 100 per cent, goods. The Wealth-tax Officer, however, valued the debt as declared to the FERA authority but the Wealth-tax Officer accepted the position that the provision of Section 31(7) regarding the stay to be granted in respect of assets located in a country where there are prohibitions or restrictions on remittances are attracted.
9. Now, the contention of Shri Dastur is that the attention of the Tribunal was specifically drawn to the words used in the correspondence with the Government that the assets are "frozen". This aspect has not received the attention of the Tribunal. Secondly, it was an agreed position that the Wealth-tax Officer had accepted that the conditions of Section 31(7) are fulfilled. The Tribunal, however, came to a contrary finding without giving proper opportunities to the assessee. Normally, the Tribunal cannot depart from an agreed position. There is thus a clear error in the Tribunal finding that there are no restrictions or prohibition on the remittance. The Tribunal should, therefore, have given a reasonable opportunity or sent the matter back for readjudication on the issue. Shri Dastur next contended that the Tribunal has also not taken note of the contents of the correspondence that goods could not be imported from Portugal and South Africa. Lastly, the Tribunal has also not given due importance to the contention made that matters have remained stagnant all along. Regarding the observation of the Tribunal that there was no evidence in support of the contention regarding restriction or prohibition on remittance Shri Dastur contended that all that Shri Joshi admitted was that there was no evidence at present. It was not the contention of Shri Joshi that if time was given, evidence could not have been produced.
10. Shri Dastur next contended that it is not an infallible rule that in the course of M. A. no new material can be looked into. In support of this contention, he referred to CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal). In this case, the Tribunal proceeded on a wrong finding of fact that the donor trust was not a charitable institution. This was because neither side brought to the notice of the Tribunal the correct fact. On a M. A. by the Department that the donor trust has been held to be a charitable institution, the Tribunal declined to entertain the same. Their Lordships held that the Tribunal should have, in the course of M. A. taken note of the fact regarding the donor trust though the same was not available to the Tribunal at the time of hearing. Thus, when the Tribunal did not find the basic and primary facts for deciding the controversy, it could not be said that the Tribunal has done justice to the case by not entertaining the M. A. of the Revenue.
11. The second case to which reference was made was the Delhi High Court decision in CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840. In this case also, the question was of capital gains in the case of one co-owner. The Tribunal proceeded on the basis of admission from both sides that a particular value had been adopted in the case of another co-owner. Later on, it was brought to the notice of the Tribunal that this was not factually correct and that a different value was adopted in the case of other co-owners. Their Lordships held that although this fact was not before the Tribunal at the time of first hearing, the Tribunal was duty bound to look into this aspect and rectify the same.
12. According to Shri Dastur in view of the above legal position, the Tribunal ought to have looked into certain aspects before arriving at the conclusion that there are no restrictions or prohibition on remittances. In this respect, Shri Dastur referred to the Indo-Portugal Treaty of 1975. He also referred to a decree issued in Portugal regarding prohibition on remittances and confiscation of properties of persons who were in Goa. In support of his contention that the Income-tax Department is duty bound to examine the records even though they might not technically form part of the records of the assessee and examine a particular factual aspect not even to one existing on the date of decision, he placed reliance on Mahendra Mills Ltd. v. P.B. Desai, AAC [1975] 99 ITR 135 (SC) at page 142. This was a case where a later Tribunal decision was considered as giving rise to a mistake apparent from the record in the order of the Appellate Assistant Commissioner, regarding valuation of stocks. Thus, the records which required to be referred to within the scope of Section 154 need not exist at the time of the decision of the particular authority.
13. Shri Dastur then submitted that the Indo-Portugal Treaty constitutes law and if the same is not considered, though due to be considered, it would constitute a glaring and obvious mistake of law. In support, he relied on CIT v. Ram Nath Prem Kumar [1980] 124 ITR 404 (P & H) where the Income-tax Officer had overlooked the statutory provision of Section 40A(3) and it was held that such an overlooking constitutes a mistake apparent from records. He also placed reliance on D.S. Chinai v. WTO [1985] 11 ITD 9 (Hyd) and Indocean Engg. (P.) Ltd. v. ITO [1985] 14 ITD 483 (Hyd). According to Shri Dastur, article of the Indo-Portugal Treaty provides a complete answer to the question regarding restriction on remittances, difficulties in realisation, etc., and nothing would be recovered at least till then. Thus, only when these restrictions and prohibitions were removed in 1975, there could perhaps have been a debt of any value.
14. Shri Dastur was aware of the fact that the provisions of Section 31(7) as interpreted by the Wealth-tax Officer were not the sole basis for coming to the conclusion regarding the value. He, however, submitted that since one of the wrong considerations which weighed in the mind of the Tribunal is regarding remittances, the entire order should be considered as vitiated, being based on an irrelevant consideration. To our query as to how this would constitute an irrelevant consideration and not a mere wrong application or understanding of the situation, Shri Dastur contended that wrong application is synonymous with irrelevant consideration.
15. Shri Dastur then took us through paragraph 10 of the Tribunal's order in Income-tax Appeal No. 345, and once again reiterated that the contention regarding the fact that the debt is frozen and, therefore, does not constitute an asset has not been considered. He further contended that the Gujarat High Court in CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 is wrongly applied because the Tribunal has proceeded on the wrong footing that the factum of prohibition on remittances is accepted in that case, whereas it was not accepted in the appeal before us. If the factum of prohibition or restriction is accepted, as it should have been, by the Tribunal, the value would be nil. He further reiterated the point that the Tribunal has not given due consideration to the contention that in the absence of a written contract the assessee could not have filed a suit for recovery. He next contended referring to paragraph 16 of the M. A., that when the Tribunal has taken note of the inaction of the Reserve Bank of India itself and is convinced about the value of the debt being eroded, there is no reason for holding back the aspect for the other years. Shri Dastur then referred to J.K. Bankers v. CIT [1974] 94 ITR 107 (All) and paragraph 18 of the M. A. regarding the limitations of the Tribunal about going beyond the facts which are not in dispute. Since the applicability of Section 31(7) was not in dispute the Tribunal exceeded its jurisdiction in giving a finding to the contrary. Summing up, Shri Dastur submitted that this is not a case where he could put the blame on anyone, but in the interest of justice, the order should be recalled and the various issues examined de novo so as to cause no injustice to the assessee who has now been saddled with a liability of nearly Rs. 75 lakhs.
16. In reply, the Departmental Representative contended that a good portion of the argument of the learned advocate seeks a review rather than rectification. He pointed out that the Tribunal does not depart from the earlier decision on the same factual and legal position but does not stop the parties from pointing out new aspects (see CIT v. S. Devaraj [1969] 73 ITR 1 (Mad)). It would be improper to suggest that the earlier Tribunal has misdirected itself on law, on any of the points now canvassed by Shri Dastur. The Tribunal has examined the issue fairly and objectively. It is now settled law that the decision of the Tribunal is not to be examined through a microscope as it were. In a M. A., there is no scope for re-examining the issues. The order of the Tribunal may not mention the various aspects in the manner in which the losing party would like it to be but this cannot warrant the acceptance of a M. A., which proposes wholesale review which would go out of the purview of glaring and obvious mistakes. From the order, it cannot be said that the Tribunal has not examined any of the aspects. The overall picture emerging is that the Tribunal was fair in giving a further opportunity even at the Tribunal stage to the assessee to present any factual or legal points not considered by the earlier Bench. All the new aspects raised have been duly dealt with. There was not even a request from learned counsel for admission of new evidence or of the alleged existence of such evidence. It is too far-fetched an argument to suggest that the Tribunal should have embarked on a research programme on its own, hunting for new material which might support the assessee. Regarding reliance on CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal) and CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840 (Delhi), the Departmental Representative contended that one need not dispute these principles. Without prejudice, the Departmental Representative submitted that one need not go to these judgments when there is a direct judgment of the Bombay High Court in Velji Deoraj and Co. v. CIT [1968] 68 ITR 708. Their Lordships have held clearly that the right of a party to produce new evidence is not an inherent right but is subject to the consideration as to whether the same is necessary for the disposal of the appeal. Where a particular matter affects a particular point directly, it may be necessary to see such of the records as were considered relevant. One need not be dogmatic about it but such records should have a direct nexus. When the assessee does not mention the name or names of the debtors and does not even state clearly that the debt is situated in Portugal, looking at the Indo-Portugal Treaty, which does not state anything about restriction on remittances, etc., would be a futile exercise. Now, for the limited purpose of finding out the relevance, Shri Srinivasan pointed out that article III of the Treaty on which so much reliance is placed, merely states about the Indo-Portugal accord to settle through bilateral negotiations all questions between them including those concerning the property, assets or claims of citizens of their respective countries, as well as questions concerning State property and assets of either State in the territories of the other State. This does not have even a remote connection with the question decided by the Tribunal. Thus one need not dispute the principles that the treaty is law, but there is no question of applying such law if it is otherwise not applicable at all.
17. Regarding the contention that the Government had referred to the assets as frozen, the Departmental Representative submitted that it cannot be said that the Tribunal did not consider this aspect. The word "frozen" is to be read in the context in which it is mentioned in the correspondence. It is not what the Government has said but what the assessee has said. Much of its force is taken away because the very letter which refers to frozen assets also proposes to bring the amounts to India though not in cash. The word "frozen" has then a limited impact on the question of the existence of assets or valuation thereof. Further, the Departmental Representative referred to the assessee's letter dated May 6, 1975, to the Finance Minister in which the assessee has stated as below ;
"To summarise our case, I may state that I was engaged in transacting banking business before liberation of Goa and used to finance the importers to import goods. According to the regulations in Goa, the importers in Goa were allowed to import goods without providing foreign exchange and I used to procure foreign exchange for the importers, through my Lisbon partner. Due to sudden police takeover in Goa, my advances to the tune of Rs. 2.17 crores (£1.1 million) were blocked in abroad via Lisbon."
18. Regarding the alleged excessive exercise of jurisdiction by going beyond the agreed position regarding Section 31(7), the Departmental Representative pointed out that there is an apparent fallacy in this argument. Section 31(7) refers to grant of stay which does not say anything about the valuation of assets. If as now contended the value of an asset where stay under Section 31(7) is due is to be nil, the provision would stultify itself as there would then be no demand to be stayed. The principle of valuation and the law regarding restriction or prohibition operate in their own fields and have limited mutual interactions. Further, the Tribunal has ample powers to show to what extent Section 31(7) has been correctly applied. This is not a case which the representative has called admitted position. The Tribunal has taken note of both the aspects, viz., valuation and Section 31(7), as taken by the Wealth-tax Officer. The factual aspect, viz., similar contentions have been taken and considered in the earlier years before adopting the par valuation has also been noted. There is thus no question of there being an agreed position that Section 31(7) automatically operates to convert any such asset which cannot be remitted, into an asset of nil value. The alleged restrictions could not, therefore, have been considered as affecting the valuation in the manner proposed by the learned representative.
19. The proposition that if the Tribunal did not agree to the Wealth-tax Officer's interpretation of Section 31(7), the Tribunal should have sent the matter back is clearly untenable. Firstly, this was only one of the several factors considered. Secondly, on account of the anonymity of the debtor as also the location of the debt or asset there would not be any question of sending the matter back because it was not the case of the assessee that he was denied opportunities at the appropriate level or that some important new material had come into his possession for the first time. When counsel does not even say that he would like to collect evidence the question of remittance back to the authorities below or waiting indefinitely for such evidence to come would not arise. Further, it cannot also be said that the Tribunal has not considered the impact of restrictions put by the Government that goods cannot be imported from Portugal or South Africa. Import of goods was the assessee's offer and, therefore, it was for the assessee to explain how in spite of the freeze, prohibition and restrictions, he could moot his proposal. The Departmental Representative next pointed out that the Tribunal has also taken note of the difficulties in realising the debts through suits. The valuation cannot be made to depend wholly on the assumption that unless the suit is filed there would be no recovery. The Tribunal had enough material on this point because it was the assessee who stated that he can bring the amounts in a particular manner. This would normally show that notwithstanding the absence of the written contracts as alleged or the expenses or alleged time-bar, the assessee still considered himself confident of bringing the money if only he was given permission to bring the same to the extent of 100 per cent. in the form of machinery. Lastly, the question of valuation does not depend upon the decision which the Government may take on particular facts. Nevertheless, the Tribunal has in a fair manner held that since after 1976, \matters have remained stagnant there could be some hesitation on the part of the prospective buyers taking over the rights of the assessee at par value and gave some deduction. The Tribunal has rightly left the issue open for later years.
20. In the course of hearing, an attempt was made by Shri Dastur to show that the fact that the debt was expressed in sterling has also been taken out of context. Shri Dastur tried to produce an opinion of an advocate, Shri Periera. But such opinion cannot be taken unless the expert himself is available. Besides, there is nothing to show why such an opinion could not be led at the time of hearing. Nothing, therefore, turns on the alleged opinion.
21. The Departmental Representative wound up his arguments pointing out that in any case the issues now raised through this M. A. are highly debatable issues and are thus clearly beyond the purview of the M. A. The allegation that basic submissions are not taken into account is incorrect. Regarding Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC), Shri Srinivasan pointed out that the ratio actually supports the Department's case because as far as can be seen the Tribunal has not considered any irrelevant matter. He referred to a later judgment of the Kerala High Court in Dy. CST v. M.P. Chellappan [1987] Tax LR 2188 indicating that if additional evidence is to be taken in this manner, it would not be in conformity with law.
22. In his rejoinder, Shri Dastur contended that the ratio of Velji Deoraj and Co. v. CIT [1968] 68 ITR 708 (Bom) would not be applicable because that was a case of cash credit where the assessee wanted to produce some evidence to strengthen his case and this amounted to an attempt to revive lost opportunities. The facts of the present case before us do not give any such indication. The ratio would not apply where the fundamental law on the point is not considered by the Tribunal. He further contended that the contention that the Tribunal has not given any finding about the absence of restrictions is not correct. This is clearly mentioned. He further contended that Section 31(7) deals with remittances to India and the contention that there are no restrictions on remittances to other countries through which the assessee could have brought the amount to India is not tenable because in such matters one has to see fairly what the normal buyer would do. He further contended that Shri Joshi's contention at the time of regular hearing that he does not have evidence at the moment does not mean that the assessee was prepared to proceed without any further evidence. Regarding the contention of the Departmental Representative that 1971 correspondence is not relevant for the assessment years 1969-70 and 1970-71, etc. Shri Dastur submitted that this is not as if evidence later available changed the pre-existing position. It merely enlightens us on a pre-existing position. Shri Dastur then contended that since the Wealth-tax Officer has given a finding that the assets were located in Portugal, there is no question of the Tribunal stating that the debts were not so located. Lastly, Shri Dastur contended that the very fact that after 1976, the Tribunal was prepared to give discounting means that for earlier years also a substantial discounting was warranted.
23. We have examined the various facts and arguments. In our opinion, the Tribunal has examined as objectively as possible all the facts of the case. It found as a matter of fact that although the assessee was claiming that he had one foreign debtor, he never gave particulars with the precision required. He merely used broad language as frozen. The word "frozen" is to be read in the particular context. The very Wealth-tax Officer who granted stay under Section 31(7) had no doubt about valuation of the asset. This was also the view held by the Income-tax Appellate Tribunal in earlier years. Thus, the decision of the Wealth-tax Officer regarding grant of stay has no direct bearing on the point. We do not also agree with the proposition that the grant of stay in respect of tax on certain assets which cannot be remitted to India without difficulty is determinative of the true character of the debt or its value. The Tribunal has taken note of the various contentions regarding time-bar, absence of documents, alleged restrictions, etc., and yet found that there is no material to warrant a departure from the earlier conclusion even after considering the 1971 and later correspondence except for post 1977-78 assessments. From paragraph 6 onwards, the Tribunal has taken note of the contention regarding time-bar, Portugal being an enemy country and the implications of Section 31(7), etc. In paragraph 7 of Wealth-tax Appeal No. 345, the Tribunal has fairly summarised the contention made before it by learned counsel for the assessee. It is quite clear that no representation was made that for any of the earlier years factual or legal aspects except those already canvassed at the time of hearing required further examination. Whilst we do agree that in some cases, even in the M. A., it may be necessary to refer to new documents which whilst not existing at the time of passing order, may be relevant, from the various contentions made by Shri Dastur, we cannot say that there is any such matter which goes to the root of the matter. It would be futile to expect the Tribunal to proceed on its own and convert itself into a research organisation and gather material or evidence which the parties have not even expressed a desire to produce. There can be no limit to the enquiries that could be made ostensibly in the interest of justice, but if the Tribunal has drawn a line somewhere, there would not be a glaring mistake. We have also considered the question whether the evidence now proposed to be produced regarding the India-Portugal Treaty, the opinion of Mr. Periera, etc., can be considered for the purpose of this M. A. We do not find any justification for the same. Paragraph 8 of the Tribunal order shows clearly that the assessee himself never stated that the parties were actually in Portugal or that the debts were contracted to be repaid only in Portugal. All the facts including the assessee's own offer have been objectively examined. We find that far from seeking to produce new evidence, learned counsel at the time of hearing before us was at pains to explain how for reasons beyond the control of the assessee, there would be hardship if the same value was repeated from year to year. In paragraph 10 of our order (Wealth-tax Appeal No. 345), we have left the issue open for re-examination of the valuation on the basis of whatever facts and legal arguments the assessee might bring in later years.
24. We cannot also agree with the proposal that the Wealth-tax Officer having accepted that the conditions of Section 31(7) are fulfilled, would have put fetters on the Departmental Representative for assisting us in arriving at a proper decision. It is true that the Tribunal has held that no evidence was produced regarding the alleged prohibition or restriction. But the Tribunal also made it clear in paragraph 12 of its combined order (Wealth-tax Appeals Nos. 334-344) that it would not express any opinion on the stay granted by the Wealth-tax Officer as the same is not relevant for our purpose. As pointed out by the Departmental Representative, this provision (Section 31(7)) and the provisions regarding valuation operate in their own fields. If as now contended, the applicability of Section 31(7) automatically brings the value of the movable assets to nil, there would be no question of applying the provision as the demand itself would be nil. The Tribunal also has found on the basis of evidence that the value of the debt could as well have been higher than the original declaration. Thus, it is the combined effect of all the facts that has led the Tribunal to value the asset in a particular manner. It cannot, therefore, be said that there is any mistake glaring or obvious of fact or of law arising in this case.
25. For these and other reasons canvassed by the Departmental Representative, we hold that there is no merit in these M. As. which stand rejected. We would make it clear that in the course of the M. A. hearing, we have not examined any new evidence as we have held that there is no case made out for entertaining new evidence.
T.A. Bukte (Judicial Member)
26. I have gone through carefully the order of my learned colleague on the abovesaid miscellaneous applications and I am of the opinion that the request of the assessees' learned counsel, Shri S. E. Dastur, to call back the appellate order passed in Wealth-tax Appeals Nos. 334 to 344/(PN) of 1985, 345/(PN) of 1985 and 346 to 356/(PN) of 1985 should have been accepted and the order should have been called back for rehearing the appeals. Therefore, I do not agree with the view taken by my learned colleague in this respect and I give my own reasons for accepting the contentions of learned counsel Shri S.E. Dastur to recall the appellate order for giving an opportunity of being heard on the merits to the assessees.
27. Firstly, there is no doubt that the learned Departmental Representative, Shri K. Srinivasan, has raised a preliminary point about the admissibility of the miscellaneous applications. The miscellaneous applications have been argued to the fullest length and many submissions have been made why it is necessitated to recall the orders passed by the Tribunal in the appeals. It would now be better to deal with those submissions one after another.
28. It would not be out of context to mention certain facts relevant to decide these miscellaneous applications. Goa was liberated in December, 1961. Prior to that, it was under the control of Portugal. The assessee was doing his business. He deposited a sum of £ 11,50,750 with a party in Portugal prior to liberation of Goa to supply some goods under import licences granted by the Portuguese authorities. This contract was not reduced into writing. The goods were not yet despatched to Goa before liberation. The Foreign Exchange Regulation Act was made applicable to Goa from March 11, 1963, and the residents of Goa, Daman and Diu holding foreign currency balances abroad were required to declare them to the Reserve Bank of India.
29. The assessee declared his foreign balance to the Reserve Bank of India and also disclosed this balance in his wealth-tax return. He mentioned in the return of wealth that the foreign balance was not realisable and contended that there was no documentary evidence to prove the claim, the debt was time-barred, nothing could be received as Portugal was an enemy country and that the Government of India did not agree to the suggestion for 100 per cent, import of goods and the Government insisted upon 50 per cent, repatriation of the balance and nothing could be done.
30. The Wealth-tax Officer and the Appellate Assistant Commissioner did not accept these contentions. The Wealth-tax Officer added the entire rupee value of the balance to the assessee's wealth for all the years in question. But the Wealth-tax Officer did not start recovery and kept the demand in abeyance under Section 31(7) of the Wealth-tax Act. The assessee went in appeal before the Tribunal. Whether the right to receive the foreign balance was an asset or not was a question to be decided by the Tribunal. The Tribunal decided that it was an asset of the assessee. The second question before the Tribunal was what was the value of that asset. The assessee took support from the judgment of the Gujarat High Court in the case of CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 to decide the value of the asset.
31. It was contended on behalf of the assessee that no value of the said asset was includible or in any event, the value of the said asset would be nil because there was no documentary evidence to prove the claim. The claim was barred by law of limitation and no remittance could be received from Portugal being an enemy country. The Wealth-tax Officer also accepted the fact of there being a prohibition or restriction on the remittance and hence, kept the recovery in abeyance under Section 31(7) of the Wealth-tax Act. The judgment of the Gujarat High Court in the case of Shri Sadiqali Samsuddin [1985] 152 ITR 190 was brought to the notice of the Tribunal, It was urged that because of the restrictions imposed on remittances or repatriation of a balance or deposit in a foreign country could not be taken at the full value and nothing could be included in the net wealth of the assessee. The Tribunal concluded that the entire rupee value of the deposit in Portugal was includible on the valuation dates after March 31, 1974, and the Tribunal gave a discount of 20 per cent. The Tribunal did not give any discount on the valuation dates before March 31, 1974. The Tribunal held that :
(1) There was no correspondence on record to show that the debt was not recoverable.
(2) The assessee has offered to import goods of the equivalent amount and hence, it indicated that the debt had a value and, therefore, the value could not be less than the face value of the debt.
(3) No data or other material was produced regarding restriction on remittance in Portugal law.
(4) The Tribunal distinguished the judgment of the Gujarat High Court in CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 on the ground that in that case, the fact of the restriction on the remittance was clearly admitted and there was no evidence in support of the restriction in the present case.
32. There was also nothing to suggest that the debt existed in Portugal alone and the Portugal Government was not prepared to allow repatriation facilities for the assessee. Thus, the Tribunal confirmed the additions.
33. Learned counsel, Shri S.E. Dastur, has contended that the finding of the Tribunal that there was no prohibition or restriction on repatriation of funds from Portugal to India is contrary to the facts which are on the record of the Tribunal and, hence constitutes an error apparent on the face of the Tribunal's order. He has pointed out from pages 8, 11, 12, 16 and 19 of the compilation in respect of the correspondence between the assessee and the Government of India pertaining to prohibition or restriction. The Government of India has used the words "frozen funds in Portugal". Shri Dastur also brought to our notice the Wealth-tax Officer's action of keeping the demand in abeyance under Section 31(7) of the Wealth-tax Act for the assessment year 1969-70 and of not treating the assessee as a defaulter. The Wealth-tax Officer has specifically mentioned that "the tax on foreign assets of Rs. 1,03,57,678 located outside India is kept in abeyance under Section 31(7) of the Act." The recovery for subsequent years also is kept in abeyance under the said section. That the funds could not be repatriated to India from Portugal was not challenged by the Wealth-tax Officer as he kept the demand in abeyance.
34. Shri Dastur contended that the Tribunal's finding that there is no prohibition or restriction on repatriation is inconsistent with the factual position which becomes clear from the correspondence between the assessee and the Government of India. This correspondence was on the record of the lower authorities and the Tribunal. The Tribunal would not have gone away from this finding of the Wealth-tax Officer. The judgment of the Allahabad High Court in the case of J.K. Bankers v. CIT [1974] 94 ITR 107 was cited before the Tribunal and relied upon by the assessee urging that it was not open for the Tribunal to adjudicate or to give a finding on questions which were not in dispute and which did not form a part of the subject-matter of the appeal. The Tribunal's finding is contrary to the provisions of the law and hence constituted an error of law. According to Shri Dastur, such an error can be rectified at any stage and more so even at the stage of hearing of the miscellaneous application.
35. Shri Dastur also made a reference to the Indo-Portugal Treaty dated December 31, 1974. He has pointed out that the diplomatic and economic relations between the two countries were resumed for the first time in December, 1974, only after signing the treaty after about 20 years. He drew our attention to article III of the treaty which provides that both the countries would settle all disputes through bilateral negotiations concerning property, assets or claims of citizens of their respective countries. The treaty has become law and, therefore, the Tribunal would have considered the treaty as a law. In support of this proposition, Shri Dastur has relied on page 100 of "Jurisprudence" by M.J. Sethna and contended that the international law is a very good example of conventional law. He has also relied on page 193 of legal sources of law including conventions, agreements and treaties and he has pointed out from page 195 that conventions, contractual relationships and treaties between nations may be regarded as an important source of law. He urged that the Tribunal has overlooked a law and, therefore, it is its duty to rectify the said mistake. According to him, it is immaterial by whom the mistake is committed. Mr. Dastur has relied in support of his contention on three judgments :
36. He has relied on the judgment in the case of CIT v. Ram Nath Prem Kumar [19801 124 ITR 404 (P & H), wherein the Tribunal has overlooked the provisions of Section 40A(3), the decision of the Special Bench in the case of D. S. Chinai v. WTO [1985] 11 ITD 9 (Hyd) and in the case of Indocean Engg, (P.) Ltd. v. ITO [1985] 14 ITD 483 (Hyd). In the case of D. S. Chinai [1985] 11 ITD 9 (Hyd), the Tribunal has held that if an applicable provision of law is left out without being applied, the order suffers from an apparent mistake, which is liable to be rectified under Section 35 of the Wealth-tax Act. The Tribunal has held in the case of Indocean Engg. (P.) Ltd. [1985] 14 ITD 483 (Hyd) that rectification should be made on the basis of retrospective amendment to the definition of entertainment expenditure under Section 37(2A) of the Income-tax Act. Thus, Shri Dastur has contended that the provision of Section 254(2) cannot be limited only to the appeal papers and the record with the Tribunal at the time of hearing of the appeal. He has relied upon the judgment of the Supreme Court in the case of Mahendra Mills Ltd. v. P.B. Desai, AAC [1975] 99 ITR 135 and CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal). In the case of Mahendra Mills Ltd. [1975] 99 ITR 135, the Supreme Court has held that for fixing the value of the opening stock for the assessment year 1960-61, the value placed by the Tribunal in the appeal for the assessment year 1959-60 should be considered. The Supreme Court overruled the contention that the decision of the Tribunal for the assessment year 1959-60 could not be looked into because it was given after the decision of the Appellate Assistant Commissioner for the assessment year 1960-61. According to Shri Dastur, it is permissible to consider matters relating to earlier assessment years and which were not before the appellate authority at the time of passing the order. In the case of Nopany Education Trust [1986] 159 ITR 367 (Cal), the assessee, a public charitable trust, received donations from two other trusts. The Income-tax Officer held that the donor trusts were charitable trusts and, hence the donations were hit by Section 12(2) of the Income-tax Act. The Tribunal accepted the contention that the donor trusts were family trusts and, hence the provisions of Section 12(2) were not attracted.
37. Thereafter, the Department made a miscellaneous application and contended that, the finding of the donor trust being family trust was not based on facts. The Department produced assessment orders of the donor trust and contended that the correct facts were now brought on record and the Tribunal should rehear the appeal. The Tribunal rejected the Department's miscellaneous application on the ground that the assessment orders of the donor trust were not on record before the Tribunal at the time of hearing of the appeal. The Tribunal held the view that if the assessment orders of the donor trusts were now looked into, it would amount to review of the decision which was not permissible. The Calcutta High Court has held that rejection of the Department's miscellaneous application by the Tribunal was wrong and the Tribunal has erred. Shri Dastur has pointed out the relevant observations from pages 373 and 374 of 159 ITR 367 (CIT v. Nopany Education Trust). It has also held that the Tribunal should not have brushed aside the said assessment orders on the ground that the rehearing of the appeal after cancellation of its order would amount to a review. The Tribunal has inherent powers to rectify a wrong committed by itself. The High Court has held that the Tribunal ought to have given an opportunity to the Department to produce the records or to call for the records when the correctness of the primary facts was in question. When there is a dispute as regards the assessment orders of the donor trusts and where the conclusion of the Tribunal entirely depended on the question of law on the basis of the correctness of the primary facts and when it was pointed out that the basic and primary facts were contrary to the evidence on record, the Tribunal should have entertained the miscellaneous application and reheard the appeal.
38. Shri Dastur also relied on the judgment in the case of CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840 (Delhi). In that case, 17 co-owners were to be given 30 per cent, of the constructed area under an agreement with the company. The assessee valued the said portion of the constructed area at Rs. 18 lakhs to compute the capital gains. The Appellate Assistant Commissioner reduced it to Rs. 54 lakhs. At the time of hearing, it was pointed out that the Commissioner of Income-tax (Appeals) adopted the value of the said portion at Rs. 42,50,000 in the case of other co-owners and it was accepted by the Department. The assessee pleaded to accept the same value in his case also and the Tribunal accepted his claim. Subsequently, the assessee discovered that his contention to accept the value of Rs, 42,50,000 was based on a mistake because the Tribunal had confirmed the value at Rs. 18 lakhs on appeal by the other co-owners. Therefore, the assessee made an application for rectification of the order under Section 254(2). The Tribunal allowed the assessee's miscellaneous application, reheard the appeal and confirmed the value at Rs. 18 lakhs. The Department's applications both under Sections 256(1) and 256(2) were rejected. The Delhi High Court has held that the Tribunal has accepted the position that the earlier order was based on a mistaken assumption. That the decision of the Commissioner of Income-tax (Appeals), Chandigarh, had become final was factually wrong. When that assumption was found to be incorrect, the Tribunal was justified in setting aside its order and considering the issue afresh.
39. Shri Dastur has contended that in the light of the decisions in the case of Mahendra Mills Ltd. [1975] 99 ITR 135 (SC), CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal), CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840 (Delhi), when the correct legal position had been brought to the notice of the Tribunal even at the stage of the hearing the miscellaneous application, the Tribunal would be justified in cancelling its order and in rehearing the appeals. According to him, it is the duty of the Tribunal to do so. Shri Dastur has pointed out that the Tribunal's giving a discount of 20 per cent, for the valuation dates falling after March 31, 1974. itself would show that the Tribunal has accepted the position that there were restrictions in getting the amount to India. There is a contradiction in the Tribunal's order of giving discount on the one hand and holding that there is no prohibition or restriction on bringing the money from Portugal to India.
40. His next contention is that the Tribunal committed a fundamental error in taxing the deposit on full value on the assumption that there was no prohibition or restriction on remittances. India was not having diplomatic and economic relations with Portugal and, therefore, no full value of this deposit can be taken. He has also pointed out the opinion of an advocate from Portugal in support of restrictions on remittances from pages 63 and 76 of the compilation. According to him, the restrictions were still there even after December 19, 1975, to bring money from Portugal to India. He has urged that it cannot be said that the assessee has brought any additional evidence before the Tribunal because both the assessee and the Department have proceeded on the assumption that there were prohibitions and restrictions on repatriation. As the position was admitted by both the parties there is no necessity for the assessee to produce any evidence. If the Tribunal wanted to take a contrary view from the admitted position holding that there were no restrictions on remittances then it would have been better on the part of the Tribunal to give an opportunity to the parties to produce the necessary evidence. Shri Dastur has distinguished the judgment of the Bombay High Court in Velji Deoraj and Co. v. CIT [1968] 68 ITR 708 which is on the point of production of additional evidence. According to Shri Dastur, that is not a case in the instant appeals. The point is that if the Tribunal wanted to take a different view from the admitted position then it was incumbent on the Tribunal to ask the parties to produce the evidence. According to Shri Dastur, by giving a contrary finding without offering an opportunity to produce evidence would amount to denial of justice. If the assessee had shown his inability to produce any evidence, then there would not have been any scope to blame the Tribunal, but the Tribunal did not do so. Shri Dastur has urged that the issue before the Tribunal was whether there was prohibition or restriction on remittances and whether the provisions of Section 31(7) of the Wealth-tax Act were correctly applied by the Wealth-tax Officer. Shri Dastur has argued probable findings on the said issue. According to him, in the ordinary course, there would have been three alternatives which are as follows :
(1) No finding has been given by the Tribunal, (2) The Tribunal has held that there were no restrictions, (3) The Tribunal has found that there were restrictions.
41. Shri Dastur forcefully put forward that if the Tribunal has not given any finding on the issue, then its order would necessarily have to be recalled. If, on the other hand, the Tribunal has given a finding that there are no prohibitions or restrictions, then this finding is contrary to the evidence on record which was before the Tribunal at the time of hearing of the appeal and for this reason also, the order would have to be recalled. Thirdly, if the Tribunal has given a finding that there are restrictions on the repatriations then also the order of the Tribunal reveals a mistake which requires a rectification inasmuch as if there are restrictions, the value of the deposit could not be the face value and to this extent, the order of the Tribunal was directly contrary to the decision of the Gujarat High Court in CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190.
42. Shri Dastur has also submitted that the Tribunal has not dealt with the contention of the assessee that the assessee did not have documentary evidence to substantiate his claim. Whether the assessee could file a suit to recover the debt or not, whether the market value of the asset would be nil or whether any buyer was willing to purchase the assessee's right is also not considered. It is not decided whether the assessee could bring the goods from Portugal or not.
43. Shri Dastur summed up his arguments relying on the judgment of the Supreme Court in the case of Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288, wherein it is held that if the Tribunal arrives at a decision by considering irrelevant material or material partly relevant and partly irrelevant, then it is impossible to say to what extent the mind of the court was affected by the irrelevant material. He has submitted that under such circumstances, a question of the finding being vitiated arises because of the reason of relying upon conjectures, surmises and suspicions not supported by any evidence on record or partly upon evidence and partly upon inadmissible material.
44. In the light of the above discussed facts and legal position and by taking into consideration the arguments advanced by learned counsel for the assessee, Shri S.E. Dastur, I am of the opinion that it is a fit and proper case to recall the Tribunal's order and to give an opportunity of being properly heard to the assessee before deciding the claim on the merits. However, as it is very much a point in these miscellaneous applications whether any mistakes have cropped up on the face of the order of the Tribunal and I am of the further opinion, as pointed out by Shri Dastur in the preceding paragraphs, that three mistakes have cropped up in the order of the Tribunal and they require to be rectified to avoid injustice to the assessee. Therefore, I hereby recall the order of the Tribunal by allowing these miscellaneous applications without considering the merits, which will be considered at a proper time at the time of rehearing of the appeals.
45. In the result, the miscellaneous applications are allowed as above.
ORDER OF REFERENCE TO THIRD meMBER
46. In accordance with Section 255(4) of the Income-tax Act, 1961, the following point of difference of opinion is referred to the President of the Income-tax Appellate Tribunal :
"Whether, on the facts and in the circumstances of the case, the prayers made in the miscellaneous applications of the assessees deserve to be accepted ?"
ORDER OF THIRD MEMBER Chander Singh (Accountant Member)
47. These miscellaneous petitions by the assessees arise out of Wealth-tax Appeals Nos. 334 to 344/(PN) of 1985 in the case of Shri Modu Timblo and Wealth-tax Appeals Nos. 345 to 356/(PN) of 1985 in the case of Smt. Sushila M. Timblo. In accordance with Section 255(4) of the Income-tax Act, 1961, the following question has been referred to me as a Third Member for decision :
"Whether, on the facts-and in the circumstances of the case, the prayers made in the miscellaneous application of the assessees deserve to be accepted ?"
48. As identical issues have been referred in the cases mentioned above, a consolidated order, for the sake of convenience, is being passed. It is to be stated that whereas in the case of Shri Modu Timblo, the assessment years involved are 1970-71 to 1979-80, in the case of his wife, Smt. Sushila M. Timblo, apart from the abovementioned assessment years, the assessment year 1969-70 is also involved. However, the issue is identical for all the years in respect of both the assessees.
49. It is necessary to state briefly the background of the case to appreciate the point at issue. In essence, the dispute related to the assessability of foreign debts owed to the assessees to the extent of £11,50,750. These foreign debts owed to the assessees were stated to be with parties in Lisbon and elsewhere. The debts in question arose prior to liberation of Goa in 1961. The assessee had advanced money to a party in Portugal for supply of machinery. Before the machinery could be supplied, Goa was liberated by the Government of India in December, 1961. As the assessees were husband and wife governed by the concept of community of interest under the Portuguese Civil Code, it is accepted by both sides that the value of debts, if any, has to be equally included in their hands in the respective assessment years.
50. A common consolidated appellate order had been passed in the case of husband and wife for the assessment years 1970-71 to 1979-80 and a separate order has been passed in the case of wife, Smt. Sushila M. Timblo, for the assessment year 1969-70.
51. The assessee had pleaded before the Assessing Officer that the debts were frozen by the Government of Portugal; that there was no documentary evidence regarding debts and that on various valuation dates, the debt was time-barred. The assessees thus pleaded that the value of the debt was nil on the various valuation dates. The Assessing Officer, however, did not accept the contention of the assessees and included the value of foreign debts as the wealth of the assessees as on the valuation date. The Wealth-tax Officer, however, recognised the fact that the debts were frozen as a result of which, he stayed the recovery under Section 31(7) of the Wealth-tax Act. The Commissioner of Income-tax (Appeals) concurred with the Assessing Officer.
52. In the first round of litigation before the Tribunal, the Bench held that the value of the debt was liable to be included in full for all the assessment years except for the assessment year 1975-76 onwards where a discount of 20 per cent, was allowed. No relief was granted in respect of other assessment years. Thereafter, the assessees preferred miscellaneous applications and prayed for, for the reasons set out in the said applications, recalling the order passed by the Tribunal. It would be useful to extract the relevant grounds on which the assessees had sought the recall of the order of the Tribunal.
(1) The Tribunal has not considered the contention that the debt in question being not backed by any documentary evidence, the assessee had no legal remedies available to it which could be enforced and, therefore, the impact of the position on the market value of the asset should have been considered and was not considered by the Tribunal. It has been urged in the said miscellaneous petitions, no buyer would buy such an asset being a debt owed in these circumstances and the market value was nil.
(2) The debt in question was barred by limitation and this fact should have been considered in valuing the debt. This has been disposed of by the Tribunal by a mere observation that no proof under the Portuguese law regarding limitation had been adduced. It was stated that if the Tribunal desired further evidence regarding limitation, the Tribunal should have called upon the assessee to lead proof in this regard. The failure of the Tribunal has resulted in denial of the principles of natural justice.
(3) The Tribunal had totally ignored the fact that having regard to the well-known facts and liberation of the Government (Goa) by India in 1961, the status of Portugal was that of an enemy country and there was a bar/restriction on remittances from Portugal to India and this fact had not been taken into account while disposing of the appeals. The Tribunal has also ignored the fact that the assessee could not even file a suit in the Portuguese Civil Court for recovery of the debt as the assessee was an enemy national in Portugal. The Tribunal had proceeded on the premises that relations between India and Portugal were normal and no restrictions whatsoever were there on the transfer of funds between the two countries. The assessee had in its paper book No. II alluded to the correspondence between the Government of India and the assessee to show that the assets of the nature held by the assessee were frozen and there was no trade or economic relation between the two countries. It was self-evident from such evidence that there could be no remittance of funds from Portugal to India as long as this state of affairs continued.
(4) The very action of the assessing authority in invoking the provisions of Section 31(7) of the Wealth-tax Act, to keep the demands in abeyance was proof enough that there was a bar/restriction on remittances into India. It was specifically submitted that until the passing of the order by the Tribunal none had raised the issue of absence of such a bar/ restriction on such remittances and the case had all along proceeded on the footing that this was the correct state of affairs. It was not the Department's case that there was no such bar. It was also pointed out in the said miscellaneous application that the assessee was never called upon during the hearing to prove the existence of such restrictions. The assessee came to know that the Tribunal had passed an order on the alleged absence of such restrictions only on receipt of the order and not earlier.
53. It was stated in the miscellaneous application that the assessee was making enquiries with the Ministry of External Affairs of the Government of India to ascertain the position regarding enemy territory and that it would place all relevant material before the Tribunal at the time of hearing of the miscellaneous application. It was finally submitted that discounting of the debt from the assessment year 1975-76 itself was an admission by the Tribunal that there was restriction on remittance and it had observed that there was no proof of restriction on remittance for the earlier years which was obviously an apparent mistake.
54. The Tribunal had given a finding in paragraph 11 of its appellate order that the Gujarat High Court in the case of CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 was distinguishable as explained by the Departmental Representative. The Departmental Representative distinguished the judgment by saying that it was to be taken as confined to the facts of that case where the question was about the concept of cash and prohibition on remittance and total restriction on utilisation was accepted as a fact. It was submitted that in view of the stay granted by the Wealth-tax Officer under Section 31(7) of the Wealth-tax Act, by passing a speaking order, the Department had accepted the position that there was a prohibition on remittance and, hence the very basis for distinguishing the judgment of the Gujarat High Court in CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190 was erroneous. The contention raised by the assessee in the miscellaneous petitions under reference was examined by the Tribunal. The learned Accountant Member examined the issue and was of the view that there was no error in the order of the Tribunal so as to effect the rectification or to recall its order. The learned Accountant Member has mentioned that the assessee had failed to file details of the foreign debts and also there was no evidence that the said debt was time barred. The assessee, in the opinion of the learned Accountant Member, did not file any evidence regarding the restrictions on repatriation during the course of hearing of the miscellaneous petitions, The treaty dated December 31, 1974, between the Government of India and Portugal was also brought to the notice of the Bench. The learned Accountant Member did not take judicial note of the said treaty. The learned Accountant Member also declined to express an opinion on the alleged stay granted by the Wealth-tax Officer in terms of Section 31(7) of the Wealth-tax Act as in his opinion, it was not relevant for the purpose. For the reasons mentioned by the learned Accountant Member, it was held that there was no rectifiable mistake on the face of the record, as a result of which, he rejected the miscellaneous application.
55. The learned Judicial Member was of the view that the Bench had ignored the relevant fact while deciding the appeal. He was convinced that the foreign debts were frozen as a result of which its market value was adversely affected. He was also of the view that in the absence of any document to support the foreign debt, the assessee could not have initiated any legal action. The debt was also time-barred. The learned Judicial Member also mentioned that the treaty between the Government of India and Portugal was the law of the land and on the date of decision of the Tribunal the said treaty was available from which it could be seen that bilateral trade and economic relations between the Government of India and Portugal started from 1975. He, therefore, took into account these facts and came to the conclusion that the order of the Tribunal suffered from apparent mistakes and was liable to be recalled.
56. On account of this difference of opinion between the learned Accountant Member and the learned Judicial Member, this issue has now come up before me to resolve the difference.
57. Learned counsel for the assessee, Shri K.R. Prasad, advocate, strongly argued that the Bench had failed to take note of the factual position regarding the foreign debt owed to the assessee. The Bench ignored the fact that the foreign debt was not supported by any document as a result of which no legal action for recovery was possible. The learned Members of the Tribunal also failed to take note of the fact that the foreign debt was frozen as it was evident from the correspondence between the assessee and the Government of India. In particular, he has drawn my attention to compilation No. II in which copies of the correspondence between the assessee and the Government of India are placed. In his opinion, the Government of India admitted the factual position that the foreign debt in question was frozen in Portugal. The Members also did not take note of the fact that the said debt was time-barred as a result of which, the assessee had no legal remedy. Moreover, the Assessing Officer himself had applied the provisions of Section 31(7) of the Act and was convinced that the said debt was frozen by the Government of Portugal. He also drew my attention to the treaty between the Government of India and Portugal dated December 31, 1974. Particularly, he took me through articles 1, 2 and 3 and pointed out that a plain reading of these articles clearly establishes that the foreign debt was in fact, frozen and bilateral trade and economic relations between the two countries started from 1975. A copy of the treaty, he asserted, was filed by the assessee before the Tribunal during the hearing of the miscellaneous petition. He, however, fairly conceded that at the time of first round of litigation, the assessee had not filed a copy of the treaty before the Tribunal. However, he continued, the Tribunal decided the appeal, vide its order dated November 18, 1986, while the treaty was in existence from December, 1974. In his opinion, the provisions of the treaty are the law of the land as per international law and, therefore, should not have been ignored by the Tribunal.
58. Learned counsel further submitted that it is an act of court which means and includes the Income-tax Appellate Tribunal, should not prejudice a party. The Tribunal has inherent powers to rectify a mistake. Where the Tribunal fails or omits to deal with an important contention affecting the maintainability which merits an appeal, it must be deemed to be a mistake apparent from the record which empowers the Tribunal to reopen the appeal and rectify the same if it is so satisfied.
59. Learned counsel has also taken me through Section 254(2) of the Income-tax Act, 1961, which contemplates that the Tribunal may at any time within the statutory period rectify any mistake apparent from the record. If a point which is material for determining the amount of tax was pressed but not considered by the Tribunal, it would certainly constitute a mistake apparent from the record within the meaning of Section 254(2) of the Act. For these and other propositions, learned counsel has placed reliance on the following decisions :
(1) ITO v. S.B. Singar Singh and Sons [1970] 75 ITR 646 (All);
(2) Mangat Ram Kuthiala v. CIT [1960] 38 ITR 1 (Punj);
(3) Khushalchand B. Daga v. T.K. Surendran, Fourth ITO [1972] 85 ITR 48 (Bom);
(4) ITO v. M.K. Mohammed Kunhi [1969] 71 ITR 815 (SC);
(5) Laxmi Electronic Corporation Ltd. v. CIT [1991] 188 ITR 398 (All);
(6) CIT v. ITAT [1988] 172 ITR 158 (MP);
(7) CIT v. Mithalal Ashok Kumar [1986] 158 ITR 755 (MP);
(8) CIT v. Ram Nath Prem Kumar [1980] 124 ITR 404 (P & H);
(9) CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal);
(10) Nandlal Vithaldas v. CIT [1989] 180 ITR 609 (Bom);
60. Learned counsel continued and said that under the provisions of the Income-tax Act, a mistake apparent from the record can be rectified. The record includes the whole of the record before the Tribunal as well as other relevant records. Even the treaty between the Government of India and Portugal would be record which was before the Tribunal at the time of hearing of the miscellaneous applications. Even at the time of original appeal, the treaty was very much in existence and, therefore, the Tribunal should have taken note of it. Since the treaty constituted record, the non-consideration of it has resulted in an apparent mistake. In this regard, learned counsel has placed reliance on a decision of the Hyderabad Bench of the Tribunal in the cases of D.S. Chinai v. WTO [1985] 11 ITD 9 and Indocean Engg. (P.) Ltd. v. ITO [1985] 14 ITD 483.
61. Learned counsel has also pointed out that the Bench was convinced that the foreign debt owed to the assessee was frozen. It is only on that basis that the Tribunal had allowed the discount at 20 per cent, from 1976-77 onwards. Learned counsel thus, concluded that there was an apparent mistake in the order of the Tribunal which should have been rectified. He, therefore, supported the decision of the learned Judicial Member. He contended that the learned Accountant Member was in error in not accepting the miscellaneous applications of the assessee.
62. The learned Senior Departmental Representative, Dr. Sunil Pathak, on the other hand, strongly supported the order of the learned Accountant Member. He took me through the correspondence between the assessee and the Government of India. He pointed out that the words "money frozen in enemy country" were used by the assessee himself. The Government of India has merely repeated these words while replying to the assessee. It, therefore, cannot be said that the Government of India was convinced that the foreign debt owed to the assessee was a frozen asset in Portugal. He also pointed out that the assessee was willing to import machinery to the extent of 100 per cent. The Government of India, however, directed the assessee to import machinery to the extent of 50 per cent, and the remaining 50 per cent, should be brought to the country in the form of foreign exchange. If the debt was frozen, the assessee would not have insisted for the import of goods to the extent of 100 per cent.
63. The learned Departmental Representative further contended that it was the duty of the assessee to file any evidence under Section 16(2) before the Assessing Officer. The Assessing Officer has examined the issue in great detail without any evidence of either the treaty or the foreign debts frozen in the foreign country. As no such evidence was filed by the assessee even before the Commissioner of Income-tax (Appeals) or for that matter before the Tribunal, a copy of the treaty was neither before the Tribunal nor before the Revenue authorities at the relevant time. The learned Departmental Representative, therefore, strongly objected to its admission.
64. The learned Departmental Representative also pointed out that the discount of 20 per cent, for the assessment year 1976-77 onwards was allowed by the Tribunal without having regard to the treaty between the Government of India and Portugal. The assessee, therefore, cannot take shelter behind the said treaty. The learned Departmental Representative also pointed out that the provisions of Section 31(7) were only applied by the Assessing Officer to stay the recovery. The application of the stay provision does not ipso facto prove that the foreign debt was frozen.
65. Regarding limitation, the learned Departmental Representative pointed out that there was no evidence on record on which either the Wealth-tax Officer or the Commissioner of Income-tax (Appeals) or even the Tribunal could act. As a matter of fact, the Tribunal has specifically mentioned lack of evidence regarding the limitation. The assessee also did not make a request to the Tribunal to file any further evidence. The learned Departmental Representative further asserted that only a mistake apparent from the record can be rectified. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record. The Tribunal, he argued, had no power to review its own orders. In the case of the assessee, there is no mistake apparent from the record and what the assessee seeks is to review the order of the Tribunal. Since review is not permissible, the miscellaneous applications of the assessee need not be entertained. For the various propositions, the learned Departmental Representative drew our attention to the following decisions :
1. CIT v. Ramesh Electric and Trading Co. [1993] 203 ITR 497 (Bom) ;
2. Raj Kumarjain v. Asst. CIT [1994] 208 ITR (AT) 22 (All) ;
3. Gayways Publicity Pvt. Ltd. v. CIT [1995] 211 ITR 506 (Delhi) ;
4. Ram Prasad Sharma v. CIT [1979] 119 ITR 867 (All) ;
5. CIT v. ITAT [1992] 196 ITR 640 (Orissa) ;
6. Asst. CIT v. Dr. Ved Prakash [1994] 209 ITR 448 (AP).
66. The learned Departmental Representative, therefore, concluded that there is no apparent mistake which could be corrected under Section 254(2) of the Act. The decision given by the learned Accountant Member is, therefore, legally sound and should, therefore, be upheld.
67. In reply, learned counsel, Shri K. R. Prasad, distinguished the judicial pronouncements relied upon by the learned Departmental Representative. In particular, he pointed out that the Bombay High Court in the case of Ramesh Electric and Trading Co. [1993] 203 ITR 497 has decided the issue on its own facts. The facts of the assessee's case are peculiar and cannot be applied to the facts of the decision adverted to by the learned Departmental Representative. Learned counsel has again taken me through the correspondence between the assessee and the Government of India and pointed out that it was not the assessee who mentioned the word "frozen". As a matter of fact, the Government of India itself used the words "assets frozen". In this regard, he drew our attention to a letter from the Deputy Secretary to the Government of India dated July 12, 1972, and several other letters. Learned counsel thus reiterated that there is an apparent mistake which needs rectification.
68. I have given anxious thought to the issue before me in the light of the judicial pronouncements relied upon by the parties to the dispute. The Tribunal has inherent power to rectify under Section 254(2), the mistake, if any. Being the final authority on a question of fact, the Tribunal in deciding the appeal is bound to consider all the evidence and the arguments raised by the parties. It is not enough that the Tribunal merely records a bare conclusion without setting out any reason in support thereof. If the Tribunal has done so, it could not be assumed that in so recording the conclusion the Tribunal had considered the evidence. Reference in this connection may be made to the decision of the Supreme Court in the case of Killick Nixon and Co. v. CIT [1967] 66 ITR 714 and Omar Salay Md. Sait v. CIT [1959] 37 ITR 151. The Tribunal has to act judicially in the sense that it has to consider with due care all material facts and evidence in favour of and against the assessee and record its finding on all the contentions raised by the assessee. I further admit that the Tribunal has no power to review. Its only power is one of rectification conferred by Section 254(2). It is a well-settled proposition that an act of the Tribunal should not prejudice a party. In such a case, it would not be just to drive the party to a reference under Section 256. It is the duty of the Tribunal to reopen an appeal if it finds that it has omitted to deal with an important ground or an important argument urged by the parties.
69. What is rectifiable under Section 254(2) is a mistake which is apparent. What is a mistake apparent from the record has been dealt with by many courts. For the purpose on hand, I may only refer to the decision of the Allahabad High Court in the case of ITO v. S.B. Singar Singh and Sons [1970] 75 ITR 646 under the Excess Profits Tax Act, 1940, wherein it was held that the Tribunal has inherent power to rectify its orders, to correct a wrong done to a party especially so when a particular ground raised has not been dealt with. Even though this decision was reversed by the Supreme Court the reversal was on a totally different ground. The courts over the years have recognised the inherent powers of a body like the Tribunal to correct apparent mistakes. In this connection, it would be necessary to refer to Mangat Ram Kuthiala [1960] 38 ITR .1 (P&H), Khushalchand B. Daga v. T.K. Surendran, Fourth ITO [1972] 85 ITR 48 (Bom) and M.K. Mohammed Kunhi [1969] 71 ITR 815 (SC). These inherent powers are to be exercised where apparent patent injustice is rendered to the assessee by the action of the Tribunal. In several decisions by the various courts, it has been held that non-consideration of the material on which the Tribunal had passed its decision constitutes an apparent mistake. In this regard, reference may be made to the decision of the Madhya Pradesh High Court in the case of Mithalal Ashok Kumar [1986] 158 ITR 755 and the Allahabad High Court decision in the case of Laxmi Electronic Corporation Ltd. v. CIT [1991] 188 ITR 398. Here, I may also usefully refer to the decision of the Bombay High Court in Nandlal Vithaldas v. CIT [1989] 180 ITR 609. In that case, the Tribunal while disposing of an appeal held that the liability under Section 41(2) of the Act on the sale of assets was a contingent liability and, therefore, could not be taken into account in determining the amount available for distribution to the creditors of an assessee by the official liquidator. It has to be noticed that there was a specific finding by the Tribunal that the liability under Section 41(2) was contingent. This was held to be a mistake apparent from the record. I have mentioned the legal position and laid down the general proposition with a view to place the matters in the proper perspective. It is undisputed that a mistake apparent from the record embraces both mistakes of law and mistakes of fact. Overlooking the provisions of law also constitutes a mistake apparent from the record.
70. In the light of the legal position stated above, what is to be seen in the case before me is whether there is a patent mistake of fact or mistake of law in. the order passed by the Tribunal resulting in a recall of the order. The learned Accountant Member had held against the assessee, whereas the learned Judicial Member rendered the decision in favour of the assessee.
71. On an appreciation of the facts of the case, I am inclined to agree with the learned Judicial Member for the following reasons. In para 8 of the consolidated order, the Tribunal itself for the assessment years 1970-71 to 1979-80 noticed that the advocate for the assessee specifically referred to two letters of the Government of India dated September 15, 1972, and January 31, 1973, which, formed part of the paper book filed before the Tribunal. It was contended that the correspondence would show that the Government of India had accepted that the funds in Portugal were frozen. It was also submitted by counsel that the stay granted under Section 31(7) of the Act also proved the position regarding the freeze of the assets. The necessary pre-condition for acting under Section 31(7) of the Act is that there must be a prohibition or a restriction on the remittances of money to India in respect of assets located in a country outside India. It is not disputed that evidence was on record to show by way of a speaking assessment order setting out the reasons under Section 31(7) of the Act in respect of the aforesaid debts. From the appellate order, it is clear that it was never the case of the Department that the treatment of the assessee as not being in default under Section 31(7) of the Act was improper. When it was an accepted position throughout until the stage of hearing that there was such prohibition/restriction it would be just and proper to hold that this issue was never in dispute. No doubt there is an observation in para 8 of that order of the Tribunal which reads as under :
" To our specific query the learned advocate could not show any evidence regarding restriction on repatriation or remittance."
72. Obviously this can only mean that there was no other evidence at that point of time with him apart from the contents of the paper book and the order of the Wealth-tax Officer which were material to show that there was such restriction. But this does not, in any way, take away the evidentiary value of either of the letters, the contents of the above paper book No. II and the order under Section 31(7) of the Act. If it was the intention of the Tribunal not to act upon such evidence and to depart from the accepted position of the Wealth-tax Officer in the order under Section 31(7) it should have called for, in all fairness for further evidence from the parties to support or disprove the assessee's plea regarding restriction on remittances. However, nowhere in the body of the order, has the Tribunal given any indication of having considered the contents of paper book No. II and specifically the letters dated September 15, 1972, and January 31, 1973.
73. I find in para 12 of the order of the Tribunal the following observations :
"We express no opinion on the alleged stay granted by the Wealth-tax Officer in terms of Section 31(7) of the Wealth-tax Act as the same is not relevant for our purposes."
74. These observations of the Tribunal indicate that the stay granted by the Wealth-tax Officer under Section 31(7) was of no consequence. The order of the Wealth-tax Officer granting stay was also part of the record before the Tribunal. It was nobody's case that no stay was granted by the Wealth-tax Officer. The Tribunal itself states that it has not at all considered that fact of stay under Section 31(7). The prohibition/restriction on remittances is a very material point for determining the value of an asset. I need only refer to the decision of Shri Sadiqali Samsuddin [1985] 152 ITR 190 (Guj). Thus, in my view, the learned Members committed an apparent error in not considering the order under Section 31(7) of the Act. In my view, this constituted an apparent mistake from the record.
75. Similarly, adverting to paper book II in general and the two letters mentioned above in particular, at the time of argument, my finding is that relevant material which was brought to the notice of the Tribunal and which had an important bearing upon the issues in contention were not considered by the Tribunal. This also resulted in an apparent mistake. Here I may only refer to the letter dated July 12, 1972, at page 8 of the paper book II, where the Deputy Secretary to the Government of India specifically stated that the assets in Portugal were frozen. Similarly, the letter dated January 31, 1973, addressed by the Under Secretary to the Government of India also refers to these assets as frozen assets in Portugal. Again in the letter dated June 23, 1971, Shri K. N. Rao, Officer of the Finance Ministry, had stated, inter alia, "the goods will be allowed to be imported only from countries other than Portugal and South Africa". The only inference that can be drawn from these observations is that there was a bar/restriction on trade and economic relations between India on the one hand and Portugal and South Africa on the other. The position in respect of South Africa was well known at that time. The position in respect of Portugal was identical with that of South Africa during the assessment years before me. No trade or bilateral transactions were allowed between these countries and India. Trade, repatriation, etc., were taboo. There is nothing on record to show that the correspondence which has a bearing on the valuation of the asset in question contained in paper book II was considered by the Tribunal at all. I am reinforced in my above finding by the following extract from the decision of the Tribunal.
"No data regarding alleged prohibition or restriction on remittance has been given either to the authorities or to the Government of India."
76. A reference to the assessment order under which Section 31(7) especially regarding the stay under the said section to show that the Assessing Officer had specifically found on the material placed before him that the conditions under Section 31(7) prima facie indicated that there was material to show that Section 31(7) applies and hence there was a restriction or prohibition for repatriation, etc. The correspondence between the assessee and the Government of India also show that the Government of India itself was aware that the assets were frozen and there were no economic relations between the two countries. In the light of these findings, the above observations of the Tribunal clearly suffer from an apparent mistake.
77. The learned Departmental Representative's assertion that the word "frozen" or "restriction" was mentioned by the assessee and the Government of India merely repeated the same is not borne out by the facts of the case. I have very carefully gone through the correspondence between the assessee and the Government of India and find that there was an application of mind on the part of the Government of India. The words "frozen" or "restriction", etc., are consciously used by the Government of India in the said correspondence. This is also borne out by the fact that the restriction was lifted only after the Indo-Portugal treaty in December, 1974. The assertion of the learned Departmental Representative does not, therefore, seem to be correct on the facts.
78. I have carefully gone through the dissenting order in the miscellaneous petition of the learned Judicial Member, wherein he has laid down three alternatives which are as follows :
(a) No finding has been given by the Tribunal ;
(b) The Tribunal has held that there were no restrictions ;
(c) The Tribunal has found that there were restrictions.
79. If the Tribunal has not given any finding on the issue, then its order would necessarily have to be recalled. If, on the other hand, the Tribunal has given a finding that there are no prohibitions or restrictions, then this finding is contrary to the evidence on record which was before the Tribunal at the time of hearing of the appeal and for this reason also, the order would have to be recalled. Thirdly, if the Tribunal has given a finding that there are restrictions on the repatriation, then also the order of the Tribunal reveals a mistake which requires a rectification, inasmuch as if there are restrictions, the value of the deposits could not be the face value and to this extent, the order of the Tribunal is directly contrary to the decision of the Gujarat High Court in CWT v. Shri Sadiqali Samsuddin [1985] 152 ITR 190. It is pertinent to mention that in W.T.A. No. 345/ PN/75 in the case of Smt. Sushila M. Timblo for the assessment year 1969-70, there were similar mistakes committed by the Hon'ble Bench.
80. It has been specifically contended that in the absence of any documentary evidence to prove the existence of the assessee's debts any action for recovery of such debts through a legal process would have been futile especially having regard to the status of debts being in Portugal and, therefore, this was a very material factor in valuing the asset. Though there is a reference in the order on the miscellaneous petition to this fact even after a careful scrutiny I find that this aspect of the issue has not been considered and pronounced in the appellate order of the Tribunal. It is not possible to hold that the particular ground on which no decision has been rendered in the appellate order has in fact been impliedly considered. Thus, the non-consideration of this vital issue also constitutes an apparent mistake from the records. As a matter of fact, the learned Judicial Member has given a specific finding in this regard which is contained in paragraphs 15 and 17 (at pages 62 and 63) of his order in the miscellaneous petition.
81. I have stated above that the mistake of law also falls within the ambit of apparent mistake. The failure to take note of relevant provisions of the Act constitutes an apparent mistake. Having regard to the issues involved here the failure of the Tribunal to take note of the existence of the Indo-Portugal treaty amounted to a mistake of law. The reliance on the decisions of CIT v. Ram Nath Prem Kumar [1980] 124 ITR 404 (P & H), Ohinai (D. S.) v. WTO [1985] 11 ITD 9 (Hyd) and Indocean Engg. P. Ltd. v. ITO [1985] 14 ITD 483 (Hyd), in respect of this aspect of the issue is apt. Diplomatic and economic relations between the two countries were resumed after this treaty. The treaty has become law and a relevant piece of legislation was not considered by the Tribunal when it overlooked the same. Reference to the position in international law in paragraph 9 (at page 58) of the learned Judicial Member's order in the miscellaneous petition regarding sources of law and the status of treaties from the standard text-books of jurisprudence reflects the correct position. The learned Accountant Member in paragraph 22 (at page 54) of his order in the miscellaneous petition states that in some cases even in miscellaneous petitions, it may be necessary to refer to documents which while not in existence at the time of the passing of the order may be relevant. Here, the Indo-Portugal Treaty was available even when the earlier order was passed, i.e., November 18, 1986. The said treaty was executed in 1974 and was effective from 1975. In the same para, the learned Accountant Member has stated (at page 54 ) :
"We have also considered the question whether the evidence now proposed to be produced regarding India Portugal Treaty, the opinion of Mr. Periera, etc., can be considered for the purpose of this M. A. We do not find any justification for the same."
82. Assuming for a moment that the opinion of Mr. Periera was not relevant and could not be considered, there was, however, no reason for not considering the treaty between India and Portugal. It may also be mentioned that a copy of the treaty was placed before the Bench during the hearing of the miscellaneous petitions under reference. A perusal of the treaty itself shows that in the preamble it speaks of Portugal recognising the full sovereignty of India over the territories of Goa, Daman and Diu. It obviously means that until that date the Portuguese Government did not recognise the sovereignty of India over the territories of Goa, Daman and Diu. Therefore, there was an enemy status between the two countries as Portugal until 1974 considered Goa, Daman and Diu as its own territory even though it was in occupation by India. Article I of the treaty for the first time contains an acknowledgment by Portugal that the territories of Goa, Daman and Diu have become parts of India and specifically recognises the sovereignty of India over these territories. This implies that until that date, no such recognition was there and, therefore, the enemy status continued. Article III speaks of the contracting parties agreeing to settle through bilateral negotiations all questions including those concerning the property, assets or claims of citizens of their respective countries of either State in the territories of the other State. This clearly recognises that until that time there was no agreement between the two countries on the manner in which the assets of a citizen of one country in the other country was to be dealt with and also as regards remittances, etc., available to that citizen. Hence, this treaty which has the status of an enactment under international law was very material, was in existence during many of the assessment years involved before us and, therefore, the contents of this treaty have a direct bearing on the issues involved and they go to the root of the matter and, therefore, by the very test laid down by the learned Accountant Member merited consideration. Therefore, non-consideration of the terms of this treaty amounts, in my opinion, to an apparent mistake liable to be rectified under the relevant provisions of the Act.
83. It is noteworthy that if after the conclusion of the treaty the restrictions regarding remittances have been recognised by the Department itself, vide its orders subsequent to the date they should have been recognised the position in respect of prior years. I need here refer only to the decision in CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840 (Delhi) in support of the proposition that this subsequent information coming into possession could be the basis of rectification under Section 254(2) of the Act.
84. I may also mention that the wealth-tax assessments in the case of the petitioners before me were completed in a similar manner for the subsequent assessment years. In other words, the frozen assets in Portugal were included as part of the wealth of the assessees. The assessees were also not successful before the first appellate authority. The assessees, therefore, carried the matter to the Tribunal. The appeals on this issue filed by the assessees were pending before the Tribunal. The Department, however, wrote a letter to the Tribunal withdrawing this ground from the grounds of appeal. The Department, therefore, for subsequent years, has recognised and finally reconciled that these frozen assets do not have market value as on the valuation date.
85. Before parting with the case, I would like to refer to the fact that from the assessment year 1976-77 onwards, the Tribunal itself has granted 20 per cent, discount in respect of these debts for reasons stated. If even after the conclusion of the Indo-Portugal Treaty and after the restoration of the diplomatic and economic relationship between the two countries, the Tribunal could recognise that the debts have to be discounted for the purpose of valuation, it is difficult to understand how the position could have been any better in the earlier years when there was enemy status between the two countries. The position as regards the value of the assets situated in the enemy country could only have been worse than what was obtaining in 1975-76. This supports my conclusion that the order of the Tribunal in the appeals did suffer from apparent mistakes both as regards the inclusion of assets in question as well as its valuation. The relevant material has not been considered, the submissions made which have a vital role have not been dealt with and the impact of legislation and law on the issue of valuation have not been considered.
86. I have very carefully studied the judicial decisions brought to my notice by the learned Senior Departmental representative. In my considered view, the decisions relied upon by him do not advance the Department's case. In my view, therefore, I find it a fit case for accepting the miscellaneous petitions for the reasons mentioned above. I, therefore, agree with the conclusion of the learned Judicial Member. In these circumstances, I hold that on the facts and in the circumstances of the case, the prayers made in these miscellaneous petitions of the assessees to recall the order in question for consideration in accordance with law and taking into account all relevant material deserve to be accepted.
87. Now, the matter may be placed before the Hon'ble Bench for appropriate action. I order accordingly.