Kailashnath Malhotra v. Joint Commissioner of Income-tax, Special Range 56, Mumbai

1. The following point of difference has been referred to me by the Hon’ble President under section 255(4) of the Income-tax Act, 1961.

"Whether on the facts and in the circumstances of the case the miscellaneous application filed by the assessee under section 254(2) on the issue of addition of Rs. 11 lakhs made by the Assessing Officer can be allowed."

2. Briefly stated the facts of the case are that a search action was taken under section 132 of the Act against the assessee on 15-12-1997. As against the Nil undisclosed income shown by the assessee in its return for the block period 1-4-1987 to 15-12-1997, the Assessing Officer computed the total undisclosed income at Rs. 18,80,887. On restoration of the matter by the Tribunal, the learned CIT(A) accepted the appeal of the assessee in part. Cross appeals filed by both the sides in ITSS(A) Nos. 78 and 614/ Mum./2003 before the tribunal were heard by the Bench. The appeal filed by the revenue was dismissed. Out of three grounds raised by the assessee, ground Nos. 1 and 2 were allowed. However the 3rd ground assailing the sustenance of addition of Rs. 11 lakhs came to be dismissed by the Tribunal.

3. At this juncture it will be relevant to note the facts leading to the sustenance of addition of Rs. 11 lakhs. During the course of search, one page marked as No. 18 of Annexure A-1 containing notings of working of money available and expenses incurred, was found and seized from the residence of the assessee. The said paper was claimed by the assessee to be a proposed planner and not the actual incurring of expenses mentioned on it. The Assessing Officer did not accept the assessee’s contention for the reasons set out in the assessment order as reproduced by the ld. AM in his separate instant order. The Assessing Officer made addition of Rs. 11 lakhs by treating it as income from undisclosed sources. No relief was allowed by the learned CIT(A) as well who reproduced the entries appearing on page 18 of Annexure A-1 in detail. On the top of the said page the noting of the denominations of Notes available were also mentioned i.e.,

Certain amounts of expenses with narration were mentioned on the said page with identified dates and the net balances were drawn at various stages. The period covered on the said page No. 18 was from 1-4-1995 to 19-9-1997. The learned CIT(A) did not accept the contention of the assessee that the expenses mentioned on this page were a planner and not actual expenditure. It was noticed by him that the specific expenses such as electricity bills, stamp duty, NSCI bill etc., were found to have been mentioned which indicated that these were actual expenditure incurred and not any planner as claimed by the assessee. He, therefore, affirmed the addition of Rs. 11 lakhs.

4. The assessee argued the same point before the Tribunal by further contending that he had sufficient cash available with him. The Tribunal dismissed this ground raised by the assessee with the following finding :—

"13. ... ... ... ...In any case, the perusal of the entries in the said documents categorically show the availability of cash in exact denominations and thereafter date-wise entries of expenditure on various items spreading over a period of 15 months. It is very surprising that notings on account of estimated expenditure have been made by the assessee on specific dates which range over a period of 15 months. It is not comprehensible how the assessee has worked out the balance money available on various junctures if there was no money available with the assessee whatsoever.

14. The contention of the assessee is that it had sufficient cash available with him is not correct. The Bank Statement from 1-7-1994 to 30-9-1994 reveals that the assessee had a opening balance of Rs. 13,34,782 but three cheques of Rs. 5,69,665, Rs. 3,78,612 & Rs. 6,33,333 have been cleared leaving a balance of Rs. 98 only. Thus disproving the claim of the assessee regarding the availability of cash in his hand. The said document found from the possession of assessee and seized from the residence of the assessee is in the hand writing of the assessee. The presumption under section 132(4) of the Income-tax Act about the contents of the seized documents stand established in the absence of the assessee proving otherwise with necessary evidence. During the course of search, cash of exact Rs. 2.00 Lakhs being the balance as per the said document was found, which further proves the case of the revenue. The withdrawals made by the family members of the assessee including assessee are only sufficient to meet the household expenses and there is no question of any savings from the same.

15. The assessee claims that the copy of the said seized document was not made available to him. But even the perusal of the explanation by way of attachments under section 154 does not hold the case of the assessee. The facts in the case of CIT v. Murugesh Jaykrishna ( 245 ITR 638 ) (Guj.) are different to the extent that a reasonable explanation was offered by the assessee in that case explaining the entries on the paper. In the facts of the present case, no satisfactory explanation has been filed by the assessee regarding the notings on account of denominations of notes available with the assessee and also date-wise expenditure incurred by the assessee. The ratio laid down by Mumbai Tribunal in the case of D.A. Patel v. Dy. CIT ( 72 ITD 340 ) relied upon by the learned AR for the assessee is not relevant to the facts of the present case. We agree with the findings of the CIT(A) in this regard and dismiss the ground filed by the assessee."

5. Thereafter the assessee filed-miscellaneous application running into seven pages with paras 1 to 8 dividing grounds into two broad heads, viz., (a) the conclusion is based on erroneous facts and/or on misappreciation of the facts on record; and (b) vital issues/grounds and legal contentions which go to the root of the very addition are remained to be dealt with and/or considered. The entire application was directed against the sustenance of addition of Rs. 11 lakhs, which was registered and numbered as 307/Mum./2006. The said miscellaneous application was dismissed giving exhaustive reasoning, as under :—

"3. The provisions of sub-section (4) to section 254 of the Income-tax Act categorically states that order passed by the Tribunal reaches finality at the moment the same is passed. The same order cannot be touched thereafter except with a view to rectify any mistake apparent from record, as provided in sub-section (2) of section 254 of the Income-tax Act. The power of rectification under section 254(2) of the Act is limited to an error which is apparent on the face of the record but where error is far from self-evident, rectifying the same ceases to be an apparent error. The plain meaning of the word "apparent" is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It, therefore, follows that a decision on debatable point of fact or law or failure to apply the law to a set off fact which remains to be investigated cannot be corrected by way of rectification. The mistake to be discovered by a long drawn process of argument, proof or investigation is not a mistake apparent from record. Their Lordships of Hon’ble Bombay High Court in CIT v. Ramesh Electric and Trading Co. ( 203 ITR 497) had held as under :—

"It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. 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, although it may be an error of judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion."

4. The power conferred under section 254(2) of the Income-tax Act does not contemplate a rehearing and rearguing the matter. The provisions of section 254(2) of the Act are limited to only obvious, clear and self evident errors and the Tribunal has no power to recall its previous order in order to rewrite the said orders. The mistake has to be such for which no elaborate arguments or reasons are required. In the present miscellaneous application the assessee has set out at length, which according to him are the errors and facts not considered by the Tribunal. The other issue raised by the applicant in the miscellaneous applicant is non-dealing/non-consideration of various vital issues which again are not to be raised by way of miscellaneous application under section 254(2) of the Act. Their Lordships of Hon’ble Bombay High Court in CIT v. Ramesh Electric and Trading Co. (supra) have categorically held that the 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.

5. Their Lordships of Hon’ble Supreme Court in CIT v. Karam Chand Thapar and Bros. (P.) Ltd. ( 176 ITR 535 ) had held as under :—

"It is equally well-settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. The court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decisions of the Tribunal is not liable to be interferred with, unless, of course, the conclusions arrived at by the Tribunal are perverse.

It is not necessary for the Tribunal to state in its judgment specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the Tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal".

As stated above, there is no mistake apparent from the record in the impugned order of the Tribunal. We, therefore, decline to accept the prayer of the assessee for adjudicating afresh the aspects involved in the case. We hereby dismiss the miscellaneous application moved by the assessee."

6. Once again the assessee moved another miscellaneous application which was registered and numbered as 246/Mum./2007. This instant miscellaneous application is of 12 pages comprising of 13 paras. The first 8 paras of this application are ditto reproduction of the first miscellaneous application except reference to page No. 75K to 75N in para 7.2 as against the earlier page numbers as 73 to 75N in para 7.2 itself. Here again the only grievance of the assessee is against the sustenance of the addition of Rs. 11.00 lakhs, which has been divided into two broad heads, viz., (a) the conclusion is based on erroneous facts and/or on misappreciation of the facts on record; and (b) vital issues/grounds and legal contentions which go to the root of the very addition are remained to be dealt with and/or considered. After the reproduction of first 8 paras, which constituted the whole of the first miscellaneous application, the assessee has also placed reliance on certain judgments.

7. The ld. JM, relying on the judgment of the Hon’ble Supreme Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 173 Taxman 322 and the judgment of the Hon’ble Bombay High Court in the case of CIT v. Ramesh Electric & Trading Co. [1993] 203 ITR 497 ¹ recalled the order on ground No. 3 in the light of the judgment rendered by the Hon’ble Supreme Court in the case of P.R. P.R Metrani v. Commissioner Of Income Tax, Bangalore. [2006] 287 ITR 209² on merits. In her opinion non-consideration of the decision of the Hon’ble Supreme Court was a mistake apparent from record. However, the learned AM did not agree with the ld. JM and dismissed the miscellaneous application on the ground that successive miscellaneous applications are not permissible and further the judgment of the Hon’ble Supreme Court in the case of P.R. Metrani (supra) is not applicable. This is how the matter has come up before me.

8. The learned Counsel for the assessee contended that the learned JM was justified in recalling the order as the same was not in conformity with the law laid down by the Hon’ble Supreme Court in the case of P.R. Metrani (supra), which came into being after the passing of the order. He relied on the judgment of the Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. (supra) for the proposition that a subsequent judgment delivered by the Hon’ble Supreme Court on the point decided by the Tribunal was binding and if such order is not in conformity with the law laid down by the Hon’ble Supreme Court, the same is rendered erroneous capable of rectification under section 254(2). He pleaded that the judgment of the Hon’ble Supreme Court in the case of P.R. Metrani (supra) has clarified that the presumption under section 132(4A) is not available for framing the regular assessment. It was, therefore, requested that the impugned order be recalled and a fresh opportunity of hearing be granted to the assessee. In the opposition, the learned Departmental Representative, relying on the order passed by the learned AM. submitted that there was no mistake in the original-order passed by the Tribunal. He stated that the addition of Rs. 11 lakhs was made on the basis of a document found during the course of search which was admitted by the assessee to have been written in his own hand-writing. According to him the Tribunal has appropriately considered the issue while dismissing ground No. 3 of the assessee’s appeal. He further stated that the assessee was not justified in moving one miscellaneous application after the other on the same subject-matter.

9. I have considered the rival submissions and perused the relevant material on record. Section 254(1) provides that the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. Sub-section (2) states that the Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. On going through the prescription of sub-section (2) it clearly emerges that the Tribunal is empowered to rectify the mistake which is apparent from record. Now the question arises that what is mistake apparent from record. The mistake, as envisaged under this sub-section, may be factual or legal or both. However it is not any mistake which can be rectified within the ambit of this section. There are two essential ingredients. Firstly there should be mistake and secondly such mistake must be apparent from record. If it is only a mistake, which is not apparent from record, that goes outside the purview of this sub-section. It is evident that the scope of sub-section (2) is restricted to rectifying any mistake in the order which is apparent from record and does not extend to reviewing of the earlier order.

10. The crucial expression ‘mistake apparent from the record’ came up for adjudication before the Hon’ble Supreme Court in the celebrated case of T.S. Balram, ITO v. Volkart Bros. [1971] 82 ITR 50 . In this case it was held that : "a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record." The Hon’ble Supreme court in the case of CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463¹ considered the scope of rectification proceedings. In this case the claim for deduction under section35B was not originally allowed at all. An order was passed by the CIT(A) on assessee’s application directing certain allowance to be given on proportionate basis after verification of the assessee’s claim under section 35B. The ITO thereafter entertained the assessee’s prayer for rectification of the order and allowed the assessee’s claim in respect of matters like coloured albums, export staff travelling expenses, export sales commis- sion, etc. When the matter travelled to the Hon’ble Summit Court, reiterating the well settled position in law, it was held that : "rectification is not possible if the question is debatable. Moreover, the point which was not examined on facts or in law cannot be dealt as mistake apparent on the record," More recently the Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. (supra) came to hold as under :—

"A patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the record means an error which strikes on mere looking and does not need a long drawn out process of reasoning on points on which there may be conceivably two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no court would permit it to remain on record. If the view accepted by the court in the original judgment is one of possible views, the case cannot be said to be covered by an error apparent on the face of the record."

11. A survey of the afore-noted three judgments of the Hon’ble Apex Court makes it manifest that the scope of proceedings under section 254(2) is confined to rectifying any mistake which is apparent on the very face of it. If the point needs to be proved on the strength of different facets of reasoning, the same would become debatable. Once a particular point falls in the realm of "debatable issue" that automatically goes out of the domain of sub-section (2) of section 254. Thus the error, capable of rectification under this sub-section, must be one which is apparent on the face of order itself. Further if two views are possible on a particular point and the Tribunal has preferred one view over the other, no rectification application lies for impressing upon the Tribunal to choose the other possible view in preference over the one already adopted by it. If however the order passed by the Tribunal is not in conformity with the judgment of the Hon’ble Supreme Court or that of the jurisdictional High Court rendered prior to or subsequent to the impugned order, the same constitutes a mistake from record capable of rectification under section254(2). In the same breath it will be an error apparent from record if the order is not in conformity with the retrospective amendment carried out to the statutory provision covering the period and point in dispute, of course, subject to the fulfilment of other conditions prescribed in the Act such as limitation period etc.

12. It is, therefore, clear that the power given to the Tribunal under section 254(2) is confined to rectifying any mistake which is apparent from the record. The Tribunal is not empowered to review its order in the garb of rectification under section 254(2). The Hon’ble jurisdictional High Court in the case of Ramesh Electric & Trading Co. (supra) considered a case in which the Tribunal was required to decide whether the commission payment of Rs. 54,000 was deductible under section 37. After examining the circumstances it came to the conclusion that the amount was not deductible. The assessee moved miscellaneous application under section 254(2) stating that although the appeal memo contained five different grounds of appeal but the order of the Tribunal did not mention three of the grounds. It was contended that the order of the Tribunal did not consider some of the arguments advanced by the assessee. Such application was entertained by the Tribunal. On re-hearing the matter the assessee was allowed deduction of the commission payment by the Tribunal. On appeal, the Hon’ble Bombay High Court held as under :—

"These two arguments, according to the Tribunal, were overlooked by it while passing the earlier order, and, hence, it purported to exercise its power of rectification by re-examining all the circumstances relating to this transaction and upholding it. Clearly, this could not have been done in the exercise of any power of rectification. In the present case, in the first order, there is no mistake which is apparent from the record at all. The Tribunal was required to decide whether the commission payment of Rs. 54,000 was deductible under section 37 of the Income-tax Act. After examining the circumstances, the Tribunal came to the conclusion that it was not so deductible. The Tribunal cannot, in exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from the record itself. No such mistake was apparent from the record. In fact, we doubt if this sort of an exercise could have been done by the Tribunal even if it had the power of review. The Tribunal has, patently, far exceeded its jurisdiction under section 254(2) of the Income-tax Act in redeciding the entire dispute which was before it in this fashion, and the Tribunal has committed a gross and inexplicable error for reasons which we fail to understand."

13. From the above pronouncement of law by the Hon’ble jurisdictional High Court, which is binding on all the authorities under its jurisdiction, it is more than evident that the Tribunal has got the power of rectifying a mistake which is apparent from the record itself and even an error of judgment is outside the ambit of section 254(2) of the Act. The oft-quoted judgment of the Hon’ble Rajasthan High court in CIT v. Ramesh Chand Modi [2001] 249 ITR 323 ¹ distinguishing the judgment of the Hon’ble jurisdictional High Court in the case of Ramesh Electric & Trading Co. (supra) needs to be examined. In this later case the Tribunal omitted to decide some of the grounds of the appeal by oversight. The Hon’ble Rajasthan High Court approved the view taken by the Tribunal in exercising its power under section 254(2) by recalling the order to make a fresh order deciding the issues which were left undecided. The Hon’ble Rajasthan High Court discussed in para 5 the judgment of the Hon’ble jurisdictional High Court in Ramesh Electric & Trading Co. (supra) and held that the issue raised before it was different from the one considered by the Hon’ble Bombay High Court. It was clarified that the ratio decidendi of Ramesh Electric & Trading Co. (supra) was that while deciding an issue the Tribunal did not take into consideration some of the arguments and it was under those circumstances that the miscellaneous application was held to be not maintainable. Further it was clarified that the case before the Hon’ble Rajasthan High Court was on the failure to decide the grounds raised by the assessee in appeal memo. It is, therefore, axiomatic that the judgment of the Hon’ble jurisdictional High Court in the case of Ramesh Electric & Trading Co. (supra) has not been diluted in any manner by any other Courts including the Rajasthan High Court in Ramesh Chand Modi (supra). Be that as it may we are duty bound to religiously follow the mandate of any judgment rendered by the Hon’ble jurisdictional High Court and cannot needlessly venture to distinguish it on one count or the other. It is still further noticed an opinion similar to that of the Hon’ble Bombay High Court has been rendered by the Hon’ble Delhi High Court in a recent judgment in Ras Bihari Bansal… v. Commissioner Of Income Tax & Anr.… [2007] 293 ITR 365 ¹. In this case it has been ruled that section 254(2) enables the Tribunal to rectify any mistake apparent from the record. "It is well-settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, 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, although it may be an error of judgment. The mere fact that the Tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2). Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section."

14. We need to examine the facts of the instant case, in the face of the aforenoted judgment of the Hon’ble Supreme Court and those of the Hon’ble High Courts, as discussed above, to find out if any mistake can be traced in the original order passed under section 254(1). Adverting to the facts, it is noticed that the addition of Rs. 11 lakhs was made by the Assessing Officer on the basis of Page No. 18 of Annexure A-1, seized during the course of search. This page contained the detail of denominations of Currency Notes i.e., Rs. 500 Notes, Rs. 100 Notes (bank seal) and Rs. 100 Notes. Thereafter details have been given for incurring of certain expenses with the relevant dates such as Grill terrace, Adv wonder kitchen, Papoo for August, Wander kitchen extra, Stamp duty, NSCI bill etc., etc., with exactitude. Stage by stage certain expenses have been totalled with a remark "spent". The assessee claimed that the expenses mentioned on this page were a planner of expenditure to be incurred in future and not actual spending. All the authorities starting from Assessing Officer to CIT(A) and then Tribunal gave a concurrent finding, on the appreciation of this page No. 18, that it was not a planner but the incurring of actual expenditure. Even the balance as on 19-9-1997 at the end of the page at Rs. 2 lakhs matched with the cash of Rs. 2 lakhs found at the time of search. The assessee in statement recorded at the time of search admitted that this page was in his own handwriting but claimed to be a rough working and assured to inform actual position in due course. There is no material on record through which the assessee furnished any detail of the notings on this page contrary to its contents. When the Tribunal dismissed this ground of the assessee with the elaborate reasoning as extracted above, it can be safely concluded that a particular view was formed about this Page No. 18, on its appreciation. The first miscellaneous application filed by the assessee met with the fate of dismissal by the reasoning as extracted above. Now through this miscellaneous application the assessee desires to convince the Bench for forming a different opinion from the one made earlier. In my considered opinion the doors of section 254(2) are closed to the review of the earlier decision based on the same set off facts.

15. Another important question which requires adjudication is whether the second rectification application can be entertained by the Tribunal when the first miscellaneous application already stands rejected on the same point. The learned Accountant Member relied on an order passed by the Delhi Bench of the Tribunal in support of his view that the second miscellaneous application is not maintainable. On the contrary the learned Judicial Member has relied on the submission of the learned AR vide para 5 of her order that "the present Miscellaneous Application is the second Miscellaneous Application filed against the order itself, which is permissible in law." No reference has been made to any judgment which supports the maintenance of second miscellaneous application on the same set off facts. I observe that almost similar issue came up before the Hon’ble Madhya Pradesh High Court in Commissioner Of Income-Tax v. Smt. Gunwanti Bai [1996] 219 ITR 632 in which the first application moved before the Tribunal was rejected but the second application claiming that full material was not considered earlier, came to be accepted by the Tribunal. When the matter came up before the Hon’ble High Court it was held that when the first application was rejected by the Tribunal after taking into consideration all the relevant material, there was no occasion to have moved a second application for rectification. It was noticed that there was no change of the facts except that the incumbent who decided the matter changed. This approach on the part of the Tribunal was held to be "absolutely erroneous". The observations of the Tribunal that certain documents were not considered by it in the original order or in the order of the first rectification order were found to be importunate by the Hon’ble High Court. Thus the order passed by the Tribunal on the second miscellaneous application was set aside. Similarly the Hon’ble Allahabad High Court in Commissioner Of Income-Tax v. Kamal Bhai Ismailji [2007] 288 ITR 297 ¹ held that the Tribunal having rejected the miscellaneous application was not justified in entertaining the second application on the same set off facts and recalling its original order. The same was held to be review, a power not possessed by the Tribunal. In still another later judgment in CIT v. Chemical & Allied Products [2008] 296 ITR 297 ¹ (All.). Their Lordships of the Hon’ble Allahabad High Court disproved the view taken by the Tribunal in entertaining the second miscellaneous application on the same set off facts and recalling its appellate order on the alleged premise that there was an error apparent in the order. The ld. AR failed to draw my attention towards any judgment accepting the maintainability of second miscellaneous petition on the same set off facts. From these judgments it becomes apparent that once a miscellaneous application is filed which is rejected by the Tribunal, it is not permissible to entertain a second miscellaneous application against the original order on the same set off facts. Coming back to the instant case I observe that the Tribunal, after through discussion, in the order passed against the first miscellaneous application took a conscious decision that its conclusion in the original order was not based on erroneous facts and/or on mis-appreciation of the facts on record and further no legal contention going to the root of the very addition remained to be considered. Now when the second miscellaneous application came to be filed with the same contents, inter alia, placing reliance on certain judicial precedents, no different view was possible on the same set off facts.

16. The learned Counsel for the assessee contended that after the passing of the order on the first miscellaneous application but before moving of the second miscellaneous application, the Hon’ble Supreme Court in the case of P.R. Metrani ( supra) has given a judgment that the presumption under section 132(4A) is not available for framing the regular assessment. In his opinion non-consideration of this judgment delivered almost close to the passing of the order on the first miscellaneous application rendered the original order as erroneous, being not in conformity with the view expressed by the Hon’ble Supreme Court. I have absolutely no doubt in my mind that the non-consideration of a judgment of the Hon’ble Supreme Court or that of the Hon’ble jurisdictional High Court delivered prior to or even subsequent to the order constitutes a mistake apparent from record as has been held by the Hon’ble Supreme Court in Saurashtra Kutch Stock Exchange Ltd. (supra). Similar view was expressed earlier by the Hon’ble Gujarat High Court in CIT v. Subodhchandra S. Patel [2004] 265 ITR 445² . In view of these judgments it is vivid that even if the Hon’ble Supreme Court or the Hon’ble jurisdictional High Court render a judgment after the passing of the order, the same has to be strictly followed. Interpretation of a statutory provision by the Hon’ble Supreme Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified.

17. Now the case of the learned A.R. is that the judgment in the case of P.R. Metrani (supra ) has rendered the original order passed by the Tribunal as erroneous requiring rectification on the score that it is not in consonance with the view expressed by the Hon’ble Supreme court. A dip into the facts of the case before the Hon’ble Supreme Court reveals that a search was conducted on the business as well as residential premises. Statement of one Shri J.J. Bakale was recorded at the time of search and Shri P.R. Metrani was away to Rajasthan on a business tour. He was examined after his return to Hubli. He denied the possession of certain documents on the basis of which the addition was made. He also denied that these papers contain any writing made by him. The Assessing Authority made a summary adjudication order under section 132(5). Thereafter assessment was completed for assessment years 1981-82 and 1982-83 by making certain additions on the basis of the documents found at the time of search. The Assessing Officer pressed into service the presumption in terms of section 132(4A) of the Act. The addition so made was echoed in the first appeal. The Tribunal however accepted the appeals of the assessee and set aside the orders passed by the learned CIT(A) except to the extent of certain additions. The Hon’ble High Court held that presumption under section 132(4A) was not limited to the passing of an order under section 132(5) only and the same presumption could be raised for framing the regular assessment as well. When the matter came up before the Hon’ble Supreme Court it was held that the presumption under section 132(4A) is available only in regard to the proceedings for search and seizure under section132 and is not available for framing regular assessment. It was clarified that though the presumption under section 132(4A) is not available to the authorities while framing the regular assessment but the material seized can be used as a piece of evidence in any other proceedings under the Act. It is on the basis of this judgment rendered by the Hon’ble Apex Court that the assessee is requesting for recalling of the order passed by the Tribunal on ground No. 3 for a fresh adjudication. I am unable to see that how this judgment advances the case of the assessee in any manner. Section 132(4A) provides that where any books of account, other documents, money, bullion, jewellery etc., are found in the possession or control of any person in the course of search, it may be presumed that such books of account, other documents, money, bullion, jewellery etc. belong to such person; that the contents of such books of account and other documents are true; and that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by any particular person are in that person’s handwriting. In the present case we are concerned with Page No. 18 of Annexure A-1 which was found from the assessee’s premises containing certain details. The assessee in his concluding statement admitted that it was signed by him and was also in his own handwriting. He however failed to furnish any explanation about the contents of this page with assurance that such clarification will be furnished in due course. There is nothing on record to suggest, even remotely, that the assessee furnished any further clarification except for raising the contention that the entries mentioned on this page were planner and not the amounts actually spent. A casual look on this page clearly demonstrates that the same did not contain any planner but the actual transactions. The mentioning of the denominations of Notes into those of Rs. 500 and Rs. 100 and the further classification of Notes of Rs. 100 into ‘sealed’ and others, leaves nothing to doubt that it referred to actual amount and not some arbitrary figure. Further the mentioning of expenditure incurred on certain items on day to day basis with the spending of the amount on regular intervals jettisons the contention of the assessee that it was only a planner.

18. There is a marked difference between raising any presumption as per section 132(4A) and appreciation of evidence found at the time of search. The presumption under sub-section (4A), in the present context, can be only of three kinds viz., (i) the document i.e., Page No. 18 of Annexure A-I belongs to the assessee; (ii) its contents are true and (iii) it is in the handwriting of the assessee. The assessee himself admitted that it was in his own handwriting, which implied that it belonged to him. He however took a plea that its contents were not actual transactions but only a planner. No evidence worth the name could be produced in support of his submission. Even in his final statement, he assured of filing explanation in due course, but at no stage of proceedings before the Tribunal, the assessee could point out any such explanation having been furnished. Obviously none of the transactions recorded on this page were found to have been entered in the regular books of account. When this page itself is crying hoarse that the recordings on it are the actual transactions, the natural consequence is that such transactions are undisclosed if not recorded in the regular books of account, which is the case here. The consideration of Page No. 18 of Annexure A-I does not amount to raising any presumption, be it rebuttable or non-rebuttable, as contemplated under section 132(4A). It is a simple case of appreciation of evidence found at the time of search. In the scheme of block assessment of search cases, a specific definition has been given to ‘undisclosed income’ under section 158B(b) which includes .....any income based on any entry in.......documents........., where such....entry in.....documents .......represents wholly or partly income .... which has not been ...... disclosed for the purposes of this Act.... Then the mechanism for the computation of undisclosed income of the block period has also been given in section 158BB. From the above prescription of the relevant sections of Chapter XIV-B, it is obvious that the undisclosed income also includes income on the basis of an entry on any document which has not been disclosed for the purposes of this Act. Page No. 18 contains entries of certain transactions, which have not been accounted for in the books of account by the assessee. In such a situation and in the given circumstance this page cannot be brushed aside while computing the undisclosed income of the block period. If any amount of undisclosed income earned by the assessee is unfolded on the appreciation of this page, which is included in the undisclosed income, it cannot be said that the authorities have drawn any presumption of income.

19. The authorities below and the Tribunal in its original order did not go by mere presumption about the contents of Page No. 18 of Annexure A-I. There is no question of any presumption about this document. Even if the provisions of section 132(4A) are excluded from consideration, it is not possible to hold that the Tribunal has not taken a possible view on the sustenance of the addition. This issue has been discussed at length by the tribunal in the order under section 254(1) and first order under section 254(2). The decision so rendered by the Tribunal in the present circumstances of the case cannot be called in question. Here is a case in which the assessee has filed one miscellaneous application after another praying for the recalling of the order on ground No. 3 with a plea that he will explain his case in the fresh proceedings under section 254(1), without actually furnishing any explanation about page No. 18 either in such miscellaneous applications or in the oral submissions made before me. In my considered opinion the afore-noted judgment of the Hon’ble Supreme Court in P.R. Metrani’s case (supra) is not applicable to the facts of the instant case and there is no mistake, much less the mistake apparent on record, in the original order passed by the Tribunal warranting any interference on this count. For the foregoing reasons I agree with the view expressed by the learned Accountant Member. The Registry of the Tribunal is directed to list this matter before the Division Bench for passing an order in accordance with the majority view.