1997 (11) TMI 295 - HC - Central Excise

Summary

Issues Involved:
1. Assessment of Income and Additions u/s 68 and 69A of the Income Tax Act, 1961.
2. Rejection of Additional Evidence by CIT (Appeals) and ITAT.
3. Applications under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963.
4. Jurisdiction and Procedural Errors by ITAT.
5. Availability of Alternative Remedy under Section 256 of the Income Tax Act.

Issue-wise Comprehensive Details:

1. Assessment of Income and Additions u/s 68 and 69A:
The petitioners filed their returns of income, which included amounts received and deposited in their accounts under the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities & Exemptions) Act, 1991. The Assessing Officer (AO) issued notices u/s 143(2) and 142(1) and noted the absence of prescribed declarations. Consequently, the AO treated the receipts as unexplained cash credit u/s 68 of the Act.

2. Rejection of Additional Evidence by CIT (Appeals) and ITAT:
The petitioners moved applications under Rule 46A of the Income Tax Rules, 1962, seeking admission of additional evidence, which was rejected by the CIT (Appeals). The ITAT also dismissed the appeals and did not dispose of the applications under Rule 29 for additional evidence, leading to the petitioners' grievance.

3. Applications under Rule 29:
The ITAT's order dated 3-1-1997 did not address the petitioners' applications under Rule 29. The petitioners moved subsequent applications under Section 254(2) to rectify this oversight, which were also rejected by the ITAT on 27-6-1997. The ITAT concluded that the non-disposal of the Rule 29 applications did not constitute a mistake apparent from the record.

4. Jurisdiction and Procedural Errors by ITAT:
The petitioners argued that the ITAT committed a jurisdictional error by not disposing of the Rule 29 applications first, as mandated by its order dated 23-10-1996. The ITAT's failure to address the applications was claimed to have caused grave injustice, necessitating a recall of the order dated 3-1-1997.

5. Availability of Alternative Remedy under Section 256:
The High Court noted that the petitioners had an alternative remedy under Section 256 of the Income Tax Act, which they had already availed. The High Court emphasized that the only remedy available against the ITAT's order dated 3-1-1997 was by invoking Section 256, thereby dismissing the writ petitions on the ground of availability of an efficacious alternative remedy.

Conclusion:
The High Court dismissed the writ petitions, holding that the petitioners' remedy lay in filing an application under Section 256 of the Income Tax Act. The Court noted that the ITAT's failure to dispose of the Rule 29 applications did not constitute a jurisdictional error warranting interference in writ jurisdiction. The Court also observed that procedural rules are meant to promote justice and not to obstruct it, and the petitioners should pursue their remedy under Section 256.