RUMA PAL, J. ( 1 ) THE point involved in this writ petition is very short. The facts, however, are complex. In order to appreciate the issue involved it is necessary to recount the facts in some detail. ( 2 ) ON June 4, 1966, the petitioner entered into a contract with Hindusthan Motors Ltd. for sale of 932,617 at the rate of Rs. 13. 33 : 1. This was to cover contracts for import of goods which had been entered into by Hindusthan Motors. On the same day, the petitioner entered into three separate contracts with the Reserve Bank, Chartered Bank and the Bank of India for purchase of foreign exchange totalling 832,000, The balance of the 932,617, namely, 100,617, was to be met by the petitioner from its own resources. ( 3 ) THESE purchases were also made by the petitioner from the said bank at the rate of Rs. 13. 33 : 1. ( 4 ) ON June 6, 1966, the rupee was devalued and the rate of exchange became Rs. 21 : 1. ( 5 ) BETWEEN the petitioner and Hindusthan Motors, the petitioner converted the import bills raised by it at the pre-devaluation rate, viz. , at Rs. 13. 33 : 1. In the circumstances, it is contended by the petitioner that there was no profit made by the petitioner out of the said transaction. It made the required foreign exchange available to Hindusthan Motors at the rate at which it had purchased the same. ( 6 ) ON August 30, 1971, two officials of the petitioner were arrested by the Enforcement Directorate on the allegation that they had violated Section 4 (2) and Section 22 of the Foreign Exchange Regulation Act. The officers were released on bail. Show-cause notices were issued by the Enforcement Directorate for the violation of Section 4 (2 ). Adjudication proceedings were commenced. The adjudication proceedings were challenged by the petitioner under Article 226 of the Constitution. Ultimately, the Division Bench of this court set aside the adjudication proceedings by a judgment dated July 10, 1978. The judgment has since been reported in UCO Bank Ltd. v. Director, Enforcement Directorate [1978] 2 CLJ 75. Adjudication proceedings were commenced. The adjudication proceedings were challenged by the petitioner under Article 226 of the Constitution. Ultimately, the Division Bench of this court set aside the adjudication proceedings by a judgment dated July 10, 1978. The judgment has since been reported in UCO Bank Ltd. v. Director, Enforcement Directorate [1978] 2 CLJ 75. ( 7 ) IN the meantime, as far as the income-tax authorities were concerned, by a letter dated March 3, 1972, the Income-tax Officer wrote to the petitioner alleging that since the contract, between the petitioner and Hindusthan Motors was illegal, invalid and unenforceable, being in violation of Sections 3 (4) and 4 (2) of the Foreign Exchange Regulation Act, 1947, addition had to be made for the difference between the post-devaluation and pre-devaluation rates of exchange, namely, the difference between Rs. 21 and Rs. 13. 33. This worked out to a sum of Rs. 71,53,172. ( 8 ) ON March 18, 1973, the Income-tax Officer passed an order of assessment in respect of the assessment year 1967-68 adding the said sum of Rs. 71,53,172 on account of the difference in the pre-devaluation and post-devaluation rates of exchange. The petitioner preferred an appeal from the said assessment order. The Appellate Assistant Commissioner considered the findings of the Income-tax Officer which in brief were as follows: (i) that the transaction of sale of the foreign exchange between the petitioner and Hindusthan Motors was in contravention of the Foreign Exchange Regulation Act, (ii) the transaction was collusive, (iii) the sale should have been effected at the post-devaluation rate. Therefore, on the basis of what the Income-tax Officer thought should have been the rate of exchange, a notional income was added to the petitioner's returned income. ( 9 ) THE Appellate Assistant Commissioner dealt with the finding of the Income-tax Officer as follows :"even assuming that the transaction in question was clearly vio-lative of the Foreign Exchange Regulation Act, I fail to understand how any income could have accrued to the appellant on the facts of the case. The undisputed facts are that the appellant had agreed to sell on June 4, 1966, pound sterling 932,617 in foreign exchange to Hindusthan Motors Ltd. for the purpose of imports. It is also not denied that the Hindusthan Motors were in possession of valid import documents. The undisputed facts are that the appellant had agreed to sell on June 4, 1966, pound sterling 932,617 in foreign exchange to Hindusthan Motors Ltd. for the purpose of imports. It is also not denied that the Hindusthan Motors were in possession of valid import documents. This amount of foreign exchange was released to the Hindusthan Motors at the rate prevailing prior to devaluation for the purpose of retiring certain import bills. The appellant (viz. , the petitioner herein) had also made effective arrangements to meet its requirements by making forward purchases from the Reserve Bank of India, Chartered Bank and Bank of India. These contracts were taken up after devaluation at the pre-devaluation rate. In the circumstances, it passes my comprehension how it could be held that the transaction was collusive and colourable in nature and that income to the tune of Rs. 71,53,172 accrued to the appellant. The charge under the Income-tax Act, 1961, is on the real income of the appellant and not on some imaginary income which the appellant could have earned in the opinion of the Income-tax Officer. If the transaction was in contravention of the Foreign Exchange Regulation Act, the appellant will have to pay the penalty for the same but that could not be made a ground for making the addition as has been done in the assessment order. The simple and unassailable facts of the case are that the appellant has agreed to sell to Hindusthan Motors 932,617 for the purpose of imports at the pre-devaluation rate and this contract has been fulfilled in the post-devaluation period at the pre-devaluation rate as per the terms of the contract. Except the marginal amount arising from the difference between the buying and selling rates, no other income has accrued to the bank. The addition is, therefore, totally unjustified and deleted. " ( 10 ) IN other words, the Appellate Assistant Commissioner found that the facts were admitted, i. e. , that the rates of purchase and sale of the foreign exchange by the petitioner were at the pre-devaluation rate. The Appellate Assistant Commissioner concluded that there could be no question of imposition of tax on any notional income. ( 11 ) THE Revenue authorities preferred an appeal to the Tribunal from the order of the Appellate Assistant Commissioner. The Appellate Assistant Commissioner concluded that there could be no question of imposition of tax on any notional income. ( 11 ) THE Revenue authorities preferred an appeal to the Tribunal from the order of the Appellate Assistant Commissioner. By an order dated February 6, 1978, the Tribunal remanded the matter back to the Appellate Assistant Commissioner with the following observation :" It appears that the Appellate Assistant Commissioner has accepted the contentions made on behalf of the assessee although the said contentions were not substantiated with reference to the books of account and documents. For all these reasons, we are of the opinion that the order of the Appellate Assistant Commissioner should be set aside and the appeal should once again be restored to his file for fresh disposal after making proper scrutiny into the facts and circumstances of the transaction which the assessee-bank entered into with Hindusthan Motors Ltd. With this object in view, we set aside the order of the Appellate Assistant Commissioner and restore the appeal once again to his file for fresh disposal according to law. " ( 12 ) ON a reference under Section 256 (1) of the Act, the following questions were referred to the High Court:"1. Whether, on the facts and in the circumstances of the case, the disposal of the appeal by the Tribunal was in accordance with law? 2. Whether, on the facts and in the circumstances of the case, the order of remand by the Tribunal was legal and valid ?" ( 13 ) THE reference application was disposed of by a judgment delivered on September 1, 1981/september 3, 1981, with the following observations :"on behalf of the Revenue, it was stressed that the assessee was not able to produce the books. That is true. For that, the Income-tax Officer was entitled to draw adverse inference and come to his own conclusion. As a matter of fact, he did in this case and the Appellate Assistant Commissioner had observed that even assuming that there was any contravention of the provisions of the Foreign Exchange Regulation Act, no income had been derived by the assessee thereby and, therefore, there was no justification for bringing to tax any amount. Unfortunately, the Tribunal has not held or considered whether this was justified or not. If that is the position, there was no need for a fresh finding of facts. Unfortunately, the Tribunal has not held or considered whether this was justified or not. If that is the position, there was no need for a fresh finding of facts. " ( 14 ) ACCORDINGLY, the High Court answered the questions referred as follows (at page 445 of 137 ITR) :"so far as question No. 1 is concerned, we will answer the question by saying that as the appeal has not been disposed of by the Tribunal in view of the fact that the Tribunal has not decided about the conclusion arrived at by the Appellate Assistant Commissioner, as we have indicated before, the question is answered in the negative. The Tribunal will now be entitled to dispose of the appeal in the light of the observations made herein. " ( 15 ) IN other words, the Tribunal was directed by the High Court to consider the conclusion of the Appellate Assistant Commissioner and take a decision whether on the facts before the Appellate Assistant Commissioner such conclusion was justified or not. There was no question of any fresh collection of evidence. ( 16 ) NO appeal was preferred by the Revenue authorities from the judgment dated September 1, 1981/september 3, 1981, under Section 261 of the Act. ( 17 ) ON September 29, 1988, an order was passed by the Tribunal purportedly under Section 260 (1 ). This is one of the impugned orders in the writ petition. In the said order, the Tribunal has not at all considered the conclusion of the Appellate Assistant Commissioner in conformity with the decision of the High Court under Section 256 (1 ). The Tribunal has, on the other hand, elaborately considered its own powers to remand a case for the purpose of obtaining further evidence. The Tribunal has further considered the nature of the evidence that would be required and why the evidence before the Tribunal was not adequate. Accordingly, the Tribunal remanded the matter back to the Income-tax Officer directing him to -"verify whether the foreign currency of 932,617 or any part thereof was sold or used during the relevant accounting year and to bring to tax the profits calculated at post-devaluation rate only on the foreign currency actually sold or used during the relevant accounting year. Accordingly, the Tribunal remanded the matter back to the Income-tax Officer directing him to -"verify whether the foreign currency of 932,617 or any part thereof was sold or used during the relevant accounting year and to bring to tax the profits calculated at post-devaluation rate only on the foreign currency actually sold or used during the relevant accounting year. " ( 18 ) ON November 26, 1988, the petitioner made an application under Section 254 (2) of the Act alleging that the first impugned order required amendment as the same had not been passed in accordance with the judgment of the High Court dated September 1, 1981/september 3, 1981. This application was disposed of ex parte as the Tribunal did not accede to the prayer of the petitioner's representative for an adjournment. In the order on the application which was passed on March 14, 1989, the Tribunal held that-"the assessee-bank did not point out any mistake apparent from the record in the Tribunal's order dated September 29, 1988, In fact, the assessee is suggesting to the Tribunal to make a review of its order and rewrite the order. Review of the order by the Tribunal is not permitted under the law. " ( 19 ) ACCORDINGLY, the Tribunal rejected the petitioner's application under Section 254 (2 ). This is the second order impugned in this writ application. ( 20 ) THE petitioner's application under Section 256 (1) against the second impugned order was also rejected by the Tribunal on September 13, 1989. The petitioner filed an application under Section 256 (2) against the order dated September 13, 1989, before the High Court. This was also rejected on September 11, 1990, on the ground that no reference had been made against the main order of the Tribunal. The court, however, observed that this would not prejudice the petitioner to take steps in accordance with law for challenging the order dated September 29, 1988. ( 21 ) ON April 9, 1990, this writ application was filed. The court, however, observed that this would not prejudice the petitioner to take steps in accordance with law for challenging the order dated September 29, 1988. ( 21 ) ON April 9, 1990, this writ application was filed. It is contended on behalf of the respondents that the application is liable to be rejected on the following grounds : (1) that disputed questions of fact were involved ; (2) that if the order under Section 256 (1) had not been complied with by the Tribunal, the petitioner should have gone back to the reference Bench for clarification or directions ; (3) no prejudice would be caused to the petitioner if the first impugned orders were given effect to. ( 22 ) I am unable to accept any of the contentions of the respondents. It is a matter of record whether the Tribunal has acted in conformity with the judgment of the High Court under Section 260 (1 ). The terms of the judgment of the High Court under Section 256 (1) dated September 1, 1981/ September 3, 1981, are not ambiguous. As noted earlier in this judgment, no appeal was preferred from the said judgment by the respondents under Section 261. The Tribunal had been directed to consider whether on the facts available before the Appellate Assistant Commissioner, the Appellate Assistant Commissioner was justified in reaching the conclusion he did. However, the Tribunal has not even referred to the conclusion of the Appellate Assistant Commissioner, leave alone considering the same in terms of the judgment of the High Court. ( 23 ) THE question of prejudice being suffered by the petitioner is not a consideration. The only consideration is that the Tribunal was bound statutorily to dispose of the matter in strict conformity with the judgment of the High Court. The Tribunal has not done so. In any event, the first impugned order has directed the Income-tax Officer to recompute the alleged profits on the basis of a notional income, i. e. , the Tribunal had in fact without considering the Appellate Assistant Commissioner's conclusion at all in terms of the judgment of the High Court negatived the same. ( 24 ) THE first impugned order is, therefore, quashed. The second impugned order which is consequent upon the first impugned order, is, therefore, also set aside. ( 24 ) THE first impugned order is, therefore, quashed. The second impugned order which is consequent upon the first impugned order, is, therefore, also set aside. The Tribunal will be at liberty to dispose of the matter strictly in conformity with the judgment of this High Court dated September 1, 1081/september 3, 1981, on a reference under Section 250 (1 ). Accordingly, the rule is made absolute. There will be no order as to costs.