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2005 (12) TMI 465 - ITAT MUMBAIPowers Of Appellate Tribunal - whether or not the assessee, if it is to be taxed on the same rate as an Indian company, should have been taxed at the rate applicable for a ‘closely held domestic company’ or at a rate applicable for a ‘company in which public are substantially interested’ ? - HELD THAT:- The powers of the Tribunal are not confined to deal with the issues arising out of the orders of the authorities below. As long an issue has relevance to the correct determination of taxes in respect of the year, and particularly when relevant facts can be found from the material already on record, it is open to the appellant and the cross objector, whether assessee or revenue, to raise that issue, provided the issue so raised is bona fide and the same could not have been raised earlier for good reasons. There is no difference between the assessee and the revenue on this issue as both of these parties are equal parties before us and their rights are the same. We are of the considered opinion that the Tribunal is not always prevented from passing orders which may result in enhancement of the assessee’s tax liability beyond the tax liability determined by the Assessing Officer. In other words, it is not always necessary that as a result of the proceeding following assessee having been carried in appeal, the assessee cannot be worse off vis-a-vis the position in the event of his having simply accepted the order which is so carried in appeal. The rule preventing enhancement of assessee’s tax liability, beyond the liability fixed by the Assessing Officer, is not universal and without exceptions to the said rule. The reason for revenue not taking up this plea earlier is the retrospective amendment in law. There can be any lack of bona fides in this reason; nobody can be expected to have the clairvoyance of knowing as to what the amendments in the statute will be in future. When the law so permitted, the Assessing Officer happily gave the relief prayed for. The legal position has changed now. The appellate proceedings are still on and there cannot be any excuse for any appellate authority to decide the issue in any manner except in accordance with the law as is in existence at the point of time, for the relevant assessment year, when the appeal is being heard. The appeal before us, even in original grounds of appeal, seeks us to decide what is correct rate of tax chargeable on the income of the appellant. If the correct rate of tax is the rate which neither the Assessing Officer nor the CIT(A) has applied, we have no option except to remit the matter to the file of the Assessing Officer to decide in accordance with the law. We are dealing with a purely legal question which, on being decided in accordance with the law, could result in enhancement of tax liability vis-a-vis the tax liability as a result of appeal effect order but neither there is an enhancement of income, nor there is an enhancement in the tax liability vis-a-vis the tax liability determined by the Assessing Officer in the assessment order u/s 143(3) of the Act as framed by him originally. Thus, we deem it fit and proper to vacate the order of the CIT(A) which is not in accordance with the correct legal position now in force. The matter shall now be sent back to the Assessing Officer for fresh adjudication in accordance with the law. While doing so, he will give due and fair opportunity of hearing to the assessee and decide the matter by way of a speaking order. The appeal filed by the revenue is allowed for statistical purposes in the terms indicated above.
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