2018 (8) TMI 1726 - HC - Income Tax

Maintainability of appeal under Section 260A - True and proper construction of section 254(1) - question not raised before the Tribunal nor independently opined on by the Tribunal - Tribunal justification in confirming the disallowance u/s 14A - Held that - It is an undisputed position before us that the aforesaid alternate contention was not urged before the Tribunal. In the above view we pointed that in view of the decisions of this Court in CIT v/s. Tata Chemicals Pvt. Ltd. 2002 (4) TMI 42 - BOMBAY HIGH COURT and CIT v/s. Smt. Lata Shantilal Shah 2009 (1) TMI 436 - BOMBAY HIGH COURT an appeal under Section 260A of the Act can only be in respect of issues which were raised before the Tribunal. Admittedly the issue of the disallowance in excess of the total exempt income was not an issue urged before the Tribunal. Therefore it would be not possible for us to entertain this appeal as the issue being urged before us now is not an issue of jurisdiction. The question of law not raised before the Tribunal would not be allowed to be urged before the High Court in appeal under Section 260A of the Act. This of course does not preclude this Court from entertaining an appeal on issue of jurisdiction even if the same has not been raised before the Tribunal. However in this case admittedly the proposed question is not one of jurisdiction.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding disallowance under section 14A of the Income Tax Act, 1961 for Assessment Year 2008-09.

Analysis:
The appellant raised questions of law challenging the Tribunal's decision not to give reasons for disallowance under section 14A of the Act regarding strategic investments made in firms and companies for projects. The appellant cited a previous decision in their favor and sought to reframe the question of law. However, the Court noted that the alternate ground regarding disallowance under Section 14A of the Act was not raised before the Tribunal. As per precedents, an appeal under Section 260A can only be on issues raised before the Tribunal, and since the new issue was not raised, the Court could not entertain it.

The Court referred to previous judgments emphasizing that a question not raised before the Tribunal cannot be considered in an appeal. The appellant's reliance on certain cases was dismissed, as they were not directly relevant to the current situation. The Court also highlighted that the proposed question did not pertain to jurisdiction, which could have been considered even if not raised before the Tribunal. Ultimately, the Court found that the framed question did not present a substantial question of law and dismissed the appeal without any costs.

In conclusion, the High Court dismissed the appeal challenging the Tribunal's order on disallowance under section 14A of the Income Tax Act for Assessment Year 2008-09. The Court emphasized the importance of raising all relevant issues before the Tribunal for consideration in appeals under Section 260A, and highlighted the limitations on introducing new questions of law during the appeal process.