TMI Blog1994 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... putation of property income. With the learned departmental representative not objecting to our recalling the order dated 10-12-1993, on the issue of disallowance of Rs. 60,174, that part of the order of the Tribunal was recalled and this is how we are in seisin of the present appeal. 2. We have heard rival submissions at length. The assessee has filed papers containing evidence of payment of property tax on 26-3-1985 and also papers relating to the adjustment sheet giving the return of income with the department filing the profit and loss account and the details thereof. The assessee is a company in which the public are not substantially interested. The previous year ends on 31-5-1984 relating to the assessment year 1985-86. It is now agreed that the reference to building tax in the assessee's papers as well as in the records is inappropriate and proper reference is to the property tax on the building. There can be no dispute that property tax would be a valid deduction in arriving at the annual value of the property and, therefore, should fall under the head 'Income from property'. The burden of Sri John's contention is that section 43B is relevant only for the computation of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return : Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36, and where such payment has been made otherwise than in cash, the sum has been realised within fifteen days from the due date. Explanation (1) --- For the removal of doubts, it is hereby declared that whereas deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the first day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the fact that the said sum of Rs. 60,174 has already been deducted while computing the income under the head 'Property'. In any case, the CIT (Appeals), while deleting the disallowance made by the ITO under section 43B, ought to have restricted the Municipal tax to Rs. 19,046 instead of Rs. 79,220 deducted while computing the income under the head 'Property', as the assessee had paid property tax (municipal tax) only to the extent of Rs. 19,046 during the year out of the total claim of Rs. 79,220." 4. We have heard rival submissions. Sri John vehemently contends that the additional ground does not arise out of the order of the CIT (Appeals) ; nor does it arise on the subject-matter of appeal before the Tribunal. In the appeal filed by the assessee before the first appellate authority, against the order of assessment, the assessee had two grievances, viz., (i) the non-granting of investment allowance and (ii) the disallowance made under section 43B in respect of a sum of Rs. 1,94,663, which included the amount of Rs. 60,174 in respect of property tax erroneously described as building tax. Both objections related to the computation of income from business. The learned CIT (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and, therefore, the Tribunal is competent to correct the error in the assessment order, especially when it is brought to its notice. Sri Balakrishnan relied on the following decisions : Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC), CIT v. Kerala State Co-operative Marketing Federation Ltd. [1992] 193 ITR 624 (Ker.) and CIT v. Smt. Khairunnissa Ebrahim [1993] 201 ITR 903 (Ker.). 5. We have thus heard rival submissions. It must be stated in this context that the decision of the Supreme Court in Jute Corporation of India Ltd.'s case does not appear to have been brought to the notice of the Calcutta High Court relied on by the assessee. In the decision of the Supreme Court in Jute Corporation of India Ltd.'s case, the dispute was in relation to the deduction of the sales-tax liability and it was in that context an additional ground was raised before the CIT (Appeals) who permitted the appellant to raise the additional ground. The Tribunal placing reliance on the decision of the Supreme Court in the case of Addl. CIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1 held that the Appellate Assistant Commissioner had no jurisdiction to entertain the additional claim. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of raising new issues before the Tribunal not raised before the Assessing Officer cannot raise in the case of an appeal by the revenue. Of course, the revenue has a right to ask for the amendment of its order by way of enhancement, but such right is confined when an appeal by an assessee is pending before the first appellate authority. When a request for enhancement has been made by the Assessing Officer to the first appellate authority, the latter can certainly look into it and decide the issue in accordance with law. This is because the first appellate authority has the power of enhancement. His powers are co-terminus with those of the Assessing Officer. The Tribunal does not have the power of enhancement. Therefore, before the Tribunal the department cannot ask for enhancement of the assessment even though it happens to be the appellant before it. Further, the assessee has to seek remedy against an assessment only through the appellate forum usually and occasionally by resort to revision under section 264. It has no other avenues of relief. On the other hand, in the case of under-assessment or escapement of income, the revenue has enormous powers to set right the situation by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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