TMI Blog2008 (12) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... on appeal before us. 2. At the very outset, the learned counsel for the assessee framed the following two questions as preliminary issues before the Bench : "( i )On the facts and circumstances of the case, whether the ratio of the decision of the Hon ble Supreme Court in CIT v. Sun Engineering Works (P.) Ltd. [1992] 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC) is applicable ? ( ii )If the ratio of the decision of the Hon ble Supreme Court in CIT v. Sun Engineering Works (P.) Ltd. ( supra ) is applicable, is it open to the Hon ble Tribunal either itself to raise a ground or permit the respondent, who has not appealed, or filed a cross-objection, to raise a ground which will work adversely to the appellant ? 3. In regard to the first issue as to the applicability of the decision of the Hon ble Supreme Court in CIT v. Sun Engineering Works (P.) Ltd. [1992] 198 ITR 297, the learned counsel for the assessee drew the attention of the Bench to the question of law before the Hon ble Supreme Court, which was as follows: "Where an item unconnected with the escapement of income has been concluded finally against the assessee, how far in reassessment on an escaped ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was argued by the learned counsel for the assessee that both the issues, namely, whether the assessee can be assessed on book profit under section 115JA of the Act and be charged interest under sections 234B and 234C of the Act were neither concluded nor had attained any finality so as to attract the ratio of the decision of the Hon ble Supreme Court in Sun Engineering Works (P.) Ltd. ( supra ). 6. In this connection the attention of the Bench was drawn to the following observations of the Hon ble Supreme Court at p. 320 of the said decision in Sun Engineering Works (P.) Ltd. ( supra ) : "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its, colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the Courts must carefully try to ascertain the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon by the CIT(A) and consequently the reassessment order had merged with the order of the CIT(A). If the Department were aggrieved against the order of the CIT(A) insofar as the CIT(A) had adjudicated upon the grounds relating to the applicability or otherwise of section 115JA of the Act and the levy of interest under sections 234B, 234C and 234D of the Act was concerned, the Department had every right to file an appeal against the said order of the CIT(A). The Department had chosen not to do so and had neither filed any cross-objection in the matter. In the circumstances, it is argued that no jurisdiction lay with the Hon ble Tribunal to either of its own accord raise the issue or permit the Department which has not come in appeal against the order of the CIT(A), nor filed a cross-objection, to raise a ground, as to whether in reassessment proceedings the matter relating to applicability or otherwise of section 115JA of the Act or the levy of interest under sections 234B, 234C and 234D of the Act can be reagitated. 9. In support of his submissions the learned counsel for the assessee referred to the following judicial pronouncements : ( a ) Motor Union Insurance Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals, he is the party who comes before the Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objection. But, if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to support the judgment of the first officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour. Apart from that, the section, in our opinion, does not permit the course adopted by the Tribunal in this case. Under section 31, when the legislature thought of giving power to the AAC to enhance the assessment, it has in terms enacted that. In our opinion, that fact is against the contention that the words of section 33(4) are wide enough to include a power of enhancement, without any appeal by the CIT. The word thereon used in section 33(4) only means on the appeal , which must mean on the grounds raised in the appeal. Read in that way, the sub-section only gives power to the Tribunal to give its decision and pass orders in respect of all grounds urged (which must be on behalf of the appellant) in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Trial Court, but on any other ground." 14. Thereafter, at p. 857, the Hon ble High Court refers in detail to its earlier decision in The Motor Union Insurance Co. Ltd. case ( supra ) and states as follows : "So far as the respondent is concerned, he cannot raise a new ground. As regards the Tribunal itself, obviously, what the learned judgment was that, if the appellant did not urge a ground then the Tribunal could not itself decide the appeal on a ground which might adversely affect the appellant." 15. The Hon ble High Court thereafter refers to the observations of their Lordships in Motor Union Insurance Co. Ltd. case ( supra ) relating to rule 21 of the ITAT Rules which dealt with the powers of the Tribunal and explains the said decision of the Bombay High Court in the following words : "Therefore, again, what is being emphasized is that the Tribunal should not give a relief to the respondent which relief was not given to him by the Trial Court and which relief he has not himself sought by either cross-appealing or cross-objecting. It only says that the Tribunal is not obliged to rest its decision on the grounds urged by the appellant. It recognizes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [1945] 13 ITR 272 (Bom.) and New India Life Assurance Co. Ltd. v. CIT [1957] 31 ITR 844 (Bom.), on which the High Court has relied, have been rendered in relation to section 33(4) of the Indian Income-tax Act, 1922, but, in our view, the said provision of Income-tax Act is in pari materia with the provisions of section 39(4) of the Kerala General Sales-tax Act, 1963, Moreover, the Bombay High Court has pointed out in those decisions that section 33(4) merely enacted what was the elementary principle to be found in the CPC that the respondent who has neither preferred his own appeal nor filed cross-objections in the appeal preferred by the appellant, must be deemed to be satisfied with the decision of the lower authority and he will not be entitled to seek relief against a rival party in an appeal preferred by the latter. In the first mentioned case, the elementary principle is stated at p. 282 of the Report thus: Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objection. But, if no such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to whether the assessment based on book profits under section 115JA is valid and whether the levy of interest under section 234B, 234C and 234D of the Act is correct. 23. In regard to the second issue as to whether at this stage the Tribunal has jurisdiction to either itself raise a ground, or permit the Department which has not appealed nor filed a cross-objection, to raise a ground which will work adversely to the assessee and in favour of the Department, the learned CIT-Departmental Representative relied upon the decision of the Apex Court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 wherein the Hon ble Supreme Court held that the Tribunal has the discretion to allow an additional ground even if no ground had been taken in the grounds of appeal. 24. We heard at great length the argument submitted by the learned counsel for the assessee and the learned Departmental Representative on the preliminary issues framed at para 2 above and are inclined to accept that on both the issues the assessee deserves to succeed. 25. It is well-settled that a case is a precedent for what it explicity decides and nothing more. The words used by Judges are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not open to an assessee to seek a review of the concluded item, unconnected with the escapement of income, for the purpose of computation of the escaped income." 27. In the circumstances, it is only an issue which has been concluded finally against the assessee in the original assessment, which is not permitted to be reagitated in reassessment proceedings. In the present appeal, the assessee has agitated both the issues that were the subject-matter of consideration in the original assessment, namely ( a )In regard to invoking section 115JA of the Act and subjecting the assessee to tax on book profits; and ( b )The levy of interest under sections 234B and 234C of the Act. 28. In appeal before the CIT(A) as well as carried the matter further to the Tribunal, both the above issues were therefore not concluded finally against the assessee. Consequently, the assessee is well within its rights in reassessment proceedings to agitate both the above issues before the Hon ble Tribunal. 29. Insofar as the second issue is concerned, the decisions of the Hon ble Bombay High Court and the Supreme Court relied upon by the learned counsel for the assessee are directly on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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