TMI Blog1961 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... er found cash credits in the accounts of the firm aggregating to ₹ 90,000 in the names of four non-resident persons. All these credit entries appeared in the months of December, 1947, and January, 1948, the earliest being on the 13th December, 1947, and the last on the 9th January, 1948. The Income-tax Officer before whom no explanation was offered by the assessee with regard to this amount of ₹ 90,000 treated it as income of the assessee from an undisclosed source and added the amount to its assessable income. In the appeal to the Appellate Assistant Commissioner, the case was remanded and thereafter the explanation offered by the assessee in respect of this amount of ₹ 90,000 was accepted, and its addition to the assessable income was deleted. The department took an appeal to the Tribunal against the order of the Appellate Assistant Commissioner. The Tribunal was of the view that the burden was on the assessee to explain the source of the cash credits and the burden had not been properly discharged by the assessee. Before the Tribunal, however, a new point was raised by the assessee which had not been raised either before the Income-tax Officer or before the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Tribunal has erred in law in permitting the assessee-respondent to raise the fresh ground at the Tribunal stage, viz., the 'previous year' for income from an undisclosed source could only be the financial year and as such assessable in the assessment year 1948-49 and not in 1949-50 ? 4. Section 33 which deals with appeals to the Tribunal states in sub-section (4) therefore that the Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner . It is argued by Mr. Joshi that the powers extend to pass orders on the appeal before it, and the word thereon appearing in the sub-section limits the power to deciding the case on the grounds of appeal set up before it in the said appeal. Rule 12 of the Appellate Tribunal Rules provides that the appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth, in the memorandum of appeal; but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s decree which is against him, and the appellate court will have no power or jurisdiction to permit him to do so. But, in so far as he only wants to maintain the decree of the lower court which is against the appellant and in his favour, he will be entitled to support it on fresh grounds also if he can do so, and the appellate court also will have jurisdiction to permit him to do so, provided, of course, that the fresh grounds which he wants to urge do not require a further investigation into facts which are not already on record and are not based on facts which were neither alleged nor admitted nor proved and which the other side was never called upon to meet in the lower court. But, if all the facts necessary to sustain a fresh ground which he wants to urge are undisputed facts which are already on record and the contention which he wants to raise is a pure question of law, we do not see why there should be any difficulty in his way in raising the same, or any difficulty in the way of the appellate court to allow him to do so. 6. Mr. Joshi says that if the fresh ground which the respondent wants to raise has the effect of affection the appellant adversely, such a ground can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat decree was wholly in his favour, cannot be permitted to raise a new ground available to him in support of the decree, although the same ground would have been available to him if he was in the position of an appellant, it would amount to putting him in a worse position as a respondent than as an appellant. In our opinion, therefore, the Tribunal had jurisdiction to allow the assessee-respondent to urge a fresh ground which it sought to raise in the present appeal before it. 7. The decisions to which Mr. Joshi has invited our attention do not, in our opinion, go contrary to the view which we are inclined to take. In Motor Union Insurance Co. Ltd. v. Commissioner of Income-tax it was held : The word 'thereon' used in section 33(4) of the Indian Income-tax Act only means 'on the appeal' which must mean on the grounds raised in the appeal. The sub-section only gives power to the Appellate Tribunal to give its decision and pass orders in respect of all grounds urged on behalf of the appellant in respect of the decision appealed against. In deciding those grounds it can pass appropriate orders. But it is not open to the Tribunal itself to raise a ground or per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the amount of ₹ 90,000 was subject to tax. The Income-tax Officer had held that it was subject to tax and had added it to the income. The Appellate Assistant Commissioner had deleted it. The dispute before the Tribunal was whether it should be taxed or not and the respondent-assessee was supporting the decision of the Appellate Assistant Commissioner that it was not subject to tax. Whether the ground that it was urging in support of the decision of the Appellate Assistant Commissioner was the one on which the Appellate Assistant Commissioner had relied or some other ground did not make any difference. The appellant was not being affected adversely in the sense that the permitting of the ground to be raised by the respondent was to affect the decision of the lower authorities which was against the appellant to a further detriment of the appellant as in the case referred to by Mr. Joshi. In our opinion, what is meant by the observation that the respondent will not be permitted to raise a ground which will work adversely to the appellant is that the respondent will not be entitled to raise a ground which have can only raise provided he has cross-appealed or cross-objected. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the respondent was not entitled to support the decree in his favour on a ground other than the one on which the lower court had decided in his favour. Another decision to which Mr. Joshi has invited our attention is Rajkumar Mills Ltd. v. Income-tax Appellate Tribunal. It was held in that case that that the jurisdiction of the Appellate Tribunal under section 33 in an appeal against an order of the Appellate Assistant Commissioner is limited to the grounds of appeal raised before it and the Tribunal is only entitled to determine the objections raised by the appellant, does not preclude the Tribunal from determining the matter on the basis of facts canvassed before the Income-tax Officer and the Appellate Assistant Commissioner, on which either the Income-tax Officer or the Appellate Assistant Commissioner might have recorded a finding but considered that finding not necessary for the determination of the assessment because he took a particular view of the assessee's liability, which view the Tribunal dissents from; and the position is the same where the Tribunal accepts that view, but upon a reference the High Court holds that that view is wrong. Now, the actual dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand. It was in these circumstances that the observations, to which Mr. Joshi has drawn our attention, were made by this court. Now, the circumstances of the case before us are entirely different. On the facts as stated by the Tribunal, the contention raised in the present case was one purely, in law, on the facts as they existed all along before the Income-tax Officer as well as the Appellate Assistant Commissioner, though the legal argument available on those facts was not urged before either of the authorities. In our opinion, none of the decisions to which Mr. Joshi has invited our attention, goes contrary to the view which we are inclined to take in the matter. In our opinion, therefore, it was within the jurisdiction of the appellate powers of the Tribunal to permit the assessee-respondent to raise the question, which it sought to raise for the first time before the Tribunal, and the Tribunal, therefore, could not be said to have erred in permitting the assessee-respondent to do so. Our answer, therefore, to the question No. 1, as reframed by us, is in the negative. 9. Coming to the second question, the argument of Mr. Joshi is that the Tribunal was not justified in refus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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