TMI Blog2011 (3) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... ns involving five (5) questions each. The facts which are required to be noticed for disposal of the captioned references are briefly as follows: 2.1 The assessee/company at the relevant time was a wholly owned subsidiary of the Oil and Natural Gas Commission of India ( ONGC for short). The assessee was incorporated with the main object of taking over the right and interest of the ONGC available to it under the Joint Structure Agreement ( JSA for short) dated 17.01.1965. There were four parties to the said JSA namely National Iranian Oil Company ( NIOC for short); ACIP, SPA of Italy; Philips Petroleum Company, USA and ONGC of India. Under the JSA, the aforementioned four parties were required to carry on the business of drilling, extracting, producing and selling petroleum and other crude oil products in the Persian Gulf. It is not disputed that under the JSA it had been agreed that 50 per cent of the produce would be owned by NIOC, while the balance would be shared among the remaining three parties: ONGC, ACIP and Philips in equal proportion. After the incorporation of the assessee, as noticed above, the rights under the JSA which were available to the ONGC, were assigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Agreement, however, made the agreement subject to the approval of the appropriate authority of the parties who were signatories to the Settlement Agreement. 2.7 It is not disputed that the approval was received by the parties on 01.01.1984. The Effective Date of the Settlement Agreement thus, as per the provisions referred to above was 01.01.1984. 2.8 In the background of these facts, the Assessing Officer framed an assessment order dated 20.03.1987. As per the aforesaid assessment order, the Assessing Officer made the following additions: 2.9 Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) { CIT(A) for short}. The CIT (A) vide order dated 04.11.1987 partially allowed the appeal of the assessee. 3. This resulted in a situation whereby both the assessee as well as the revenue preferred an appeal to the Income Tax Appellate Tribunal ( Tribunal for short). Profit u/s 41(2) Rs.17,40,43,120/- Profit on sale of exploration store stock and Development store stock. Rs.47,77,375/- Profit on sale of crude oil stock. Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reasons. In the present case, we find that in the application, the assessee has not given any good reason for not raising this ground earlier. Therefore, applying the ratio of the above cited decision of the Hon ble Supreme Court, this ground could not be raised. Otherwise also, we find that no doubt the previous year is the calendar year i.e.31.12.1983 for the business of the assessee but for different source of income, there can be different previous years. Therefore, for the income for year under consideration if previous year is adopted as financial year ending on 31.03.1984, then date of January, 1984 falls in assessment year 1984-85. So the year of assessment adopted by the tax authorities having not been objected at any stage and there is no evidence of that on record. Therefore, this additional ground cannot be admitted. Further, it will necessitate investigation of facts. In view of this, the additional ground is rejected. (emphasis supplied) 3.5 A reading of the reasoning supplied by the Tribunal would show that while the Tribunal does not dispute that the previous year of the assessee was the calendar year which ended on 31.12.1983, it chose to bring it within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the assessee preferred an appeal before the Appellate Assistant Commissioner (in short, AAC ). During the course of the appeal, the assessee raised an additional ground whereby, it sought deduction of ₹ 11,54,995/- on account of liability towards purchase tax. The deduction was claimed by the assessee on the basis of the decision of that very court (i.e., Supreme Court) in the case of Kedarnath Jute Manufacturing Co. Ltd. Vs. CIT (1971) 82 ITR 363. The AAC permitted the assessee to agitate the additional ground raised by it, and after hearing the Income Tax Officer (in short, ITO ) accepted the assessee s claim and allowed the deduction claimed. 5.2 Being aggrieved, the revenue carried the matter in appeal to the Income Tax Appellate Tribunal (in short, the Tribunal ). The Tribunal came to the conclusion that the AAC had no jurisdiction to entertain an additional ground or to grant relief to the assessee based on a ground which had not been raised before the I.T.O. Consequently, the Tribunal set aside the order of the AAC. In coming to this conclusion, the Tribunal placed reliance on another judgment of the Supreme Court in the case of CIT (Addl.) Vs. Gurjargravures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were certain special facts which perhaps persuaded the bench to make the observations which it did. These observations briefly being: that the exemption in any case was not allowable to the assessee. 5.5 The Supreme Court in Jute Corporation case went on to make the following observations in addition to what is extracted hereinabove by us :- The above observations do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made, or that the ground became available on account of change of circumstances or law. There may be several factors justifying raising of such a new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the reasons supplied were not good enough, for the Tribunal to have entertained the additional ground. The Supreme Court in the said case, as a matter of fact, remitted the case to the Tribunal for a fresh consideration. 6. The situation is no different in the present case. The Tribunal having found in favour of the assessee that the settlement agreement was operable from 01.01.1984, it ought to have taken this fact into account and entertained the plea of the assessee to agitate the additional ground of appeal. 6.1 As a matter of fact, the decision of the Supreme Court in the case of Jute Corporation has been considered in a latter decision rendered by it in the matter of: National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383. The observations of the Supreme Court in this context, in the case of National Thermal Power Co. Ltd., being pertinent are extracted hereinbelow :- 5. Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad [1981] 128 ITR 388(Delhi), C.I.T. v. Karamchand Premchand P. Ltd. [1969] 74 ITR 254(Guj) and C.I.T. v. Cellulose Products of India Ltd. [1985] 151 ITR 499(Guj). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 7. Therefore, according to us, if the facts and material available with the Tribunal give rise to a pure question of law, then the Tribunal ought not have any difficulty in entertaining the additional ground. We are, at this stage, not expressing a view either way as to whether the ground is sustainable or not. We propose to remand the matter to the Tribunal to consider the additional ground that ought to have been considered by it, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
