TMI Blog2016 (9) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... nt opportunity of being heard on that ground. Thus even if it is a pure question of law, the Tribunal cannot consider an additional ground without affording the other side an opportunity of being heard. We venture to state that even in the absence of the proviso it would be incumbent upon the Tribunal to afford a party an opportunity of meeting an additional point raised before it. Moreover, even though Rule 11 requires an appellant to seek the leave of the Tribunal, it does not confine the Tribunal to a consideration of the grounds set forth in the memorandum of appeal or even the grounds taken by the leave of the Tribunal. In other words the Tribunal can decide the appeal on a ground neither taken in the memorandum of appeal nor by its leave. The only requirement is that the Tribunal cannot rest its decision on any other ground unless the party who may be affected has had sufficient opportunity of being heard on that ground. In the present case the Tribunal ought to have exercised its discretion especially in view of the fact that the assessee intends raising only a legal argument without reference to any disputed questions of fact. In view of the afore-referred statement m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee raised an additional ground with regard to calculation of Minimum Alternate Tax to be carried forward to the subsequent year. According to the assessee, in the Assessment Order, the same had not been correctly calculated. As this ground was to challenge the above computation made in the assessment proceedings and had not been raised before the Commissioner, the Tribunal refused to adjudicate upon the same as according to the Tribunal prior leave of the Tribunal through an application in writing should have been obtained before raising the additional ground. An oral request made by the assessee to raise this additional ground was not considered enough. The Tribunal held that in the absence of any request in writing for admission of an additional ground in the appeal, the Revenue would be put to serious prejudice as it would have no opportunity to counter the request of the assessee in this regard. For arriving at the above conclusion, the Tribunal relied upon a judgment of the Gujarat High Court in Smt. Arundhati Balkrishna and others vs. G. M. Singhvi, Income Tax Officer, Group Circle III-2, Ahmedabad and others [1976] 103 ITR 763 (Guj) , a judgment of Allahabad High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee to adduce evidence either on points specified by them, or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. Rule 11 of the Rules provides that the appellant, with the leave of the Tribunal can urge before it any ground not taken in the memorandum of appeal and that the Tribunal while deciding the appeal is not confined only to the grounds taken in the memorandum of appeal or taken by leave of the Tribunal under Rule 11. Rule 29, as quoted above, is to the effect that though parties to the appeal before the Tribunal shall not be entitled to produce additional evidence but if the Tribunal desires the production of any document or examination of any witness or any affidavit to be filed, it can, for reasons to be recorded, do so. A harmonious reading of Section 254 (1) of the Act and Rules 11 and 29 of the Rules coupled with basic purpose underlying the appellate powers of the Tribunal which is to ascertain the correct tax liability of the assessee leaves no manner of doubt in our minds that the Tribunal while exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 7. The view that the Tribunal is confined only to issues arising 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 (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings and may in certain circumstances place an unfair burden upon the Revenue such as when the proceedings have been pending for a long period of time and it is difficult to ascertain the facts. Such cases would deprive the Revenue an opportunity of meeting the case on facts effectively. In the case before us Mrs. Suri made a statement that the assessee would not rely upon any additional evidence and would proceed only on the basis of the facts admitted by the department. In other words she stated that the assessee intended to and would raise a question of law and would not rely upon any disputed questions of facts. In these circumstances there was no justification in preventing the assessee from raising the additional point. The judgment of the Apex Court in National Thermal 's case (supra) was considered and followed by this Court in Avery Cycle Industries Ltd. vs. Commissioner of Income Tax - (2007) 292 ITR 493 (P H) , wherein it was held as under :- 4. When the facts raised in the instant appeal are examined in the light of the principle laid down by the Hon'ble Supreme Court, then no doubt it felt that all the facts relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to agitate the question under the guise of granting leave under rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. These observations are contrary to the judgment of the Supreme Court in National Thermal Power Co. Ltd. case (supra). Infact the Full Bench of the Bombay High Court in Godavari Sugar Mills Ltd. case (supra) dealing with Rule 11 observed as under:- 19. In this connection a reference may also be made to the Income Tax (Appellate Tribunal) Rules, 1963 which have been framed under section 255(5) of the Income Tax Act, 1961. Under Rule 11 of the Appellate Tribunal Rules the appellant shall not, except by leave of the Tribunal urge or be beard in support of any ground not set forth in the memorandum of appeal but the Tribunal in deciding an appeal shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule; (underlining * ours); provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being beard on that ground. So that in deciding the appeal the Tribunal is not restricte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct supports the assessee. As noted in the opening paragraph the Tribunal had admitted an additional ground and allowed the relief to the assessee on that ground. The Division Bench noted that the Tribunal while admitting the additional ground had not discussed the full facts of the case. In paragraph- 19 the Court observed that when the facts of the case are neither clear nor discussed by the Tribunal, the Tribunal having permitted the assessee to raise additional grounds treating it to be a legal ground in appeal for the first time, should have set aside the order of the Commissioner of Income Tax (Appeals) and remanded the case to him for deciding the appeal afresh rather than to decide the same on the merits for the first time by itself. Upon remand the CIT(A) would have been in a position to examine the issue for the first time in relation to the additional ground. In any event, the observation that the Tribunal had overlooked the fact that the ground did not arise from the order of the CIT(A) is not in accordance with the judgment of the Supreme Court. The judgment in any event appears to have turned on the facts of the case, namely, that the facts of that case were neither cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
