TMI Blog1981 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... that no adequate ground was brought out to condone the delay in filing the additional grounds ? " Out of three questions referred to us, the first question is directly covered by a decision of this court in CIT v. Patel Brothers Co. [1977] 106 ITR 424. We, therefore, do not consider it necessary to set out the relevant facts so far as this question is concerned. Following the above decision, this question will have to be answered in the affirmative and against the Revenue. So far as the remaining two questions are concerned, the facts which are relevant are as under. The assessee is a registered partnership firm. The accounts of the assessee-firm disclosed that it had paid interest to its partners. The partners also had paid interest to the assessee-firm and such interest was credited to the interest account of the assessee-firm. While computing the income of the assessee-firm, interest paid to the partners was disallowed. The ITO, however, did not take into consideration the interest paid by the partners to the assessee-firm while disallowing such interest. The contention of the assessee-firm was that the interest paid by the partners ought to have been adjusted against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Appellate Tribunal on November 7, 1975, which was the last date for filing the appeal. On November 28, 1975, the Revenue sought to raise additional grounds challenging the view taken by the AAC on the question of adjustment of interest as stated above while disallowing interest under s. 40(b) of the Act. In other words, the Revenue sought to prefer an appeal against that part of the order of the AAC by which he upheld the claim for adjustment of interest paid by the partners to the assessee-firm while disallowing deduction of interest paid to the partners by the assessee-firm under s. 40(b) of the Act. The assessee-firm resisted the application made by the Revenue to raise additional grounds. It was contended that the appeal against the decision of the AAC allowing the above claim made by the assessee-firm was time-barred and that there was no sufficient ground to condone the delay. No facts or materials were placed on record by the Revenue justifying the delay in raising additional grounds or in other words preferring appeal against the order of the AAC, allowing the above claim of the assessee-firm. It was, however, urged that the additional grounds were raised in view of a ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. We are not able to see any force in Mr. Shah's argument. Claims regarding, (i) messing and tea expenses, and (ii) adjustment of interest paid by the partners to the assessee-firm while disallowing interest paid to the partners under s. 40(b) of the Act were separate and distinct claims, which were made in the course of the assessment proceedings. Both these claims were the subject-matter of appeal before the AAC, who, as stated above, upheld them. It is true that it is permissible to file a common memorandum of appeal for both the claims, and, in fact, such a common memorandum of appeal was filed for both the claims before the AAC; but, at the same time, it could not be gainsaid that each claim made in the appeal was a separate and distinct subject-matter for which separate appeals could have been filed before the AAC. As pointed out above, the Revenue did not prefer an appeal against the decision of the AAC upholding the assessee-firm's claim that while disallowing interest paid to the partners under s. 40(b) of the Act interest paid by the partners to the firm should be adjusted. Therefore, so far as that part of the order of the AAC was concerned, it became final. Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue was seeking to prefer a fresh appeal against the decision of the AAC allowing the claim of the assessee-firm for adjustment of interest as stated above. A new subject-matter cannot be introduced by raising additional grounds. Rule I of the I. T. (Appellate Tribunal) Rules, 1963, on which reliance was placed by Mr. B. R. Shah, does not permit an appellant before the Tribunal to introduce an altogether new subject-matter of appeal, in respect of which the decision was accepted. All that it provides is 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. Under the said rule, the Tribunal has the discretion to permit the appellant to raise additional grounds. The additional grounds must, however, relate to the subject-matter of the appeal and in the guise of raising additional grounds a new item or subject-matter cannot be allowed to be introduced under r. 11. Disallowance of interest tinder s. 40(b) of the Act was not the subject-matter of appeal before the Tribunal. As already stated earlier, the appeal was confined to the assessee-firm's claim in respect of messing and tea expenses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments which were advanced before it, came to the conclusion that there were no sufficient grounds to condone the delay and permit the Revenue to raise additional grounds for bringing in a new item which was not the subject-matter of the appeal as originally filed. It was fully within the discretion of the Tribunal whether or not to condone the delay. It was, however, urged by Mr. Shah that the Board's circular referred to above was brought to the notice of the ITO after the appeal was filed by the Revenue challenging the decision of the AAC on the question of messing and tea expenses and it was, therefore, that the additional grounds were belatedly raised. No material was produced before the Tribunal to show as to when the above circular was sent to or received by the ITO. In fact, no argument was advanced before the Tribunal that it was because the ITO came to know about the Board's circular after filing of the appeal that the additional grounds were raised belatedly as stated above. The Tribunal was expected to decide the question whether or not to condone the delay on the basis of the material placed before it. It is not open to the Revenue to make out a new case on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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