TMI Blog2023 (2) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... though banking channels and AO did not bring any adverse or positive material against the assessee to prove the same as otherwise. In view of foregoing the order of Ld. CIT(A) granting relief to the assessee deleting the additions also gets strong support from the judgment of Winstral Petro Chemicals P Ltd [ 2010 (5) TMI 65 - HIGH COURT OF DELHI] We are unable to see any valid reason to interfere with the findings arrived by the Ld. CIT(A) and therefore we uphold the same. Accordingly ground nos. 1 to 3 of revenue are dismissed for A.Y. 2010-11. Assessment order passed u/s. 153A - Necessity of approval u/s. 153D - application of assessee under Rule 27 of the ITAT Rules - Bogus creditors - Whether addition was based on incriminating material in the form of two balance sheets marked as real and final which was found during the course of search action? - HELD THAT:- Approval u/s. 153D of the Act was sought by the DCIT/Assessing Officer on 28.03.2013 from ACIT which was granted on the same date i.e.28.03.2013 by the ACIT to the Assessing Officer and said approval has been held by the Tribunal in the case of Subhash Dabas [ 2022 (3) TMI 643 - ITAT DELHI] and subsequent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks bogus creditors and by that logic the books of account submitted by the assessee cannot be treated as correct. 6. That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in admitting additional evidences under Rule 46A of Income Tax rules. 7. That the commissioner of Income Tax (Appeals) has erred in law and on facts by neither conducting her own independent and effective inquiry nor 8. iving a direction as per subsection 4 of section 250, Income Tax Act and ignoring Hon'ble Delhi High Court's judgment in the case of The Commissioner of Income Tax - II Vs M/s Jansampark Advertising and Marketing (P) Ltd. Ground No. 3 of Revenue for A.Y. 2010-11 3. The learned CIT(DR) supporting the action of the AO submitted that impugned amounts remain unverifiable despite the fact that notices u/s. 133(6) of the Act, were sent to all seven parties at the addresses given by the assessee company. However in the case of Atul Anand Rajiv Singh Chillar confirmations were received in respect of payment of Rs. 60 lakhs Rs. 10 lakhs through cheque respectively but regarding remaining five parties no reply was received. The Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the case laws relied upon by appellant company in support of its case. The impugned addition was made by the Assessing Officer on the ground that the appellant did not prove the credit worthiness of the creditors and the genuineness of the transactions in the context of section 68 of the IT Act, 1961, in respect of the credits appearing in the names of Mr. Ajay Gupta, Mr. Guneet Kaur Chadha, Mr. Harminder Singh Chadha, Mr. Rajinder Rani and Shri Bhawani Textiles amounting to Rs. 1,76,00,000/-. In the course of the appeal proceedings, the appellant filed additional evidences in the form of chart giving name, address, PAN and the jurisdiction of the Assessing Officer with whom the said parties were assessed alongwith the confirmation of accounts, balance sheets, etc. All these evidences were sent to the Assessing Officer for his examination/verification/ enquiry and to send a report on the additional evidences filed by the appellant. On perusal of the remand report of the Assessing Officer on the issue of the unsecured loans amounting to Rs. 1,76,00,000/-. The documents filed as additional evidences gave complete details of the creditors and the Assessing Officer could have m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the appellant. 11.3 Therefore, the addition made amounting to Rs. 1,76,00,000/- is not sustainable and hence the same is liable to be deleted. 6. On careful consideration of rival submissions and stand of the AO simultaneously findings recorded by the Ld. CIT(A) we observe that the Ld. CIT(A) admitted additional evidences of assessee under Rule 46A of Income Tax Rules 1962 and the remand report of Assessing Officer was called thereon after examination, verification and necessary enquiry at the level of AO. The Ld. CIT(A) noted that the documents filed as additional evidence gave complete details of creditors then the AO could have made enquiries and verified the creditworthiness of the creditors and genuineness of the transactions. There was no substantial adverse comment by the A.O. on the additional evidence filed by the assessee, in the remand report. We are agreement with the conclusion recorded by the Ld. CIT(A) that the AO was unjustified in making addition by drawing and adverse inference only on the ground that the five parties to whom the notices were issued u/s. 133(6) of the Act did not respond. From the copy of remand report the Ld. CIT(A) observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the remand report and additional evidence filed under Rule 46A of the Rules during the course of the appellate proceedings rightly concluded that the addition made by the AO on the basis of different sets of balance sheet found the during the course of search proceedings revealed different figures as the seized balance sheet and work in progress has been over stated by the appellant company by crediting the accounts of various parties. The learned counsel also submitted that the purpose of over statement was only to obtain some loans and advances from the financial institutions and bank and actually no income was accrued to the assessee by such over statement of work in progress and by crediting the accounts of various parties. The learned counsel also pointed out that the Assessing Officer made enquiries by issuing notices u/s. 133(6) of the Act to such creditors and they appeared before the AO and categorically denied of entering in to alleged transaction with the assessee giving details of their PAN and other information. 10. The learned counsel also pointed out that in the same A.Y. 2010-11 in the case of Shri Subhash Dabas proprietor of Tirupati Construction Company whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations and findings:- 12. At the outset, the ld. Counsel for the assessee, invoking the provisions of Rule 27 of the ITAT Rules submitted that the order of the Ld. CIT(A), which allowed relief on merit, is also supported on legal ground of non-application of mind by Addl. CIT while granting approval to draft assessment order u/s 153D of the Act. He submitted that this ground is purely legal in nature and goes to the root of the matter. Therefore, although the assessee has succeeded on merit, however, the assessment order being void-ab-initio has to be quashed. 13. The Ld. DR strongly objected to the arguments advanced by the ld. Counsel for the assessee. He submitted that the assessee is making an oral application under Rule 27 of the ITAT Rules and is urging the additional ground pertaining to the issue of approval of draft assessment order u/s 153D of the Act. He submitted that since, the assessee did not file any cross appeal or cross objection u/s 253(4) of the Act, he cannot invoke Rule 27 of the ITAT Rules to question the validity of the approval given u/s 153D of the Act, which has attained finality. Therefore, now the assessee cannot challenge the same by in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication under Rule 27 of ITAT Rules and urged additional grounds against the findings of the CIT(A) pertaining to the issue of recording of satisfaction note, and the necessary condition of existence of nexus between assessment and incriminating material by contending that these findings were in the teeth of the law as settled by various courts in respect of the said issues. The Tribunal disagreed with the assessee and on a technical ground refused to consider the legal issues there were premised on Rule 27 of the ITAT Rules. However, at the same, on merit, the Tribunal overturned the decision of the CIT(A) and allowed the appeal in favour of the Revenue and restored the issues to the file of the Assessing Officer for deciding afresh. 17.1. The assessee approached the Hon ble High Court challenging the findings of the Tribunal pertaining to Rule 27. The apepal was admitted vide order dated 16.09.2019 and following question of law was framed. What is the scope of Rule 27 of the Appellate Tribunal Rules, 1964 in the context of Section 253(4) of the Income Tax Act, 1995? 18. After considering the various decisions, the Hon ble High Court held that order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urge all grounds in support of the order appealed, as provided under Rule 27. The appeal deserves to be allowed on this short ground and we would have no hesitation in doing so with a consequential direction to ITAT to reconsider the matter afresh on the additional grounds urged by the Appellant. However, that direction would not take the controversy to a logical conclusion. Mr. Hossain raises a more fundamental issue by arguing that in absence of an appeal by the Petitioner, or cross objections by it, the issue of validity had attained finality, and cannot be raked up by taking recourse to the said Rule putting them in a more disadvantageous position. He persists that irrespective of the format of the application and regardless of the reasons given in the impugned order, the appellant cannot be permitted to urge jurisdictional objections before ITAT. We feel clarity is required on this vital ground, particularly, since Mr. Hossain has attempted to substantiate his submissions by contending that this court has already taken a view that supports his line of arguments. In fact, this prompted the learned counsels for both the parties to cite plethora of case laws dealing with this jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been a subject matter of interpretation of several decisions of various High Courts and many of those have been relied upon by both the counsels. We do not perceive the need to elaborately advert to each and every case cited before us by the respective counsels. In-depth analysis is necessary of only those decisions that are strongly relied upon by the Revenue to support the impugned order of the ITAT on the proposition of law encapsulated in the foregoing paras. Let's first dwell on a seminal decision rendered by Madras High Court quite some time back in Commissioner of Income Tax, Madras vs. Sundaram Co. Pvt. Ltd. (1964) 52 ITR 763 (Madras), which is also relied upon by the Appellant. The law expounded in this judgment forms the bedrock for several other decisions on the subject. Indeed, majority of the recent judgments also refer to this decision, as the law therein has been elucidated in lucid and unequivocal terms and is still on the mark. In the said case, the High Court dealt with Rule 27 of the ITAT Rules, 1946 a provision pari materia with the instant Rule 27 of the ITAT Rules, and authoritatively held that although the assessee may not have preferred an independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on other grounds held against held against him by an authority whose decision is challenged on appeal is nothing peculiar to the procedure before the Income-tax Appellate Tribunal. A similar provision is found in the Civil Procedure Code. Order XLI, rule 22, Civil Procedure Code, states: (I) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the court below, but take any cross-objection to the decree which he could have taken by way of appeal..... 13. The reason for such a rule is obvious. If the final outcome of a decision is favourable to a person it would not matter to him how and by what reasoning the decision is arrived at so long as it is not challenged by his adversary. But, if it is attacked he must be in a position to support it on every ground he urged before the deciding authority whether or not it found favour. If he were not given that amount of freedom he would be a victim of wrong reasons. This would be unjust in the extreme. If rule 27 had not been enacted there would still have been scope for invoking the principle underlying that rule in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility of section 34 of the Act was a general question raised by the assessee even before the Appellate Assistant Commissioner. It cannot be said that it became debarred from raising the question over again before the Tribunal because of the fact that it did not choose to file an appeal against other portions of the order of the Assistant Commissioner which was unfavourable to it. The scope of section 34 was a ground which was decided against the assessee before the Appellate Assistant Commissioner and we do not see how the assessee is precluded from relying upon rule 27 and urging that ground before the Tribunal with a view to support only that portion of the Appellate Assistant Commissioner's order which was favourable to it. 15. The decision of this court in V. Ramaswamy Iyengar v. Commissioner of Income-tax [[1960] 40 I.T.R. 377,395.] is relied upon by the learned counsel for the department in support of the contention that the subject-matter of the appeal is confined only to the grounds of appeal raised on behalf of the appellant. We have no doubt that this decision is not authority for the position contended. The decision in that case was that where an appeal was onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of the decree passed in his favour, even though the decision of the court, against which the appeal is filed, is against him. The learned judges of the Bombay High Court observed that this is a general rule and that the position of the Appellate Tribunal is the same as a court of appeal under the Civil Procedure Code and that its powers are identical with the powers enjoyed by the appellate court under the Code. At page 124 it is observed as follows: Now, a respondent in an appeal is undoubtedly entitled to support the decree which is in his favour on any grounds which are available to him, even though the decision of the lower court in his favour may not have been based on those grounds. A respondent, unless he has filed an appeal himself or filed cross--objections in the appeal filed by his opponent, will not be entitled to challenge that part of the lower court's decree which is against him, and the appellate court will have no power or jurisdiction to permit him to do so............ It thus follows that the subject-matter of appeal would get confined to the limits of the grounds specifically raised in the memorandum of appeal, the new grounds raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound in the search. The CIT(A) decided that the addition was beyond the scope of 153A, however at the same time, he upheld the conclusion of the AO regarding the share application money and sustained the additions made by the AO. Assessee then filed an appeal before the ITAT. In this appeal, Revenue sought to assail the finding of the CIT (A) which held that the additions were outside the scope of section 153A. Although the Tribunal permitted the revenue to raise the contentions, it however, finally upheld the conclusion of the CIT (A). Thereafter, appeals were preferred before this Court by both, Asssesee as well as Revenue. During the proceedings, Assessee contented that since Revenue has not appealed against the order of the CIT (A), it could not raise the issue before the Tribunal and the scope of the subject matter of the appeal was limited to the finding of the CIT(A) with respect to the merits of the addition and the Tribunal could not have gone beyond the subject matter. In this context, this court held as under:- 5. He submitted that the scope of the subject matter of the Appeal was limited to the finding of the CIT (A) with regard to the merits of the addition made; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 1963. By virtue of the said Rule, a respondent before the Tribunal can support the decision appealed against not only on the grounds decided in favour of the respondent but also on grounds decided against it. However, Rule 27 of the said Rules would not extend to permitting the respondent to expand the scope of an appeal and assail the decision on issues, which are not subject matter of the appeal. In CIT v. Edward Keventer (Successors) Pvt. Ltd. (supra), this court had reiterated that it would not be open to a respondent to travel outside the scope of the subject matter of the appeal under the guise of invoking r 27. 13. The learned counsel for the Revenue has referred to the decision of the Supreme Court in National Thermal Power Corpn Ltd. v. CIT [1998] 229 ITR 383 (SC)in support of the contention that it is open for the Tribunal to consider all questions of law where no investigation into facts are necessary. We find that the aforesaid decision is wholly inapplicable to the facts of the present case. It is trite law that the Tribunal may, under Section 254(1) of the Act, pass such orders as it thinks fit; nonetheless, the decision must be in respect of the subject m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 27 before the Tribunal, since the issue as sought to be urged by the Revenue was subject matter of Assessee's appeal before the Tribunal [Ref: first ground of the memorandum of appeal, reproduced above]. Thus, the aforesaid observations made by the court cannot be construed to restrict the Appellant herein from invoking Rule 27 in the context of the present case. We cannot also read the aforesaid judgment as a view contrary to the law expounded in Sundaram Co.(supra), as contended by Revenue. 17. Further, Mr. Hossain has placed reliance on the judgment of this court in CIT, New Delhi (Central) v Edward Keventer (Successors) Pvt. Ltd, (1980) 123 ITR 200, a decision also noticed in Divine Infracon (supra).First, the factual controversy in this case is required to be explained. In this case, the assessee had filed a return showing loss which it had incurred via purchase and subsequent sale of shares and the payment of interest which had accrued due to the loan taken for the purpose of making the investments in the aforesaid shares. The Income Tax Officer (in short 'ITO') found that losses out of the share transactions undertaken by the assessee were fictitious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of objection, not set forth in the grounds of appeal. But this rule has also an exception for the very rule impliedly confers a power on the Tribunal to grant leave to the appellant to urge additional grounds not set forth in the memorandum of appeal. Normally speaking such additional grounds can be urged only in relation to the subject-matter already appealed against and in regard to such grounds the Tribunal has discretion to grant or refuse permission and the grant of permission may also be express or implied. But, where an appellant seeks to bring in new items which had nothing to do with the subject-matter of the appeal as originally filed, it will be as if the appeal in this regard has been filed belatedly and the Tribunal can entertain them only after considering whether there are grounds to excuse the delay in filing the appeal (See Panchura Estate Ltd. v. Government of Madras, [1973] 87 ITR 698 (Mad)). Where, however, permission is granted by the Tribunal, the scope of the original appeal will stand expanded or enlarged so as to cover the matters raised in the original grounds as well as those raised in the additional grounds. Thus, the subject-matter of the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal is inclined to accept the figure of Rs. 2 lakhs shown by the assessee. We think it would be fair to say that the subject- matter of the appeal is not merely the question of what should be the sale consideration but as to what should be the capital gain. If the department was satisfied with the determination of the capital gain at Rs. 1 lakh it could not be expected to file an appeal and it would not be correct to deprive the department of the opportunity to maintain the AAC's order by construing the subject-matter of the appeal in a narrow manner as restricted to the question of the sale consideration; We think, therefore, that the department would be entitled to support the order of the AAC, under r. 27, on the basis that the market value as on January 1, 1954, was Rs. 1 lakh as determined by the AAC and not Rs. 1 lakhs as decided by the AAC, rejecting the ITO's contention. Therefore on the same analogy that in a case where certain grounds concerning the same matter are interlinked, they should be considered together and the scope of the subject- matter before the Tribunal should be construed accordingly. The position might be different where different ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department could not have filed an appeal on this point as it was consequential, according to it, on the finding of the AAC on the first point which was to its benefit. It could not have assailed the latter in appeal without attacking the finding on the first also. To say, in such circumstances, that the department cannot seek to uphold the AAC's order on this subject-matter would virtually amount to denial of natural justice to it which, as pointed out in Sundaram's case, [1964] 52 ITR 763 (Mad), is not the object of the relevant statutory provisions. Moreover, even if the department's ground ultimately succeeds on merits, the assessee will not be adversely affected and will not be in a worse position than if it had preferred no appeal at all. (emphasis supplied) 18. Mr. Hossain, relying on Edward Keventer(supra) argued, if the additional grounds raised by the assessee under Rule 27 were examined and allowed by the ITAT, the revenue would be left in a worse off position than it was before filing of the appeal. He submits that since the assessee had not assailed the order of CIT(A), it has attained finality qua him. Now, the assessee cannot be permitted to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p by the Revenue to deprive the Appellant [ Respondent before ITAT] an option to raise Jurisdictional grounds of objection is completely misplaced. If we refer to Rule 27 of ITAT Rules, 1963, a bare reading thereof manifest that a Respondent has a right to support the impugned order, without having filed any cross appeal or cross objection. This understanding emerges from the language of the said provision which begins with the words The Respondent, though he may not have appealed, . This means that the provision is to enable a Respondent to effectively defend the order appealed before the Appellate forum. The expression though he may not have appealed also indicates that the provision is to be resorted to in a situation where a Respondent may otherwise have a right to file an appeal or cross objections, but has chosen not to avail of this remedy. Thus, a party who has not availed of the option of filing an appeal, in a given situation, if arrayed as a Respondent before the Appellate Tribunal, can rely upon Rule 27, to support the order under appeal. The aforesaid expression also suggests that recourse to Rule 27 would only be available in case the remedy of appeal is otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an independent issue that has been decided against him in the order appealed by the Appellant, which has no bearing on the result of order impugned in appeal before the Tribunal, the appropriate remedy would lie in of filing a cross appeal or cross objection. In that event, as explained above, Rule 27 cannot be pressed into service to have the same upset or overturned. 21. Therefore, arguably Rule 27 has a limited sphere of operation, but this cannot be whittled or narrowed down to the extent, the Revenue would like us to hold. We cannot read Rule 27 in a restrictive manner to hold that the said provision can only be invoked to support the order in appeal and while doing so, the subject matter of the appeal before the ITAT should be confined only to the extent of the grounds urged by the Appellant. To read Rule 27 in this manner would render the said rule redundant as the respondent before the Tribunal would, even otherwise be entitled to oppose the appeal and raise submissions in answer to the grounds raised in the appeal that are pressed at the hearing of the appeal. With this clarity, we do not find any merit in the submissions of the Revenue that the assessee had accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and immediately he was given a part of the land on lease for 999 years on a nominal rent. He was permitted to sell the land to anybody as a freehold property. Accordingly, he sold a major part of it during the accounting year for Rs. 1,26,870/-. During his assessment, two questions arose, one, whether the net receipts from the sale of the land amounted to profits of business, example, an adventure in the nature of trade or commerce liable to tax, and the other being the quantum of the net receipts. The Income Tax Officer (ITO) held that the receipts were profits and fixed the amount at Rs. 1,16,870/-,by deducting Rs. 10,000/- paid aspremium, from the sale proceeds of Rs. 1,26,870/-. The assessee appealed before the Appellate Assistant Commissioner (AAC), who confirmed the Income Tax Officer's finding that the receipts from the sale were profits but disagreed with the finding that the amount of Rs. 1,16,870/- was the quantum of profits. The AAC was of the opinion that market price of the land should be cost to the assessee. Accordingly, on the basis of a report from the ITO, he determined the market price of the land was Rs. 1,12,056/- and on that basis determined the net rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from that in Order 41, rule 22(1). While rule 22(1) gives two rights to the respondent, one in respect of part of the claim decreed in his favour, and the other in respect of the part disallowed, rule 27 deals with the order of the lower court, viz., the Appellate Assistant Commissioner in its entirety. It does not contemplate the splitting of the Appellate Assistant Commissioner's order into two parts for the simple reason that an assessment order is incapable of being treated as an order partly allowing something and partly disallowing the other thing. While in respect of a claim of a plaintiff it can be said that part of it is allowed and part disallowed the same cannot be said in respect of an assessment order and it cannot be said to involve two orders partly assessing something and partly disallowing assessment of another thing. When a person is assessed he is assessed on all the income found assessable. There are no two parties before an Income-tax Officer or an Appellate Assistant Commissioner and there is no claim by one party to be met by the other; so the analogy of a suit, part of which may be decreed and part rejected, does not apply to an assessment proceeding. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier the order is one assessing the income after accepting and rejecting various grounds of attack and defence. Grounds of attack and defence may be grounds of law or of fact. A ground of law may affect the assessability of the assessee or inclusion of the whole of a receipt or a part of a receipt in his assessable income. If an assessee is not liable to be assessed at all no part of his income can be assessed; if the whole of a receipt is not income no part of it can be included in his assessable income and if a part of a receipt is not income that part cannot be included in his assessable income. If an assessee is not assessable at all but is still assessed he and the department both can be aggrieved by the assessment order; he, on the ground that he was not liable to be assessed at all and other grounds, if any, and the department, on the ground that something more should have been included in his assessed income. So either of them can file an appeal. If he files an appeal, the department can urge in support of the assessed income any ground of attack that might have been rejected by the Appellate Assistant Commissioner but it cannot ask for an increase in the assessed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... octrine which can be relied upon for barring his contention that he was not assessable at all. It is irrelevant to consider that on the ground on which he urges that there should be no increase he should not have been assessed at all; there is no law that in the absence of estoppel or res judicata a ground applicable to a whole cannot be urged in respect of a part if it is not urged, or is urged but rejected, in respect of the other part. No incongruity results from applying it to a part even though it is not applied to the other part nor any shock to the conscience. There is no incongruity in maintaining the assessment order passed on the assessee and refusing to increase it on the ground that he was not liable to be assessed at all. What is irksome is incongruity in two orders and not incongruity in respect of reasons for the two orders. Two orders should not be incompatiable with each other, so that one can be enforced and the other cannot be, but if two orders can both be enforced it is immaterial that they are based upon contradictory reasons. Two orders not mutually exclusive have been maintained even though they are based on mutually exclusive reasons: vide Dunn v. Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for its consideration is whether the increase or part of it should be allowed or not. Whether the amount already assessed was wrongly assessed or not or whether the assessee is liable to be assessed at all or not is a question quite outside the scope of the appeal and any decision on it cannot be said to be an order on the appeal. Consequently it cannot be said that the Tribunal would have power to annul the assessment even without any prayer by the assessee to that effect, if it accepts his ground of defence that he was not liable to be assessed at all. On that ground being accepted it can only refuse to increase the assessed income; only that would be an order on the appeal by the department. Any other order such as annulling the assessment would be outside the scope of the appeal. Therefore, it would be erroneous to say that the effect of accepting the ground of defence of the assessee would be the annulment of the assessment order and that this would be quite the reverse of supporting it by the ground of defence. xxx xxx xxx 13. In the result I hold that the assessee could contend that the recepits were not profits of a business at all, but for the purpose of showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds decided against him. This rule embodies the fundamental principle that the person, who may not have been aggrieved by an order of the lower authority or the Court and has therefore not filed any appeal against such order, is free to defend the order before the Appellate Forum on all grounds including the ground, which may have been held against him by the lower authority or the Court, whose order is otherwise in his favour. xxx xxx xxx 11. To put the controversy beyond doubt, Rule 27 of the Rules makes it clear that the respondent in appeal before the Tribunal even without filing an appeal can support the order appealed against on any of the grounds decided against him. It can be easily appreciated that all prayers in the appeal may be allowed by the Commissioner (Appeals), however, some of the contentions of the appellant may not have appealed to the Commissioner. When such an order of the Commissioner is at large before the Tribunal, the respondent before the Tribunal would be entitled to defend the order of the Commissioner on all grounds including on grounds held against him by the Commissioner without filing an independent appeal or cross- objection. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in addition to what he has already been given by the decree under challenge. We have therefore no hesitation in accepting the submission of the learned counsel for the appellant that the High Court was in error in proceeding on the basis that the appellant not having filed a memorandum of cross-objections, was not entitled to canvass the correctness of the finding on the bar of Order II Rule 2 rendered by the trial court. 14. Similar issue came-up before Division Bench of this Court in case of Dahod Sahakari Kharid Vechan Sangh Ltd. v. CIT [2006] 282 ITR 321/[2005] 149 Taxman 456 (Guj.) in which the Court observed as under: 17. Taking up the second issue first, the Tribunal has committed an error in law in holding that the assessee having not filed cross-objection against findings adverse to the assessee in the order of Commissioner (Appeals), the said findings had become final and remained unchallenged. The Tribunal apparently lost sight of the fact that the assessee had succeeded before the Commissioner (Appeals). The appeal had been allowed and the penalty levied by the assessing officer deleted in entirety. In fact, there was no occasion for the assessee to feel a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en away by the Tribunal by referring to provisions of Section 253(4) of the Act. The Tribunal was, therefore, in error in holding that the finding recorded by the Commissioner (Appeals) remained unchallenged since the assessee had not filed cross objections. 15. The first question is, therefore, answered against the Revenue and in favour of the assessee. (emphasis supplied) 25. Similar views have been expressed in, Commissioner of Income Tax v. M/s India Cements Ltd., Chennai in Tax Appeal Case No.117/2009 (Madras High Court), Sir Syed Educational and Social Welfare Society, Bhopal v. Assistant Commissioner of Income Tax-I, Bhopal in ITA Nos. 102-108/2019 (MP High Court ) and Principal Commissioner of Income Tax-6 v. M/s Dhara Vegetable Oil and Foods Company Ltd. in ITA 454/2019 (Delhi High Court). 26. The upshot of the above discussion is that Rule 27 embodies a fundamental principal that a Respondent who may not have been aggrieved by the final order of the Lower Authority or the Court, and therefore, has not filed an appeal against the same, is entitled to defend such an order before the Appellate forum on all grounds, including the ground which has been he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT. 13. We further note that the Tribunal in the said order dated 09.09.2021 for A.Y. 2010-11 and 2011-12 (supra) in the case of Subhash Dabas (supra) proprietor M/s. Tirupati Construction Company has adjudicated that application of assessee under Rule 27 of the ITAT Rules with following observations and finding in the first part of said order which read as follows:- 19. In view of the detailed reasoning given by the Hon ble Delhi High Court in the case cited (supra), we respectfully following the same, admit the ground raised by the assessee challenging the validity of approval of the draft assessment order u/s 153D by the Addl. CIT. 20. Now coming to the ground raised by the assessee in the application under Rule 27, we find the only issue to be decided is regarding the validity of the approval given by the Addl. CIT to the draft assessment order u/s 153D of the Act for the above two Assessment Years. We have already decided this issue while adjudicating ITA No.2399/Del/2016 and Cross Objection No.222/Del/2016 in assessee s own case for Assessment Year 2009-10, vide order of even date and have held that all the assessment orders are vitiated for want of valid approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Loaner Loan Amount 1 M/s Golden Buildmart Pvt. Ltd. Rs.7,00,000/- 2 Sh. Santosh Singh Rs.20,00,000/- 3 Sh. Surinder Yadav Rs.4,50,000/- 4 M/s Tirupati Real Tech Pvt. Ltd. Rs.14,75,00,000/- Total Rs.15,06,50,000/- Since the identity, creditworthiness and genuineness of transaction was not proved same was added back as unexplained credit u/s 68. The additional evidences in respect of unverifiable unsecured loan were examined and report on the same is as under:- Regarding unsecured loan the assessee has submitted that he had already submitted confirmation of accounts of various loaner parties during the course of assessment. It is pertinent o mention here that during the course of assessment confirmation of accounts was submitted as appearing in the books of the assessee and the same were not verifiable during the course of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer, the approval given by the Addl. CIT and the copy of remand report of the Assessing Officer show that there is only some namesake approval given by the Addl. CIT on the very same day on which the Assessing Officer sought approval. The Addl. CIT without verifying the records has given approval in a mechanical manner. This is more so evident from the fact that the opening balance of unsecured loans of Rs.8 Crores was added by the Assessing Officer, which is not a small amount and the number of unsecured loan creditors are only four and not very large. We find merit in the argument of the ld. Counsel for the assessee that the Ld. Addl. CIT received draft assessment order in 35 cases and approved all cases in one go on the same day and the Assessing Officer not only passed the orders on the very same day but also prepared demand notices after completion of tax calculation and penalty notices etc. which is not possible within a span of few hours. 37. It has been held in various decisions that the function to be performed by the Addl. CIT or CIT in granting previous approval requires an enquiry and judicial approach on the entire facts, material and evidence. It has been held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. 15. Undisputedly, search was conducted on various entities of Dabas group including Subhash Dabas proprietor of Tirupati Construction Company and Tirupati Building Offices Pvt. Ltd. i.e. present assessee and other companies and individuals. The Ld. ACIT granted approval u/s. 153D of the Act on 28.03.2013 as has been reproduced by the co-ordinate bench of Tribunal in para 33 of the order dated 08.09.2021 for A.Y. 2009-10 (supra). On being asked by the bench, the Ld. CIT(DR) could not point out or show us any distinct and dissimilar facts and circumstances establishing that the facts and circumstances in the case of Subhash Dabas for A.Y. 2010-11 2011-12 dated 09.09.2021 (supra) are distinct and different from the facts and circumstances of present assessee. At the cost of repetition we may also point out that Ld. CIT(A) granted approval by order dated 28.03.2013 (supra) in the case of Subhash Dabas and present assessee company M/s. Tirupati Buildings Offices Pvt. Ltd., by the same order, which are listed at serial no. 1 4 respectively. 16. Per contra, as we have noted above, it clearly discernable that the approval u/s. 153D of the Act was sought by the DCIT/Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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