9911796707
TMI Blog2023 (2) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has erred in law and on facts in deleting of Rs. 1,76,00,000/- by ignoring the fact that the AO has clearly commented in the Remand report that the perusal of bank statement showed circulatory transactions, typical of entry businesses and loan givers don't have the capacity to advance such loans. 4. That the commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 74,83,17,490/- without appreciating the fact that the addition was based on incriminating material in the form of two balance sheets marked as real and final found during the course of search action. 5. That the commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 74,83,17,490/- by admitting in the appeal order that the assessee has himself books 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad rightly relay on the judgment of Hon'ble jurisdictional High Court of Delhi in the case of CIT vs. Winstral Petro Chemical P Ltd. in ITA No. 992/2010 dated 12.05.2010, therefore first appellate order may kindly be uphold dismissing the ground of revenue on this issue. 5. On careful consideration of rival submissions first of all from first appellate order we observe that the Ld. CIT(A) has granted relief to the assessee with following observations and findings:- 11. I have considered the facts of the case, the assessment order, written submissions of the appellant, remand report of the Assessing Officer, rejoinder of the appellant and also the additional evidences filed under Rule 46A of the Income Tax Rules, 1962 during the course of appellate proceedings. I have also 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. Harmind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that the appellant did not submit details to satisfy the provisions laid down u/s 68. These loans were taken through banking channels and the Assessing Officer did not bring any material on record to prove it otherwise. In view of the above evidence available on records, the capacity of the lenders and genuineness of the transactions stands established and there is no merit in invoking the provisions of section 68. 11.2 On this issue, I draw support from the issue laid down by the Hon'ble Delhi High Court in CIT vs. Winstral Petro Chemicals P Ltd in ITA No. 992/2010 dated 12.05.2010 wherein Hon'ble High Court held that where the identity, creditworthiness and genuineness of the transitions stands explained, there is no merit in making any addition in the 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 Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat logic the books of accounts submitted by the assessee cannot be treated as correct. 8. The learned CIT(DR) also submitted that before granting relief to the assessee the Ld. CIT(A) has erred in law on facts in admitting and considering the additional evidence under Rule 46A of the Rules therefore impugned first appellate order may kindly be set aside by restoring that of the AO. The Ld. CIT(DR) also relied on the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. M/s. Jansampark Advertising and Marketing (P) Ltd. 9. Replying to the above the learned counsel of the assessee submitted that Ld. CIT(A) after considering assessment order written submissions of the appellant, remand report of the Assessing Officer rejoinder appellant 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 part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in favour of the assessee by the order of the Tribunal dated 08.09.2021 for A.Y. 2009-10 and 09.09.2021 for A.Y. 2010-11 and 2011-12 (supra). 11. Placing rejoinder to the above the Ld. CIT(A) strongly opposed to the submissions of the assessee as well as application dated 24.05.2022 of assessee under Rule 27 of ITAT Rules. However he could not show us any order of Hon'ble High Court to show that the said orders of ITAT Delhi 'G' Bench for A.Y. 2009-10 dated 08.09.2021 (supra) 2010-11 and 2011-12 dated 09.09.2021 (supra) have been set aside, modified or dismissed. 12. From the said order dated 09.09.2021 (supra), we note that the Tribunal first of all admitted the application of assessee filed under Rule 27 of ITAT Rules, 1963 with following 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 mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed the assessment and determined the total income Rs.1,46,15,445/- against the returned income of Rs.8,90,760/- in the order passed u/s 153C of the Act. In appeal, before the Ld. CIT(A), the assessee besides challenging the additions made by the Assessing Officer on merits, also raised legal grounds qua the validity of the reassessment proceedings undertaken by the Revenue u/s 153C of the Act. The Ld. CIT(A) rejected the legal ground but allowed the appeal in favour of the assessee by deleting all the additions. 17. The Revenue contested the order passed by the Ld. CIT(A) by filing an appeal before the Tribunal challenging the deletion of the additions. In the said proceedings, the appellant-assessee made an oral application 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 conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the draft Appellate Tribunal Rules 2017 proposing to insert a proviso to Rule 27, providing for an application to be made in writing, have not been notified, as yet. Therefore, the reasoning of the Tribunal for rejecting Appellant's contentions is palpably wrong. If the provision does not specify any defined structure for making an application in a particular manner, the Tribunal ought not to have deprived the Appellant of an opportunity to raise a fundamental question of jurisdiction, taking a hyper technical viewpoint. The Tribunal has plainly refused to consider the additional grounds on an erroneous premise which is contrary to the statutory scheme of the Act, that permits the Respondent to 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 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Commissioner (Appeals), has been preferred under subsection (1) or sub-section (2) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof, within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3)." 13. The Rule 27, has 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 Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any such restrictions. Turning to rule 27 which permits the respondent before the Tribunal to support the order of the Appellate Assistant Commissioner on any of the grounds decided against him, it seems to be clear that this is a right conferred upon him. The Tribunal has no discretion to deprive the respondent of the benefit of this rule. It is an enabling provision which the respondent can avail himself of in order to retain the benefit which has accrued to him from the order appealed against. 12. The rule that a respondent before the court or Tribunal can justify and support the decision in his favor not merely on grounds favourably decided but also 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 tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identified with the grounds raised either by the appellant or by the respondent. In the present case the subject- matter of the appeal before the Tribunal was the reduction of tax rebate in respect of Rs. 3,54,716. It is impossible to contend that the subject-matter of the appeal lay within a narrower limit and that it was the question whether the Appellate Assistant Commissioner was right in not allowing reduction of rebate on the ground mentioned by him. The assessee had obtained relief before the Appellate Assistant Commissioner to a particular extent. And this was objected to by the department in the appeal before the Tribunal. The applicability 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 preclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal and the right of the respondent to support the decision on grounds decided against him. In J.B. Greaves v. Commissioner of Income-tax [[1963] 49 I.T.R. 107.] the Bombay High Court held, following two decisions of that court, New India Life Assurance Co. Ltd. v. Commissioner of Income-tax [[1957] 31 I.T.R. 844.] and Commissioner of Income-tax v. Hazarimal Nagji & Co. [[1962] 46 I.T.R. 1168.] , that the subject-matter of an appeal is confined to grounds specifically raised in the memorandum of appeal, the new grounds raised by the appellant with the previous permission of the Tribunal and the grounds urged by the respondent in support 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 fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infracon Pvt. Ltd, 2015 64 taxman.com 472 (Delhi) which has been strongly relied upon Mr. Hossain to suggest that the court has taken a different view on Rule 27 that is in consonance with his contentions. Let's first briefly refer to the facts of the said case. Here, the assessee filed an appeal before the CIT (A) against the order of the AO challenging additions made under section 68 of the Act, on merits, as well as on the ground that the same were beyond the scope of section 153A as the share application money was duly disclosed in its return and the addition was unrelated to any incriminating material found 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er an appeal to the Tribunal. It is not disputed that no such directions to file an appeal against the CIT (A)'s order dated 21st January, 2014 were issued by the concerned Income Tax Authority. 9. In the circumstances, there could be no dispute that the CIT (A)'s order in so far as it relates to the issue regarding the assessment being beyond the scope of Section 153A of the Act had attained finality, and thus, could not have been disturbed by the Tribunal. xxx xxx xxx 12. Indisputably, the Revenue could also not take recourse to Rule 27 of the Income Tax (Appellate Tribunal) Rules, 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer under sec.68 of the Act amounting to Rs.20,25,00,000 particularly having regard to the fact that very assumption of jurisdiction to bring to tax the aforesaid sum was beyond the scope of Learned CIT(Appeals) in the impugned order." Revenue then filed an application under Rule 27 before the Tribunal which was admitted and duly adjudicated in favour of the assessee. In these circumstances, in further appeal, since the Revenue had not filed any cross appeal or objections, this Court in these peculiar facts rightly held that Revenue could not have raised the plea under 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e one of the parties before the AAC-- the assessee or the ITO is aggrieved by the order of the AAC. He comes to the Tribunal to have his grievance redressed and the subject-matter of his grievance is set out in the grounds of appeal filed by him. To start with, therefore, the subject-matter of the appeal is constituted by the grounds of appeal filed by him which will clearly identify the question in dispute in the appeal. Rule 12 of the Tribunal Rules, as they stood at the relevant time, laid down the general rule that an appellant shall not urge or be heard in support of any 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 subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect the appellant and place it in a worse position than if it had not appealed at all. This decision illustrates the principle that the subject-matter of the appeal should be Understood not in a narrow and unrealistic manner but should be so comprehended as to encompass the entire controversy between the parties which is sought to be got adjudicated upon by the Tribunal. xxx xxx xxx 26. Suppose the assessee prefers an appeal to the Appellate Tribunal, against the AAC's order, contending that the determination of the sale consideration is excessive and 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 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the profit assessable in respect thereof. On this, the AAC had given two findings, one against the assessee and the other against the department. In view of the former being substantially beneficial to it, the department could not be aggrieved by the consequential finding on the latter. Unlike in Sundaram's case, [1964] 52 ITR 763 (Mad), where at least it could be said that the assessee could have filed an appeal in regard to the applicability of s. 34 as that was a separate and independent ground decided against it, here, however, as mentioned earlier, the 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay benefit that could be said to have accrued in favour of the Appellant before the Tribunal. The jurisdictional question is not an independent issue that can be reversed only by way of an appeal or cross objection. We do not find any merit in the submission of Mr. Hossain. 20. Having analyzed the judgments relied upon by the Revenue and not finding same to be of any assistance to the Revenue, we now proceed to examine the legal position that emerges from a plain reading of the provision in question. In fact, we feel the controversy sought to be raked up 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal], and the decision on the said issue has no bearing on the final decision of the CIT (A), then invocation of Rule 27 to challenge the correctness of the same cannot be sustained. Rule 27 and the provisions dealing with cross objections operate in separate fields, although there is certain overlap between them. Evidently, if cross objection is not filed, the Respondent would run the risk of being faced with a situation that it cannot succeed in getting anything over and above the order in appeal being confirmed. If the Respondent wants to assail 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad a bearing on the final order passed by the CIT(A), because if the said issues were to be decided in favour of the appellant herein the assessee, that would have been an additional reason to delete the additions made by the A.O. 23. We shall now also note some other decisions, where similar issue has been considered. The decision in Kanpur Industrial Works v. Commissioner of Income-Tax, 1965 SCC OnLine All 480: (1966) 59 ITR 407 is worth mentioning. In this case, certain land of the assessee was acquired by the State Government for Rs. 10,000/- 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 asprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant Assistant Commissioner. If it prayed that the assessment order be quashed, it was not entitled to be heard, whereas if it simply prayed that the Department's appeal be dismissed, it was entitled to be heard. This judgment thus brings out this fine distinction with respect to the interplay of Rule 27, which is the pari materia provision under the rules in operation. The observations of the Court, bring out the scope of Rule 27, reads as under: "7. The provision in rule 27, with which we are concerned, is to be distinguished 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right given to him by rule 27. There is only one order of the Appellate Assistant Commissioner that assessing the income at a certain figure, and the right given to him is of urging another ground, though rejected by the Appellate Assistant Commissioner, in support of it; he must support the order, i.e. must not ask for any variation (in his favour) in the order. In other words, he must not ask for any reduction in the assessed income. Asking for any reduction in the assessed income is not supporting the order assessing it. 8. As I said 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being assessed. His submission to the assessment order does not amount to his submission to assessability. If the assessment order becomes final it may be said that he is barred by estoppel or res judicata from contending in a subsequent proceeding that he was not liable to be assessed at all. In an appeal against the assessment order itself there is no question of his being barred by estoppel or res judicata. The appeal being from the assessment order there is no question of its being final or operating as res judicata. There is no other doctrine 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the grounds raised in the appeal." In the last case the learned judges observed that "the subject-matter of an appeal.... is that which the Tribunal or the appellate court is called upon to decide and to adjudicate" and that "the subject-matter cannot be identified with the grounds raised either by the appellant or by the respondent." By its order an appellate court can dispose of the appeal and not something not included within its scope. In the department's appeal for an increase in the assessable income the only question 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents taking the recourse of Rule 27 of the ITAT Rules without assessee having filed cross appeal or cross objection before the Tribunal against order of Commissioner (Appeals). Examining this question, the High Court,relying upon the decision of Gujarat High Court in Dahod Sahakari Kharid Vechan Sangh Ltd. v. Commissioner of Income Tax, 2005 149 Taxman 456 (Gujarat), held as under: 9. This Rule thus provides that the respondent, though he may not have appealed, may support the order appealed against on any of the 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any of the findings that might have been rendered by the trial court against himself. For supporting the decree passed by the trial court, it is not necessary for a respondent in the appeal, to file a memorandum of cross-objections challenging a particular finding that is rendered by the trial court against him when the ultimate decree itself is in his favour. A memorandum of cross-objections is needed only if the respondent claims any relief which had been negatived to him by the trial court and 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect proposition, it would render Rule 27 of the Tribunal Rules redundant and nugatory. It is not possible to interpret the provision in such manner. Any interpretation placed on a provision has to be in harmony with the other provisions under the Act or the connected Rules and an interpretation which makes other connected provisions otiose has to be to avoided. Rule 27 of the Tribunal Rules is clear and unambiguous. The right granted to the respondent by the said Rule cannot be taken 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 Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, pertaining to issues relating to the assumption of jurisdiction and the validity of the reassessment proceedings under Section 153C of the Act. 27. The appeal is allowed in the above terms." 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is as under:- 34. We find the Ld. CIT(A) has reproduced the remand report of the Assessing Officer where the Assessing Officer while giving his comments about the addition on account of unsecured loan has given the following report:- "2. Unsecured loans During the year the assessee has received Rs.15,06,50,000/- as unsecured loan from following parties Sl. No. Name 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the approval sought by the Assessing Officer, 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicated being academic in nature. 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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