TMI Blog1980 (10) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... essee during the concerned previous year. It was submitted on behalf of the assessee before the AAC that the ground relating to this claim of rebate on export sales was not raised before the ITO. The AAC, however, allowed the point to be raised and in his order for assessment years 1964-65 he directed that the ITO should gather the details regarding the quantum of exports effected between February 28, 1963, and December 31, 1963, and should work out the rebate as mentioned in s. 5(1)(iii) of the Finance Act of 1964. (The reference is to s. 2, sub-s. (5)(a)(ii) of the Finance Act of 1964). Similarly, as regards assessment year 1965-66 which is under reference, by his order the AAC directed the ITO to verify export sales and to allow rebate under s. 2(5)(a)(iii) of the Finance (No. 1) Act of 1965. (The section is wrongly mentioned as s. 5(a)(iii) in the statement of the case). The department being aggrieved by the order of the AAC filed an appeal in respect of the above assessment year before the Income-tax Appellate Tribunal. The Tribunal held that the AAC was justified in entertaining the additional ground for allowing rebate on export profit at two per cent. of the export sales ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst time, no claim having been made in that behalf before the ITO under the provisions of the Finance Act of 1965. As regards the powers of the AAC in an appeal under s. 251 of the I.T. Act, 1961, being a section similar to s. 33(b) of the Indian I.T. Act, 1922, there has been the authoritative pronouncement of the Supreme Court in Addl. CIT v. Gurjargravures P. Ltd. [1978] III ITR 1. In that case, the Supreme Court reversed the decision of this High Court which is to be found reported in [1972] 84 ITR 723. In the case of Gurjargravures P. Ltd. one of the grounds of appeal raised by the respondent in the appeal before the AAC was that the ITO had erred in not giving the respondent the benefit of s. 84 of the I.T. Act, 1961. No such claim had been made before the ITO when he completed the assessment, nor was there any material on record supporting such a claim. In the subsequent years relief under s. 84 had been allowed to the respondent. The appeal was dismissed by the AAC on the ground that the question of error on the part of the ITO did not arise as no claim for exemption under s. 84 had been made before the ITO. On further appeal, the Appellate Tribunal held that since the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer examining a portion of the profits from the point of view of its taxability only, should be deemed to have also considered the question of its non-taxability. As we have pointed out earlier, the statement of case drawn up by the Tribunal does not mention that there was any material on record to sustain the claim for exemption which was made for the first time before the Appellate Assistant Commissioner. We are not here called upon to consider a case where the assessee failed to make a claim though there was evidence on record to support it, or a case where a claim was made but no evidence or insufficient evidence was adduced in support. In the present case neither any claim was made before the Income-tax Officer nor was there any material on record supporting such a claim. " (Emphasis supplied). Thus, it is clear that the Supreme Court relied on the earlier decision in Rai Bahadur Hardutroy's case [1967] 66 ITR 443 (SC), for principles to be called out regarding the powers of the AAC and the passage which has been relied upon indicates that the record which is spoken of by the Supreme Court in Gurjargravures' case [1978] 111 ITR 1 in the subsequent passage which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs." This is Circular No. 14 (XI-35) of 1955 and is dated April 11, 1955. In view of this circular it is clear that for the purpose of the circular, what should be the guiding factor is whether the proceedings or other particulars before the ITO at the stage of original assessment disclosed any, grounds for relief under s. 2(5)(a)(iii) of the Finance Act of 1964 or of the Finance Act of 1965, even though no claim was made for that relief by the assessee at the stage of those proceedings before him. It is possible to argue that, to the extent to which the circular of 1955 speaks of proceedings or other, particulars before the ITO as distinguished from the return and the assessment order which were spoken of by the Supreme Court in Rai Bahadur Hardutroy's case [1967] 66 ITR 443, there is a deviation from the correct legal position. But it is now well-settled after the decision of the Supreme Court in Ellerman's case [1971] 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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