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TMI Blog2024 (11) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case and in law the CIT(A), NFAC erred in, sou motu, making addition of business income of the appellant society, holding the society not being eligible for deduction u/s 80P in respect thereof, not realizing that the powers of the First Appellate Authorities do not extend to making addition in respect of an altogether a new source of income as held by Delhi High Court in the case of CIT vs Sardari Lai & Co., 251 ITR 864 (Delhi). 2. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing." Additional Grounds of appeal : "1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad in law. 2.1 Ld.AR submitted that section 80A(5) was not applicable for A.Y.2015-16. Hence, ld.CIT(A) erred in invoking section 80A(5) of the Act. 2.2 Ld.AR also submitted that the CIT(A) does not have any power to add a new source of income which has not been considered by the AO. In this case the CIT(A) has considered the Net profit which was never considered by the AO hence CIT(A) does not have jurisdiction to consider it . 2.3 Ld.AR relied on the following decisions: * Vijay Builders Vs. ITO 863 /PUN/2013 * CIT Vs. Lotte India Corporation Ltd 212 CTR 543(Madras) * CIT Vs. Sardari Lal &Co 251 ITR 864(Delhi) Submission of ld.DR : 3. The ld.DR relied on the order ld.CIT(A). 4. Findings &Analysis : 4.1. We have heard both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,16,500/-. 4.2. However, then in Paragraph 7.5, ld.CIT(A) observed that as per the Profit & Loss Account filed by the assessee, the Net Profit was Rs. 10,93,629/-. The Ld.CIT(A) observed that assessee had not filed any return of income hence the assessee will not be eligible for any deduction u/s 80P of the Act as per section 80A(5) of the Act. The Ld.CIT(A) directed the AO to add Rs. 10,93,629/- and assess the said amount as business income of the Assessee. 4.3. Aggrieved by the Order of the Ld.CIT(A) the assessee has filed appeal before this Tribunal. The moot question raised by the assessee is that the Ld.CIT(A) has no jurisdiction to consider the new source of income. 4.4 In this case admittedly the profit and Loss Account was not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l against an assessment. Thus, the subject matter of appeal in this case is an Assessment Order. When we read the 'Explanation' of the Section 251, it says the CIT(A) may consider any matter arising out of the proceedings in which the order appealed was passed, it means for the case under consideration, the explanation to section 251 says that CIT(A) may consider any matter arising out of the Assessment Proceedings. Thus, when we read the entire section 251 with its explanation it emanates that CIT(A) may consider any matter arising out of the Assessment proceedings when Assessment order is subject of appeal. 4.7 In this context, when we analyse the facts of the case, it is observed that the impugned Profit and Loss account considered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o jurisdiction, under s. 31(3) of the Act, to assess a source of income which has not been processed by the Income- tax Officer and which is not disclosed either in the returns filed by the assessee or in the assessment order, and therefore. the Appellate Assistant Commissioner cannot travel beyond the subject- matter of the assessment. In other words, the power of enhancement under s. 31 (3) of the Act is restricted to the subject-matter of assessment or the sources of income which have been considered expressly or by clear implication by the Income-tax Officer from the point of view of the taxability of die assessee. It was argued by Mr.Vishwanath Iyer on behalf of the appellant that by applying the principle to the present case, the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, to enhance the taxable income of the assessee on the basis of this amount of Rs. 5,85,000 or of any portion thereof. As we have already stated. it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income- tax Officer with a view to find out new sources of income and the power of enhancement under s. 31(3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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