TMI Blog1994 (2) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... a memo signed by the General Manager (Accounts) of Gujarat Electricity Board (assessee) which reads as under: "Additional Ground of Appeal: The appellant submits that the order passed under s. 143(1)(a) of the IT Act is without jurisdiction of Dy. CIT (Asst.), since as a result of the adjustment made by him, there was no tax payable on account of loss nor there was any question of refund as there was no tax deducted at source or taxes paid in advance. The intimation under s. 143(1)(a) is without jurisdiction and should be cancelled." Before hearing arguments from both the sides on merits of the case, we directed the assessee's counsel to convince us as to why and how the new ground should be admitted for consideration, because prima facie it appeared to us that the same was a ground on a new point and issue and not being subject matter of appeal before this Tribunal or before the A.C. and it was not an additional ground in respect of an issue decided by the A.C. The assessee's counsel submitted that this Tribunal has power to admit a new ground of appeal which was not raised or taken in the memorandum of appeal inasmuch as the same arises out of the order of the A.C. impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held that the appellant/assessee is entitled to raise a ground in respect of an issue or point not covered by the order of the lower authority, namely, the AC 4. The Departmental Representative Shri M.S. Rai submitted that this Tribunal has power and discretion to allow any appellant to raise an additional ground in respect of an issue, dispute or controversy which was the subject matter of appeal before the first appellate authority but no appellant has right for admission or consideration of a ground in respect of a new issue, dispute or controversy which was not dealt with by the first appellate authority or by the original assessing authority. If this is permitted or allowed, then there will be no end or finality to any proceedings or litigation. The Departmental Representative drew support to advance such argument from decisions citations of which are given below: (i) CIT vs. Karamchand Premchand (P) Ltd. (1969) 74 ITR 254 (Guj) (ii) CIT vs. Steel Cast Corpn. (1977) 107 ITR 683 (Guj) (iii) CIT vs. Late Begum Noor Banu Alladin (1993) 115 CTR (AP) (FB) 448 : (1993) 204 ITR 166 (AP) (FB). The DR repelled the argument advanced by the assessee's counsel and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver either before the AO or for that matter before the AC regarding jurisdiction, power and authority of the AO in passing the intimation on 24th July, 1992. No ground was taken in the memorandum of appeal filed before this Tribunal in this regard. It is only for the first time on 22nd Dec., 1993, that the assessee filed a memo captioning it as "additional ground" which we have extracted in para 3 on page 2 of this order. It is true, indubitably, that this Tribunal has power under r. 11 of the ITAT Rules, 1963 and the decisions of various Courts in this regard, to allow any party before it in appeal to raise additional ground but those ground/grounds should and must relate to the subject matter of appeal and not beyond or outside. The subject matter of appeal before the AC as well as before this Tribunal was the power of the AO in making adjustments of the gratuity amount under s. 143(1)(a) of the Act and it was made subject matter of rectification before the AO under s. 154 of the Act. Thus, the issue, dispute or controversy before the AC was not that the AO had no jurisdiction, power or authority to pass the intimation inasmuch as there was no tax or interest found due or payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst appellate authority. While their Lordships of the Bombay High Court in the case of Ahmedabad Electricity Co. Ltd. have held so, the Full Bench of the Andhra Pradesh High Court in the case of Late Begum Noor Banu Alladin have laid down that the Tribunal has no power to admit a new ground which is outside the subject matter of the appeal. Similar view has been expressed by the Hon'ble Gujarat High Court in the case of Karamchand Premchand (P) Ltd., Steel Cast Corpn. and Cellulose Products of India Ltd. 4. In view of the discussion made by us above and on the strength of the judgment of the Hon'ble Gujarat High Court in the three cases mentioned above as well as on the strength of the judgment of the Andhra Pradesh High Court in the case of Begum Noor Banu Alladin, we are of the considered opinion that this Tribunal has no power to admit a new ground, which is outside the ambit and scope of the subject-matter of appeal. The ground raised by the assessee is, therefore, rejected. Since we are not admitting the ground raised, the arguments advanced on the merits of the case are not vetted and adjudicated upon. 5. The new ground raised by the assessee can also be rejected even f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ombay High Court in the case of Khatau Junkar Ltd. Anr. vs. K.S. Pathania, Dy. CIT Anr. (1992) 102 CTR (Bom) 194 : (1992) 196 ITR 55 (Bom). On a query from us, the assessee's counsel submitted that the gratuity fund has not been approved. The DR countering the argument of the assessee's counsel submitted that since the gratuity fund was not approved, the same though debited to P L account was disallowable item of expenditure in terms of s. 40A(7) of the Act and the AO had power under s. 143(1)(a) of the Act to disallow such inadmissible expenditure and the assessee cannot make out a case that a mistake has been committed by the AO which requires rectification under s. 154 of the Act. The order of the AC was required to be upheld, submitted the DR. 7. We have given our anxious consideration to the facts of the case and the submissions made before us by representatives of both the sides. On careful study of the judgment of the Bombay High Court in the case of Khatau Junkar Ltd., we find that the facts which are present in the instant case are at variance with the facts before their Lordships of the Bombay High Court. In that case, the Bombay High Court has held that the surplu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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