Powers of Tribunal to allow the claim of assessee for the first time before Tribunal

Powers of Tribunal to allow the claim of assessee for the first time before Tribunal

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Powers of Tribunal to allow the claim of assessee for the first time before Tribunal

Tribunal has jurisdiction to examine a question of law, even though raised for the first time before the Tribunal, which arises from the facts as found by the authorities below and having a bearing on tax liability of assessee. Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier.

Assessee had deposited its funds which were not immediately required, on short-term deposits with banks. Interest received by assessee on such deposits was offered for tax assessment and assessment was completed on that basis. Before CIT(A), a number of grounds were taken by the assessee challenging the assessment. However, inclusion of such interest was neither challenged by assessee nor considered by CIT(A). From the order of CIT(A), assessee had filed an appeal before Tribunal. The inclusion of the said amount was not objected to even in the grounds of appeal as originally filed before Tribunal.

It was held that under section 254, Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. There is no reason to restrict the power of Tribunal under section 254 only to decide the grounds which arise from the order of CIT(A). Both the assessee as well as department has a right to file an appeal/cross-objections before Tribunal. Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier.

Decision: In assessee’s favour.

Referred: Jute Corporation of India Ltd. (1991) 187 ITR 688 (SC).

 

IN THE BOMBAY HIGH COURT OF JUDICATURE BENCH ORDINARY ORIGINAL CIVIL JURISDICTION

M.S. SANKLECHA & A.K. MENON, JJ.

CIT v. State Bank of India

ITA No. 452 of 2014

1 August, 2016

Appellant by: Suresh Kumar

Respondent by: Girish Dave a/w. Kadambari Dave and Atul Jasani

P.C.

This Appeal under section 260-A of the Income Tax Act, 1961 (for short ‘the Act’) challenges the Order, dt. 4-9-2013 passed by the Income Tax Appellate Tribunal (for short ‘the Tribunal). The impugned order is in respect of assessment year 2003-04. 2. This appeal raises the following question of law for our consideration :–

(a) Whether on the facts and circumstances of the case, the Tribunal was correct in law, in admitting the additional ground of appeal when the assessee had not raised this issue before the Assessment Officer or the Commissioner (Appeals) ?

(b) Whether on the facts and circumstances of the case, the Tribunal was correct in law, in admitting the additional ground of appeal relying on the judgment of Supreme court in the case of NTPC reported at (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 342 (SC)thereby overlooking the fact that the judgment is clearly distinguishable, as the fact relating to the conduct of search in the assessee’s case were not available on record and in the process, the Tribunal has overlooked the judgment of Supreme Court in the case of Jute Corporation of India Ltd. Reported at 187 ITR 688 ?

(c) Whether on the facts and circumstances of the case, the Tribunal was correct in law, in quashing the re-assessment proceedings relying on the judgment of Delhi High Court in the case of Anil Kumar Bhatia overlooking the fact that the Department has not accepted the decision and SLP has been filed before the Supreme Court ?

(d) Whether on the facts and circumstances of the case, the Tribunal was correct in law in quashing the re-assessment proceedings based on 2nd proviso to section 153A of the Income Tax Act, 1961 ignoring the fact that re-assessment proceedings were initiated by issue of notice under section 148 of the Income Tax Act, 1961 on 8-2-2006 for assessment year 2003-04 and the same could not be said to have abated on the date of search 2-7-2005 as the same was not pending on the date of search ?

3. It is agreed position between the parties that identical questions as raised herein were raised by the revenue in its Income Tax Appeal Nos. 1119 and 1134 of 2013before this Court. Both the aforesaid appeals bearing No. 1119 and 1134 of 2013were dismissed on all the identical questions raised herein by Order, dt. 21-4-2015 of this Court.

4. In the above view, the questions as raised herein stand concluded against the revenue by the decision of this Court dated 21-4-2015 in the Income Tax Appeal Nos. 1119 and 1134 of 2013.

5. Accordingly, the questions as raised herein for our consideration does not give rise to any substantial question of law. Thus not entertained.

6. Appeal dismissed. No order as to costs.

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