Appellate Tribunal may entertain a new legal ground from existing record, even if not raised before first appeal.

The High Court held that the Appellate Tribunal was wrong to refuse an additional ground merely because the Revenue had not raised it before the Commissioner (Appeals). Where the issue arises from facts already on record, either party may urge a question of law before the Tribunal even if it was not taken earlier. The Tribunal has discretion to admit or reject such a ground, but it cannot decline consideration on the mistaken view that it lacks jurisdiction to do so. The Revenue's additional ground was therefore held to be entertainable.

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Issues: Whether the Appellate Tribunal was justified in refusing to permit the Revenue to raise an additional ground that the amount to be excluded was Rs. 6,99,841, though that plea had not been the subject-matter of appeal before the first appellate authority.

Analysis: The controversy concerned the Tribunal's power to entertain a new ground arising from the assessment proceedings where the Revenue sought to correct an apparent mistake in the figure referred to in the assessment order. The Tribunal declined to consider the plea only because it had not been raised before the Commissioner of Income-tax (Appeals). The Court held that this approach was too narrow. Relying on the settled principle that the entire assessment is before the Appellate Tribunal, it is open to either side to raise a question of law arising out of facts already on record, even if the point was not urged earlier. The Tribunal has discretion to admit or reject such a ground, but it cannot decline jurisdiction on the mistaken view that it lacks power to consider it at all.

Conclusion: The Tribunal was not justified in refusing to entertain the Revenue's additional ground on the ground that it was not raised before the first appellate authority. The question was answered in favour of the Revenue.

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