Appellate admission of a new tax claim allowed when the authority can examine it on merits and facts.

An appellate authority may admit a legally available tax claim raised for the first time in appeal and remit it for examination on merits. The Tribunal was therefore justified in directing the Income-tax Officer to entertain the assessee's weighted deduction claim under section 35B(1)(b) and decide it after both sides placed the relevant material. The appellate forum's jurisdiction to admit such a plea was recognised, and the claim was to be determined on the factual record rather than rejected merely because it had not been raised before the Assessing Officer.

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Issues: Whether the Tribunal was justified in directing the Income-tax Officer to admit the assessee's claim for weighted deduction under section 35B(1)(b) and to decide the claim on merits, when the plea had not been raised before the Assessing Officer.

Analysis: The claim was raised for the first time in appeal before the Appellate Assistant Commissioner, who did not admit it. The Tribunal nevertheless permitted the plea and directed examination of the claim on facts after giving both sides an opportunity to place the relevant material. The appellate authority was held to have jurisdiction to admit such a plea, and the Tribunal's approach was supported by the cited Supreme Court decisions.

Conclusion: The answer is in the affirmative. The Tribunal was right in directing the Income-tax Officer to admit the assessee's claim and determine it on merits, in favour of the assessee and against the Revenue.

Final Conclusion: A new legal claim can be entertained in appellate proceedings and remitted for factual adjudication where the appellate authority has jurisdiction to do so.

Ratio Decidendi: An appellate authority may admit a legally available claim not raised at the assessment stage and direct its factual examination on the merits.

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