Pure question of law can be urged on appeal from existing facts, but relief cannot be enlarged without cross-objections.

A respondent in an income-tax appeal may be allowed to raise, at the Tribunal stage, a fresh pure question of law based on facts already on record where the point only supports the existing favourable order and does not enlarge relief or prejudice the appellant without a cross-appeal or cross-objections. The Tribunal's refusal to grant a direction under section 34(3) was also treated as valid because the direction was not mandatory and the Tribunal was bound by existing precedent. The commentary states that the reference was answered against the revenue on the first issue and that the Tribunal's refusal stood upheld on the second.

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Issues: (i) Whether the Appellate Tribunal could permit the assessee-respondent to raise, for the first time at the Tribunal stage, a fresh ground based on a pure question of law arising from facts already on record. (ii) Whether the Tribunal's refusal to give a direction under section 34(3) was valid.

Issue (i): Whether the Appellate Tribunal could permit the assessee-respondent to raise, for the first time at the Tribunal stage, a fresh ground based on a pure question of law arising from facts already on record.

Analysis: The appellate powers of the Tribunal were treated as analogous to those of a civil appellate court. A respondent, though not filing an appeal or cross-objections, may support the favourable order on any available ground, provided the new contention does not require further investigation into disputed facts and rests on facts already admitted or found. The restriction against a respondent raising a new ground applies where the ground would enlarge relief or work adversely to the appellant in the sense of modifying the decree in the appellant's favour. Where the new ground only sustains the existing favourable decision and is a pure question of law on undisputed facts, the Tribunal may allow it.

Conclusion: The Tribunal was competent to allow the assessee-respondent to raise the fresh ground, and the question was answered in the negative.

Issue (ii): Whether the Tribunal's refusal to give a direction under section 34(3) was valid.

Analysis: The Tribunal was not under an obligation to issue the requested direction. Since the governing decision binding on the Tribunal treated such a direction as not mandatory, the Tribunal could validly decline to grant it. The legality of the refusal, rather than its wisdom, was the relevant inquiry.

Conclusion: The refusal to give a direction under section 34(3) was valid, and the question was answered in the affirmative.

Final Conclusion: The reference was answered against the revenue on the first question and in its favour on the second in the sense that the Tribunal's refusal stood upheld, resulting in dismissal of the department's challenge.

Ratio Decidendi: In an income-tax appeal, a respondent may be permitted to urge a new pure question of law based on facts already on record to support the favourable order, but not to enlarge relief or alter the decree to the appellant's prejudice without cross-appeal or cross-objections; a non-mandatory procedural direction may validly be refused when the Tribunal is bound by existing precedent.

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