Tribunal appellate jurisdiction is limited to disputed issues and cannot reopen an unchallenged factual finding on payment quantum.

The Tribunal's appellate jurisdiction is confined to the subject-matter of the appeal, read with the grounds raised and any properly permitted cross-contentions. It cannot suo motu reopen an unchallenged factual finding or enlarge the controversy beyond what is actually in dispute. Applying that principle, where the Appellate Assistant Commissioner had found the assessee to have paid a stated amount and the department had not challenged that finding, the Tribunal could not revisit the quantum while deciding only whether the payment was capital in nature. The question was answered in favour of the assessee.

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Issues: Whether the Appellate Tribunal could, in the assessee's appeal, suo motu go into the question of the quantum of payment made to a third party when that finding of the Appellate Assistant Commissioner had not been challenged by the department.

Analysis: The appellate power of the Tribunal under section 33(4) of the Indian Income-tax Act extends to the subject-matter of the appeal, read with the grounds raised by the appellant, any additional grounds permitted, and any cross-contentions properly advanced by the respondent under the relevant rules. The expression "thereon" limits the Tribunal to matters that are actually in dispute before it. On the record, the Appellate Assistant Commissioner had found that the assessee had paid Rs. 3 lakhs, and that finding was not shown to have been assailed by the Income-tax Officer or the departmental representative. The assessee's appeal challenged only the adverse conclusion that the payment was capital in nature. The Tribunal therefore could not enlarge the controversy on its own and re-open the unchallenged factual finding as to the amount paid.

Conclusion: The Tribunal had no jurisdiction to determine suo motu the quantum of payment, and the question referred was answered in favour of the assessee.

Ratio Decidendi: The Tribunal's jurisdiction in appeal is confined to the subject-matter raised by the appeal and any proper response to it; it cannot, without a challenge from the other side, reopen an uncontroverted finding and decide an issue not put in dispute before it.

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