Tribunal discretion and discontinuance of profession determine admissibility of new evidence and relief under the income-tax law.

A Tribunal may refuse a belated new ground that depends on fresh evidence where the omission is attributable to the party seeking to raise it, and its discretion to decline reopening the record must be exercised judicially. The text also states that relief under Section 25(3) of the Indian Income-tax Act, 1922 turns on whether the assessee intended to discontinue his profession or only suspend it temporarily. On the facts discussed, the assessee's dismissal of staff, surrender of chambers, and stated compulsion to give up practice supported a finding of discontinuance, and later resumption of practice was not treated as conclusive against that finding.

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Issues: (i) Whether the Appellate Tribunal was justified in refusing to permit the revenue authorities to raise a new point and adduce additional evidence at the reference stage; (ii) whether the assessee had discontinued his profession so as to qualify for relief under Section 25(3) of the Indian Income-tax Act, 1922.

Issue (i): Whether the Appellate Tribunal was justified in refusing to permit the revenue authorities to raise a new point and adduce additional evidence at the reference stage.

Analysis: The revenue authorities sought to introduce a wholly new factual basis at the Tribunal stage, although the point had not been taken before the Income-tax Officer or the Appellate Assistant Commissioner. The additional evidence required was not merely explanatory but was necessary to establish the new factual foundation. The Tribunal's power to receive additional evidence was treated as narrowly confined under the applicable procedural framework, and its discretion to refuse such a belated request had to be exercised judicially. On the facts, the omission was attributable to the revenue authorities themselves, and the Tribunal was not acting arbitrarily in declining to reopen the matter.

Conclusion: The refusal to entertain the new point and additional evidence was upheld and is in favour of the assessee.

Issue (ii): Whether the assessee had discontinued his profession so as to qualify for relief under Section 25(3) of the Indian Income-tax Act, 1922.

Analysis: The governing inquiry was whether, at the relevant time, the assessee intended to abandon his profession or merely to suspend it temporarily. The Tribunal had before it facts showing that the assessee had dismissed his clerk, given up his chambers, and expressed that he had been compelled to give up his profession during detention. The subsequent resumption of practice was not conclusive against discontinuance, because a later return to practice did not necessarily mean that the earlier cessation was only temporary. The issue was substantially one of fact, and the Tribunal's finding that the profession had been discontinued was supported by the evidence.

Conclusion: The assessee was entitled to relief under Section 25(3), and the finding of discontinuance was sustained in favour of the assessee.

Final Conclusion: The reference was answered against the revenue and in favour of the assessee, with the Tribunal's refusal to admit the belated point and its grant of relief under Section 25(3) both being upheld.

Ratio Decidendi: A Tribunal may refuse a belated new ground requiring fresh evidence where the omission is attributable to the party seeking it, and whether a professional practice was discontinued or merely suspended depends on the assessee's intention at the relevant time, as found on the evidence.

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