1994 (10) TMI 52 - HC - Income Tax

Assessee permitted to raise claim for deduction during appeal process; Court emphasizes appellant's bona fides

The High Court allowed the assessee to raise a claim for weighted deduction under section 35B during the appeal process, despite the initial omission ... Income Tax Act, Power To Admit Additional Ground, Powers Of Tribunal Issues:1. Admissibility of a claim for weighted deduction under section 35B raised during appeal.2. Interpretation of the decision in CIT (Addl.) v. Gurjargravures P. Ltd.3. Applicability of the decision in Jute Corporation of India Ltd. v. CIT.4. Authority of the Appellate Assistant Commissioner to entertain additional grounds of appeal.5. Bona fides of the assessee in raising additional points during appeal.Analysis:1. The issue in this case revolved around the admissibility of a claim for weighted deduction under section 35B raised by the assessee during the appeal process. The assessee had initially omitted to make this claim before the assessing authority but raised it during the appeal before the Commissioner of Income-tax (Appeals).2. The Commissioner of Income-tax (Appeals) refused to entertain the claim citing the decision in CIT (Addl.) v. Gurjargravures P. Ltd. as a barrier to considering the plea. However, the Income-tax Appellate Tribunal took a different view and directed the Income-tax Officer to examine the claim under section 35B. This led to the reference of the question of law to the High Court under section 256(2) of the Income-tax Act, 1961.3. The High Court, in its analysis, referred to the decision in Jute Corporation of India Ltd. v. CIT, where the Supreme Court clarified that the decision in Gurjargravures P. Ltd.'s case was not of general application and that the appellate authority could entertain additional grounds of appeal based on the facts and circumstances of each case.4. The High Court further discussed the authority of the Appellate Assistant Commissioner to admit new grounds or evidence during the appeal process. It cited the decision of the Calcutta High Court in Rai Kumar Srimal v. CIT and the subsequent approval by the Supreme Court, emphasizing the importance of the appellant's bona fides in raising additional points.5. Ultimately, the High Court found no dispute regarding the bona fides of the assessee in this case and upheld the Tribunal's decision to permit the assessee to raise additional points about section 35B during the appeal. The High Court ruled in favor of the assessee, stating that the Revenue's contentions were not meritorious and were concluded by the decision of the Supreme Court.