2014 (12) TMI 354 - HC - Income Tax

Admitting new tax appeal grounds under ITAT Rule 11 not decided earlier-tribunal must consider; Revenue challenge rejected.

The dominant issue was whether the ITAT could admit and decide additional grounds under r.11 of the ITAT Rules that had not been adjudicated by the ... Validity of admission of additional grounds – Rule 11 of ITAT Rules - Revenue contended that the grounds ought not to have been raised before the Tribunal which was not adjudicated before the CIT(A) – Held that:- The provision makes it clear that the assessee has the right to raise additional grounds and if it is beneficial to the assessee, the same should be considered by the Tribunal - the very same issue, raised as additional grounds, has already been considered by the Tribunal in respect of the assessee's own case - when the additional grounds is beneficial to the assessee, the Tribunal is right in allowing the same – Decided against revenue. Issues Involved:1. Entertaining additional grounds not adjudicated by CIT(A).2. Applicability of Section 115JB to the assessee bank.Entertaining Additional Grounds:The case involved an appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal. The Revenue raised concerns regarding the Tribunal's decision to entertain additional grounds that were not adjudicated by the Commissioner of Income Tax (Appeals). The Tribunal allowed the raising of additional grounds based on Rule 11 of the Income Tax Appellate Tribunal Rules, which permits raising additional grounds if beneficial to the assessee. The Tribunal had already considered the same issue in the assessee's own case, leading to the conclusion that the Tribunal was right in allowing the additional grounds.Applicability of Section 115JB to the Assessee Bank:The dispute centered around the applicability of Section 115JB of the Income Tax Act to the assessee bank for the assessment year 2002-03. The assessee, a Scheduled Bank under the Banking Regulation Act, filed a return of income declaring a total loss. The Assessing Officer determined book profit under Section 115JB and demanded tax. The issue was whether Section 115JB applied to the assessee bank, with the Tribunal referring to a previous decision in the assessee's own case for the assessment years 2004-05 to 2006-07. The Tribunal held in favor of the assessee, stating that Section 115JB did not apply to the bank. The questions of law related to this issue were answered against the Revenue and in favor of the assessee.Conclusion:The High Court dismissed the Tax Case (Appeal), upholding the Tribunal's decision to entertain additional grounds and ruling in favor of the assessee regarding the applicability of Section 115JB to the bank. The other substantial questions of law were given up, resulting in the appeal being dismissed without costs.