Cross-objection before the ITAT can raise new legal grounds when facts are already on record and tax liability needs correct determination.

A cross-objection before the ITAT under section 253(4) read with Rule 22 is treated as having the same footing as an appeal and is not restricted to grounds already raised before the Assessing Officer or the first appellate authority. The Tribunal may admit a new legal ground where the relevant facts are already on record, the point is necessary for correct determination of tax liability, and there are bona fide reasons for not raising it earlier. On that basis, jurisdictional and procedural objections to the assessment, including challenge to satisfaction for section 153C proceedings and compliance with section 282A, were found maintainable without fresh factual enquiry, and the Revenue's preliminary objection was rejected.

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Issues: Whether the assessee could raise, in cross-objections before the Tribunal, legal grounds not raised before the Assessing Officer or the first appellate authority.

Analysis: The Tribunal held that a cross-objection under section 253(4) of the Income-tax Act, 1961 read with Rule 22 of the ITAT Rules, 1963 stands on the footing of an appeal and is not confined to points already urged before the lower authorities. It relied on the principle that the Tribunal may entertain a new legal ground where the relevant facts are already on record, the issue is necessary for correct determination of tax liability, and there are bona fide reasons for not raising it earlier. The objections concerned the validity of the assessment on jurisdictional and procedural grounds, including satisfaction for proceedings under section 153C and compliance with section 282A, and required no fresh factual enquiry beyond the record.

Conclusion: The cross-objections were held maintainable and the preliminary objection of the Revenue was rejected in favour of the assessee.

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