Court allows Income Tax Appeal, emphasizes timely grounds, fair argument chance, remands case for reconsideration.

The court allowed the Income Tax Appeal, setting aside the previous order and remanding the case to the ITAT for reconsideration. The decision emphasized the importance of raising specific grounds at the earliest opportunity and providing all parties with a fair chance to present their arguments. The court found that the ITAT's failure to address the impact of not raising a specific contention early on necessitated a fresh consideration of the case.

---

---

Issues:
1. Jurisdiction of ITAT to entertain a ground by oral submission without specific ground raised.
2. Propriety and power of ITAT to examine grounds raised orally for the first time.
3. Impact of failure to raise a ground at the first available opportunity.

Analysis:

Issue 1: Jurisdiction of ITAT
The appellant challenged the ITAT's decision to entertain a ground by oral submission without any specific ground raised previously. The appellant argued that the ITAT did not give the revenue an opportunity to respond to the new ground, which was not raised before the assessing officer or CIT(A). The appellant relied on Rule 27 and contended that allowing oral submissions without proper challenge by the revenue was improper.

Issue 2: Propriety and Power of ITAT
The primary question before the court was the propriety and power of the ITAT to examine grounds raised orally for the first time. The court referred to various judgments, including the National Thermal Power Co. Ltd. case, emphasizing the wide powers of the ITAT to consider questions of law arising in assessment proceedings, even if not raised earlier. The court highlighted that both the assessee and the department have the right to file appeals or cross-objections before the ITAT, allowing for the consideration of new legal issues.

Issue 3: Impact of Failure to Raise a Ground
The court noted that the ITAT did not evaluate the impact of the failure to raise a specific contention at the first available opportunity. It was emphasized that the failure to raise such an objection early on was not considered, and its consequences were not assessed. The court concluded that the ITAT's failure to address this aspect warranted the decision to quash the previous order and remand the case for fresh consideration, allowing both parties to raise appropriate grounds.

In conclusion, the court allowed the Income Tax Appeal, setting aside the previous order and returning the case to the ITAT for reconsideration in accordance with the law. The judgment highlighted the importance of raising relevant grounds at the earliest opportunity and ensuring a fair opportunity for all parties to present their arguments.

---