Appellate jurisdiction under section 251 cannot extend deemed dividend additions to other persons after deleting them in the assessed case.

The appellate power under section 251 of the Income-tax Act is confined to the assessment order under appeal: the Commissioner (Appeals) may confirm, reduce, enhance or annul that assessment, but cannot travel beyond it. After deleting the deemed dividend addition under section 2(22)(e) in the assessee's hands, the Commissioner (Appeals) could not direct the Assessing Officer to make the same addition in the hands of other persons. Section 150(1) did not enlarge that jurisdiction. The direction to assess the amount in the hands of other persons was without jurisdiction and was liable to be expunged.

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Issues: Whether the Commissioner (Appeals), after deleting an addition made in the assessee's hands under section 2(22)(e) of the Income-tax Act, 1961, could direct the Assessing Officer to make the same addition in the hands of other persons, and whether such directions were within the appellate powers under section 251 of the Income-tax Act, 1961.

Analysis: The subject matter before the Commissioner (Appeals) was confined to the addition made in the assessee's assessment for the relevant year. Under section 251 of the Income-tax Act, 1961, the appellate authority may confirm, reduce, enhance or annul the assessment, and its jurisdiction remains confined to the assessment order under appeal. Once the addition was deleted in the assessee's hands, the matter should have ended there. The further direction to assess the amount in the hands of other persons went beyond the scope of the appeal and exceeded the powers vested in the Commissioner (Appeals). Reliance on section 150(1) of the Income-tax Act, 1961 was misplaced, as that provision does not enlarge the appellate authority's jurisdiction to issue directions on matters not before it.

Conclusion: The direction to assess the deemed dividend in the hands of other persons was without jurisdiction and was liable to be expunged. The assessee succeeded.

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