ITAT remand power extends to fresh enquiry on incidental assessment facts within the appeal's subject matter.

Section 254(1) gives the ITAT power to pass orders "as it thinks fit" on the subject matter of the appeal, including remand directions, even where the specific factual aspect was not earlier investigated by the lower authorities. The Tribunal may direct fresh enquiry into matters incidental to the assessment if the enquiry is necessary for correct determination of tax liability, provided the issue remains within the appeal and both sides are heard. A remand of this kind does not itself determine taxability; it only permits the Assessing Officer to examine the factual foundation. The Tribunal was therefore held to have jurisdiction to remand enquiry into the fair market value of shares, and the assessee's challenge failed.

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Issues: Whether the Income Tax Appellate Tribunal, while disposing of an appeal under Section 254 of the Income-tax Act, 1961, can direct a fresh enquiry into an aspect not earlier investigated by the lower authorities and which may affect or enhance the assessee's tax liability.

Analysis: The appellate power under Section 254(1) is not confined merely to the precise grounds raised by the appellant, but extends to the subject matter of the appeal. The expression "as it thinks fit" authorises the Tribunal to pass appropriate orders, including remand directions, so long as the matter remains within the contours of the appeal and both parties are heard. The Tribunal, as the final fact-finding authority, may direct enquiry into matters incidental to the assessment that were not earlier examined, particularly where the enquiry is necessary for correct determination of tax liability. Such a direction does not itself decide the taxability question, but only permits the Assessing Officer to examine the factual foundation.

Conclusion: The Tribunal had jurisdiction to remand the matter for enquiry into the fair market value of the shares and the appeal by the assessee failed.

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