Rule 27 permits a respondent to support an appellate order on interconnected grounds without seeking a worse position for the appellant.

In a tax appeal, the Tribunal's appellate jurisdiction is limited to the subject-matter of the appeal, but that subject-matter must be read in a practical and interconnected way. A respondent may support the first appellate order under Rule 27 on a ground decided against it, provided the contention is used only to sustain the order and does not worsen the appellant's position. Where disputed share profits and the related interest allowance formed one connected assessment controversy, the Department could argue that the interest relief could not stand if the share transactions were treated as bogus.

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Issues: Whether, in an appeal before the Tribunal, the Department could support the Appellate Assistant Commissioner's order by invoking a ground decided against it and whether the Tribunal could refuse to entertain that contention on the footing that no appeal had been filed by the Department.

Analysis: The scope of the Tribunal's appellate power is confined to the subject-matter of the appeal, but that subject-matter is not to be read in a narrow or artificial manner. Where the grounds decided by the first appellate authority are inter-connected and form part of the same controversy, a respondent may support the order under Rule 27 on a ground decided against it, so long as the plea is used only to sustain the order and not to place the appellant in a worse position than if no appeal had been filed. In the present controversy, the addition on account of alleged share profits and the corresponding allowance of interest were linked aspects of the same assessment dispute, and the Department was entitled to contend that the interest relief could not survive if the share transactions were held to be bogus.

Conclusion: The Tribunal was not justified in refusing to entertain the Department's contention regarding disallowance of interest, and the Department could support the order on that ground under Rule 27.

Ratio Decidendi: In a tax appeal, the respondent may invoke a ground decided against it to support the order appealed from where the grounds are inter-connected and form part of the same subject-matter, but not to seek a larger relief than that sustained by the first appellate authority.

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