Appellate jurisdiction and fresh exemption claims in income tax assessments cannot extend beyond matters considered by the assessing officer.

Appellate relief under section 251(1)(a) of the Income-tax Act, 1961 is limited to matters that were part of the subject-matter of assessment before the Income-tax Officer. Mere taxation of a receipt does not mean exemption from that receipt was considered, and a fresh claim cannot be entertained unless the Officer had applied his mind to the item's taxability or non-taxability. On the stated facts, no claim for exemption under section 84 had been made before the Income-tax Officer and no supporting material existed at that stage, so the appellate authority could not grant the relief and the Tribunal was not justified in directing it.

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Issues: Whether, on the facts of the case, the Appellate Assistant Commissioner and the Tribunal could entertain and grant relief under section 84 of the Income-tax Act, 1961, when no such claim had been made before the Income-tax Officer.

Analysis: The power of the Appellate Assistant Commissioner under section 251(1)(a) of the Income-tax Act, 1961, was treated as comparable to the earlier appellate power under section 31(3) of the Indian Income-tax Act, 1922, but only to the extent that the item in question had been processed or considered by the Income-tax Officer. The Court held that mere taxation of a receipt does not mean that its exemption was considered, and a matter cannot be treated as part of the subject-matter of assessment unless the Income-tax Officer had applied his mind to its taxability or non-taxability. On the record, no claim for exemption under section 84 had been made before the Income-tax Officer and no material supported such a claim at that stage.

Conclusion: The Appellate Assistant Commissioner had no jurisdiction to entertain the fresh claim for exemption under section 84, and the Tribunal was not justified in directing relief; the question referred ought to have been answered in the negative.

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