TaxTMI 
TaxTMI 
2018 (9) TMI 1883
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....of which the assessee did not challenge the addition in appeal and accepted the same. 4. The Ld. CIT(A) ought to have decided the appeal on merits of the case and upheld the order of the Assessing Officer. 5. Any other ground that may arise at the time of hearing." 2. Vide letter dated 31/05/2018, assessee has filed a petition for admission of its additional ground of appeal, which is as under: "In the absence of specific charge raised by the AO in the notice u/s 274 r.w.s. 271(1)(c), the levy of penalty u/s 271(1)9c) is no valid." 3. Ld. DR objected to the admission of the above additional ground of appeal submitting that the respondent-assessee is not entitled to raise any grounds of appeal in the appeal filed by the revenue. According to him, assessee can only file a cross-appeal or cross-objections, but, cannot file any grounds of appeal in the revenue's appeal. He relied upon the judgment of the Hon'ble Bombay High Court in the case of New India Life Assurance Co. Ltd., Vs. CIT, reported in [1957] 31 ITR 844 (Bom.), in support of his contention. 4. Ld. Counsel for the assessee, on the other hand, submitted that ground raised by the assessee is purely a legal issue and....
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....he powers of the Tribunal are restricted to the grounds of appeal raised by the appellant and the respondent-assessee cannot raise any grounds in the appeal filed by the appellant. We find that this decision has been considered by the subsequent bench of the High Court in the case of Hazarimal Nagji & Co. (supra) wherein the Hon'ble Court has observed as under: "6. Mr. Joshi says that if the fresh ground which the respondent wants to raise has the effect of affection the appellant adversely, such a ground cannot be permitted to be raised by the respondent, and he says that thissubmission which he is making is supported by some decisions of out court. Now, if what is meant by saying that a ground cannot be permitted to be taken by the respondent which affects the appellant adversely is that a ground cannot be permitted to be taken by the respondent which relates to that part of the decree against the respondent and in favour of the appellant or relates to the modification of the decree passed by the lower court in favour of the respondent; we agree with Mr. Joshi that such a ground cannot be allowed to be taken unless the respondent has filed a cross-appeal or has filed cross-obje....
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....-taxit was held : "The word 'thereon' used in section 33(4) of the Indian Income-tax Act only means 'on the appeal' which must mean on the grounds raised in the appeal. The sub-section only gives power to the Appellate Tribunal to give its decision and pass orders in respect of all grounds urged on behalf of the appellant in respect of the decision appealed against. In deciding those grounds it can pass appropriate orders. But it is not open to the Tribunal itself to raise a ground or permit the party, who has not appealed, to raise a ground, which will work adversely to the appellant. The words of the section are not wide enough to include a power of enhancement, without an appeal by the Commissioner." In that case, the income-tax authorities had held that the assessee company, which was a non-resident company, had invested Indian money in the United Kingdom, and it was, therefore, liable to be taxed under section 42(1) of the Indian Income-tax Act. the Income-tax Officer computed the amount of interest which was held to have been earned by the company out of Indian prima by the application of rule 6 of the schedule. From the order passed by the Income-tax Officer,....
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....of the ground to be raised by the respondent was to affect the decision of the lower authorities which was against the appellant to a further detriment of the appellant as in the case referred to by Mr. Joshi. In our opinion, what is meant by the observation that the respondent will not be permitted to raise a ground which will work adversely to the appellant is that the respondent will not be entitled to raise a ground which have can only raise provided he has cross-appealed or cross-objected. We may refer, in this connection, the following observations which appear in the decision, at page 282 of the report : "Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has any grievance, he has a right to file a cross-appeal or cross-objections. But if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to support the judgment of the first officer on any ground open to him, but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour." 8. The next case to wh....
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....Appellate Assistant Commissioner, on which either the Income-tax Officer or the Appellate Assistant Commissioner might have recorded a finding but considered that finding not necessary for the determination of the assessment because he took a particular view of the assessee's liability, which view the Tribunal dissents from; and the position is the same where the Tribunal accepts that view, but upon a reference the High Court holds that that view is wrong." Now, the actual decision in the case has no application to the case before us. Mr. Joshi, however, has pointed out that, in deciding the case, the court has considered the scope of the jurisdiction of the Tribunal in its appellate powers and has observed that "if the case which was put forward by the department before it was a new case, the Tribunal would have had no jurisdiction to make the order that it did. If, on the other hand, it was not a new case for the department, but has always been its case, then the Tribunal would have jurisdiction to make the order that it did." Mr. Joshi says that applying these tests, the case which the assessee made before the Tribunal and which the Tribunal entertained was a case which had ....
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....isdiction of the appellate powers of the Tribunal to permit the assessee-respondent to raise the question, which it sought to raise for the first time before the Tribunal, and the Tribunal, therefore, could not be said to have erred in permitting the assessee-respondent to do so. Our answer, therefore, to the question No. 1, as reframed by us, is in the negative. 9. Coming to the second question, the argument of Mr. Joshi is that the Tribunal was not justified in refusing to give a direction which the department had requested it to give. If a new contention was permitted to be raised by the assessee-respondent for the first time in appeal before the Tribunal, it was but fair and proper that a direction, as was prayed for by the department, should have been given by the Tribunal under section 34(3) of the Income-tax Act. Moreover, says Mr. Joshi, the reason which the Tribunal gave in refusing to give a direction, viz., that no useful purpose will be served by giving such a direction in view of the decision of this court in Hiralal Amritlal Shah v. K.C. Thomas, I Income-tax Officer, M-Ward, Bombay, is erroneous. In the first place, the mere circumstance that no useful purpose will ....
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....-Processing Society (supra) wherein the Hon'ble Court has held as under: "Under r. 11 of the Rules relating to the Appellate Tribunal an appellant can be allowed to urge a ground in support of the appeal which has not been set forth by him in the memorandum of appeal. The Tribunal in deciding the appeal is not confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal. The only proviso to this rule is that the Tribunal cannot rest its decision on a new ground unless the party who would be affected thereby has had sufficient opportunity of being heard on that ground. If the appellant can be allowed a concession of the nature contained in r. 11, there is no justification for denying the respondent in an appeal a similar concession. The Tribunal can, therefore, allow an assessee to raise a ground which had not been taken before or adjudicated upon by the ITO, so long as that does not require a further investigation into facts." 5.2 Respectfully following the above judgements, which are in agreement with the assessee's contention that it can raise additional grounds of appeal in the appeal filed by the revenue wherein the CIT(A) had given relief ....