TaxTMI 
TaxTMI 
1984 (7) TMI 125
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.... the learned ITO erred in not allowing vacancy claim of Rs. 4,171 (relating rent of Rs. 10,650) in computing the income from house property. 3. That the learned ITO erred in law as well on fact in assessing capital gains at Rs. 63,512 in respect of two 3-bed room flats sold by the appellant and her husband jointly. 4. That the learned ITO erred in law in assessing a sum of Rs. 30,658 recovered by the appellant from 3 co-owners of the flat at Jindal House representing their respective share of municipal taxes. 5. That the learned ITO erred in allowing deduction under s. 80T @ 25 per cent instead of @ 35 per cent 6. That the learned ITO erred in not allowing deduction under s. 80G on donation of Rs. 4,400 to charitable institution....
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....ere. From the assessment records it is found that the contention of the authorised representative is correct. The ITO also admitted that by mistake the approval of the IAC was not obtained. Inview of the above position, I am of the opinion that as proper procedure was not adopted by the ITO, while computing the capital gains arising on sale of two flats, the assessment should be set of two flats, the assessee should be set aside. The ITO is directed to recompute the total income of the assessee after observing proper procedure and after allowing necessary opportunities to the assessee. 2. In the result, the assessment is set aside." From the said order of the AAC the assessee filed appeal before the Tribunal on the following 3 grounds....
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....(SC) and judgment of Calcutta High Court in the case of Kathihar Jute Mills (P) Ltd. vs. CIT (1979) 120 ITR 861 (Cal) held that the ITO rightly refused to reconsider the point covered by the remaining 5 grounds of appeal taken before the AAC and as such, dismissed the appeal. 2. Now in this appeal contention of the ld. counsel of the assessee is that the ITO was not justified in deciding to reconsider the points covered by those 5 grounds of appeal. According to the ld. counsel it should have been spelled out from the order of the AAC that he had set aside the entire assessment and the ITO was required to reformat the assessment on all the points. In support the ld. counsel placed reliance upon judgment of the Allahabad High Court Abhai ....
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.... those grounds having not been decided by the AAC, it was if no consequence. The AAC in fact, decided only part of the appeal which he should have not done. The case of Katihar Jute Mills (P) Ltd. has been misplaced by the CIT (A). In that case, there was appeal before the AAC only on a particular point which was decided by the AAC. In that context, the Hon'ble Calcutta High Court held that the point as on which no appeal was filed before the AAC could not be permitted to be agitated in the reassessment proceedings. Here the grounds wee specifically taken and the AAC skipped over them. Thus, those 5 grounds have been left undecided and the assessee cannot be made bound by the findings of the ITO in the original assessment proceedings on tho....
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....this is a glaring mistake of procedure against which relief has to be granted to the assessee without entering into technicalities of procedure. We are, therefore, inclined to grant relief to the assessee. In this context, following observation of the Hon'ble Supreme Court in CIT vs. Mahalakshmi Textile Mills Ltd. (1967) 66 ITR 710 (SC) are pertinent: All questions whether of law or of fact which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, grant of belief to him on another ground is justified, it would be open to the Departmental authorities and the Tribunal, and indeed they would be under a duty, to g....