1978 (10) TMI 156 - AT - Income Tax

Summary

Issues:
1. Whether the appellant can raise an additional ground regarding the aggregation of shares for computing duty payable.
2. Whether the Tribunal can adjudicate on the constitutional validity of a provision based on a High Court decision.

Analysis:

Issue 1:
The appellant sought to raise a new ground based on a decision of the Madras High Court regarding the aggregation of shares for computing duty payable. The revenue argued that since this ground was not raised before lower authorities, it cannot be raised before the Tribunal. The Judicial Member allowed the appellant to raise the contention as it did not require fresh facts and was based on a recent High Court decision. However, the Accountant Member held that since the question was not raised before the Appellate Controller, it cannot be considered by the Tribunal. The Tribunal ultimately permitted the appellant to raise the additional ground, citing precedents where new legal contentions were allowed if no new facts were needed and the other party had an opportunity to respond.

Issue 2:
The Tribunal was faced with the question of whether it could adjudicate on the constitutional validity of a provision based on a High Court decision. The Judicial Member held that if a provision declared unconstitutional by a competent court is invoked by an assessing authority, the Tribunal can consider such a declaration and make appropriate modifications. The Accountant Member, however, opined that the Tribunal cannot decide on the constitutional validity of a provision, even if following a High Court decision. The Tribunal's decision to rely on the Madras High Court judgment in a similar case was upheld by the Madras High Court in a subsequent judgment, indicating the Tribunal's discretion to follow binding decisions.

In conclusion, the Tribunal allowed the appellant to raise the additional ground and relied on the Madras High Court's decision to conclude that the aggregation of shares for computing duty payable was not justified. The Tribunal's decision was in line with established legal principles and precedents, ensuring a fair and thorough consideration of the issues involved.