2015 (1) TMI 703 - HC - Income Tax

Admission of additional grounds - payments effected during the year for the buildings that existed on the land acquired for mining and demolished immediately such acquisition to prepare such land acquired for the purpose of mining operations admissible - cost incurred for preparation of land to make it minable if not allowable as revenue expenditure, is to be treated as an intangible asset eligible for amortization for depreciation - Held that - Appellate Tribunal, which has been conferred with wide powers under the Act, is entitled to permit the parties before it to raise new questions before it for the first time subject to the condition that the relevant facts in respect of the claim raised before the Tribunal are available on record. In the present case though, the omission to urge the fresh grounds may not have been due to any malafide intention, in so far as these cases are concerned, we are satisfied that the relevant facts were not on record and that the appellant had no good reason whatsoever why these contentions were not urged on earlier occassions when the matter was pending before the assessing officer or the first appellate authority. Appeal dismissed. -Decided against assessee.

Summary

Issues:
Challenge to orders passed by Income Tax Appellate Tribunal regarding assessment years 2005-06, 2006-07, and 2007-08; Legality of rejecting admission of additional grounds raised by appellant.

Analysis:
The appeals were filed challenging the orders passed by the Income Tax Appellate Tribunal concerning the assessment years 2005-06, 2006-07, and 2007-08. The central issue raised was the legality of the Tribunal's decision in rejecting the appellant's plea to admit two additional grounds not raised before the tax authorities previously. The appellant sought to admit these grounds related to the allowance of expenditure incurred for preparing land for mining operations and the treatment of costs incurred under a statutory license. The Tribunal declined admission of these grounds citing lack of relevant facts on record, following the decision of the Supreme Court and the Madhya Pradesh High Court.

The appellant argued that since the expenditure claimed was reflected in the audited accounts, the Tribunal should have entertained the additional grounds. Reference was made to judgments of the Kerala High Court and the Supreme Court to support this argument. On the contrary, the standing counsel for the department supported the Tribunal's decision, citing the Apex Court's judgment and emphasizing the absence of relevant facts on record for the additional grounds.

The High Court analyzed the precedents set by the Supreme Court in the NTPC case, emphasizing the wide powers of the Appellate Tribunal to permit new questions to be raised if relevant facts are on record. The Court noted that each case should be considered on its facts and that the appellate authority has the discretion to allow new contentions based on bona fides and reasons for not raising them earlier. Despite the appellant's attempt to explain the lack of facts on record, the Court held that the Tribunal's decision was in line with the principles established by the Supreme Court.

Referring to a Division Bench judgment of the Kerala High Court, the appellant sought to raise additional points not previously raised before the assessing authority or the Commissioner (Appeals). However, the Court found that this judgment did not deviate from the principles laid down by the Supreme Court and reiterated the importance of relevant facts, bona fides, and reasons for not raising the contentions earlier. Consequently, the High Court confirmed the Tribunal's decision to dismiss the appeals related to the additional grounds, leading to the dismissal of all appeals without costs.