2017 (4) TMI 1063 - HC - Income Tax

Allowing raising additional grounds raised by the respondent-revenue - Held that - After considering the matter, it has been categorically recorded by the Tribunal that as per the provisions of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 (in short, the Rules ), there is no limitation for raising additional grounds before the Tribunal. It has also been provided that the Tribunal in deciding the appeal shall not be confined to the grounds set forth in the memorandum of the appeal. In the present case, the issues as quoted above being additional grounds were considered to be legal issues which could be decided on the basis of the facts and the material available on the record. Thus, the said grounds are essential for the just decision of the controversy involved. Learned counsel for the petitioner has not been able to produce any material on record to show that the order passed by the Tribunal is illegal or perverse. No ground to interfere with the impugned order passed by the Tribunal allowing the additional grounds raised by the respondent-revenue. Consequently, the petition is dismissed.

Issues:
1. Quashing of order dated 03.11.2016 passed by the Income Tax Appellate Tribunal
2. Admitting additional grounds by the respondent-revenue for the assessment year 2003-04
3. Legal issues raised by the respondent-revenue for admission before the Tribunal
4. Consideration of additional grounds by the Tribunal under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963
5. Applicability of judgments in Aravali Engineers P. Limited Vs. Commissioner of Income Tax and Prabhakar Vs. Joint director, Sericulture Department

Analysis:

1. The petitioner sought to quash the order passed by the Income Tax Appellate Tribunal admitting additional grounds filed by the respondent-revenue for the assessment year 2003-04. The petitioner contended that the respondent-revenue's application for additional grounds should have been rejected based on previous opportunities availed. However, the Tribunal allowed the additional grounds application on 3.11.2016, leading to the petitioner filing a writ petition.

2. The legal issues raised by the respondent-revenue for admission before the Tribunal included violations of natural justice, acceptance of new evidence, lack of technical competence in judgment, and non-satisfaction of legal requirements under Section 10B. The Tribunal considered these additional grounds as essential for a just decision based on available facts and materials, as per Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963.

3. The Tribunal, after considering the matter, emphasized that there is no limitation for raising additional grounds before the Tribunal as per Rule 11. The Tribunal's decision-making process is not confined to the grounds in the appeal memorandum. The legal issues raised by the respondent-revenue were deemed necessary for a fair resolution of the controversy, and the Tribunal found no illegality or perversity in its decision.

4. Referring to the judgments in Aravali Engineers P. Limited Vs. Commissioner of Income Tax and Prabhakar Vs. Joint director, Sericulture Department, the court highlighted the discretion of appellate authorities to allow new questions based on the interest of justice. While acknowledging the principles established in these judgments, the court found the petitioner unable to benefit from them due to the unique circumstances of the case.

5. Ultimately, the court dismissed the petition, upholding the Tribunal's decision to allow the additional grounds raised by the respondent-revenue. The court directed the Tribunal to expedite the pending appeal proceedings in compliance with the law, emphasizing the importance of a swift resolution.

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