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Issues:
1. Appeal against the order of the Commissioner under s. 263 of the IT Act, 1961 for the asst. yr. 1979-80. 2. Deduction of exgratia payment to employees. 3. Disallowance of incentive and guest house expenses. Analysis: 1. The appeal was filed by the assessee challenging the order of the Commissioner under s. 263 of the IT Act, 1961 for the assessment year 1979-80. The main issue pertained to the deduction of exgratia payment to employees, along with minor grounds related to the disallowance of incentive and guest house expenses at specific amounts. 2. The assessee sought to raise additional grounds challenging the jurisdiction of the Commissioner to revise the ITO's order, contending that the ITO's order merged with that of the CIT(A). The Departmental Representative objected to the additional grounds, citing precedents that new questions cannot be raised as additional grounds if they involve a new subject matter not previously raised before the Commissioner. 3. The Tribunal considered the arguments presented by both parties and held that it has the power to allow additional grounds of appeal, provided they relate to the subject matter of appeal and can be decided based on existing facts. The Tribunal cited various legal precedents to support its decision to admit the additional grounds raised by the assessee. 4. The Tribunal emphasized that a pure question of law or a plea that can be considered based on existing evidence can be raised for the first time before the Tribunal. It held that the additional grounds challenging the Commissioner's jurisdiction under s. 263 of the IT Act were admissible as they pertained to the root of the matter and could be decided based on the facts already on record. 5. The Tribunal further explained that the additional grounds raised by the assessee could be decided based on the evidence already placed on record. It noted that the additional grounds challenged the Commissioner's jurisdiction and were purely legal in nature, allowing them to be admitted for consideration. 6. The Tribunal distinguished the present case from precedents cited by the Departmental Representative, stating that the new grounds raised by the assessee were not entirely new subject matters and could be decided without requiring fresh material. As a result, the Tribunal admitted the additional grounds raised by the assessee. 7. Citing relevant legal decisions, the Tribunal affirmed its decision to permit the additional grounds raised by the assessee as they constituted a question of law crucial to the subject matter of the appeal. It emphasized the importance of considering legal questions that go to the root of the matter. 8. The Tribunal referred to a decision of the Bombay High Court regarding the issue of merger of orders, holding that once the order of assessment is confirmed by the AAC or any order is made by them, the Commissioner cannot revise the ITO's order. Based on this precedent, the Tribunal concluded that the Commissioner could not exercise power under s. 263 as the ITO's order had merged with that of the CIT(A). 9. Ultimately, the appeal was allowed based on the legal ground related to the merger of orders, rendering further consideration of other grounds unnecessary. 10. The Tribunal reiterated the allowance of the appeal on the legal ground discussed and confirmed the decision to not delve into the other grounds raised by the assessee. 11. The appeal was allowed based on the legal findings presented, concluding the judgment in favor of the assessee.
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