1999 (10) TMI 93 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order dated 8-3-1994.
2. Applicability of Section 153(2A) regarding the time limit for passing the assessment order.
3. Right of the assessee to raise a new ground of appeal before the Tribunal.
4. Maintainability of the appeal before the Tribunal.

Detailed Analysis:

1. Validity of the Assessment Order Dated 8-3-1994:
The assessee, M/s. Season Rubbers Ltd., challenged the validity of the assessment order passed by the Assessing Officer on 8-3-1994, claiming it was barred by limitation. The original assessment order for the assessment year 1981-82 was dated 12-3-1984, and the CIT (Appeals) had set aside the assessment on 16-2-1985 for re-examination of the salary paid to Smt. Rosamma Thomas. The CIT (Appeals) directed the Assessing Officer to reconsider the admissibility of the salary payment and other issues. The subsequent order passed by the Assessing Officer on 8-3-1994 allowed the salary deduction and made further adjustments, resulting in a business loss of Rs. 1,34,420. The assessee contended that this order was invalid as it was passed beyond the prescribed time limit.

2. Applicability of Section 153(2A) Regarding the Time Limit:
The assessee argued that under Section 153(2A), the order of fresh assessment should be made within two years from the end of the financial year in which the appellate order under Section 250 was passed. Since the CIT (Appeals) passed the order on 16-2-1985, the fresh assessment order should have been made by 31-3-1987. The order dated 8-3-1994 was thus beyond the time limit and invalid. The departmental representative countered that the order passed on 8-3-1994 was not a fresh assessment but an order giving effect to the appellate order, and hence, the time limit under Section 153(2A) did not apply.

3. Right of the Assessee to Raise a New Ground of Appeal:
The assessee's representative contended that it was open to the assessee to raise a legal ground questioning the validity of the assessment order at any time in the appellate proceedings, even if it was not raised before the CIT (Appeals). The representative cited various judicial decisions, including the Kerala High Court's decision in CIT v. Kerala State Co-operative Marketing Federation Ltd., to support the claim that the Tribunal could permit the appellant to raise new grounds of appeal. However, the Tribunal noted that this right presupposes a valid appeal already pending before the Tribunal.

4. Maintainability of the Appeal Before the Tribunal:
The departmental representative argued that the appeal was not maintainable as the assessee was not aggrieved by the order of the CIT (Appeals), which had fully allowed the appeal regarding the carry forward of the business loss. According to Section 253, an appeal to the Tribunal can be filed only by an aggrieved assessee. The Tribunal referred to the Madhya Pradesh High Court's decision in CIT v. Princess Sarala Kumari, which held that an assessee whose appeal has been fully allowed by the first appellate authority cannot be said to be aggrieved and thus cannot file a further appeal. The Tribunal concluded that since the assessee's appeal was fully allowed by the CIT (Appeals), the present appeal was not maintainable.

Conclusion:
The Tribunal rejected the appeal filed by the assessee as not maintainable, holding that the assessee was not aggrieved by the order of the CIT (Appeals) and thus had no right to file an appeal before the Tribunal. The Tribunal emphasized that the right of appeal is conferred on an aggrieved assessee, and in this case, the assessee could not be considered aggrieved by the order of the CIT (Appeals), which had allowed the appeal in its entirety. The Tribunal also noted that the time limit under Section 153(2A) did not apply as the order passed on 8-3-1994 was not a fresh assessment but an order giving effect to the appellate order.