1966 (4) TMI 9 - HC - Income Tax

Application filed under s. 26A for registration of a partnership - Where the Appellate Tribunal in appeal finds that the petition of the assessee under section 26A was invalid, whether the Tribunal had jurisdiction to dismiss the assessee s application on this ground

Summary

Issues:
1. Jurisdiction of the Tribunal to dismiss the assessee's application based on a ground not raised earlier.
2. Interpretation of Rule 12 of the Income-tax Appellate Tribunal Rules regarding raising new points before the Tribunal.
3. Comparison with previous judgments regarding the Tribunal's power to allow new grounds to be raised.

Detailed Analysis:
The judgment by the High Court of PUNJAB dealt with the issue of the jurisdiction of the Tribunal to dismiss the assessee's application based on a ground not raised earlier. The case involved an application for registration of a partnership under section 26A for the assessment year 1950-51. The Income-tax Officer rejected the application, but the Appellate Assistant Commissioner allowed registration. The Tribunal accepted the appeal on a new ground not raised before, which was the lack of signatures of all partners on the application, as required by law. The Tribunal doubted its power to rectify this at that stage. The High Court referred to the Textile Supply Co. case, acknowledging the validity of the ground raised by the Tribunal but focused on whether such a decision could be based on a point not previously raised.

Regarding the interpretation of Rule 12 of the Income-tax Appellate Tribunal Rules, the Court noted that the rule allows new points to be raised before the Tribunal with its permission. The rule specifies that the Tribunal is not confined to the grounds set forth in the appeal memorandum, provided the affected party has an opportunity to be heard on the new ground. In this case, the assessee had the chance to address the new ground raised by the Tribunal, which was crucial as the law required all partners to sign the registration application.

The judgment also referenced the New India Life Assurance Co. Ltd. case, where the Tribunal based its decision on a ground not raised in the appeal memorandum. The Court highlighted that the Tribunal has the power to allow new grounds to be raised, as seen in the previous case where the Tribunal reversed the decision based on a new question. The judgment concluded that the Tribunal had the authority to dismiss the assessee's application based on the new ground and answered the question in the affirmative, allowing costs to the Commissioner from the assessee. The decision was agreed upon by both judges, affirming the Tribunal's jurisdiction in such matters.