2005 (6) TMI 238 - AT - Income Tax

Summary

Issues Involved:
1. Admission of Additional Ground of Appeal
2. Jurisdiction of the Tribunal under Section 255(4) of the Income-tax Act, 1961
3. Difference between Orders under Section 254(1) and Section 255(4)

Issue 1: Admission of Additional Ground of Appeal
The assessee sought permission to raise an additional ground of appeal, arguing that the assessment order passed by the Assessing Officer under section 158BC of the Income-tax Act, 1961, was barred by limitation as per the provisions of section 158BE(1)(a). This additional ground was initially raised before the Third Member but was not admitted at that stage. The assessee contended that this ground is a legal one, going to the root of the dispute, and should be adjudicated for the disposal of the entire decision. The assessee cited various precedents, including National Thermal Power Co. Ltd. v. CIT and Shilpa Associates v. ITO, to support the admissibility of the additional ground.

Issue 2: Jurisdiction of the Tribunal under Section 255(4) of the Income-tax Act, 1961
The Tribunal examined the jurisdiction under section 255(4), which is confined to deciding points of difference of opinion by the majority view. This section does not empower the Tribunal to consider any additional ground raised after the conclusion of the original hearing. The Tribunal emphasized that the scope of the present proceedings is limited to passing a consequential order after considering the opinion expressed by the three members, including the Third Member who settled the controversy.

Issue 3: Difference between Orders under Section 254(1) and Section 255(4)
The Tribunal highlighted the distinction between the powers and jurisdiction under sections 254(1) and 255(4). Section 254(1) allows the Tribunal to pass orders with wide amplitude, including entertaining additional legal grounds raised for the first time. In contrast, section 255(4) is limited to giving effect to the majority view on points of difference between members who originally heard the appeal. The Tribunal noted that the additional ground raised by the assessee was not entertained by the Third Member as it was not related to the questions of dispute.

Detailed Analysis:
1. Admission of Additional Ground of Appeal:
The Tribunal acknowledged the assessee's argument that the additional ground, raised after the conclusion of the hearing by the Division Bench, should be entertained. However, it concluded that the additional ground was raised after the original hearing concluded, and therefore, it could not be admitted. The Tribunal stressed that allowing additional grounds after the conclusion of the hearing would delay the judicial process and prevent finality in proceedings.

2. Jurisdiction of the Tribunal under Section 255(4):
The Tribunal clarified that its jurisdiction under section 255(4) is confined to deciding points of difference according to the majority view. The Tribunal cannot entertain additional grounds not related to the points of difference originally heard. The Tribunal cited various judicial pronouncements, emphasizing that the language of section 255(4) is plain and unambiguous, and does not permit the admission of additional grounds beyond the original points of dispute.

3. Difference between Orders under Section 254(1) and Section 255(4):
The Tribunal distinguished between the powers under sections 254(1) and 255(4). While section 254(1) allows the Tribunal to entertain additional grounds during the hearing, section 255(4) is limited to passing consequential orders based on the majority view of the points of difference. The Tribunal reiterated that the additional ground raised by the assessee could not be entertained under section 255(4) as it was not part of the original points of dispute.

Conclusion:
The Tribunal declined to admit the additional ground raised by the assessee, emphasizing that its jurisdiction under section 255(4) is limited to deciding points of difference according to the majority view. The Tribunal highlighted the distinction between the powers under sections 254(1) and 255(4), concluding that the additional ground could not be entertained as it was raised after the conclusion of the original hearing. The appeals were disposed of in these terms.