1972 (4) TMI 13 - HC - Income Tax

Estate Duty Act, 1953 - additional grounds - issue regarding status neither raised before Assistant Controller nor in grounds of appeal to the Board Board would be justified in refusing to entertain the issue raised as additional grounds

Issues Involved:
1. Whether the Board acted within their powers when they declined to admit the fresh contentions raised at the time of hearing of the appeal before them.
2. Whether the assessment is invalid because of failure to issue notice to Srinivasan, the eldest son of the deceased.
3. Whether the assessment of the estate on the basis that it solely belonged to the deceased is valid in law.

Issue-wise Detailed Analysis:

1. Whether the Board acted within their powers when they declined to admit the fresh contentions raised at the time of hearing of the appeal before them:

The court reframed the first question to focus on whether the Board exercised proper judicial discretion in declining to admit the fresh grounds raised during the appeal hearing. According to section 63(3) of the Estate Duty Act, the Board has the discretion to hold further inquiries and pass orders as it thinks fit. The court referenced several precedents to establish that appellate bodies have broad jurisdiction to entertain new grounds of appeal, even if not raised earlier, provided they exercise their discretion judicially.

The court cited *Ramgopal Ganpatrai & Sons v. Commissioner of Excess Profits Tax*, emphasizing that appellate courts have full jurisdiction to reverse or modify an order on any legal ground, even if not raised in the lower court. Similarly, in *New India Life Assurance Co. v. Commissioner of Income-tax*, the Bombay High Court equated the powers of the Appellate Tribunal to those of a court of appeal under the Civil Procedure Code.

However, the court also noted that the discretion to admit new grounds is not absolute and must be exercised judicially. In *Phool Chand Gajanand v. Commissioner of Income-tax*, the Allahabad High Court held that the Tribunal must consider the reasons for not raising the grounds earlier and that ignorance of the law is no excuse. The court concluded that the accountable person did not provide a sufficient explanation for failing to raise the new grounds earlier, thus justifying the Board's decision to refuse to entertain them.

2. Whether the assessment is invalid because of failure to issue notice to Srinivasan, the eldest son of the deceased:

This issue was considered only if the first question was answered in favor of the assessee. Since the court upheld the Board's discretion in the first issue, this question did not arise for consideration.

3. Whether the assessment of the estate on the basis that it solely belonged to the deceased is valid in law:

Similarly, this issue was contingent on the first question being answered in favor of the assessee. Given the court's decision on the first issue, this question also did not arise for consideration.

Conclusion:

The court upheld the Central Board of Direct Taxes' decision, affirming that the Board properly exercised its jurisdiction and discretion in rejecting the additional grounds of appeal. Consequently, the other two questions did not require consideration. The court answered the first question in favor of the Revenue and returned the reference in T.C. No. 114 of 1969, awarding costs to the Revenue in T.C. No. 300 of 1966.

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