2005 (11) TMI 53 - HC - Income Tax

Power of tribunal additional ground - Assessing Officer denied the benefit of section 11 to the assessee on the ground that the assessee had violated the provisions of sections 13(1)(c)(ii) and 13(1)(d) of the Act. In appeal before the Commissioner of Income-tax the assessee appears to have alternatively claimed benefit under section 10(22A) of the Act which too was rejected by the Commissioner. In a further appeal before the Tribunal the assessee was allowed to urge the additional claim for benefit under section 10(22A) of the Act in exercise of the Tribunal s power under rule 11 of the Income-tax (Appellate Tribunal) Rules 1963. - Inasmuch as the Tribunal had allowed the assessee to raise an additional ground and make a claim under the provisions of section 10(22A) it had not committed any error of law nor did the order passed by the Tribunal give rise to any substantial question of law

Summary

Issues:
1. Denial of benefit under section 11 on the grounds of violating sections 13(1)(c)(ii) and 13(1)(d) of the Act.
2. Rejection of alternative claim under section 10(22A) by the Commissioner of Income-tax.
3. Tribunal allowing the assessee to raise an additional claim under section 10(22A) using rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963.
4. Tribunal remitting the matter back to the Assessing Officer for re-examination.

Analysis:
The Assessing Officer denied the benefit of section 11 to the assessee based on violations of sections 13(1)(c)(ii) and 13(1)(d) of the Act. The Commissioner of Income-tax also rejected the alternative claim under section 10(22A) made by the assessee. However, the Tribunal intervened and allowed the assessee to raise the additional claim under section 10(22A) using its power under rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. The Tribunal directed the Assessing Officer to re-examine the claim under the said provisions and pass fresh orders after providing the assessee with an opportunity to be heard.

During the hearing, the counsel for the Revenue and the respondent-assessee presented their arguments. The High Court concluded that the assessee's entitlement to the benefit of section 11 had been finally denied, and the assessee did not challenge this denial by filing an appeal. However, the assessee was allowed to make an alternative claim under section 10(22A) before the Tribunal, as evidenced by the order of the Commissioner of Income-tax. The High Court held that the Tribunal did not err in allowing the assessee to raise an additional claim under section 10(22A) and investigate it further. It was determined that no substantial question of law arose from the Tribunal's order, and thus, the appeal was dismissed.

In summary, the High Court upheld the Tribunal's decision to allow the assessee to make an additional claim under section 10(22A) and dismissed the appeal questioning the correctness of the Tribunal's order. The High Court found that the Tribunal had the jurisdiction to entertain the alternative claim, and no substantial question of law necessitated the admission of the appeal.