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TMI Blog2001 (12) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, therefore, the same deserve to be admitted. Additional grounds are merely elaboration of ground No. 1 taken in appeal. Learned Authorised Representative drew our attention to the decision in the case of Krishan Gopal Bhadra vs. ITO (1980) 124 ITR 580 (Cal), in which it was held that an assessee is entitled to raise a pure question of law for the first time before the Tribunal though it did not raise before ITO/AAC. The Tribunal is under statutory obligation to entertain the plea and decide the same. He also relied on the decision in the case of Addl. CIT vs. East Coast Flour Mills (P) Ltd. AIR 1994 SC 1513, in which it was held that a question of law can be raised for the first time before the Tribunal. He relied on the decision in the case of State of Punjab vs. Baldev Singh (1999) 157 CTR (SC) 3 and pleaded that assessment proceedings in this case have taken place under Chapter XIV-B and it is incumbent upon the Tribunal to go into this aspect whether various safeguards provided under s. 132 have been observed during search operation and, if not, then the search will become illegal, assessment framed under s. 158BC(c) arise only in consequence of a search. Sec. 158BC(c) is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Rakesh Gupta is not correct appreciation of law in respect of admission of additional grounds. The Tribunal had relied on the case of Dr. Partap Singh Anr. vs. Director of Enforcement Ors. (1985) 46 CTR (SC) 319 : (1985) 155 ITR 166 (SC). With due respect, the said decision does not relate to admissibility of additional grounds but to the legality of search. In case of search, reasons to believe are to be recorded by the officer who has issued warrants. Similarly, in case of proceedings under s. 148 the reasons to believe are to be recorded by the AO and whenever an appeal regarding legality of reassessment on the basis of reasons to believe is taken, the assessee is not required to challenge it before the AO. This aspect has not been dealt with by the Tribunal in the aforesaid case. The Tribunal has wide powers to entertain grounds of appeal. Rule 11 of the Income-tax (Appellate Tribunal) Rules has not restricted the powers of the Tribunal to the grounds of appeal arising out of order of the AO. Under proviso to this rule, the Tribunal is empowered to take any ground of appeal but the only requirement is that the affected party should be given sufficient opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the action of acquisition proceedings was divided in two parts : first pre-acquisition, i.e., initiation of acquisition proceedings and recording of reasons by the competent authority; and post-initiation, i.e., actual initiation of acquisition proceedings, once the competent authority was of the opinion that the proceedings were to be initiated on the basis of reasons to believe that the conditions stated under s. 269C(1) were satisfied. Proceedings for acquisition actually get initiated after compliance of provisions of s. 269D. Under s. 269G, an appeal could be filed before the Tribunal challenging the acquisition. In a number of decisions, the Tribunal has passed order and entertained grounds of appeal that the acquisition proceedings were illegal, as there was no reason to believe in compliance with the conditions as laid down under s. 269C (i.e. pre-initiation). We, therefore, reject the plea of learned Departmental Representative and permit the assessee to raise the additional grounds. 4.1 The main objection of learned Departmental Representative is that the facts relating to the compliance of various provisions of s. 132 are not on record and are to be investigated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any ground, if law supports it, even if there is no material to support it. The Tribunal is a final fact finding authority. 4.3 In the case of Hukumchand Mills Ltd. vs. CIT (1967) 63 ITR 232 (SC), the Revenue was permitted to take a new ground for the first time. It was held that the rules framed by the Tribunal for regulating their own procedure including the procedure relating to additional ground are merely self-regulating in character and did not circumscribe or control the powers of the Tribunal as an appellate authority. This judgment, which deals with admission of additional ground, has not been considered in the case relied upon by learned Departmental Representative. On this aspect, the Special Bench in the case of Indo Java Co., while discussing the observations in the cases of ITO vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC) and CIT vs. Bansi Dhar Sons (1986) 50 CTR (SC) 250 : (1986) 157 ITR 665 (SC), held as under: "......The next point, therefore, which requires consideration is as to whether the subject-matter of appeal is immutable or it can be enlarged or expanded. But before we do that, we may look at the nature of the power of the Tribunal under s. 254 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not agree with the observations made in the said case that additional grounds involve verification of facts from the file of Director of IT(Inv.) and investigation of facts confrontation of the concerned record with the concerned persons, etc. which would not be proper and warranted in the case at the stage of the Tribunal. In the case of National Thermal Power Co. Ltd., the apex Court has held that: "......the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." The apex Court has accepted the discretionary power of the Tribunal in respect of additional grounds. It has observed that the additional ground has to be allowed by the Tribunal where a question of law arises out of facts which are on record of the IT authorities. 4.4 In the case of Rakesh Gupta, the Tribunal has not considered the meaning of the word 'record'. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powered to entertain appeal, etc. by condoning the delay. Therefore, we can entertain additional grounds, if there is sufficient reason to condone the delay. The provision for condoning the delay is made for rendering substantial justice. In this case, the assessee has explained the reasons for filing additional grounds late due to the decision of Third Member, which is sufficient reason to file additional ground after filing the appeal. We cannot reject the admission of additional grounds merely on technical consideration. The approach of the Tribunal should be justice-oriented and it should not avoid its duty on technical considerations. In the case of Collector, Land Acquisition vs. Mst. Katiji Ors. (1987) 62 CTR (SC) 23 : (1987) 167 ITR 471 (SC), it was held as under: "When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay." We cannot ignore the observations of Madras High Court in the case of CIT vs. Indian Express (Madurai) (P) Ltd. (1983) 33 CTR (Mad) 314 : (1983) 140 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is all the while a party, in a manner of speaking and is also at the same time, an authority vested with the responsibilities of drawing up the assessment and laying down the correct liability, it would not be in accord with the scheme of the Act to impose restrictions on the ambit and power of the Tribunal by such like notions as finality, subject-matter of appeal, and the like. The statutory provision in s. 33(4) of the 1922 Act and s. 254 of the 1961 Act which confers appellate jurisdiction on the Tribunal clearly lays down that the Tribunal, in disposing of an appeal, may pass such orders thereon as it thinks fit. Excepting that the expression 'subject-matter' has taken the fancy of many learned and eminent judges, that is an expression which is not employed by the provision conferring the jurisdiction in the Tribunal. Indeed in CIT vs. Mahalakshmi Textile Mills (1967) 66 ITR 710 (SC) in one of the passages to which we have made reference, the Supreme Court has understood the Tribunal's appellate jurisdiction as jurisdiction to pass 'such orders on the appeal as it thinks fit', without adding any gloss of their own to the expression. In CIT vs. Nelliappan (1967) 66 ITR 722 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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