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TMI Blog1993 (4) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... of Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 in support of the admissibility of the additional ground. On the merits of the claim that the surtax liability is deductible under section 37 of the Act, the ld. representative for the assessee drew our attention to the following decisions of the Hon'ble Gauhati High Court :--- (i) In the case of Makum Tea Co. (India) Ltd. v. CIT [1989] 178 ITR 453. (ii) In the case of Doom Dooma Tea Co. Ltd. v. CIT [1989] 180 ITR 126. 10. The ld. Departmental Representative on the other hand, vehemently objected to the admission of the additional ground at the stage of the Tribunal. She drew our attention to the decision of the Hon'ble Supreme Court in the case of Addl. CIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1. She also pointed out that the income-tax and surtax proceedings are separate proceedings, that the records are also maintained separately, and, therefore, the additional ground involves investigation of fresh facts and therefore should not be admitted. 11. The ld. representative for the assessee filed copies of the surtax return for the assessment year under appeal and the relevant statements in support of his claim tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Legislature intended to entrust the task of reviewing assessments made under the Act. Under the scheme of the Act, which gives only the High Courts and the Supreme Court the power of interference on questions of law, the Tribunal is constituted the final authority on facts and the penultimate authority on law touching the assessment and other proceedings under the Income-tax Act. The primary purpose of the statute is to levy and collect the income-tax. This is based on the cardinal principle, which has been incorporated as a veritable constitutional provisions, that no tax can be levied or collected save under authority of law. The task of an appellate authority under the taxing statute, especially a non-departmental authority like the Tribunal, is to address its mind to the factual and legal basis of an assessment for the purpose of properly adjusting the taxpayer's liability to make it accord with the legal provisions governing his assessment. Since the be-all and end-all of the statutory provisions, especially those relating to the administration and management of income-tax is to ascertain the taxpayer's liability correctly, to the last pie, if it were possible, the various p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inent judges, that is, an expression which is not employed by the provision conferring the jurisdiction in the Tribunal. Indeed, in the Mahalakshmi Textile Mills' case [1967] 66 ITR 710 (SC) in one of the passages to which we have made reference, the Supreme Court has understood the Tribunal's appeals 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 the Nelliappan's case [1967] 66 ITR 722 (SC) as well as the Mahalakshmi Textile Mills' case, the Supreme Court had even used phrases which are reminiscent of the language which English judges have used while describing a tax appeal. The Supreme Court observed that the Tribunal is not precluded from ' adjusting ' the tax liabilities of the assessee in the light of its findings merely because the findings are inconsistent with the case pleaded by the assessee. English judges have regarded a tax appeal, not as a lis, but as a process of further adjustment of taxpayer liability --- vide Lord Hewart in Rex v. Special Commissioner of Income-tax [1935] 20 TC 381 (CA) ; Greer L. J. in IRC v. Sneath [1932] 17 TC 149 (CA) ; Romer IL J. in the same case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Supreme Court cited above was rendered in the context of section 33(4) of the Income-tax Act, 1922, since the same is pari materia with section 254 of the present Act, the dictum of the Supreme Court was applicable. 17. We may now briefly refer to the decision of the Supreme Court in the case of Jute Corpn. of India Ltd. relied upon by the ld. representative for the assessee. This decision assumes importance since in that decision, the Supreme Court had occasion to consider its earlier decision in the case of Gurjargravures (P.) Ltd. which was relied on by the ld. D. R. before us. In that case, the assessee did not claim deduction in respect of purchase tax liability in the return for the assessment year 1974-75. The assessee did not claim the liability since it took the view that it was not liable. Subsequently, the assessee was assessed to purchase tax, but the assessment was disputed by the assessee. In the meantime, an appeal had been filed against the income-tax assessment, to the Appellate Assistant Commissioner. Since, the assessee had not made a claim for deduction of the purchase tax liability in the return, it raised an additional ground before the Appellate As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is open before the AAC and that his powers are the same as that of the assessing authority. We have already seen that the Madras High Court, following the Supreme Court judgment in Mahalakshmi Textile Mills Ltd.'s case, has taken the view that there is nothing in the Income-tax Act which restricts the Tribunal to the determination of the questions raised before the assessing authority and that it was open to the Tribunal to consider all matters relating to the assessment, whether of fact or law. The dispute before the Tribunal, as held by the Madras High Court is not a dispute or ' lis ' in the sense in which the same is understood in adversary proceedings such as proceedings under the Code of Civil Procedure. The same was the view taken by the Patna and Calcutta High Courts as also the Special Bench of the Tribunal, as we have noticed earlier. The judgment of the Supreme Court in Gurjargravures (P.) Ltd.'s case relied on by the ld. D. R. before us is not relevant in the context of the dispute raised in the present case. That was a case, where the assessee claimed deduction under section 84 of the Act, and it was an admitted position that there were no materials before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 37 of the Act is also in favour of the assessee, as laid down by the Hon'ble Gauhati High Court in the case of Doom Dooma Tea Co. Ltd. 18. The Kerala High Court had occasion to deal with the question regarding the power of the Tribunal to entertain or admit additional grounds raised before it for the first time. This was in the decision reported in the case of CIT v. Kerala State Co-operative Marketing Federation Ltd. [1992] 193 ITR 624 (Ker.). The High Court after referring to the decision of the Supreme Court in the case of Jute Corpn. of India Ltd. posed to itself the following questions :--- (i) Has the Tribunal the same powers as that of the CIT (A) as laid down by the Supreme Court in Jute Corporation case ? (ii) Is the Tribunal entitled to admit a new ground which has not been raised before the lower authorities ? After posing to themselves, these questions at page 636 of the report, Their Lordships went on to hold as under : " These are the questions which require answers in these references. The Tribunal gets power under section 254(1) of the Income-tax Act which provides that the Tribunal may, after giving both parties to the appeal an opportunity of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this decision, the Kerala High Court clearly held that once any new or additional ground is raised before the Tribunal, the Tribunal is " duty bound to entertain that ground and render a decision thereon either themselves or by remanding the matter if further investigation into the fact is necessary ". [Emphasis supplied]. If, as held by the Kerala High Court, the Tribunal is duty bound to entertain the additional ground, we are unable to appreciate how we can shy away from the duty and refuse to entertain the additional ground raised by the assessee in the cross objection before us. 19. For these reasons, we admit the ground relating to the claim for deduction of the surtax liability. 20. The next point to be considered as to what order should be passed on the merits of the additional ground. The papers filed before us show that the assessee has submitted a return of chargeable profits under the Surtax Act on 28-12-1987. This prima facie establishes that the assessee is liable to pay surtax. It cannot be a gainsaid that the liability is a statutory liability. However, we do not know and no materials were placed before us to show whether any assessment has been made under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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