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TMI Blog1979 (2) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... t based on the same reasons as recorded by the ITO for issuing notice under s. 147(b) and therefore the assessment under consideration may please be quashed 2. Alternatively That the notice under s. 147(b) is bad in law because no second notice under s. 147(b) can be issued for the same matter. It is submitted that for the same matter the ITO has earlier issued under s. 147(b) and completed the assessment on the return filed in response to the first notice. It is therefore played that the proceedings started under s. 147(b) for the second time is bad in law and therefore the assessment made on the basis of the second notice under s. 147(b) is bad in law and deserves to be quashed. 3. Alternatively That the notice under s. 147(b) is bad in law as it is time barred because the Tribunal Order relevant to the asst. yrs. 1964-65 to 1966-67 dt. 31st Aug., 1973 does not lift the bar of time limit as provided under s. 148r/w s. 150. The appellant further craves your Honour's indulgence to allow the following addl. Plea Ground No. 3. 4. Alternatively As the loans advanced to the appellant by M/s. Udaipur Mineral Development Syndicate Pr. Ltd. Was in the ordinary course of mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arajuly Naidu and Another vs. CIT Madras (2) the amounts in question could not be assessed in the hands of the HUF as it was not the shareholder of company concerned. The same arguments were advanced before the learned AAC also. Both the authorities, however, followed Tribunal's decision aforementioned relating to the asst. yrs. 1964-65 to 1966-67 in which the decisions referred to by the learned counsel and also another Supreme Court decision in the case of Shri Rameshwarlal Sanwarmal (3), has been duly considered and it was held that the amounts in question had been rightly assessed in the hands of the assessee HUF. The learned AAC also referred to Bombay High Court decision in the case of H.A. Sharh Co. vs. CIT Bombay(4), according to which the earlier decision on the same question of the Supreme Court, namely, 82 ITR 629(3), being still good law was bound to be followed. 5. The assessee has come up in appeal to the Tribunal with the grounds of appeal mentioned in Para 2 above. Permission has also been sought to raise the addl. grounds mentioned above. We shall take up first the assessee's request for admission of the additional grounds. 6. It is urged by the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re High Court decision in the case of CIT vs. Sujirkar's Tile Works Pvt. Ltd. (8), Gujarat High Court decision in CIT vs. Steel Cost Corporation (9), Andhra Pradesh High Court decision in CIT vs. Krishna Mining Co. (9) and Madras High Court decision in CIT vs. Tuttapullam Estate (10). Elaborating his argument he said that the question of taxability of the deemed dividend had been under consideration from the very beginning. the assessee had been claiming exemption on the basis of the Supreme Court decision referred to above. The same issue was taken up in appeal to the learned AAC and is at present before the Tribunal. The non-taxability of the deemed dividend has been thus under consideration at all stages and forms the subject matter of the appeal before the Tribunal. The assessee is now claiming non-taxability on a different ground. Reasons have been given for not raising this plea at earlier stages. In such circumstances, in the interest of substantial justice, this additional plea should be allowed to be raised. 7. The learned Department Representative opposed the admission of the additional grounds. With reference to the additional grounds. With reference to the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by him." R. 11 of the Tribunal Rules, 1963 itself provides in clear terms that the appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set-forth in the memorandum of appeal and in disposing of the appeal the Tribunal shall not be confined to the grounds set-forth in the memorandum of appeal or taken by leave of the Tribunal under this rule, provided that the Tribunal shall not raise its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground. The position thus is that the Tribunal is competent not only to permit an assessee to raise an additional ground but it is also competent to permit a party to raise any question of law or fact for the first time before it so long as it is within the subject-matter of the appeal before the Tribunal provided that the other party has been given adequate opportunity to express its opinion thereon. 10. In the case of Hukumchand Mills Ltd.(6) their Lordships were concerned with the determination of the written down value in the case of a company which was incorporated in the native State of Indore. Before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done. It is necessary to state that rr. 12 27 are not exhaustive of the powers of the Tribunal. The rules are merely procedural in character and do not, in any way, circumscribe or control the power of the Tribunal under s. 33(4) of the Act. We are accordingly of the opinion that the Tribunal had jurisdiction to entertain the argument of the Department in this case and to direct the ITO to find whether any depreciation was actually allowed under the Industrial Tax Rules and whether such depreciation should be taken into consideration for the purpose of computing the written down value." 11. In S. Nelliappan's case (7) the question of accessibility of unexplained cash credits was raised for the first time and their Lordships held that the Tribunal was right in entertaining the additional ground. the relevant observations are as follows: "In hearing an appeal the Tribunal may give leave to the assessee to urge grounds not set forth in the memorandum of appeal, and in deciding the appeal the Tribunal is not restricted to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal. The Tribunal was, therefore, competent to allow the assessee to raise th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AAC. The subject-matter of the appeal before the Tribunal can only be the decision express or implied of the AAC and the jurisdiction of the Tribunal is restricted to the subject-matter of the appeal. Once the subject-matter of the appeal is determined, the Tribunal has very wide powers to deal with all questions of fact and law pertaining to that subject-matter of appeal and it can allowing a new question of law to be raised in support of the same claim for relief. On the facts found, if a new aspect of law can be applied, it can allow it to be urged even though that aspect of the law was not urged either before the ITO or the AAC. The Tribunal is not restricted to the very grounds of appeal on which originally the decision of the AAC was sought to be challenged when the appeal was filed. It has wide powers to allow the party to add to or alter the grounds of appeal subject, of course, to the opportunity being given to the other side of being heard on this new ground of appeal. these are the restrictions and limitations within which the Tribunal can function and can exercise its jurisdiction but it must be emphasised that the jurisdiction of the Tribunal which is restricted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on record supporting such a claim. In subsequent years relief under s. 84 had been allowed to the assessee. The AAC dismissed the assessee s appeal on the ground that the question of error on the part of the ITO did not arise as no claim for exemption under s. 84 had been made before the ITO. On further appeal the Tribunal held that since the entire assessment was open before the AAC, there was no reason for his not entertaining the claim and directed the ITO to allow the appropriate relief. Their Lordships held that as neither was any claim made before the ITO regarding the relief under s. 84 nor was there any material on record in support thereof, and from the mere fact that such a claim had been allowed in subsequent years it could not be assumed that the prescribed conditions justifying a claim for exemption under s. 84 were also fulfilled, the Tribunal was not competent to hold that the AAC should have entertained the question of relief under s. 84 or to direct the ITO to allow the relief. Their Lordships further observed that merely because the ITO brings an item to tax, he cannot be deemed to have considered its non-taxability though no such claim was made before him by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue could not be raised at earlier stages. The concerned Company M/s. Udaipur Mineral Development Syndicate Pvt. Ltd. has been claiming from the very beginning that it was doing money lending business but this plea was not accepted by the Department and the income from interest was being assessed under the head 'other source.' Eventually, in the appeals relating to asst. yr. 1952-53 to 1966-67 which were disposed of by Delhi Bench 'B' of the Tribunal by its consolidated order dt. 30th Sep., 75 it was held that the said company had been carrying on money lending business. we reproduce below a portion of para. 33 thereof: "I am in agreement with the conclusion of the learned Accountant Member. Though the main business of the assessee is that of soap stone mining, it is clearly carrying on a money lending business also. The huge amounts of interest received and paid, the substantial amount of interest-bearing loans and advances shown in the balance sheets and the facts that, except for the advance to SG, none of the other advances have been treated to be not in the course of the business for the purpose of disallowing interest on borrowed capital, all indicate beyond doubt that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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