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TMI Blog2005 (11) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances, the Tribunal ought to have allowed the additional grounds raised by the assessee which was pure question of law raised on the basis of Hon'ble Supreme Court decision settling the law on the issue ? (iii) If the additional grounds are taken into consideration whether levy of interest under ss. 234A and 234B, without there being specific directions to that effect could be upheld in view of the decision of the Supreme Court in CIT vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200: (2001) 247 ITR 209(SC) ? (iv) In the facts and circumstances, the finding that the explanation of Smt. Huma about the receipt of cash gifts from her parents at the time of her marriage and thereafter during the previous year 1991 in which marriage took place until the assessment order 1993-94 has been rejected contrary to material on record and without holding any enquiry into correctness of explanation when the initial burden of proving the source of instalment (sic'investment) has been discharged by the assessee, the evidence placed by her goes unrebutted ? (v) If the answer to the aforesaid question is found to be negative whether the additions could be made on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in substance is common and arise from common facts and circumstances from an order of Tribunal which is common and proceeds on same grounds for both years so far as controversies raised in these two appeals. 6. We shall presently notice that some of the aforesaid questions are not voluntarily framed and some of the questions in appeal No. 84 of 2004 are really not related to the case of Zakir Hussain. Because of the common order and the facts, common set of questions were framed both in the case of Zakir Hussain as well as in the case of Smt. Huma Hussain. It would be appropriate for the purpose of present appeal to redraft the questions giving out the crux of the controversy in these two appeals relating to Zakir Hussain. 7. The first controversy relates to demand on account of charge of interest under ss. 234A and 234B though, the same had not been taken in the memo of appeal before the Tribunal, but the assessee has sought permission to raise additional ground challenging the validity of charge of interest relying on the ratio of Supreme Court decision in the case of CIT vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200: (2001) 247 ITR 209(SC) laying down condition precedent befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the income declared by her as a protective measure was assessed in the hands of the present appellant as a result of induction of Smt. Huma in respect of these assessments. However, the said income was assessed substantively in the hands of assessee-appellant in respect of asst. yr. 1995-96 also. As a result of the aforesaid assessment of income on substantive basis in the hands of Zakir Hussain, the following third substantial questions of law arises in this regard in this appeal : "(iii) Whether in the facts and circumstances of the case there was any material on record on the basis of which the unexplained investment, disclosed by Smt. Huma, explanation about which was not accepted by AO, could be assessed in the hands of Zakir Hussain ?" 11. So far as the first two questions are concerned, it is pointed out by the learned counsel for the appellant that the power to permit additional grounds to be raised vests in Tribunal. Subject to permission of Tribunal, additional plea can be raised at any time. No period of limitation is prescribed for raising additional plea. The Tribunal could not have refused to consider the question of grant of permission for raising addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject-matter of reference under s. 66 of the IT Act, 1922. The Tribunal as well as the Hon'ble High Court had rejected the application for referring the aforesaid question as a question of law to the Court. The Hon'ble Supreme Court while rejecting the appeal of the Revenue stated as under : "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 the contention relating to the cash credits which was not made the subject-matter of a ground in the memorandum of appeal. It cannot be said that in accepting the contention of the assessees that the cash credits represented income from the business withheld from the books, the Tribunal made out a new case inconsistent with the assessee's own plea. In any event the Tribunal is not precluded from adjusting the tax liability of the assessee in the light of its findings merely because the findings are inconsistent with the case pleaded by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the order of the CIT(A). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier." 16. Expressing the similar view in the case of Jute Corporation of India Ltd. vs. CIT (1990) 88 CTR (SC) 66: (1991) 187 ITR 688(SC), the apex Court observed that the appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the appellate authority in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO. The Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretary of the Government of Tamil Nadu & Ors. (1994) 92 STC 631(Mad). In the said case, the Court held that since the filing of additional grounds was a part of the continuous process of filing the appeal and the appeal having been filed in time, the additional grounds which could not be put forth before the lower authority or along with the appeal, could be raised subsequent to the filing of the appeal. The Court further observed that there was no time-limit for filing additional grounds, nor was there a rigid rule in that regard. We are in complete agreement with the view expressed by the Madras High Court." In the said case, the Court held that since the filing of additional grounds was a part of the continuous process of filing the appeal and the appeal having been filed in time, the additional grounds which could not be put forth before the lower authority or along with the appeal, could be raised subsequent to the filing of the appeal. This Court has taken the same view as has been taken by Madras High Court in JDB Srinivasan's case (supra). 20. As a result of aforesaid discussion, we are in respectful agreement with the view expressed by the Madras High Court in JDB S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the AO has passed orders 'charge interest under all the aforesaid sections'. The order to charge interest has to be specific and clear, as for that matter any order to charge any tax, penalty or fine. It is different thing as in the case of Tej Kumari Devi where there is an order levying interest but it left the calculation to the office. The assessee must be made to know that the AO after applying his mind has ordered the charging of interest and under which of the sections of the Act. Interest is payable under various provisions like for default or delay in furnishing the return of income [ss. 139(8) and 139(9)] and also under the various sections for default in payment of advance tax (ss. 215, 216, 217, 234B and 234C). A notice of demand is somewhat like a decree in a civil suit which must follow the order. When a judgment does not specify any amount to be charged under any particular section, the decree cannot contain any such amount. Similarly when the assessment order is silent if any interest is leviable, the notice of demand under s. 156 of the Act cannot go beyond the assessment order and the assessee cannot be served with any such notice demanding interest. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 29th Feb., 2000. The same is being taken on substantive basis in the hands of Shri Zakir Hussain in view of the findings of the assessment order of Smt. Huma." Likewise for the asst. yr. 1995-96 in the case of the appellant, it was recorded : "In the case of Smt. Huma, wife of assessee, assessment at Rs. 1,91,075 was made on protective basis vide order dt. 29th Feb., 2000. The same is being taken on substantive basis in the hands of Shri Zakir Hussain, in view of the findings of the assessment order of Smt. Huma." This necessarily requires going through the assessment orders in the case of Smt. Huma. So far as explanation submitted by Smt. Huma about the gift received by her, investment made by her are concerned, the same has not been accepted. Without prejudice to the contention raised in appeals filed by Smt. Huma about the merit or finding recorded in her case, for the purpose of present appeal, assuming that the explanation submitted by Smt. Huma about her source and her investment were not found satisfactory by the AO, it is apposite to notice the finding recorded by AO and subsequently affirmed by the appellate authorities. It reads as under : "In the absence of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her income from undisclosed sources for such assessment years. 29. The second part of finding is that because explanation about source of investments in the name of Smt. Huma is unsatisfactory, it is income of her husband from undisclosed sources. In other words, the AO on rejecting the explanation about sources of investment, automatically linked the source of such investment by wife to be arising from undisclosed income of her husband. No link whatever has been referred to suggest that the investment claimed by Smt. Huma about which her explanation was found to be unsatisfactory in anyway related to her husband. Surprisingly, even the search was not directed against the present appellant Zakir Hussain. It was directed against Shri Hafiz Mohd., father of the present appellant. The residential premises of Shri Hafiz Mohd. was searched. The unexplained documentary evidence collected by the Revenue during the course of search does not point finger to any other person who could remotely claim investments claimed by Smt. Huma to be hers and while specific provisions of the IT Act envisages that where an assessee is found to be in possession of any valuables or having made certain inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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