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TMI Blog2020 (2) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the present case, did have the jurisdiction to entertain the two additional grounds raised by the appellants in the context of payment of the amount of ₹ 52,14,543/- as short terms capital gain and the addition of amount of ₹ 5,90,093/- to the business income in the return filed by the appellant. However, in the present case the ITAT after holding that the CIT (Appeals) lacked the jurisdiction to entertain the two additional grounds has proceeded to observe that even on merits, the CIT (Appeals) was wrong in exercising discretion in favour of the appellants or accepting the case of the appellants on merits. - TAX APPEAL NO. 67 OF 2014 - - - Dated:- 5-2-2020 - M. S. SONAK SMT. M. S. JAWALKAR, JJ. Mr. Rohan Deshpande, Advocate with Adv. Palyekar Vinita Vishram for the Appellant. Ms. Susan Linhares, Standing Counsel for the Respondents. Judgment (Per M. S. Sonak, J) : Heard Mr. Rohan Deshpande, who appears along with Ms. Vinita Palyekar for the appellant and Ms. Susan Linhares, the learned Standing Counsel for the Respondents. 2. This appeal was admitted on 25/11/2014 on the following substantial questions of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal to the Commissioner of Income Tax (Appeals) CIT (Appeals). 6. The appellant, also instituted an appeal against the order dated 12/12/2011 made under section 143(3) of the said Act by the Assessing Officer. 7. Both the aforesaid appeals were taken up for consideration by the CIT (Appeals) and disposed of by a common order dated 26/9/2013. The CIT (Appeals) dismissed the appellant's appeal against order dated 29/3/2012 in relation to the provisions of section 154 of the said Act. However, the CIT (Appeals) allowed the appellant's appeal against order dated 12/12/2011 made under section 143(3) of the said Act. 8. Aggrieved by the aforesaid, the respondent/Revenue filed an appeal to the Income Tax Appellate Tribunal (ITAT), which has, by the impugned judgment and order dated 11/4/2014 set aside the common order dated 26/9/2013 made by the CIT (Appeals). Hence the present appeal on the aforesaid substantial questions of law. 9. Mr. Rohan Deshpande, the learned counsel for the appellant submits that the impugned judgment and order made by the ITAT is contrary to the law laid down by the division Bench of this Court in Commissioner of Income Tax Vs. Pruthv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in new grounds only if the ground so raised could not have been raised at a stage when the returns were filed or when the assessment order was made or when such a ground became available on account of change of circumstances or law. She submits tat the Memo of Appeal to which reference is made by Mr. Deshpande has to be construed liberally and so construed, it is apparent that the respondent/revenue had attacked the order of the CIT (Appeals) on merits as well. In any case, she submits that the rulings in Gurjargravures (supra) and Godze (supra) were clearly attracted to the facts and circumstances of the present case and the CIT (Appeals), erred in ignoring the same. For all these reasons Ms. Linhares submitted that the substantial questions of law framed in this appeal may be answered against the appellant/assessee and in favour of the the respondent/revenue. 14. Rival contentions now fall for our determination. 15. As regards the factual aspects, the same, have been set out to the extent necessary for the determination of the substantial questions of law on which this appeal was admitted, at the very outset. There is no doubt that when the appellants filed their returns be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the Hon'ble Apex Court in the case of Jute Corporation of India Ltd. (supra), wherein the three Judge Bench, observed that apparently the view taken by the two Judge bench in Gurujargravures (supra) appears to be in conflict with the view taken by the three Judge Bench in Kanpur Coal Syndicate (supra) which is again a decision of the three Judge Bench of the Hon'ble Apex Court. Accordingly, it was held that the view of the Larger bench in Kanpur Coal Syndicate (supra) prevails, in which, it has been categorically held that the power of the appellate authorities is co- terminus with the power of the assessing authorities. 21. Apart from the aforesaid, the Division Bench of this Court in Pruthvi Brokers (supra) by reference to the portion in Gurujargravures (supra) upon which specific reliance was placed by Ms. Linhares, has held that such portion which was also relied upon by ITAT, does not curtail the ambit of the jurisdiction of the appellate authorities. Such portion does not restrict the new/additional grounds that may be taken by the assessee before the appellate authorities, to those that were not available when the return was filed or even when the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the CIT (Appeals), in the facts and circumstances of the present case, did have the jurisdiction to entertain the two additional grounds raised by the appellants in the context of payment of the amount of ₹ 52,14,543/- as short terms capital gain and the addition of amount of ₹ 5,90,093/- to the business income in the return filed by the appellant. However, in the present case the ITAT after holding that the CIT (Appeals) lacked the jurisdiction to entertain the two additional grounds has proceeded to observe that even on merits, the CIT (Appeals) was wrong in exercising discretion in favour of the appellants or accepting the case of the appellants on merits. 25. Mr. Deshpande submits that there was no challenge to the merits on behalf of the respondent/revenue which according to him is evident from the memo of appeal which is placed on record at pages 128 to 130 of the paper Book in the present appeal. Ms. Linahres, however, contests this contention. 26. Upon perusal of the Memo of Appeal, we agree with Ms. Linhares that the same is not required to be construed in some restricted sense, but rather, the same is required to to be construed liberally. So constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order dated 11/4/2014 made by the ITAT but we also set aside the order dated 26/9/2013 made by the CIT (Appeals), restricted only to Tax Appeal no.18/MRG/2012-13 and restore only the said appeal to file of the CIT (Appeals) for deciding whether the additional grounds/claims raised by the appellant deserve to be allowed on 'merits'. The CIT (Appeals) in pursuance of this remand, shall, however, not revisit the issue of jurisdiction but only examine the additional grounds/claims on merits. Further, it is clarified that we have not interfered with the order dated 26/9/2013 made by the CIT (Appeals) in Tax Appeal no.20/MRG/2012-13 against order dated 29/3/2012 rejecting the appellant's application under section 154 of the said Act, which, in any case, had not even been challenged by the appellant before the ITAT. 31. The parties to now appear before the CIT (Appeals) on 9/3/2020 at 11 a.m. on which date, the CIT (Appeals), may indicate to the parties the date on which the Tax Appeal No.18/MRG/2012-13 which is now restored to its file, will be heard and disposed off. We clarify that in so far as the issue of exercise of discretion and the merits of the two additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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