By these two reference applications made under section 256(1) of Income-tax Act, 1961 (' Act '), Commissioner has required Tribunal to refer following question of law, which is stated to arise out of order of Tribunal passed in IT Appeal Nos. 1143 and 1826 (Delhi) of 1979 and 696 (Delhi) of 1982 relating to assessment years 1975-76 and 1976-77. " Whether, on facts and in circumstances of case, Tribunal was right in law in entertaining additional ground which had not been raised before lower authorities? " 2. By this consolidated order, Tribunal had not disposed of appeals but had considered petitions filed by assessee seeking permission of Tribunal to raise certain additional grounds of appeal in both years under consideration. These additional grounds of appeal were as under: IT Appeal No. 1143 (Delhi) of 1979 for assessment year 1975-76: " 1. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief owing to fact that cash compensatory support received by appellant of amount of Rs, 85,70,740 was in nature of capital receipt and that it was not taxable, notwithstanding fact that same has been treated as ' revenue receipt ' and included in taxable profits of appellant. 2. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief owing to fact that ' drawback of duty ' of amount of Rs. 13,30,484, was in nature of capital receipt and that it was not taxable notwithstanding fact that same has been treated as ' revenue receipt ' and included in taxable profit of appellant. 3. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief, owing to fact that ' income from sale of import entitlement ' of amount of Rs. 27,18,920 was in nature of capital receipt and that it was not taxable notwithstanding fact that same has been treated as 'revenue receipt' and included in taxable profit of appellant. 4. That without prejudice to any of aforesaid grounds of appeal, appellant also claims that learned assessing authority failed to apply provisions of section 10(17B) of Income-tax Act, which, as matter of duty cast on it and determine that none of amounts indicated above could be included by virtue of those provisions in total income of appellant. 5. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority failed to determine correct head of income under which impugned receipts were to be brought to tax as income and that, in any event, they erred in law in bringing them to tax under head ' Profits and gains of business or profession '. 6. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority erred in taxing grants made by Government from Consolidated Fund of India for specific purpose---for export promotion, under various schemes to exporters, ignoring that same are not taxable as per charging provisions of Income-tax Act 1961, thus, violating article 266(3) of Constitution of India." IT Appeal No. 696 (Delhi) of 1982 for assessment year 1976-77: " 1. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief, owing to fact that ' cash compensatory support ' received by appellant of amount of Rs. 86,73,677 was in nature of capital receipt and that it was not taxable, notwithstanding fact that same has been treated as ' revenue receipt ' and included in taxable profits of appellant. 2. That learned ITO and Commissioner (Appeals) failed to recognise and give legal relief, owing to fact that ' drawback of duty ' of amount of Rs. 18,17,445 was in nature of capital receipt and that it was n o t taxable notwithstanding fact that same has been treated as ' revenue receipt ' and included in taxable profit of appellant. 3. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief, owing to fact that ' income from sale of import entitlement ' of amount of Rs. 47,38,202 was in nature of capital receipt and that it was not taxable notwithstanding fact that same has been treated as ' revenue receipt ' and included in taxable profit of appellant. 4. That without prejudice to any of aforesaid ground of appeal, appellant also claims that learned assessing authority failed to apply provisions of section 10(17B) of Income-tax Act, which, as matter of duty cast on it and determine that none of amounts indicated above could be included by virtue of those provisions in total income of appellant. 5. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority failed to determine correct head of income under which impugned receipts were to be brought to tax as income and, that in any event, they erred in law in bringing them to tax under head ' Profits and gains of business or profession '. 6. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority erred in taxing grants made by Government from Consolidated Fund of India for specific purpose--for export promotion---under various schemes to exporters, ignoring that same are not taxable as per charging provisions of Income-tax Act, 1961, thus, violating article 266(3) of Constitution of India." 3. Tribunal considered submissions made by parties regarding t h e admission of these additional grounds. On behalf of revenue, it was contended that these additional grounds should not be allowed to be raised because they were not pure questions of law and would involve investigation into fresh facts. It was also contended that these grounds had not been raised before authorities below and, hence, they could not be raised before Tribunal. On behalf of assessee, it was urged that grounds raised did not involve any investigation into fresh facts. After considering rival submissions, Tribunal held as under: " We have carefully considered rival submissions from arguments advanced on behalf of both parties; it would be apparent that there is cleavage of judicial opinion on question whether in case like present one, additional grounds should be admitted or not. admitted position is that grounds which are sought to be raised now were not raised either before Income-tax Officer or before Commissioner (Appeals). decision of Madras High Court in CIT v. Indian Express (Madurai) (P.) Ltd. is in favour of assessee. In that judgment, judgment in IRC v. Sneath [1932] 17 TC 149 (CA) had been followed. That judgment was followed by Supreme Court itself in S.S. Gaggil v. Lal & Co. judgments of Gujarat High Court, Bombay High Court, Delhi High Court and Andhra Pradesh High Court are against assessee. We may make it clear that controversy before Delhi High Court in judgment in CIT v. Anand Prasad was not similar to controversy involved in this case. Since matter in issue is controversial, we feel that matter should be decided in favour of assessee, and more so when only question of admission of additional grounds of appeal was involved. In fact, if there are two different opinions, opinion which favours assessee is generally followed. If any authority is necessary, reference is invited to Supreme Court judgment in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. It is unnecessary to go into facts of each and every case relied on by both parties. Each case has to be determined on facts of that case. On consideration of all facts and in attendant circumstances of case, we admit additional grounds of appeal and direct that additional grounds of appeal should be heard along with other grounds raised in appeals filed by assessee. assessee is not guilty of any latches." 4. Tribunal also admitted additional grounds raised by departmental representative, which was as follows: " appellant, named above, seeks leave of Hon'ble Tribunal in support of following additional ground, which is not set forth in memorandum of appeal: ' That learned Commissioner (Appeals) erred in not disallowing weighted deduction under section 35B of Act on commission of Rs. 12,10,893 on export sales even though this amount was allowed by ITO, since such commission is not entitled to weighted deduction in view of judgment of Madras High Court reported in CIT v. Southern Sea Foods (P.) Ltd. [1983] 140 ITR 855 ' " 5. Tribunal directed that additional grounds raised by assessee as well as departmental representative were admitted and they will be heard along with other grounds of appeal taken by parties. 6. It is under these circumstances that Commissioner has sought reference on question already given above. learned counsel for assessee has, however, contended that no reference can be made to High Court in respect of order passed by Tribunal, admitting certain grounds of appeal as appeal filed before Tribunal has not at all been disposed of and even additional grounds admitted, have not been considered or disposed of. It was submitted by him that order passed by Tribunal could not be considered to be order under section 254 of Act. He referred to language of section 256 and submitted that question of law can arise only if there is order passed under section 254. He pointed out that appeal before Tribunal had not been disposed of. It was argued by him that section 254 gives power to Tribunal to pass order on appeal. He pointed out that term ' thereon ' as used in section 254 has been interpreted by Courts and that term refers to subject-matter of appeal before Tribunal. It was contended by learned counsel that question of law can be raised and considered only if Tribunal passes order disposing of particular appeal and does not merely pass interlocutory order or intermediate order. 7. departmental representative, on other hand, submitted that Tribunal has chosen to pass well discussed and detailed order and this order has to be under section 254, though it has not finally disposed of appeal before Tribunal. It was also submitted that question raised was clearly question of law as would be apparent from order of Tribunal, where conflicting case laws have been discussed and particular view has been preferred as there was clear conflict. 8. We have carefully considered rival submissions. question which w e have to decide at this stage is ' whether order passed by Tribunal, admitting certain additional grounds of appeal but not disposing of appeal, is order under section 254 in respect of which reference could be made '. At this stage, Tribunal has admitted additional grounds and he has directed that these grounds should be taken into consideration when appeals are heard. Such order, in our opinion, could not be considered as order under section 254. None of these grounds have been decided by Tribunal and those matters are still pending. As held by Courts, Tribunal hears appeals and passes orders thereon. question of consideration of additional grounds would obviously arise as and when Tribunal decides those matters, one way or other. Questions of law about merits as well as regarding admissibility, may be taken and may be considered at that stage. learned counsel for assessee was fair enough to submit before us that his client would not raise any question of limitation, if such question is raised at time of making reference application when final order of Tribunal is passed. He also submitted that it would be open to parties to contend whether question raised is question of law, which should be referred. 9. At this stage, we may take note of certain case laws which throw light on issue before us. Bombay High Court in case of Trikamlal Maneklal, In re. [1958] 33 ITR 725, held as under: " There is nothing express or implicit in sections 33(4) and 66(1) of Income-tax Act which requires that order passed by Appellate Tribunal against which application for reference of question of law to High Court may be made must be order finally disposing of assessment of assessee. order that Appellate Tribunal passes under section 33(4) on appeal from order of Appellate Assistant Commissioner may be one confirming order of Appellate Assistant Commissioner or setting aside his order or remanding proceedings to him; and against any such order, which so far as Tribunal is concerned decides questions about rights or obligations of assessee, application for making reference under section 66(1) may lie." In case of Munna Lal & Sons v. CIT [1965] 55 ITR 508 (All.), question arose---whether question of law could arise from order of Tribunal, directing ITO to make report on certain points. In that case, Tribunal, directing ITO to make report on certain points. In that case, facts were that after order of Tribunal was passed calling for report from ITO, assessee applied for reference from order, while application for reference was pending. ITO sent his report and, after hearing parties, Tribunal passed order setting aside assessment and remanding case for fresh disposal. question whether appeal to AAC was competent itself, was not raised at first stage but was raised by assessee on hearing of case after report was received. Tribunal referred matter about competence of appeal on pending reference application. On these facts, High Court held that order passed by Tribunal calling for report was not order under section 33(4) of Indian Income-tax Act, 1922 (' 1922 Act '), and no reference would lie from such order. High Court further held that even if it was assumed that this was order under section 33(4), question regarding competence of appeal did not arise from earlier order. While holding as above, High Court held that there can be only one order under section 33(4) and that is final order and interlocutory orders could not be considered as orders under section 33(4). High Court went on to hold that where Tribunal remands matter for further enquiry and report, it could not be considered as final disposal of matter and no reference can be raised at that stage. However, if Tribunal set aside order directing authorities below to pass fresh order after making necessary enquiries, such order would be order under section 33(4) and reference would lie against such order. 10. Somewhat similar matter came up before Calcutta High Court in case of CIT v. Calcutta Discount Co. Ltd. [1971] 82 ITR 941. In this case, High Court held that word ' thereon ' in section 33(4), is restricted to subject-matter of appeal before Tribunal and subject-matter of appeal consists of memorandum or grounds of appeal, additional grounds, if any, allowed by Tribunal and grounds, if any, urged by or on behalf of respondent to support order under appeal. In case, revenue wanted to raise few additional grounds of appeal and made formal application to Tribunal for that purpose. Tribunal rejected application and additional grounds mentioned therein remained outside purview of subject-matter of appeal. High Court held that since additional grounds did not form part of subject-matter of appeal, Tribunal's order refusing to entertain them was not order under section 33(4) at all and as such, no reference to High Court against that order was permissible. High Court, therefore, held that Tribunal was not competent to entertain any application under section 66(1) of 1922 Act with respect to Tribunal's order not allowing revenue to raise certain additional grounds. 11. above matter in Calcutta Discount Co. Ltd.'s case was taken to Supreme Court and judgment of Supreme Court in CIT v. Calcutta Discount Co. Ltd. [1973] 91 ITR 8. One of questions raised before High Court, which was considered by Tribunal, was whether Tribunal was competent to entertain application under section 66(1) in respect of interlocutory order of Tribunal, not permitting revenue to raise additional grounds. However, when matter was heard by Supreme Court, revenue did not seek to get any answer on this question. Supreme Court held that AAC had rightly directed some more enquiries to be made and in view of that matter, question was required to be answered. While doing so, their Lordships observed: " Had we come to conclusion that decision of Income-tax Appellate Commissioner was wrong in law we would have had no hesitation in answering three questions formulated above in favour of revenue and directing Tribunal to reconsider matter. . . ." However, in view of their decision on main question, other question was not answered. 12. Now in present case, there is no order of Tribunal rejecting petition for admission of additional grounds which possibly raise question that so far as those grounds were concerned, Tribunal has barred consideration and, therefore, question of law could be raised. This is case where certain additional grounds were raised and effect of order of Tribunal is that these grounds could have to be considered by Tribunal along with other grounds as if these grounds were already taken at time of filing of appeal. assessee may take ground in original memorandum of appeal of any question, even if it has not been considered by lower authorities and it would be open to Tribunal to consider facts and circumstances and to decide matter on merits having regard to circumstances in which question was not raised on earlier occasions and has been raised before Tribunal. Thus, whole matter is open before Tribunal and there is no disposal of any ground whatsoever and, in view of this, it has to be held that there is no order under section 254. reference application filed by Commissioner cannot, therefore, be entertained and no question could be considered for getting opinion of Hon'ble High Court. At this stage, we are not holding whether question of law, as raised by revenue, should ultimately be referred or not and it would be open to parties to raise questions after order of Tribunal under section 254, finally disposing of appeals are passed and Tribunal will consider questions which may include similar question as above on merits. reference applications are, therefore, rejected. *** COMMISSIONER OF INCOME -TAX v. GEDORE TOOLS (INDIA) (P) LTD.