Jehangir H C Jehangir v. The Income-tax Officer-12(3)(1)
[Citation -2014-LL-1107-37]

Citation 2014-LL-1107-37
Appellant Name Jehangir H C Jehangir
Respondent Name The Income-tax Officer-12(3)(1)
Relevant Act Income-tax
Date of Order 07/11/2014
Judgment View Judgment
Keyword Tags substantial question of law • opportunity of being heard • subordinate authority • additional grounds • tax liability

IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1208 OF 2012 Mr. Jehangir H C Jehangir Appellant Versus Income Tax Officer 12(3)(1) ..Respondent Mr. F. V. Irani with Mr. Rahul Hakani i/b. K. J. Hakani for Appellant. Mr. P. C. Chhotaray for Respondent. CORAM: S.C. DHARMADHIKARI AND A. A. SAYED, JJ. DATE : 7th NOVEMBER, 2014 P.C.: This Appeal by Assessee challenges that part of Tribunal's order by which it refused to admit additional ground and raised by Assessee. That was in relation to payment of Rs.7.41 lakhs and traceable to section 194 and 194J of Income Tax Act, 1961. Tribunal refused to admit this question as in its opinion, it does not arise out of order of First Appellate Authority. 2] After hearing Mr. Irani, learned counsel, appearing on behalf of Assessee, in support of this Appeal and Mr. Chhotaray, learned counsel, appearing for Revenue, we are of opinion that Appeal deserves 1/6 ::: Uploaded on - 14/11/2014 ::: Downloaded on - 18/04/2020 17:01:09 ::: *2* 907.itxa1208.12 to be admitted. It is admitted on following substantial question of law: Whether on facts and circumstances of case and in law, ITAT was right in rejecting Additional Grounds of Appeal raised by Appellant? 3] Since Tribunal has not allowed Assessee to raise this additional ground, no useful purpose will be served by keeping this Appeal pending on our file. That is why we have heard it and with consent of parties, we dispose of it finally. 4] Mr. Irani, submits that Tribunal's approach is in direct contradiction with binding judgment of Hon'ble Supreme Court in case of National Thermal Power Limited Company V/s. Commissioner of Income Tax. said decision is reported in (1998) 229 ITR 383. 5] On other hand, Mr. Chhotaray, would submit that Tribunal was justified in conclusion that it reached because really speaking there was no controversy or issue raised on this question or ground. Inviting our attention to findings of Assessing Officer, Mr. Chhotaray submits that Assessee cannot make any grievance because it has accepted before Assessing Officer that payment 2/6 ::: Uploaded on - 14/11/2014 ::: Downloaded on - 18/04/2020 17:01:09 ::: *3* 907.itxa1208.12 would attract this provision and they were obliged to deduct tax at source. In such circumstances, it was not issue before Commissioner. If it was not issue raised, then, same has been rightly disallowed to be raised by Tribunal. No substantial question of law, therefore, arises for determination in this Appeal and it should be dismissed. 6] Hon'ble Supreme Court in case of National Thermal Power (supra) has held that under section 254 of Income Tax Act, 1961, Tribunal after giving opportunity of being heard to both parties, pass such orders as it thinks fit. In dealing with power of Tribunal under section 254 of Income Tax Act, 1961, Hon'ble Supreme Court held as under: Under section 254 of Income Tax Act, Appellate Tribunal may, after giving both parties to appeal opportunity of being heard, pass such orders thereon as it thinks fit. power of Tribunal in dealing with Appeals is thus expressed in widest possible terms. The purpose of assessment proceedings before taxing authorities is to assess correctly tax liability of Assessee in accordance with law. If, for example, as result of judicial decision given while Appeal is pending before Tribunal, it is found that non taxable item is taxed or permissible deduction is denied, we do not see any reason why Assessee should be prevented from raising that question before Tribunal for first time, so long as relevant facts are on record in respect of that item. We do not see any reason to restrict power of Tribunal under section 254 only to decide 3/6 ::: Uploaded on - 14/11/2014 ::: Downloaded on - 18/04/2020 17:01:09 ::: *4* 907.itxa1208.12 ground which arise from order of Commissioner of Income Tax (Appeals). Both Assessee as well as Department have right to file Appeal/Cross objections before Tribunal. We fail to see why Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. In case Jute Corporation of India Ltd. V/s. CIT (1991) 187 ITR 688, this Court, while dealing with powers of Appellate Assistant Commissioner observed that appellate authority has all powers which original authority may have in deciding question before it subject to restrictions or limitations, if any, prescribed by statutory provisions. In absence of any statutory provision, appellate authority is vested with all plenary powers which subordinate authority may have in matter. There is no good reason to justify curtailment of power of Appellate Assistant Commissioner in entertaining additional ground raised by Assessee in seeking modification of order of assessment passed by Income Tax Officer. This Court further observed that there may be several factors justifying raising of new plea in Appeal and each case has to be considered on its own facts. Appellate Assistant Commissioner must be satisfied that ground raised was bona fide and that same could not have been raised earlier for good reasons. Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting Assessee to raise additional ground in accordance with law and reason. same observations would apply to Appeals before Tribunal also. view that Tribunal is confined only to issues arising out of Appeal before Commissioner of Income Tax (Appeals) takes too narrow view of powers of Appellate Tribunal [vide, e.g. CIT V/s. Anand Prasad (1981) 74 ITR 254 (Guj) and CIT V/s. Cellulose Products of India Ltd. (1985) 151 ITR 499 (Guj) (FB)]. Undoubtedly, Tribunal will have discretion 4/6 ::: Uploaded on - 14/11/2014 ::: Downloaded on - 18/04/2020 17:01:09 ::: *5* 907.itxa1208.12 to allow or not allow new ground to be raised. But where Tribunal is only required to consider question of law arising from facts which are on record in assessment proceedings we fail to see why such question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess tax liability of Assessee. 7] In light of authoritative pronouncement and which was binding on Tribunal, in terms of Article 141 of Constitution of India, we do not see how Tribunal could have disallowed Assessee from raising this ground. It may be that Tribunal is inclined not to grant request of Assessee because eventually ground may have to be answered against Assessee on merits. However, that is totally irrelevant consideration. We are on power of Tribunal to permit raising of such ground and which may or may not be arising from order of First Appellate Authority. In instant case, that issue is specifically taken up before Assessing Officer. That Commissioner may or may not have rendered any view on it as First Appellate Authority, does not mean that Tribunal was precluded in law from considering same after it was specifically raised by Assessee before it. This approach of Tribunal and being contrary to express language of statute and interpreted in binding judgment of Hon'ble Supreme Court that we are of opinion that Tribunal's 5/6 ::: Uploaded on - 14/11/2014 ::: Downloaded on - 18/04/2020 17:01:09 ::: *6* 907.itxa1208.12 order cannot be sustained in law. question of law as framed above, is answered in favour of Assessee and against Revenue. Tribunal's order dated 16th May, 2012 and impugned in this Appeal is quashed and set aside. This ground is restored to file of Tribunal and as result thereof, Income Tax Appeal No.2050/Mum/2009 for assessment year 2005 06 shall be re heard by Tribunal on merits and in accordance with law. We keep open all contentions of parties on same. Since, Mr. Irani has fairly stated that Tribunal need not reopen issue formulated by it with regard to applicability under section 80IB(10) of Income Tax Act, 1961, our direction shall stand confined to question formulated by us above. Tribunal shall admit this question only to its file and hear and decide Appeal in accordance with law after giving opportunity to both sides. Income Tax Appeal No.2050/Mum/2009 stands restored to file of Tribunal only for this limited purpose. Our order and direction does not express any opinion on merits of this ground. (A. A. SAYED, J.) (S.C. DHARMADHIKARI, J.) wadhwa 6/6 Uploaded on - 14/11/2014 Downloaded on - 18/04/2020 17:01:09 Jehangir H C Jehangir v. Income-tax Officer-12(3)(1)
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