LexJUTE CORPORATION OF INDIA LTD. versus COMMISSIONER OF INCOME TAX AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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JUTE CORPORATION OF INDIA LTD.
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COMMISSIONER OF INCOME TAX AND ANR.
SEPTEMBER, 4 1990
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[K.N. SINGH, T.K. THOMMEN AND KULDIP SINGH, JJ.]
Income Tax Act, 1961: Section 251-Appeal before Appellate
Assistant Commissioner-Additional grounds raised by assessee which
were not raised before the Income Tax Officer-Whether could be
entertained.
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In respect of the assessment for the assessment year 1974-75, the
appellant-assessee preferred an appeal before the Appellate Assistant
Commissioner. During the hearing of the appeal, the assessee raised an
additional ground as regards its liability to Purchase Tax and claimed a
deduction of Rs.U,54,995. After giving an opportunity of hearing to
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the Income Tax Officer, the Appellate Assistant Commissioner allowed
the said claim.
The Revenue preferred an appeal before the Income Tax Appel-
late Tribunal. The Tribunal held that the Appellate Assistant Commis-
sioner had no jurisdiction to entertain any additional ground not
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raised before the Income Tax Officer and set aside the order of the
Appellate Assistant Commissioner.
The assessee's application for making reference to the High
Court was refused hy the Tribunal. The High Court also rejected the
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assessee's applicati!ln for calling the statement of the case and reference
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F from the Tribunal. Hence, this appeal by special leave.
Disposing of the appeal, the Court,
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HELD: I. I The declaration of law is clear that the power of the
Appellate Assistant Commissioner is co-terminus with that of the
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Income Tax Officer. If that be so, there appears to be no reason as to
why the appellate authority cannot modify the assessment order on an
additional ground even if not raised before the Income Tax Officer. No
exception could he taken to this view as the Act does not place any
restriction or limitation on the exercise of appellate power. Even
otherwise an Appellate Authority while hearing appeal against the
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order of a subordinate authority has all the powers which the original
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jUTE CORPORATION v. C.i.T.
341
authority may have in deciding· the question before it subject to the
restrktioris or limitation if ally prescribed by the siatutory priJvisioris,
in the absence of any statutory prdvisfons to the cotittary the Appellate
Authority is vested with all the pieiuiry powers which the silbordlrtate
authority may have iri the matter. [i55G-il; 1S6A-B]
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Li If the Appellate Assistant Commissioner is satisfied he would 8
he acting within his jurisdiction iii considering the question so raised iri
all its aspects. Of course, while permitting the assessee hi ~aise ati
additional ground, the Appellate Assistant Commissioner sliould exer•
cise his discretion iii accordance with law aild reason. He ffiiist be
satisfied that the ground raised was bona fide arid that the same cimid
not have been raised earlier for good reasons. The satisfaciioii of the C
Appeliate Assistant Commissioner depends Upon ihe facts aild
circumstances of each case and no rigid priiidpies or any hiird and i'asi
rules can be laid down for this purpose. [i571)-F)
Commissioner of Income Tax v. Mc Millan & Co., [i<isli] 33
I. T.R, 182; Commissioner of Income Tax, l/i/· v. Kanpur Coal [j
Syndicate,, [1964] 53 I.T.R. 225; Kedarnath lut.e Mfg. Co. Ltd. v.
Commissioner of Income Tax (Central), Calcutta, [197i] 82 L'{.R. 363;
relied on,
Commissioner of Income Tax, Bombay v. Shtipporji Pal/on Ji
Mistry, [1962] 44 I. T.R. 891; Addi. Commissioner of income Tax E
Gujarat v. Gurjargravures P. Ltd., [1978] l!l I. t.R. 1; disiirtguished.
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Riii Kumar Snina/v. Commissioner of Income Tax, West Bengal III;
[ 1976] 102 I. T .R. 525, approved.
Narrondas Manordass v. Commissioner of Income Tax, [i951] 3i
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I. T.R. 909 referred to.
2. lit the .insiant case, the assessee was assessed io Purchase tax.
The appellant disputed the demand. and filed an l\ppeal before tile
Appellaie Authority and obtained stay order. The assessee thereafter
claimed deduction for the amount of Rs.H,54,995 towards his liability
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to pay Purchase Tax as deduction for the assessment year 197~75, The
assessee had not actually paid the Purchase Tax as it had oiiiiiilied stay
from the Appellate Authority; nonetheiess its liability to pay tax Hds'
led; and it was entitled to deduction of Rs.1.1,54,995. [1588,C)
3. Since the view taken by thdncoiiie tax Ajijieiiale TfibUiial ts
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