M/S Vmt Spinning Co Ltd v. Commissioner Of Income Tax Range I Ludhiana & ANR









 

 
















!"

#$%
&













"'!( !"'




















 





  






  
 











  
)

&
 *+
) 
 ,
,

-.  /

 ,
 *+
) 
 ,
 0
,+






! 
"

 #








$ 

#
% &



 

 

'
(




 

  
)



)



)
 0
,+/


&

 



*+,-






 ./+.
0 
 
1

 2
$ 
 


 
3
*,,4-,5 














6&






 6 
%  
7

  
0 
 
1

 6 2



 


  $

6  
8 

$
"-

 Whether in facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that the Grounds of Appeal raised before the ITAT could not be entertained as it was not raised as additional grounds of appeal without seeking leave of the court even though the same was part of grounds of appeal filed before the ITAT by the Appellant ?

 Whether in facts and circumstances of the case order of the ITAT is contrary to the ratio of the Apex Court in the case of National Thermal Vs. CIT 229 ITR 383   
 $

 


 -8 
8 
$ 
$



* 

 
3

8






*/.**,,/


$




$ 

$



6&







 
6 


  






  
0 
 
1


  2
$ 
$
&
 $

 


 


-
6 

 6 - 
6&

 



6&





  


 
6 

 6 


 

  


$ 
 


  
 
 


6
 
 $


68 
&









 
:





6

 &
 


 


$
 



6 





 





 



6  
6 


  

 6 


' 










 6 
 



 6 



  
$ 

 

6 6 
6 
 


  



 
8

6&



 
 
  


$

 





 6 




6



 &
8

$ 

 
  

  





 
$ 
6


 
' 


$ 


  &




8




 
 

9 
 



6 




 6 
 


'  

;'
< 





                !"##

 $% 

&'

  (   )*+,-. */0 1 ,-0 2

'  
6
< 




%

 #   !    )'/*'.03, 100* 



'  
 




4     %

  #

  !)'//,.'+0 1'03567.

= 


 6 




*>?0.2


 
$ 
  








 

 6 
&

 



 #
 


*>?0.2






"
-

'83(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit." 

 -8 
  

 


$ 
@
 





 #
 A

&
$ 
 $


 6 
 





 
 $



  

' 
 &


 

 



 

 &




&
$ 

 

6
 
 
$ 


 $




 6 


*>?


 
$ 


 


 

 6  &




..
 
*/






0
 6 2
 ./+=
0 
 
1

2

   


 $


 6 
$ 

 





*>?
0.2


 
&



 
6 



..
 
*/


"-
** 9 :( $$& The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule: 5   the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.

?

!!!!!!!!  '+5  # (#   (& The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income2tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them, or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.


..



  



$ 





 6 

 
6 

 &




#

  



 


 6 
$ 
 





 

&




#

  



#
6&



 6 


..

*/

8 
6 



 




 
 

6 

 6 



6
  

  
  
 


6


 6 
 

  
 &


 
  
 &
$  

 &
  

6
 


 
 
 6




 








*>?
0.2


 
 

..
 
*/





$ 
6
 
&



$


 6 
$ 


 


 

 6  &









 6

 


 6 
$ 

> 



' 
$ 


  

 $

6
 
6 

$

  
8 

$
 






6 


B


6
 

   
$
 



 
$ 

 

  


 


 





;    59  % <    %

 #   !*++=''+ 10=0 %
$ 

 


8
$

 6 

' 

  

8 
$
$ 
$
 


 
6 

   
6
$ 
$ 


6


  

 6  &







"-

8 Under Section 254 of the Income2tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non2 taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item.

We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income2tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross2objections 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.

- In the case of Jute Corporation of India Ltd. v. C.I.T. . this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an 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 Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income2tax Officer. This 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 facts.

The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. , The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income2tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised.

But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.

= The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.





6 
 $






&



 6 
$ 
 


'  
 *>?




 
8 

$
 

 

 



$ 



6
 
 


 $


 6 
$ 
6

 

 
&


 




6 


  
$

 $
$ 
$

 

6


 $
 


 6 
$



 $

 $




 $

$



6
 
6 

 
'  





$

 6 
$
&
8 


 

8 
$
 

 

 
$ 
$
&






 




 
8 
$
 
6
 $

6
 


 &


  6  &






 

 

    

 

  

    

  

 

   

      

        

 

     

 



  
    



   

 
          

 



  

     

 

 



       





    







 
       !    

     

 



    





 



 

 



  "   

 

   

   





     

    #       "  

 



    

  

$      %  #     







     

 

    

          

  

$    

 

 

  

 

 

 



  

   

   $  





  &



  

    



 



 

 
'  






12
3# C

$ 
$

 
 
  $
6&
 


 : %:



< %

 #   !&'//,'+' 13+0 567, $

$



"-

3 When the facts raised in the instant appeal are examined in the light of the principle laid down by the Hon'ble Supreme Court, then no doubt it felt that all the facts relevant to the additional ground seeking depreciation allowance are on record. The Tribunal is only to decide the claim of depreciation made by the assessee as per the Income Tax Act, 1961. The additional ground could be raised by the assessee in appeal before the Tribunal under Rule 11 of the Appellate Tribunal Rules, 1963. In the present case, the following additional ground has been raised, as is evident from the perusal of the additional ground of appeal, dated 92 422004 (annexure A26):

That the W.D.V. of the assets in respect of old as well as new units of Pahwa Steel and Tube Mills (P. S. T. M.), a unit of Avery Cycle Industries Ltd., has not been brought forward correctly from the preceding assessment year. 8 In view of the above, the impugned order dated 292102 2004, (annexure A2l) passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, is hereby set aside and the Tribunal is directed to deal with the aforementioned additional ground in accordance with law."

/ 


 


9
7


 

7 6&
< 



3%4%
 1#2215

+1%

67

2772#



8
9"((:;
"((

:

"

$

$



"-

In view of the above decisions, it is quite clear that the Appellate Tribunal has jurisdiction to permit additional grounds to be raised before it even though these may not arise from the order of the Appellant Assistant Commissioner, so long as these grounds are in respect of the subject2matter of the entire tax proceedings.  





6 





6 

'  
$


6&

 6 




      

 

    &

'&

( 




   



  
    



  !!"  

#



  $%&'()%*+,'(+) "............where, in an appeal to the Appellate Assistant Commissioner by the assessee against an order of assessment, the assessee has not questioned the decision of the Income2tax Officer on a point decided, and the Appellate Assistant Commissioner has not in his order considered that point, the assessee is not entitled to question the decision of the officer on that point in an appeal to the Appellate Tribunal against the order of the Appellate Assistant Commissioner and the Tribunal is not entitled to allow the assessee to agitate the question under the guise of granting leave under rule 11 of the Income2tax (Appellate Tribunal) Rules, 1963." 


  

  &

 # 

 -       ./  0    1 2 $  * +  + ( 



  
  0  , - 



"..   )

., "*+ In this connection a reference may also be made to the Income Tax (Appellate Tribunal) Rules, 1963 which have been framed under section 255(5) of the Income Tax Act, 1961. Under Rule 11 of the Appellate Tribunal Rules the appellant shall not, except by leave of the Tribunal urge or be beard in support of any ground not set forth in the memorandum of appeal but the Tribunal in deciding an appeal shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule; (underlining * ours); provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being beard on that ground. So that in deciding the appeal the Tribunal is not restricted to the grounds which are taken or which have been allowed to be taken in the memorandum of appeal."

 $   "..

   

    

  "..

 

  
   

       /     
   $           

 $ 

 

 

        
   

 

     



  $ 

 



  
  

 



 





         

 

  
   

  "..


 

 


     

   

               

 



  

  
  

  

 

 
  

   



  

 



  

 



  ! 

 




 

    





 
    

  

  

  





  

 

 

..

%   "..  



/   
  

  

 
      

       

 

       

/      
  $    
  

       



/

 

     

   
    

 


  

 

   

             

 

 

  

    $  

   
         

  

 



   

 

 



 

  

   

   

 

 
,3#
%2*7
7
$ 
$ 
$

 

6&

 6 

 6 

 

  



6
 



 
6&



$
$ 
 

 $

 6 
 










       &

 

           
&

      



   
   







  

        

  
 0

   +    


     

 



           $    .1    

      

      
   
   

 

   

 

   



   

   

        $ 
, -



     

    





    

  



 2 

.* 

 $
,-  



 

  

  



 

   

     $

  

  

 


    /  

   

  $
,-  





 &



#


&

 

           

  

   

     
  % 

 

   



 



   

  
  

  



 

  $
,- &

 

&

 

 

  

   


'  
 






3
,3

*7
7

$ 
$ 
$

 

6&

 6 



 

 


 






$
$ 
 
  



$


 

 
 
6 

< 








*+,-


 



 $


6 
$ 
 $



$
 $

6  
8 

$

 


 -

 $


 -
 

6&
 







6


 -

 

 
$


 
6&



  
 


$ 
6



 
8
 
 

 
$ 
$
&








 





 

6








$


 
6&


$ 
&





C

 

 6  &



 





$
 




 6 
 
' 



  



 


 6 
$ 
6

 6&

 



.= 




 





























9
,

-. 
;































 ,






































9
 0
,+
;



















 









,14#
"'13/
!"'

>    Whether speaking/reasoned?

√Yes/No.

Whether reportable?

√Yes/No.