DCIT, Coimbatore V. Suguna Foods Limited, Coimbatore

ITA 1396/CHNY/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2650 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 04-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Court: TRIBUNAL
• Department Lawyers: V VIVEKANANDAN
• Assessee Lawyers: N ANUSH SHANK E R
• Keywords: Additional evidence; Right to appeal
• Section: 45(2); 80IB; 246

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , # '$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NO. 1396/MDS/2015 / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF M/S. SUGUNA FOODS LIMI TED, INCOME-TAX, CORPORATE CIRCLE-1, COIMBATORE. ( /APPELLANT) V. 5 TH FLOOR, JAYA ENCLAVE, 1057, AVINASHI ROAD, COIMBATORE 641 018. PAN AADCS0655F RESPONDENT) / APPELLANT BY : SHRI V. VIVEKANANDAN, CIT / RESPONDENT BY : SHRI N. ANUSH SHANKER, CA ! / DATE OF HEARING : 04.11.2015 '# ! / DATE OF PRONOUNCEMENT : 14.01.2016 % / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 18 .3.2015. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - - ITA 1396/15 2 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE ASSESSING OFFICER HAS RIGHTLY RESTRICTED T HE CLAIM OF DEDUCTION U/S.80IB(10). 3. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT THE R ESTRICTION ON CLAIM OF DEDUCTION U/S.80HHIB(10) WAS MADE BY TH E ASSESSING OFFICER AFTER ANALYZING THE SIMILAR CASES ONLY SINCE THE ASSESSEE HAS NOT PRODUCED THE REQUISITE DETAILS . 4. THE LEARNED CIT9A) ADMITTED FRESH EVIDENCE WITHO UT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER IN VIOLATION OF THE PROVISIONS OF RULE 46A(3) OF THE IT RULES 1962 AND THEREFORE THE ORDER OF THE CIT(A) IS NOT SUSTAINABL E TO LAW. 5. THE LEARNED CIT(A) WRONGLY COMPARED THE MARKET P RICES OF POULTRY PREMIX PRODUCTS WITH THE NET MARGIN, WIT HOUT GRANTING AN OPPORTUNITY TO THE ASSESSING OFFICER FO R POINTING OUT THIS ERRONEOUS COMPARISON AND DELETED THE LAWFU L DISALLOWANCE OF EXCESSIVE CLAIM MADE BY THE ASSESSE E U/S.80IB. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND IS FULLY INTEGRATED POULTRY PRO CESSOR COMMITTED TO THE FOOD SERVICE INDUSTRY. INTEGRATIO N, TYPICALLY ENCOMPASSING ENTERPRISES RANGING FROM BREEDING, FEE D MILLING AND CONTRACT GROWING TO WHOLESALE AND RETAIL MARKET ING. THE END TO END POULTRY FARMING COMPRISES OF INDEPENDENT BUS INESS ACTIVITIES. EACH ACTIVITY HAS BECOME A SEPARATE SP HERE OF WELL- DEFINED SCIENCE. THE ASSESSEE HAS INITIATED THE IN TEGRATION PROCESS IN THE INDUSTRY AND COVERS EVEN THE GRANDPA RENT STAGE ALSO. THE ASSESSEE IS ALSO ENGAGED IN POULTRY CO MPOUND - - ITA 1396/15 3 PREMIX THROUGH ITS MANUFACTURING FACILITY LOCATED A T PONDICHERRY, WHICH HAS BEEN SET UP IN THE YEAR 2003-04 RELEVANT TO THE ASSESSMENT YEAR 2004-05 AND CLAIMED DEDUCTION OF ` 11,86,74,886/- U/S.80IB OF THE ACT. HOWEVER, THE A SSESSING OFFICER RESTRICTED THE DEDUCTION TO ` 2,11,30,061/- ON THE REASON THAT PREMIX MANUFACTURED IS INTERMEDIATE PRODUCT NO T HAVING AN INDEPENDENT MARKET. 3.1 ACCORDING TO THE AO, PREMIX PRICE CHARGED IS AR BITRARY FOR THE FOLLOWING REASONS AS THE PROFIT MARGIN VARY YEA R TO YEAR WHILE - NO SIGNIFICANT CHANGE IS NOTICED IN THE ASSETS EMPLOYED OR OPERATIONS - THIS HAS RESULTED IN ARTIFICIALLY INFLATING THE C OST OF PREMIX THAT ULTIMATELY INCREASES THE COST OF FEED M ILL. THE AO OBSERVED THAT ROI FROM PREMIX UNIT IS 3189% AS AGAINST ROI OF 13.9% AT ENTERPRISE LEVEL. PROFIT MARGINS O F ASSESSEES FEED MILLS ARE NOT AVAILABLE AND ACCORDINGLY COMPAR ED TWO INDEPENDENT COMPANIES MANUFACTURING POULTRY FEED VI Z., M/S. SKM ANIMAL FEEDS AND FOODS (INDIA) LTD. AND M/S. SH ANTHI FEEDS PVT. LTD. AND NOTICED THE PROFIT MARGIN BETWE EN 2% TO 3%. ACCORDING TO THE AO, THE ASSESSEE ARTIFICIALLY ASSI GNED MARGIN AT 15% TO THE INTERMEDIATE PRODUCT WAS WITH THE SOLE I NTENTION OF - - ITA 1396/15 4 CLAIMING HIGHER EXEMPTION U/S.80IB OF THE ACT. ACC ORDINGLY, THE AO RESTRICTED THE PROFIT MARGIN OF THE PREMIX UNIT TO 3%, THEREBY RESTRICTED THE CLAIM OF DEDUCTION U/S.80IB OF THE A CT, TO ` 2,11,30,061/- AS AGAINST THE CLAIM OF ` 11,86,74,886/-. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE T HE COMMISSIONER OF INCOME-TAX(APPEALS). 4. ON APPEAL, THE COMMISSIONER OF INCOME-TAX(APPEAL S) OBSERVED THAT THE FEED PREMIX HAS A COMPOUND OF VAR IOUS NUTRIENTS NECESSARY FOR THE POULTRY BIRDS. THE PREM IX IS PREPARED IN TWO STAGES, ONE DEALING IN VITAMINS, AMINO ACIDS AND VARIOUS MICRO INGREDIENTS. THE SECOND STAGE IS PREPARING TH EM FOR AS APPLICABLE FOR SPECIFIC BIRD LIFE STAGE. THE SECOND STAGE ACTIVITY IS CARRIED ON AT PONDICHERRY UNIT AND THE VARIOUS PREM IXES MANUFACTURED HERE ARE USED IN FEED MILLS OF SUGUNA THROUGHOUT THE COUNTRY. THE PREMIX IS MANUFACTURED BASED ON TH E REQUIREMENT OF THE VARIOUS REGIONS AND DESPATCHED T O THEM AS PER PRODUCTION SCHEDULE AND BUSINESS REQUIREMENT. T HE RAW MATERIALS USED ARE VITAMINS, AMINO ACIDS AND MICRO INGREDIENTS AND THE PREMIX UNIT IS OPERATED ONLY DURING THE DAY TIME TO AVOID PHOTOSYNTHESIS DUE TO ARTIFICIAL LIGHTING. THIS IS PREPARED IN - - ITA 1396/15 5 IMPORTED SPECIALIZED MACHINERIES AND PACKED IN 25 K G PER BAG. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THE COPIES OF INVOICE WHERE THE ASSESSEE HAS PURCHASED AN IDENTIC AL PRODUCT WHENEVER THE SUPPLY FROM PONDICHERRY UNIT FALLS SHO RT OF ASSESSEE'S DEMAND. THE CIT(APPEALS) OBSERVED THAT T HE ASSESSEE FURNISHED BEFORE HIM INVOICES OF PURCHASE MADE FROM M/S. DIVI ENTERPRISES WHERE ON 14.10.2009 THE BROIL ER VITAMIN SUPPLEMENT WAS PURCHASED AT THE RATE OF ` 350/- PER KG WHEREAS THE SAME FEED PREMIX BROILER STARTER WAS INTERNALLY TRANSFERRED ON AN AVERAGE RATE OF ` 240/- PER KG. AND ALSO THIRD PARTY INVOICE MADE BY M/S. PROBIOTECH INDUSTRIES PVT LTD. NEPAL T O A THIRD PARTY [FOR SUPPLY OF POULTRY CORN FEED MASH (CONCEN TRATE) BROILER FEED SUPPLEMENT PREMIX] @ ` 270/- PER KG. IN THE MONTH OF OCTOBER 2009. THE ASSESSEE PURCHASED 'PERFORMER BROILER BS PREMIX' FROM M/S. AVITECH NUTRITION PVT LTD. GURGAO N @ ` 320/- PER KG. WHEREAS THE INTERNAL TRANSFER MADE BY SUGUN A TO ITS FEED MIXING UNITS WAS @ ` 240/- PER KG. 4.1 HOWEVER, THE COMMISSIONER OF INCOME-TAX(APPEALS ) ASKED THE ASSESSEE TO PRODUCE FURTHER DETAILS REGAR DING THE SALE MADE BY THE PREMIX UNIT TO OUTSIDE AGENCIES AP ART FROM - - ITA 1396/15 6 INTERNAL TRANSFERS. THE ASSESSEE PRODUCED COPIES O F INVOICES DURING THE MONTH OF OCTOBER 2011 WHERE THE POULTRY FEED PREMIX (BROILER PREMIX) WAS SUPPLIED TO M/S. GODREJ AGROVET LTD. SURAT @ ` 232/- PER KG. THE CIT(APPEALS) ALSO COMPARED THE INTERNAL TRANSFERS MADE IN THE MONTH OF JULY 2011 T O M/S. SUGUNA FOODS LIMITED, RANASTHALAM MANDAL, SRIKAKULAM DISTR ICT, ANDHRA PRADESH @ ` 206/- PER KG. FOR POULTRY FEED PREMIX (BROILER PREMIX). THE ASSESSEE ALSO FURNISHED INVOI CE RAISED DURING THE MONTH OF NOVEMBER TO M/S. BIOMAK, COIMBA TORE WHEREIN THE COMPOUND PREMIX WAS SOLD @ ` 200/- PER KG. WHEREAS IN THE INTERNAL TRANSFERS MADE ON 30.11.2012, THE RATE OF THE SAME PREMIX WAS MADE @ ` 194.50 PER KG. THE COMPARISON WAS MADE BY THE CIT(APPEALS) TO FIND OUT THE PRICES AT WHICH THE PRERNIX UNIT AT PONDICHERRY WAS TRANSFERRING TO THE INTERNAL UNITS FOR PREMIX WHEN COMPARED TO PURCHASE/SALES MADE BY PREMIX UNIT. THE CIT(APPEALS) OBSERVED THAT ALL THE INVOI CE DATA SHOWS THAT THE PREMIX UNIT WAS SELLING ITS PREMIX CONCENT RATE TO SOME OF THE OUTSIDE PARTIES AT A HIGHER RATE THAN THE IN TERNAL TRANSFERS AND ALSO A COMPARISON OF THE SUPPLEMENT PURCHASED F ROM OUTSIDE PARTIES SHOWED THAT THE OTHER PARTIES, LIKE M/S. - - ITA 1396/15 7 DIVI ENTERPRISES WERE SELLING THE PREMIX OF BROILER @ ` 350/- PER KG. THE PREMIX INTERNAL TRANSFER MADE BY THE ASSESS EE WAS @ ` .240/- PER KG. FROM THIS DATA IT CANNOT BE SAID THA T THE ASSESSEE COMPANY WITH REFERENCE TO PREMIX UNIT, IS INFLATING PROFITS OR DIVERTING PROFITS FOR CLAIMING DEDUCTION U/S 80IB O F THE INCOME TAX ACT, 1961. ACCORDING TO THE CIT(APPEALS), THE ASSESSING OFFICER HAS CONSIDERED THE NET PROFIT MARGIN OF FEE D MIXING UNIT AND RESTRICTED THE PROFITS U/S 80IB OF THE ASSESSEE COMPANY AND HE HAS NOT MADE COMPARISON OF THE COMPARABLES TO RE STRICT THE PROFIT MARGIN U/S 80 IB OF THE INCOME TAX ACT, 1961 . THE CIT(APPEALS) FURTHER OBSERVED THAT THE ASSESSING OF FICER HAS NOT BROUGHT ANY ADVERSE EVIDENCE ON RECORD TO SHOW THAT THE PROFIT MARGIN HAS BEEN INFLATED AT THE PREMIX UNIT TO CLAI M DEDUCTION U/S 801B OF THE INCOME TAX ACT, 1961. THEREFORE, TH E CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLO W THE DEDUCTION U/S. 80IB OF THE ACT. AGGRIEVED, THE REV ENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, THE LD. DR SUBMITTED THA T THE DEDUCTION U/S.80IB ITSELF CANNOT BE GRANTED TO THE ASSESSEE AS THE PREMIX IS NOT AN ARTICLE OR THING AND ONLY INTE RMEDIARY PRODUCT - - ITA 1396/15 8 AND IT HAS NO INDEPENDENT MARKET. FOR RAISING THIS GROUND, THE LD. DR RELIED ON THE FOLLOWING JUDGMENTS STATING TH AT THE DR CAN RAISE THIS NEW GROUND THOUGH IT WAS NOT SUBJECT MAT TER OF ASSESSMENT BEFORE THE AO : 1. N.P..SARASWATHI AMMAL & ORS. V. CIT 138 ITR 19 2. CIT V. ASSAM TRAVELS SHIPPING SERVICES (199 ITR 1)(SC) 3. BHAVANA CHEMICALS LTD. V. CIT (231 ITR 507) (SC) 4. THANTHI TRUST V. ACIT (238 ITR 117)(MAD.) 5. SHAW SCOTT DISTILLERIES (P) LTD. V. ACIT (76 ITD 89)(SPL. BENCH KOLKATA) 6. ACIT V. INDWEL LIANINGS P. LTD. (313 ITR(AT) 118 ) ACCORDING TO THE DR, THIS PRELIMINARY OBJECTION TO BE ADMITTED AND ADJUDICATED. 6. ON THE OTHER HAND, THE LD. AR STRONGLY OPPOSED T HE ABOVE GROUND RAISED BY THE D.R. STATING THAT DENIAL DEDUC TION CANNOT BE SUBJECT MATTER BEFORE THE TRIBUNAL AND CONSIDERATIO N OF THAT GROUND AND THEREBY REMITTING THE ISSUE TO THE FILE OF THE A.O. AMOUNTS TO ENHANCEMENT OF ASSESSMENT FOR WHICH,THE TRIBUNAL HAS NO POWER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN OUR OPINION, THERE IS A METHODOLOGY TO RAISE THE - - ITA 1396/15 9 GROUND BEFORE THE TRIBUNAL AND THERE SHOULD BE GOOD AND SUFFICIENT REASON TO ADMIT AN ADDITIONAL GROUND OR PRELIMINARY OBJECTION. 8. THE RULE 11 OF THE INCOME-TAX (APPELLATE TRIBUN AL) RULES, 1963 ALLOWS THE APPELLANT TO URGE ANY GROUND NOT TA KEN IN THE MEMORANDUM OF APPEAL, THAT DOES NOT MEAN THAT, WITH THE LEAVE OF THE TRIBUNAL, THE APPELLANT CAN TAKE ANY GROUND OF APPEAL EVEN IF HE WAS NOT ORIGINALLY ENTITLED TO TAKE IT I N THE MEMORANDUM OF APPEAL. THE SUPREME COURT IN THE C ASE OF HUKUMCHAND MILLS LTD. V. CIT(63 ITR 232) OBSERVED THAT : 'THE WORD 'THEREON', OF COURSE, RESTRICTS THE JURIS DICTION OF THE TRIBUNAL TO THE SUBJECT-MATTER OF THE APPEAL.' 9. IN OUR VIEW, THE JUDGMENT OF THE SUPREME COURT IN THE 8CASE OF CIT V. KARAMCHAND PREMCHAND PRIVATE LTD.(8 6 ITR 122) WAS FOLLOWED BY THE GUJARAT HIGH COURT IN CIT V. STEEL CAST CORPORATION (107 ITR 683) , WHICH WAS IN TURN APPROVED BY A FULL BENCH OF THE GUJARAT HIGH COURT IN CIT V. CELLULOSE PRODUCTS OF INDIA LTD .(151 ITR 499). IN THE SAID FULL BENCH CASE, THE GUJARAT HIGH COURT ALSO DISCUSSED THE DECISIONS OF THE SUPREME COURT IN HUKUMCHAND MILLS LTD. V. CIT(SUPRA) , CIT V. - - ITA 1396/15 10 MAHALAKSHMI TEXTILE MILLS LTD.(66 ITR 710)(SC), ADD L . CIT V. GURJARGRAVURES P. LTD . (111 ITR 1) AND CIT V. S. NELLIAPPAN(66 ITR 722)(SC) . THE FULL BENCH OF THE GUJARAT HIGH COURT DISSENTED FROM THE VIEW OF THIS COURT IN CIT V. GANGAPPA CABLES LTD .(251 ITR 61). 10. IN THE DECISION OF THE SUPREME COURT IN JUTE CORPORATION OF INDIA LTD. V. CIT (187 ITR 688) , THE SUPREME COURT ONCE AGAIN REVIEWED THE LAW ON THIS QUESTION AND REFERRING IN PARTICULAR TO THE DECISION IN ADDL. CIT V. GURJARGRAVURES P. LTD . (SUPRA) HELD THAT THE OBSERVATIONS IN THAT DECISION 'DO NOT RULE OUT A CASE FOR RAISING AN ADDITIONAL GROUND BEFORE THE CIT(APPEALS ) IF THE GROUND SO RAISED COULD NOT HAVE BEEN RAISED AT THE STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER W AS MADE OR IF THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW' AND THAT 'THERE MAY BE SEVERA L FACTORS JUSTIFYING THE RAISING OF SUCH A NEW PLEA IN AN APP EAL, AND EACH CASE HAS TO BE CONSIDERED ON ITS FACTS'. THERE DOES NOT SEEM TO BE ANY CLEAR PRONOUNCEMENT OF THE SUPREME COURT ON THE QUESTION WHETHER, WHEN THE ASSESSEE SUBMITS AN INCO ME FOR ASSESSMENT AND DOES NOT QUESTION THE SAME IN THE AP PEAL - - ITA 1396/15 11 PREFERRED BY HIM BEFORE THE CIT(APPEALS), HE CAN QU ESTION THE ASSESSMENT OF THE SAID INCOME FOR THE FIRST TIME IN THE SECOND APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL AND WHETHER HE IS BARRED FROM QUESTIONING THE SAME ON THE GROUND T HAT THE SAID ASSESSMENT HAD BECOME FINAL BY VIRTUE OF HIS NOT QU ESTIONING THE SAME BEFORE THE FIRST APPELLATE AUTHORITY. THE LEAR NED AUTHOR, N. A. PALKHIVALA DOES NOT AGREE WITH THE VIEW OF THE G UJARAT HIGH COURT AND, IN THE EDITION OF THE LAW AND PRACTICE O F INCOME-TAX (EIGHTH EDITION OF 1990), UNDER THE HEADING 'RAISIN G NEW QUESTIONS - GROUND NOT TAKEN BEFORE LOWER AUTHORITY ' HE OPINES AS FOLLOWS: 'THE PUNJAB AND HARYANA HIGH COURT HAD HELD THAT TH E ASSESSEE IS ENTITLED TO URGE BEFORE THE TRIBUNAL A GROUND REGARDING THE VALIDITY OF THE ASSESSMENT WHICH HE H AD GIVEN UP BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) OR ANY OTHER GROUND WHICH HE HAD NOT TAKEN BY THE MADRAS H IGH COURT. THE BOMBAY HIGH COURT HAS HELD THE ASSESSEE ENTITLED TO CLAIM FOR THE FIRST TIME BEFORE THE TRI BUNAL CERTAIN BENEFITS WHICH HE HAD NOT CLAIMED BEFORE. IN CIT V. KARAMCHAND PREMCHAND P. LTD . , THE GUJARAT HIGH COURT HELD THAT IF A POINT ARISING IN THE ASSESSMENT ORDE R IS NOT TAKEN IN APPEAL BY THE ASSESSEE AND IS THEREFORE, N OT DEALT WIT BY THE COMMISSIONER OF INCOME-TAX (APPEALS), TH E ASSESSEE CANNOT RAISE THAT POINT BEFORE THE TRIBUNA L EVEN IF, ON A JUDICIAL PRONOUNCEMENT SUBSEQUENT TO THE COMMISSIONER OF INCOME-TAX (APPEALS) ON A POINT WHI CH WAS NOT AGITATED BEFORE HIM, WHILE THE RIGHT TO APP EAL TO THE TRIBUNAL IS GRANTED BY SECTION 253 TO AN ASSESSEE SO - - ITA 1396/15 12 AGGRIEVED. IT IS SUBMITTED THAT THIS DECISION IS ER RONEOUS AND WAS WRONGLY APPROVED IN CIT V. CELLULOSE PRODUCTS OF INDIA LTD. [FB ] AND WRONGLY FOLLOWED IN THE UNDERMENTIONED CASES. AUTHORITIES UNDER THE ACT HAVE TO ADMINISTER THE LA W CORRECTLY, AND IF, FOR INSTANCE, AS A RESULT OF A S UBSEQUENT JUDICIAL DECISION IT IS FOUND THAT A NON-TAXABLE IT EM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THE ASSESSEE CAN REASONABLY BE SAID TO BE AGGRIEVED BY THE COMMISSIO NER OF INCOME-TAX (APPEALS)'S ORDER IN ITS TOTALITY, AS IT FINALLY SUSTAINS THE ASSESSMENT. THE GUJARAT HIGH COURT'S A TTENTION DOES NOT SEEM TO HAVE BEEN DRAWN TO KAMALA MILLS LTD. V. STATE OF BOMBAY IN WHICH THE SUPREME COURT HELD THAT IF A DEALER WHO HAD RETURNED CERTAIN SALES AND ALLOWED T HEM TO BE TAXED FOUND ON A LATER DECISION OF THE COURT THA T THE SAME WERE NOT TAXABLE, HE COULD FILE AN APPEAL AND ASK F OR CONDONATION OF DELAY. FURTHER, THE RIGHT TO APPEAL TO THE COMMISSIONER OF INCOME-TAX (APPEALS) IS CONFERRED B Y SECTION 246 IN IDENTICAL TERMS ON 'ANY ASSESSEE AGGRIEVED' BY THE ASSESSING OFFICER'S ORDER, AND YET THE GUJAR AT HIGH COURT ITSELF RIGHTLY HELD IN LATER CASES THAT AN AS SESSEE COULD RAISE BEFORE THE COMMISSIONER OF INCOME-TAX (APPEAL S) FOR THE FIRST TIME A POINT WHICH HE HAD NOT RAISED BEFO RE THE ASSESSING OFFICER AND WHICH WAS THEREFORE NOT DEALT WITH IN THE ASSESSMENT ORDER. IT IS SUBMITTED THAT THE CORR ECT POSITION IN LAWS THAT BOTH THE COMMISSIONER OF INCO ME-TAX (APPEALS) AND THE TRIBUNAL HAVE THE JURISDICTION IN EVERY CASE TO ENTERTAIN A GROUND WHICH WAS NOT URGED BEFO RE THE AUTHORITY WHOSE ORDER IS APPEALED AGAINST, BUT THEY , JUDICIALLY EXERCISING THEIR DISCRETION, MAY OR MAY NOT ENTERTAIN THE NEW GROUND.' 11. THERE IS ALSO THE DECISION IN S. S. GADGIL V. LAL AND CO. (53 ITR 231), WHEREIN THE SUPREME COURT DELINEATED THE CHARACTERISTICS OF PROCEEDINGS FOR ASSESSMENT AS FO LLOWS (HEADNOTE) : - - ITA 1396/15 13 'A PROCEEDING FOR ASSESSMENT IS NOT A SUIT FOR ADJU DICATION OF A CIVIL DISPUTE. THAT AN INCOME-TAX PROCEEDING I S IN THE NATURE OF A JUDICIAL PROCEEDING BETWEEN CONTESTING PARTIES IS IN THE NATURE OF A JUDICIAL PROCEEDING BETWEEN CONT ESTING PARTIES, IS A MATTER WHICH IS NOT CAPABLE OF EVEN A PLAUSIBLE ARGUMENT. THE INCOME-TAX AUTHORITIES WHO HAVE POWER TO ASSESS AD RECOVER TAX ARE NOT ACTING AS JUDGED DECI DING A LITIGATION BETWEEN THE CITIZEN AND THE STATE : THEY ARE ADMINISTRATIVE AUTHORITIES WHOSE PROCEEDINGS ARE RE GULATED BY STATUTE, BUT WHOSE FUNCTION IS TO ESTIMATE THE I NCOME OF THE TAXPAYER AND TO ASSESS HIM TO TAX ON THE BASIS OF THAT ESTIMATE. TAX LEGISLATION NECESSITATES THE SETTING UP OF MACHINERY TO ASCERTAIN THE TAXABLE INCOME AND TO AS SESS A TAX ON THE INCOME, BUT THAT DOES NOT IMPRESS THE PR OCEEDING WITH THE CHARACTER OF AN ACTION BETWEEN THE CITIZEN AND THE STATE.' 12. A FULL BENCH OF THE MADRAS HIGH COURT IN STATE OF TAMIL NADU V. ARULMURUGAN AND CO . [1982] 51 STC 381, REFERRING TO THE DECISIONS OF THE SUPREME COURT IN CIT V. MCMILLAN AND CO. (33 ITR 182), CIT V. KANPUR COAL SYNDICATE (53 ITR 225)(SC) AND CIT V. MAHALAKSHMI TEXTILE MILLS LTD .(SUPRA) EXPLAINED HOW A TAX APPEAL DIFFERS FROM AN APPEAL IN CIVIL CASES IN THE FOLLOWING MANNER (AT PAGE 392 OF 51 STC) : 'AN APPELLATE AUTHORITY UNDER THE TAXING ENACTMENTS SITS IN APPEAL, ONLY IN A MANNER OF SPEAKING. WHAT IT DOES, FUNCTIONALLY, IS ONLY TO ADJUST THE ASSESSMENT OF T HE APPELLANT IN ACCORDANCE WITH THE FACTS ON THE RECOR D AND IN ACCORDANCE WITH THE LAW LAID DOWN BY THE LEGISLATUR E. AN APPEAL IS A CONTINUATION OF THE ADJUSTMENT OF THE T AX LIABILITY TO ACCORD WITH THE TAXABLE EVENT IN THE PARTICULAR TAXPAYER'S CASE. THERE CAN BE NO ANALOGY OR PARALLEL BETWEEN A TAX - - ITA 1396/15 14 APPEAL AND AN APPEAL, SAY, IN CIVIL CASES. A CIVIL APPEAL, LIKE A LAW SUIT IN THE COURT OF FIRST INSTANCE OUT OF WH ICH IT ARISES, IS REALLY AND TRULY AN ADVERSARY PROCEEDING, THAT I S TO SAY, A CONTROVERSY OR TUSSLE OVER MUTUAL RIGHTS AND OBLIGA TIONS BETWEEN CONTESTING LITIGANTS RANGED AGAINST EACH OT HER AS OPPONENTS. A TAX APPEAL IS QUITE DIFFERENT. EVEN AS THE ASSESSING AUTHORITY IS NOT THE TAXPAYER'S 'OPPONENT ', IN THE STRICTLY PROCEDURAL SENSE OF THE TERM, SO TOO THE A PPELLATE AUTHORITY SITTING IN APPEAL OVER THE ASSESSING AUTH ORITY'S ORDER ASSESSMENT IS NOT STRICTLY AN ARBITRAL TRIBUN AL DECIDING A CONTESTED ISSUE BETWEEN TWO LITIGANTS RANGED ON O PPOSITE SIDES. IN A TAX APPEAL, THE APPELLATE AUTHORITY CAN ITSELF ENTER THE ARENA OF ASSESSMENT, EITHER BY PURSING FURTHER INVESTIGATION OR CAUSING FURTHER INVESTIGATION TO B E DONE. IT CAN DO SO ON ITS OWN INITIATIVE, WITHOUT BEING PROD DED BY ANY OF THE PARTIES. IT CAN ENHANCE THE ASSESSMENT, TAKI NG ADVANTAGE OF THE OPPORTUNITY AFFORDED BY THE TAXPAY ER'S APPEAL, EVEN THOUGH THE APPEAL ITSELF HAS BEEN MOOT ED ONLY WITH A VIEW TO A REDUCTION IN THE ASSESSMENT. THESE ARE SPECIAL AND EXCEPTIONAL ATTRIBUTES OF THE JURISDICT ION OF A TAX APPELLATE AUTHORITY. THESE ATTRIBUTES UNDERLINE THE TRUTH THAT THE APPELLATE AUTHORITY IS NO DIFFERENT, FUNCTIONAL LY AND SUBSTANTIALLY, FROM THE ASSESSING AUTHORITY ITSELF. ' 13. THESE ASPECTS HAVE ALSO TO BE KEPT IN VIEW WHI LE CONSIDERING THE POWERS OF THE APPELLATE TRIBUNAL IN ENTERTAINING ADDITIONAL GROUNDS AND AN AUTHORITATIVE PRONOUNCEME NT IS NEEDED. 14. IN OUR OPINION, THIS TRIBUNAL HAS NO JURISDICTI ON TO GRANT RELIEF ON CONSIDERATION OF AN ADDITIONAL GROUND RAI SED BY THE LD. DR IN ARGUING FOR THE FIRST TIME ALTHOUGH SUCH GROU ND RELATED TO AN ITEM OF ASSESSMENT. FOR THIS PURPOSE, WE ARE CON SIDERING THE - - ITA 1396/15 15 JUDGMENT IN THE CASE OF CIT V. INDIAN EXPRESS (MADU RAI) PVT. LTD. (140 ITR 705), WHEREIN THE MADRAS HIGH COURT HELD T HAT THE TRIBUNAL IS NOT PRECLUDED IN EXAMINING AND DETERMIN ING THE POINT RAISED FOR THE FIRST TIME BEFORE IT, MERELY BECAUSE IT IS NOT TO BE PUT FORWARD AT THE EARLIER STAGES OF THE PROCEEDING S. HOWEVER, IT DOES NOT MEAN THE LD. DR COULD RAISE AN ADDITIONAL GROUND BEFORE THE TRIBUNAL. BEING SO, THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF PANCHURA ESTATE LTD. V. GOVERN MENT OF MADRAS (87 ITR 698), WHEREIN IT WAS HELD THAT THE A SSESSEE HAVING NOT CHALLENGED THE ASSESSMENT BEFORE THE FIR ST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL, SUCH GROUND CANNO T BE ENTERTAINED BY THE TRIBUNAL AND IT IS SQUARELY APPL ICABLE TO THE FACTS OF THE PRESENT CASE. ADMISSION OF ADDITIONAL GROUND DOES NOT INVOLVE A MERE QUESTION OF DISCRETION. IT IS A LSO AS QUESTION RELATING TO JURISDICTION OF THE TRIBUNAL. IF THE R EVENUE FILED AN APPLICATION FOR PERMISSION TO FILE ADDITIONAL GROUN DS OF APPEAL IN RELATION TO THE SUBJECT-MATTER WHICH IS ALREADY BEF ORE THE TRIBUNAL BY WAY OF AN APPEAL, THE MATTER WILL MERELY REST ON THE DISCRETION OF THE TRIBUNAL. BUT, WHERE THE LD. DR SEEK TO BRI NG IN NEW ITEMS WHICH HAD NOT BEEN QUESTIONED BY AO AND WHICH HAD N OTHING TO - - ITA 1396/15 16 DO WITH THE SUBJECT-MATTER OF THE APPEAL BEFORE THE TRIBUNAL AS ORIGINALLY FILED, THE QUESTION WILL ARISE WHETHER THE TRIBUNAL WILL HAVE JURISDICTION TO ENTERTAIN THE ADDITIONAL GROUN DS. IN THIS CASE, THE AO HAS NOT RAISED THIS ISSUE IN THE ASSESSMENT ORDER. THEREFORE, THERE IS NO NEED TO ADJUDICATE SUCH GROU ND BY THE TRIBUNAL. ACCORDINGLY, THE PRELIMINARY OBJECTION I S TO BE REJECTED. 15. FURTHER, THIS APPEAL IS FILED BY THE DEPARTMENT AND SUBJECT MATTER OF APPEAL IS WHETHER QUANTIFICATION OF DEDUC TION U/S.80IB OF THE ACT IS CORRECT OR NOT. NO RELIEF CAN BE GIV EN TO THE REVENUE UNLESS IT ASKS FOR IT AND IS ENTITLED IN LA W TO GET IT; THE TRIBUNAL HAS NO JURISDICTION TO GIVE IT ANY RELIEF THOUGH IT MAY BE ENTITLED TO IT, IF IT DOES NOT ASK FOR IT IN THE AP PEAL. THE POWER CONFERRED UPON TRIBUNAL IS CERTAINLY VERY WIDE BUT IS SO WIDE ONLY WITHIN THE SUBJECT-MATTER OF THE APPEAL. HOWEVER, WIDE IT MAY BE, IT IS LIMITED BY THE SCOPE OF THE APPEAL. IT C ANNOT TRAVEL OUTSIDE ITS SCOPE AND PASS ANY ORDER EVEN THOUGH I T THINKS IT A FIT ORDER. IT HAS TO PASS AN ORDER ON THE APPEAL, I.E. , IN RESPECT OF THE SUBJECT MATTER OF THE APPEAL. THE ORDER THAT I T THINKS FIT MUST BE IN RESPECT OF THE SUBJECT-MATTER OF THE APPEAL A ND SO LONG AS IT IS IN RESPECT OF IT, IT CAN BE PASSED REGARDLESS OF ITS NATURE OR - - ITA 1396/15 17 CONTENTS. BY ITS ORDER THE TRIBUNAL CAN DISPOSE OF THE APPEAL AND NOT SOMETHING NOT INCLUDED WITHIN ITS SCOPE. I N THE DEPARTMENTS APPEAL FOR INCREASE IN THE ASSESSABLE INCOME THE ONLY QUESTION FOR ITS CONSIDERATION IS WHETHER THE INCREASE OR PART OF IT SHOULD BE ALLOWED OR NOT. WHETHER THE AMOUNT ALREADY ASSESSED WAS WRONGLY ASSESSED OR NOT OR WHETHER THE ASSESSEE IS LIABLE TO BE ASSESSED AT ALL OR NOT IS QUESTION QUITE OUTSIDE THE SCOPE OF THE APPEAL AND ANY DECISION ON IT CANNOT B E SAID TO BE AN ORDER ON THE APPEAL. CONSEQUENTLY IT CANNOT BE SAID THAT THE TRIBUNAL WOULD HAVE POWER TO ENHANCE THE ASSESSMENT EVEN WITHOUT ANY PRAYER BY THE REVENUE TO THAT EFFECT, IF IT ACCEPTS THIS GROUND OF DEFENCE THAT IT WAS NOT LIABLE TO BE GIVEN A RELIEF U/S.80IB OF THE ACT AT ALL. ON THAT GROUND BEING A CCEPTED IT CAN ONLY TO INCREASE THE ASSESSED INCOME; ONLY THAT WOU LD BE AN ORDER ON THE APPEAL BY THE DEPARTMENT. ANY OTHER ORDER SUCH AS ENHANCING THE ASSESSMENT WOULD BE OUTSIDE THE SC OPE OF THE APPEAL. THEREFORE, IT WOULD BE RIGHT TO SAY THAT T HE EFFECT OF ACCEPTING THE GROUND OF DEFENCE OF THE REVENUE WOUL D BE THE ENHANCEMENT OF THE ASSESSMENT AND THAT THIS WOULD B E QUITE THE REVERSE OF SUPPORTING IT BY THE GROUND OF DEFENCE A ND IT IS NOTHING - - ITA 1396/15 18 BUT ENHANCEMENT OF ASSESSMENT BY THE TRIBUNAL FOR W HICH THIS TRIBUNAL HAVE NO POWER. 16. IN THE INSTANT CASE, THE ASSESSEE COULD CONTEND THAT THE DEPARTMENT WAS NOT ENTITLED TO SUCCEED IN THE APPEA L, I.E., TO AN INCREASE IN THE ASSESSED INCOME. IN OTHER WORDS, S O LONG AS IT DID NOT ASK FOR THE ENHANCING THE ASSESSMENT, ITS P LEA WITH REGARD TO DECIDING THE ISSUE OF QUANTIFICATION U/S. 80IB OF THE ACT TO BE ENTERTAINED. IF IT PRAYED THAT THE ASSESSMEN T TO BE ENHANCED, IT WAS NOT ENTITLED TO BE HEARD WHEREAS I F IT SIMPLY PRAYED THAT THE DEPARTMENTS APPEAL BE ALLOWED, ON MERITS, IT WAS ENTITLED TO BE HEARD. 17. THE ARGUMENT OF THE LD. DR BY ITSELF MAKES IT C LEAR THAT THE REVENUE DESIRED TO ARGUE AGAINST THE WHOLE OF T HE ASSESSMENT. THE ARGUMENT BY THE LD. DR ITSELF DOES SHOW THAT IT HAS SOUGHT PERMISSION TO ARGUE ONLY AGAINST INCR EASE IN THE ASSESSED INCOME AND NOT AGAINST THE ASSESSMENT ITSE LF. IT ITSELF NEVER DISTINGUISHED BETWEEN THE CONTENTION THAT IT WANTED TO RAISE AND ITS EFFECT AND DID NOT SAY THAT THOUGH IT S EFFECT MIGHT BE TO RENDER THE ASSESSMENT ALREADY DONE INVALID DID N OT SEEK - - ITA 1396/15 19 INVALIDATION OF IT. ACTUALLY IF IT ONLY DESIRED TH AT THE APPEAL BE ALLOWED AND DID NOT DESIRE ANY POSITIVE ORDER IT HA D THE RIGHT, UNDER RULE 27 OF THE ITAT RULES. SINCE THE FACT AS IT APPEARS, IS THAT THE LD. DR WANTED PERMISSION TO ARGUE AGAINST THE WHOLE ASSESSMENT AND THEREBY INCREASED THE ASSESSMENT SOU GHT BY THE ASSESSEE THROUGH THE PRELIMINARY OBJECTION. IT WAS TO BE DISALLOWED. RULE 27 ITSELF GAVE THE ASSESSEE A RIG HT TO ARGUE THAT IT WAS NOT LIABLE TO THE INCREASED ASSESSMENT, THERE WAS NO QUESTION OF ITS BEING PERMITTED TO ARGUE THE PRELIM INARY PLEA BEFORE THE TRIBUNAL AND, THEREFORE, THE PRELIMINAR Y PLEA OF THE LD. DR IS TO BE REJECTED. 18. WITHOUT PREJUDICIAL TO ANYTHING CONTAINED HEREI N ABOVE, THERE IS A METHODOLOGY TO FILE ADDITIONAL GROUND OR ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. THUS, WE ARE UNABLE TO ENTERTAIN THE PRIMARY OBJECTION RAISED BY THE LD DR ON THE RE ASON THAT THE PROCEDURES FOR FILING ADDITIONAL GROUND WAS NOT FOL LOWED AS DISCUSSED IN RULE 29 OF INCOME TAX RULES, WHICH IS AS FOLLOWS: - RULE 29:- THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFO RE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCE D OR ANY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR - - ITA 1396/15 20 FOR ANY OTHER SUBSTANTIAL CAUSE, OR , IF THE INCOME TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY TH EM OR NOT SPECIFIED BY THEM, THE TRIBUNAL FOR REASONS TO BE RECORDED, M AY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED O R AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. F URTHER, WHATEVER RULE IS APPLICABLE FOR FILING THE APPEAL BEFORE THE TRIBUNAL IS ALSO APPLICABLE FOR FILING ADDITIO NAL GROUNDS. THUS SEC. 253(6) OF THE ACT PRESCRIBES THAT APPEAL TO TH E TRIBUNAL SHALL BE FILED IN THE PRESCRIBED FORM AND SHALL B E VERIFIED IN THE PRESCRIBED MANNER AND SHALL, IN THE CASE OF AN APPE AL MADE, ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 IRRESPECTIVE OF THE DATE OF INITIATION OF THE ASSESSMENT PROCEEDINGS RELATING T HERETO, BE ACCOMPANIED BY A FEE OF :- A) WHERE THE TOTAL INCOME OF THE ASSESSEE AS COMPUTED BY THE ASSESSING OFFICER, IN THE CASE TO WHICH THE APPEAL RELATES, IS ONE HUNDRED THOUSAND RUPEES OR LESS, FIVE HUNDRED RUPEES, (B) WHERE THE TOTAL INCOME OF THE ASSESSEE, COMPUTED A S AFORESAID, IN THE CASE TO WHICH THE APPEAL RELATES IS MORE THA N ONE HUNDRED THOUSAND RUPEES BUT NOT MORE THAN TWO HUNDRED THOUSAN D RUPEES, ONE THOUSAND FIVE HUNDRED RUPEES, (C) WHERE THE TOTAL INCOME OF THE ASSESSEE, COMPUTED A S AFORESAID, IN THE CASE TO WHICH THE APPEAL RELATES IS MORE THA N TWO HUNDRED THOUSAND RUPEES, ONE PER CENT. OF THE ASSESSED INCOME , SUBJECT TO A MAXIMUM OF TEN THOUSAND RUPEES : (D) WHERE THE SUBJECT MATTER OF AN APPEAL RELATES TO ANY MATTER, OTHER THAN THOSE SPECIFIED IN CLAUSES (A), (B) AND (C), FIVE HUNDRED RUPEES. - - ITA 1396/15 21 PROVIDED THAT NO SUCH FEE SHALL BE PAYABLE IN THE CAS E OF AN APPEAL REFERRED TO IN SUB-SECTION (2) OR A MEMORANDUM OF CROSS -OBJECTIONS REFERRED TO IN SUB-SECTION (4). FURTHER, INCOME TAX RULES, PRESCRIBES IN RULE 47 AS UNDER:- (1) AN APPEAL UNDER SUB-SECTION (1) OR SUB-SECTION (2) OF SECTION 253 TO THE APPELLATE TRIBUNAL SHALL BE MADE IN FORM N O.36( AND WHERE THE APPEAL IS MADE BY THE ASSESSEE, THE FORM OF APPEAL, THE GROUNDS OF APPEAL AND FOR THE FORM OF VERIFICATION APP ENDED THERETO SHALL BE SIGNED BY THE PERSON SPECIFIED IN SUB-RULE (2) OF RULE 45). (2) A MEMORANDUM OF CROSS-OBJECTIONS UNDER SUB-SECTION ( 4) OF SECTION 253 TO THE APPELLATE TRIBUNAL SHALL BE MADE IN FORM NO.36A(AND WHERE THE MEMORANDUM OF CROSS-OBJECTION IS M ADE BY THE ASSESSEE, THE FORM OF MEMORANDUM OF CROSS-OBJECTION S, THE GROUNDS OF CROSS-OBJECTIONS AND THE FORM OF VERIFICATIO N APPENDED THERETO SHALL BE SIGNED BY THE PERSON SPECIFIED IN SU B-RULE (2) OF RULE 45) THE RULE 45(2) READS AS UNDER:- THE FORM OF APPEAL PRESCRIBED BY SUB-RULE (1), THE G ROUNDS OF APPEAL AND THE FORM OF VERIFICATION APPENDED THERETO R ELATING TO AN ASSESSEE SHALL BE SIGNED AND VERIFIED BY THE PER SON WHO IS AUTHORISED TO SIGN THE RETURN OF INCOME UNDER SECTION 1 40 OF THE INCOME TAX ACT, 1961 AS APPLICABLE TO THE ASSESSEE. 19. IN THIS CASE, THERE IS A PRELIMINARY OBJECTION BY THE LD. DR AND THERE IS NO ADDITIONAL GROUND FILED BY THE DEPA RTMENT. IN VIEW OF THE ABOVE PROVISIONS LAID DOWN BY THE LEGIS LATURE, IT IS TO BE SEEN THAT WHETHER THIS PLEA IS MAINTAINABLE OR N OT. WE CAME ACROSS JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF P. KUTTIKRISHNA NAIR VS. ITAT, MADRAS AND ANOTHER, ( 34 ITR 540). IN THAT CASE, WHETHER THE TRIBUNAL CAN CONSIDER THE MISCELLANEOUS PETITION SUO MOTU AND THE TRIBUNAL, I N EXERCISE OF - - ITA 1396/15 22 ITS OWN POWERS, CAN VERIFY THE MISTAKE WHETHER POIN TED OUT BY THE D.R. OR ON ITS OWN. THIS DECISION OF THE JURIS DICTIONAL HIGH COURT PERTAINS TO THE OLD INCOME-TAX ACT OF 1922 WH ERE RECTIFICATION BY THE TRIBUNAL IS PROVIDED UNDER SEC TION 35 OF THE OLD ACT AND IN SECTION 35 OF THE OLD ACT, IT WAS SP ECIFICALLY PROVIDED THAT THE WORDS 'IN LIKE MANNER' APPEARING IN SUB-SECTION (2) OF SECTION 35 IN RELATION TO SUB-SECTION (1) OF SECTION 35 ARE NOT SUFFICIENT TO APPREHEND THE AUTHORISED REPRESEN TATIVE OF THE INCOME-TAX DEPARTMENT. IT IS NOTED THAT THE LD. AU THORISED REPRESENTATIVE FOR REVENUE/ASSESSEE HAVE NO POWER TO SIGN ANY APPEALS, CROSS-OBJECTIONS, GROUNDS AND ADDITION AL GROUNDS BEFORE THE TRIBUNAL. HE IS AUTHORIZED ONLY TO ARGUE THE CASE. HE IS NOT COMPETENT TO SIGN THE APPEALS, CO-OBJECTIONS , GROUNDS AND ADDITIONAL GROUNDS BEFORE THE TRIBUNAL AS PER THE P ROVISIONS OF THE ACT. AS PER SECTION 140 OF THE INCOME TAX ACT, THE FOLLOWING PERSON COULD SIGN THE APPEALS, CO-OBJECTIONS, GROUN DS AND ADDITIONAL GROUNDS BEFORE THE TRIBUNAL. A) IN THE CASE OF AN INDIVIDUAL, (I) BY THE INDIVIDUAL HIMSELF; (II) WHERE THE INDIVIDUAL IS ABSENT FROM INDIA, BY THE INDIVIDUAL CONCERNED OR BY SOME PERSON DULY AUTHORISED BY HIM IN THIS - - ITA 1396/15 23 BEHALF; AND WHERE THE INDIVIDUAL IS MENTALLY INCAPA CITATED FROM ATTENDING TO HIS AFFAIRS, BY HIS GUARDIAN OR BY ANY OTHER PERSON COMPETENT TO ACT ON HIS BEHALF; (III) WHERE HE IS MENTALLY INCAPACITATED FROM ATTEN DING TO HIS AFFAIRS, BY HIS GUARDIAN OR ANY OTHER PERSON COMPET ENT TO ACT ON HIS BEHALF ; AND (IV) WHERE, FOR ANY OTHER REASON, IT IS NOT POSSIBL E FOR THE INDIVIDUAL TO VERIFY THE RETURN, BY ANY PERSON DULY AUTHORISED BY HIM IN THIS BEHALF : PROVIDED THAT IN A CASE REFERRED TO IN SUB-CLAUSE ( II) OR SUB- CLAUSE (IV), THE PERSON VERIFYING THE RETURN HOLDS A VALID POWER OF ATTORNEY FROM THE INDIVIDUAL TO DO SO, WHICH SHALL BE ATTACHED TO THE RETURN ; (B) IN THE CASE OF A HINDU UNDIVIDED FAMILY, BY THE KARTA, AND, WHERE THE KARTA IS ABSENT FROM INDIA OR IS MENTALLY INCAPACITATED FROM ATTENDING TO HIS AFFAIRS, BY ANY OTHER ADULT M EMBER OF SUCH FAMILY; (C) IN THE CASE OF A COMPANY, BY THE MANAGING DIREC TOR THEREOF, OR WHERE FOR ANY UNAVOIDABLE REASON SUCH MANAGING D IRECTOR IS NOT ABLE TO VERIFY THE RETURN, OR WHERE THERE IS NO MANAGING DIRECTOR, BY ANY DIRECTOR THEREOF; PROVIDED THAT WHERE THE COMPANY IS NOT RESIDENT IN INDIA, THE RETURN MAY BE VERIFIED BY A PERSON WHO HOLDS A VALI D POWER OF ATTORNEY FROM SUCH COMPANY TO DO SO, WHICH SHALL BE ATTACHED TO THE RETURN : PROVIDED FURTHER THAT(A) WHERE THE COMPANY IS BEING WOUND UP, WHETHER UNDER THE ORDERS OF A COURT OR OTHERWISE, O R WHERE ANY PERSON HAS BEEN APPOINTED AS THE RECEIVER OF ANY AS SETS OF THE COMPANY, THE RETURN SHALL BE VERIFIED BY THE LIQUID ATOR REFERRED TO IN SUB-SECTION (1) OF SECTION 178 ;(B) WHERE THE MANAGEMENT OF THE COMPANY HAS BEEN TAKEN OVER BY THE CENTRAL G OVERNMENT OR ANY STATE GOVERNMENT UNDER ANY LAW, THE RETURN O F THE COMPANY SHALL BE VERIFIED BY THE PRINCIPAL OFFICER THEREOF ; (CC) IN THE CASE OF A FIRM, BY THE MANAGING PARTNER THEREOF, OR WHERE FOR ANY UNAVOIDABLE REASON SUCH MANAGING PART NER IS NOT ABLE TO VERIFY THE RETURN, OR WHERE THERE IS NO MAN AGING PARTNER AS SUCH, BY ANY PARTNER THEREOF, NOT BEING A MINOR ; (CD) IN THE CASE OF A LIMITED LIABILITY PARTNERSHIP , BY THE DESIGNATED PARTNER THEREOF, OR WHERE FOR ANY UNAVOI DABLE REASON - - ITA 1396/15 24 SUCH DESIGNATED PARTNER IS NOT ABLE TO VERIFY THE R ETURN, OR WHERE THERE IS NO DESIGNATED PARTNER AS SUCH, BY ANY PART NER THEREOF. (D) IN THE CASE OF A LOCAL AUTHORITY, BY THE PRINCI PAL OFFICER THEREOF ; (DD) IN THE CASE OF A POLITICAL PARTY REFERRED TO I N SUB-SECTION (4B) OF SECTION 139, BY THE CHIEF EXECUTIVE OFFICER OF SUCH PARTY (WHETHER SUCH CHIEF EXECUTIVE OFFICER IS KNOWN AS S ECRETARY OR BY ANY OTHER DESIGNATION) ; (E) IN THE CASE OF ANY OTHER ASSOCIATION, BY ANY ME MBER OF THE ASSOCIATION OR THE PRINCIPAL OFFICER THEREOF; AND (F) IN THE CASE OF ANY OTHER PERSON, BY THAT PERSON OR BY SOME PERSON COMPETENT TO ACT ON HIS BEHALF. 20. THE PROCEDURE FOR FILING OF ADDITIONAL GROUNDS IS AT PAR WITH THE FILING OF APPEAL AND THE RULES FRAMED UNDER ITA T RULES FOR FILING OF APPEAL WILL ALSO APPLY TO ADDITIONAL GROU ND ALSO. THE IT RULES, 1962, PRESCRIBES AN APPEAL SHALL BE IN FORM NO.36 AND THE FORM GIVES THE REQUIRED VERIFICATION PORTION. IT I S ALSO PRESCRIBED IN RULE 47 THAT MEMORANDUM AND THE GROUNDS OF APPEA L AS ALSO THE VERIFICATION PORTION SHALL BE SIGNED BY THE ASS ESSEE AS PRESCRIBED UNDER RULE 45(2). IF THE ENTIRE PROVIS IONS OF THE IT ACT, 1961, IT RULES, 1962 AND ITAT RULES, 1963, ARE READ TOGETHER IT CLEARLY EMERGES THAT AN APPLICATION FOR ADMISSION OF ADDITION GROUNDS IN THIS CASE CAN BE FILED EITHER B Y THE ASSESSEE OR THE ASSESSING OFFICER , AS THE CASE MAY BE. IF ADDITIONAL GROUND FILED BEFORE THE TRIBUNAL BY THE ASSESSEE OR THE - - ITA 1396/15 25 ASSESSING OFFICER , THE SAME CAN BE CONSIDERED, SUBJECT TO THE PROVISIONS OF LAW. THE ONLY INTERESTED PERSONS IN THE RESULT CAN FILE THE ADDITIONAL GROUND AND THE TRIBUNAL HAS TO ACT ON REPRESENTATION MADE TO IT BY THE ASSESSEE OR BY TH E DEPARTMENT, I.E. THROUGH ASSESSING OFFICER ONLY WHO IS PARTY TO THE APPEAL. THE ASSESSEE OR THE ASSESSING OFFICER HAS A RIGHT J UST LIKE A PARTY TO DRAW THE ATTENTION OF THE TRIBUNAL AND THE Y HAVE A FURTHER RIGHT TO INSIST THAT THE TRIBUNAL SHALL EXAMINE THE ADDITIONAL GROUND. IN VIEW OF THE ABOVE LEGAL AND FACTUAL SIT UATION, THE AUTHORISED REPRESENTATIVE WHETHER OF THE REVENUE OR OF THE ASSESSEE STANDS IN THE SAME POSITION AS AN OUTSIDER . THE ONLY PERSON COMPETENT TO SIGN AND VERIFY AN APPEAL SHOUL D SIGN AND VERIFY LIKE MISCELLANEOUS PETITION, STAY PETITION A ND OTHERS LIKE ADDITIONAL GROUND. WHERE THE SIGNATURE AND VERIFIC ATION ON THE MEMORANDUM OF APPEAL WAS MADE BY ANY AGENT OF THE ASSESSEE OR FOR THE REVENUE AND NOT BY THE ASSESSEE OR THE ASSESSING OFFICER, IT CANNOT BE HELD THAT THE APPEA L OR ANY APPLICATION FILED IS A VALID APPEAL OR APPLICATION. FURTHER, AS PER THE ITAT RULES, 1963, FILING OF ADDITIONAL GROUNDS EQUATES THE PROCEDURE FOR FILING OF APPEAL WITH THAT OF THESE A PPLICATIONS. AS - - ITA 1396/15 26 FAR THE ASSESSEE IS CONCERNED, THE APPEALS ARE TO B E SIGNED BY THE ASSESSEE AND NONE OTHER THAN THE ASSESSEE. HEN CE, THE PRELIMINARY OBJECTION BY THE LD. DR IS NOT MAINTAIN ABLE. ACCORDINGLY, THE PRELIMINARY OBJECTION BY THE LD. D R IS DISMISSED AS NON-MAINTAINABLE AND ONLY AO CAN RAISE SUCH GROU ND. 21. NOW, COMING TO THE MERIT OF THE ISSUE RAISED BY THE REVENUE, AT THE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSEE MADE THE SUBMISSIONS BEFORE THE AO, WHEREIN PRODUCT FUNCTION, AND DUES DISSIMILAR IS RELATING TO POULTRY, FEED, COMPOUND PREMIX WAS BROUGHT OUT BUT, THE AO IGNORED ALL THESE AND P ROCEEDED TO COMPARE THE PROFIT MARGIN OF INDEPENDENT COMPANIES MANUFACTURING FEEDS AND COMPOUND PREMIX, WHICH ARE DISSIMILAR. THE ASSESSEE HAS ALSO FURNISHED PRICE LEVEL COMPARABILITY OF AN IDENTICAL PRODUCT MANUFACTURED BY AN INDEPENDENT PARTY AND THE SAME WAS ALSO IGNORED BY THE AO. HOWEVER, THE ASSESSEE WAS PRODUCED THE SAME BEFORE THE CIT(APPEALS), WHO AFTER EXAMINING CAME TO THE CONCL USION THAT MARKETING PRICE OF THE ASSESSEE IS JUSTIFIED IN VIE W OF THE PRICE CHART BY THE COMPARABLE CASES. AS SUCH, IN OUR OPI NION, THE FINDINGS GIVEN BY THE CIT(APPEALS) IN HIS ORDER IS APPROPRIATE AND - - ITA 1396/15 27 DOES NOT CALL FOR ANY INTERFERENCE. FURTHER, THE D R HAS STRONGLY OBJECTED THE ADMISSION OF FRESH EVIDENCE IN THE FOR M OF INVOICE OF PURCHASES MADE FROM DIVI ENTEREPRISES, PROBIOTECH I NDUSTRIES PVT. LTD. AND AVITECH NUTRITION PVT. LTD.. IN OUR OPINION, THESE DOCUMENTS WERE VERY MUCH BEFORE THE AO AND THE ASSE SSEE HAS ALSO PRODUCED THE FOLLOWING DOCUMENTS BEFORE THE AO : A) THE DETAILS OF 80IB CLAIM WEF AY 2004-05 B) COPIES OF P U RC H ASE INVOICES OF POULTRY FEED PREMIX FROM 3RD PARTY SUPPLIER M/ S . D IVI E N TERPRISES C) COPIES O F APPE L LANT STOCK TRANSFER NOTES D) COMPARATIVE F I NANCIAL STATEMENTS W.E.F. AY 2006-07 TO 2010-11 PERT A INING TO ENTITLEMENT OF DEDUCTION U/S.80IB AS WELL AS ASSESSEE E)ALSO IN RESPONSE TO THE NOTICE OF AO BE A RING NO. ADDL CIT /RANGE - 1/CBE/ A ADCS0655F/2013 - 14 DTD . 19 . 02 . 2014 FILED BY US ON 05/03/2014 ASSESSEE HAS SPECIFICALLY MENTIONED THAT TH E 80IB UNIT ST A RT E D S ELLING ITS PREMIX TO OTHER CUSTOMERS A LSO WITH EFFECT FROM FINANCI A L Y E AR 2 012-13 FOR MORE OR LESS SAM E PRICE WHI C H IS BEING S OLD TO APPELLANT F EE D MI LLS (LAST PARA) . IN SPITE OF BRINGING THIS FACT TO AO, THE AO H A S C A T EG ORIC A LLY HELD IN ASSESSMENT ORD E R (P A RA 7 . 4) TH A T POULTRY FE E D PR E MI X D OE S NOT H AVE AN Y IND E PEND E NT M A RK E T. BEING SO, IT CANNOT BE SAID THAT THERE IS FRESH EVI DENCE AND THERE IS VIOLATION OF RULE 46A OF THE I.T.RULES. CONSID ERING THE ABOVE - - ITA 1396/15 28 FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE CIT(APPEALS) AND THE SAME IS CONFIRMED. 22. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THURSDAY, THE 14 TH OF JAN., 2016 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 14 TH JAN., 2016. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.