M/s. International Power Corporation Pvt. Ltd., Bangalore V. Income Tax Officer, Bangalore

ITA 1896/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4097 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 11-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMARAH SWAIN
• Assessee Lawyers: A C RAJU
• Keywords: Opportunity of being heard; Question of law; Right to appeal; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI N. V. VASUDEVANV, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 1896/BANG/2016 (ASSESSMENT YEAR: 2009 - 10) M/S. INTERNATIONAL POWER CORPORATION LTD., NO. 19, 3 RD FLOOR, SHIVSHANKAR PLAZA, LALBAGH ROAD, RICHMOND CIRCLE, BENGALURU 560027. PAN AAACI3833Q APPELLANT. VS. THE INCOME TAX OFFICER, WARD 11 (2), BANGALORE. RESPONDENT. ASSESSEE BY : SHRI A. C. RAJU, C. A. RE VENUE BY : S HRI SMARAH SWAIN , JC IT ( DR ) DATE OF HEARING : 07.08.2018. DATE OF PRONOUNCEMENT : 10.08.2018. O R D E R PER SHRI A. K. GARODIA, A.M. : THIS APPEAL IS FILED BY THE ASSESSEE AND THIS IS DI RECTED AGAINST THE ORDER OF THE CIT (A) 3, BANGALURU DATED 31.08.2016 FOR A. Y. 2 009 - 10. 2. AS PER GROUND NO. 2, THIS IS THE GRIEVANCE OF TH E ASSESSEE THAT THE CIT (A) HAS ERRED IN NOT ENTERTAINING THE ADDITIONAL GROUND OF APPEAL WITH A PLEA TO HOLD THAT THE SALE OF CARBON CREDIT IS CAPITAL RECEIPT AND NO T LIABLE TO TAX AS TAXABLE INCOME. 3. IN COURSE OF HEARING BEFORE US, IT IS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT AS PER PARA 6 OF THE ORDER OF CIT (A) , HE HAS NOTED ABOUT THIS ADDITIONAL GROUND RAISED BY THE ASSESSEE BEFORE HIM AND AS PER PARA 6.2 OF HIS ORDER, LEARNED CIT (A) HAS REFUSED TO ENTERTAIN THI S ADDITIONAL GROUND BY SAYING THAT THIS ISSUE WAS NOT RAISED BEFORE THE AO AND NO GOOD REASON IS SHOWN BY 2 ITA NO. 1896/BANG/2016 THE ASSESSEE AS TO WHY THIS ISSUE WAS NOT RAISED BE FORE THE AO. HE SUBMITTED THAT THIS IS A LEGAL ISSUE AND THEREFORE CAN BE RAI SED AT ANY STAGE AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF NTPC VS. CIT, 229 ITR 383. LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT (A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT LEARNED CIT (A) HAS ALSO NOTED THIS JUDGMENT OF HONBLE APEX COURT REND ERED IN THE CASE OF NTPC VS. CIT (SUPRA) BUT DID NOT ADMIT THE ADDITIONAL GR OUND BY SAYING THAT AS PER THIS JUDGMENT, THIS IS TO BE ESTABLISHED BY THE ASS ESSEE THAT THE ADDITIONAL GROUND BEING RAISED BEFORE CIT (A) OR TRIBUNAL COUL D NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. HENCE, WE EXAMINE THIS JU DGMENT OF HONBLE APEX COURT TO FIND OUT AS TO WHETHER THIS IS A RATIO DEC IDENDI OF THIS JUDGMENT. WE FIND THAT THE DECISION OF HONBLE APEX COURT IS CONTAINE D IN PARA 3 TO 6 OF THIS JUDGMENT AND HENCE, WE REPRODUCE THESE PARAS FOR RE ADY REFERENCE. THESE ARE AS UNDER:- 3. UNDER S. 254 OF THE IT ACT THE TRIBUNAL MAY, AF TER 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 TE RMS. THE PURPOSE OF THE ASSESSMENT PROCEEINGS BEFORE THE TAXING AUTHORI TIES IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCOR DANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN W HILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON -TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING T HAT 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 AN Y REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER S. 254 ONLY TO DECI DE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE CIT(A). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS -OBJECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOUL D BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESS MENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. 4. IN THE CASE OF JUTE CORPORATION OF INDIA LTD. VS . CIT (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC) : TC 7R.343, THIS COURT, WHILE DEALING WITH THE POWERS OF THE AAC OBSERVED THAT AN APPELLATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUT HORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE REST RICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PR OVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION, THE APPELLATE A UTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE A UTHORITY MAY HAVE 3 ITA NO. 1896/BANG/2016 IN THE MATTER. THERE IS NO GOOD REASON TO JUSTIFY C URTAILMENT OF THE POWER OF THE AAC IN ENTERTAINING AN ADDITIONAL GROU ND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF THE ORDER OF AS SESSMENT PASSED BY THE ITO. THIS COURT FURTHER OBSERVED THAT THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL A ND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE AAC MUST BE SAT ISFIED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. THE AAC SHOULD EXE RCISE HIS DISCRETION IN PERMITTING OR NOT PERMITTING THE ASSE SSEE TO RAISE AN ADDITIONAL GROUND IN ACCORDANCE WITH LAW AND REASON . THE SAME OBSERVATIONS WOULD APPLY TO APPEALS BEFORE THE TRIB UNAL ALSO. 5. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO I SSUES ARISING OUT OF THE APPEAL BEFORE THE CIT(A) TAKES TOO NARROW A VIE W OF THE POWERS OF THE TRIBUNAL [VIDE, E.G., CIT VS. ANAND PRASAD (198 1) 128 ITR 388 (DEL) : TC 8R.1021, CIT VS. KARAMCHAND PREMCHAND (P ) LTD. (1969) 74 ITR 254 (GUJ) : TC 8R.547 AND CIT VS. CELLULOSE PRODUCTS OF INDIA LTD. (1985) 44 CTR (GUJ) 278 (FB) : (1985) 151 ITR 499 (GUJ)(FB) : TC 8R.965]. UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT W HERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARIS ING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS W E 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 COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 6. THE REFRAMED QUESTION, THEREFORE, IS ANSWERED IN THE AFFIRMATIVE, I.E., THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QU ESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORITIES B ELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. WE RE MAND THE PROCEEDINGS TO THE TRIBUNAL FOR CONSIDERATION OF TH E NEW GROUNDS RAISED BY THE ASSESSEE ON THE MERITS. 5. FROM THESE PARAS OF THIS JUDGMENT OF HONBLE APE X COURT, IT COMES OUT THAT IN RESPECT OF RAISING A LEGAL ISSUE FOR THE FIRST TIME BEFORE THE TRIBUNAL, THE ONLY PREREQUISITE IS THIS THAT ALL RELEVANT FACTS ARE ON RECORD AND THERE IS NO SUCH PRECONDITION THAT THIS IS TO BE ESTABLISHED BY THE ASSESSEE THAT THE ADDITIONAL GROUND BEING RAISED BEFORE CIT (A) OR TRIBUNAL COUL D NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. HENCE, WE HOLD THAT THE L EARNED CIT 9A) SHOULD HAVE ADMITTED THIS ADDITIONAL GROUND. WE NOW ADMIT THE S AME AND RESTORE THE MATTER BACK TO CIT (A) TO DECIDE THIS ISSUE RAISED BY THE ASSESSEE BY WAY OF ADDITIONAL GROUND. 4 ITA NO. 1896/BANG/2016 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 10.08.2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.