Sh. Rajesh Kumar, Prop., Jalandhar V. The Income Tax Officer, Jalandhar

ITA 212/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0570 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2016
• Assessment Year: 1998-1999
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: S S KALRA
• Keywords: Period of limitation; Additional evidence; Question of law
• Section: 69C; 143(3); 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.212(ASR)/2016 ASSESSMENT YEAR:1998-99 PAN: ACBPK1810B SH. RAJESH KUMAR, PROP. VS. INCOME TAX OFFICER, M/S. PARKAR INDUSTRIES, WARD-1(3), JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.S. KALRA, CA RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 27/06/2016 DATE OF PRONOUNCEMENT: 11/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 1998-99, AGAINST THE ORDER DATED 02.02.2016, PASSED BY THE LD. CIT(A)1, JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LD. CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE IN REFUSING TO ADMIT THE ADDITIONAL GROUND OF APPEAL INVOLVING PURELY A QUESTION OF LAW BASED ON THE FAC TS AVAILABLE ON RECORD, AS WAS RAISED BY THE ASSESSEE APPELLANT DURING THE COURSE OF THE APPELLATE PROCEEDINGS. 3. THAT THE LD.CIT(A) HAD FAILED TO APPRECIATE 69C OF THE ACT AS WAS AVAILABLE ON THE STATUTE UPTO 01.04.1999, AN D WAS APPLICABLE TO THE YEAR UNDER CONSIDERATION IN THE C ASE OF THE PRESENT ASSESSEE APPELLANT, THE ADDITION OF RS. 6,8 7,978/- ITA NO.212(ASR)/2016 A.Y. 1998-99 2 MADE W.R.T EXCESS EXPENDITURE INCURRED BY THE ASS ESSEE IN THE COURSE OF HIS BUSINESS, BEING ALLOWABLE AS A DE DUCTION U/S 37(1), WOULD THEREIN STAND NEUTRALIZED, PURSUAN T WHERETO NO ADDITION WOULD SURVIVE IN THE HANDS OF T HE ASSESSEE APPELLANT. 4. THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FAC TS OF THE CASE IN FAILING TO APPRECIATE THAT THE CLAIM OF THE ASSE SSEE THAT IN LIGHT OF PRE-AMENDED SEC. 69C R.W SEC. 37(1) OF THE ACT, THE ADDITION OF RS. 6,87,978/- WOULD STAND NEUTRALIZED, AS A RESULT WHEREOF NO ADDITION WOULD SURVIVE IN THE HAN DS OF THE ASSESSEE, WAS A CLAIM WHICH WAS ABSOLUTELY NOT IN C ONFLICT WITH THE OBSERVATIONS/DIRECTIONS OF THE HONBLE TRI BUNAL, BUT RATHER WAS PURELY A LEGAL ISSUE BASED ON FACTS AV AILABLE ON RECORD, WHICH HAD EMERGED AFTER THE DIRECTIONS' OF THE TRIBUNAL HAD BEEN GIVEN EFFECT TO BY THE A.O. 5. THAT THE LD. CIT(A) PROCEEDING ON THE BASIS OF MISCONCEIVED FACTS AS WELL AS LOOSING SIGHT OF THE SETTLED POSIT ION OF LAW HAD THEREIN SUSTAINED AN ADDITION OF RS. 6,87,978/- IN THE HANDS OF THE ASSESSEE. 2. GROUND NO.1 IS GENERAL. HENCE, IT DOES NOT REQUI RE ANY ADJUDICATION. 3. APROPOS GROUND NO.2, THE ASSESSEE STATES THAT TH E LD. CIT(A) HAS ERRED IN REFUSING TO ADMIT THE ADDITIONAL GROUND O F APPEAL RAISED BEFORE HIM, THOUGH THE SAME INVOLVES A PURE QUESTION OF L AW, BASED ON THE FACTS ON RECORD. 4. IN THIS REGARD, THE LD. CIT(A) HAS OBSERVED AS FOLLOWS: A REQUEST WAS ALSO MADE FOR ADMISSION OF AN ADDITI ONAL GROUND AS UNDER: 1. THAT THE AO WHILE MAKING THE IMPUGNED ADDITION OF RS.6,87,978/-PERTAINING TO THE DIFFERENCE IN THE EX PENSES AS STOOD GATHERED ON A COMPARATIVE PERUSAL OF THE EXPENSES D EBITED IN THE TRADING, PROFIT & LOSS A/C FILED WITH THE BANK, AS AGAINST THE EXPENSES DEBITED IN THE TRADING, PROFIT & LOSS A/C FILED ALONG WITH THE RETURN OF INCOME , HAS FAILED TO APPRECIATE T HAT AS PER THE PRE- ITA NO.212(ASR)/2016 A.Y. 1998-99 3 AMENDED SEC. 69C OF THE ACT AS WAS APPLICABLE DUR ING THE YEAR UNDER CONSIDERATION, THE ADDITION MADE W.R.T. SUCH EXCESS EXPENDITURE, BEING ALLOWABLE AS A DEDUCTION U/S 37 (1) , WOULD THUS STAND NEUTRALIZED AND AS A CONSEQUENCE THERETO NO A DDITION WOULD SURVIVE IN THE HANDS OF THE ASSESSEE. THAT AS THE AFORESAID GROUND OF APPEAL INVOLVES PURELY A QUESTION OF LAW ON THE BASIS OF FACTS AVAILABLE ON RECORD, I T IS THEREFORE MOST HUMBLY PRAYED THAT THE SAME .MAY KINDLY BE ADMITTED BY YOUR GOODSELF. 11. A PAPER BOOK COMPILATION OF CASE LAWS (PAGE 1 T O 32) WAS ALSO FILED IN SUPPORT AND THE SAME WOULD BE DISCUSS ED WHEREVER REQUIRED IN THIS ORDER. 12. THE REQUEST FOR ADMISSION OF ADDITIONAL GROUND WAS SENT TO THE A.O. FOR HIS COMMENTS WHICH WERE RECEIVED VIDE LETTER NO. 1078 DATED 17.08.15, AS UNDER: KINDLY REFER TO YOUR OFFICE LETTER NO.CIT(A)/JAL/L 5-16/410 DATED 29.05.2015 ON THE SUBJECT CITED ABOVE. 2. IT IS SUBMITTED THAT THE ASSESSEE VIDE HIS APPLI CATION DATED 28.04.2015 HAS RAISED ADDITIONAL GROUND OF APPEAL I N THIS CASE REGARDING ADDITION OF RS.6,87,978/- MADE BY THE ASS ESSING OFFICER UNDER THE HELD INCOME FROM OTHER SOURCES THE ADDIT IONAL GROUND OF APPEAL IS REPRODUCED AS UNDER : 1. THAT THE AO WHILE MAKING THE IMPUGNED ADDITION OF RS.6,87,978/- PERTAINING TO THE DIFFERENCE IN THE E XPENSES AS STOOD GATHERED ON A COMPARATIVE PERUSAL OF THE EXPENSES D EBITED IN THE TRADING PROFIT & LOSS A/C FILED WITH THE BANK, AS AGAINST THE EXPENSES DEBITED IN THE 'TRADING, PROFIT & LOSS A/C 'FILED ALONG WITH THE RETURN OF INCOME , HAS FAILED TO APPRECIATE T HAT AS PER THE PRE- AMENDED SEC. 69C OF THE ACT AS WAS APPLICABLE DURIN G THE YEAR UNDER CONSIDERATION, THE ADDITION MADE W.R.T. SUCH EXCESS EXPENDITURE, BEING ALLOWABLE AS A DEDUCTION U/S 37 (1), WOULD THUS STAND NEUTRALIZED AND AS A CONSEQUENCE THERETO NO A DDITION WOULD SURVIVE IN THE HANDS OF THE ASSESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSMENT I N THIS CASE WAS COMPLETED ON 24.12.2009 ON THE SPECIFIC DIRECTI ONS GIVEN BY THE HONBLE IT AT IN ASSESSEE'S CASE. THERE WAS DIFFERE NCE IN THE EXPENSES DEBITED TO THE TRADING, PROFIT & LOSS ACCO UNTS FILED BY THE ASSESSEE WITH THE BANKING AUTHORITIES AND THAT FILE D WITH THE INCOME TAX DEPARTMENT. THE HON'BLE 1TAT VIDE PARA 14 OF IT S ORDER, HAD SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORED THE ISSUE TO THE FILE OF ITA NO.212(ASR)/2016 A.Y. 1998-99 4 THE ASSESSING OFFICER GIVING SPECIFIC DIRECTIONS IN THIS CASE THAT THE ADDITIONS SHOULD BE MADE ONLY IF THE ASSESSEE IS NO T ABLE TO RECONCILE THE DIFFERENCE WITH PROPER EVIDENCE, JUST IFICATION AND EXPLANATION . THE ASSESSEE WAS GIVEN SUFFICIENT OP PORTUNITY TO FURNISH ITS EXPLANATION WITH EVIDENCE. THE REPLY FU RNISHED BY THE ASSESSEE WAS DULY CONSIDERED DURING REASSESSMENT PR OCEEDINGS AS DIRECTED BY THE HON'BLE IT A T. THE ASSESSMENT WAS ACCORDINGLY COMPLETED BY THE AO AFTER ALLOWING ADEQUATE OPPORTU NITY LO RECONCILE THE DIFFERENCE WITH PROPER EVIDENCE, JUSTIFICATION AND EXPLANATION . THE ASSESSEE COULD EXPLAIN THE DIFFERENCE IN DEPREC IATION AMOUNTING TO RS.88,053/- ONLY OUT OF THE TOTAL DIFFERENCE OF RS.7,76,631/- AND AS SUCH THE BALANCE DIFFERENCE OF RS.6,87,978/- WAS TREATED AS INCOME EARNED BY THE ASSESSEE FROM UNDISCLOSED SOUR CES AND ASSESSED UNDER THE HEAD 'INCOME FROM OTHER SOURCES . 14. IT IS SUBMITTED THAT NO SUCH GROUND OF APPEAL, AS RAISED NOW, IN ADDITIONAL GROUND OF APPEAL WAS TAKEN BEFORE THE ASSESSING OFFICER NR BEFORE THE APPELLATE AUTHORITIES EARLIER . THE ASSESSEE HAS NOT MENTIONED ANY REASONS FOR OMISSION OF SUCH GROU ND NOW RAISED AS ADDITIONAL GROUND, IN THE ORIGINAL APPEALS FILED BEFORE THE APPELLATE AUTHORITIES. IN VIEW OF THE ABOVE FACTS O F THE CASE, IT IS REQUESTED THAT THE ADDITIONAL GROUND NOW RAISED BY THE ASSESSEE BEFORE YOUR GOODSELF MAY NOT BE ADMITTED. 5. EVEN ON MERITS, THE DIFFERENCE OF RS.6,87,978/- WAS ASSESSED AS EXPENSES OUT OF UNDISCLOSED SOURCES. THE EXPENSE S AS CLAIMED BY THE ASSESSEE IN HIS TRADING, P & L A/C, WHICH IS DU LY AUDITED BY THE CHARTERED ACCOUNTANT, INCURRED, TO EARN THE TAXABLE INCOME HAVE ALREADY BEEN ALLOWED WHILE FRAMING ASSESSMENT AND A S SUCH THE QUESTION DOES NOT ARISE OF ALLOWING THE EXPENSES U/ S 37(1) OF THE ACT, AS CLAIMED IN THE ADDITIONAL GROUND. THEREFORE , THE ADDITIONAL GROND RAISED, BY THE ASSESSEE IS NOT ADMISSIBLE. 13. THE ASSESSEE, IN THE REJOINDER SUBMITTED, AS UN DER: 2. THE A.O HAD MERELY REFERRED TO AND REPRODUCED T HEREIN THE ADDITIONAL GROUND OF APPEAL AS HAD BEEN SO RAISED B Y THE ASSESSEE VIDE HIS LETTER FILED WITH YOUR OFFICE AS ON 29.04. 2015, THEREIN INVOLVING PURELY A QUESTION OF LAW BASED ON THE FAC TS AVAILABLE ON RECORD. 3 TO 5. THAT THE OBJECTIONS OF THE A. O AT SR. NO. 3 TO 5 OF THE AFORESAID LETTER DATED : 17.08.2015, ARE MORE OR LE SS OF THE NATURE, AS IF THE ASSESSEE HAD. FILED AN APPLICATION U/ RUL E 46A FOR ADMISSION OF AN ADDITIONAL EVIDENCE . IN THIS REG ARD AT THE VERY OUTSET AND WITHOUT PREJUDICE TO THE SETTLED, POSITI ON OF LAW THAT AN ADDITIONAL QUESTION OF LAW ARISING FROM THE FACTS AVAILABLE ON ITA NO.212(ASR)/2016 A.Y. 1998-99 5 RECORD CAN BE RAISED, THOUGH FOR THE VERY FIRST TIM E, BEFORE THE APPELLATE AUTHORITIES, IT IS EVEN OTHERWISE SUBMITT ED THAT THE A.O HAD FAILED TO APPRECIATE THE FINDINGS OF THE HONBL E IT AT, IN TOTO, AS SUCH, WHEREIN THE LATTER AT PAGE 7 - PARA 14 OF ITS ORDER, WHILE RESTORING THE MATTER TO THE FILE OF THE AO, HAD THE REIN DIRECTED THE LATTER TO REDECIDE THE ISSUE AFTER ALLOWING REASONA BLE OPPORTUNITY TO THE ASSESSEE, BY OBSERVING AS UNDER: 14. IN THE LIGHT OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE TH E ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF TH E A.O WITH A DIRECTION TO REDECIDE THE ISSUE AFTER ALLOWING REAS ONABLE OPPORTUNITY TO THE ASSESSEE AND KEEPING IN VIEW THE DIRECTIONS GIVEN ABOVE. THE ADDITION SHOULD BE MADE ONLY IF TH E ASSESSEE IS NOT ABLE TO RECONCILE THE DIFFERENCE WI TH PROPER EVIDENCE, JUSTIFICATION AND EXPLANATION. WHILE DOIN G SO, THE DIRECTIONS OF THE TRIBUNAL GIVEN HEREINABOVE BE BOR NE IN MIND. THEREFORE, THE GROUND OF APPEAL OF THE REVENUE IS T REATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THUS A BARE PERUSAL OF THE AFORESAID FINDINGS OF TH E HONBLE TRIBUNAL THEREIN REVEALS THAT THE ISSUE AS REGARDING THE INC URRING OF 'EXCESS EXPENDITURE OUTSIDE THE REGULAR BOOKS OF ACCOUNT S BY THE ASSESSEE HAD BEEN RESTORED TO THE FILE OF THE AO FO R BEING REDECIDED, AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSES SEE. IN THIS REGARD IT WOULD BE RELEVANT TO POINT OUT THAT THE T RIBUNAL WHILE RESTORING THE MATTER TO THE FILE OF THE A.O, FOR BE ING REDECIDED, HAD ALSO OBSERVED THAT THE DIRECTIONS OF THE ITAT MAY A LSO BE KEPT IN VIEW, WITH A FURTHER OBSERVATION THAT SUCH ADDITION IS TO BE MADE ONLY IF THE ASSESSEE IS NOT ABLE TO RECONCILE THE D IFFERENCE WITH PROPER EVIDENCE, JUSTIFICATION AND EXPLANATION, BUT HOWEVE R THE AFORESAID 'DIRECTIONS OF THE TRIBUNAL, READ IN CONJUNCTION W ITH THE TERM 'AND' USED THEREIN, ONLY SUPPLEMENTS AND ENLARGES THE SCO PE OF REDECIDING OF THE AFORESAID ISSUE, WHICH IS DIRECTED TO BE CAR RIED OUT AFTER ALLOWING REASONABLE OPPORTUNITY T O THE ASSESSEE, C OUPLED WITH THE OBSERVATIONS/DIRECTIONS SO MADE BY THE TRIBUNAL IN THE BODY OF ITS APPELLATE ORDER, WHICH THEREIN CANNOT BE CONSTRUED AS HAVING LAID DOWN A STRAIT JACKET BY THE TRIBUNAL, WHICH THER EIN WOULD LEAD TO JEOPARDIZING THE SCOPE OF ADJUDICATION OF THE AFORE SAID ISSUE UNDER CONSIDERATION. THAT STILL FURTHER WITHOUT PREJUDICE TO THE AFORESA ID FACTUAL POSITION, IT IS HUMBLY SUBMITTED THAT THE A.O HAD ABSOLUTELY MISCONCEIVED THE FACTS AND THE SETTLED POSITION OF LAW, AND THUS FAI LING TO APPRECIATE THAT IT WAS NOT A CASE WHERE THE MATTER HAD BEEN REMANDED/RESTORED BY THE TRIBUNAL TO THE FILE OF TH E LD.CIT(A) WITH A ITA NO.212(ASR)/2016 A.Y. 1998-99 6 SPECIFIC RESTRICTION ON THE SCOPE OF THE FRESH ADJU DICATION BY THE LD.CIT(A), BUT RATHER IT WAS A CASE WHERE THE AFORE SAID MATTER/ISSUE HAD BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF TH E A.O. FOR FRESH ADJUDICATION, PURSUANT WHERETO ON THE DENOVO ADJUDI CATION OF THE MATTER/ISSUE BY THE AO, WHICH IN THE PRESENT CASE H AD BEEN DONE BY THE LATTER VIDE HIS ORDER PASSED U/S 143(3) OF T HE 'ACT, DT:24.12.2009, THEREAFTER THE SCOPE OF THE POWERS O F THE ASSESSEE TO RAISE ANY LEGAL OBJECTION' BEFORE THE LD. C1T(A), AS REGARDS SUCH FRESH ADJUDICATION BY THE A.O U/S 143(3) (SUPRA), T HEREIN CANNOT BE JEOPARDIZED BY ANY MEANS, AS THE ASSESSEE REMAINS V ESTED WITH THE STATUTORY RIGHT' TO CHALLENGE SUCH FRESH ADJUDICAT ION SO CARRIED OUT BY THE A.O U/S 143(3). BEFORE THE LD.CIT(A), ON THE BASIS OF A 'LEGAL ISSUE ARISING FROM THE FACTS AVAILABLE ON RECORD. IN THIS REGARD, BY WAY OF AN EXEMPLARY SITUATION THE AFORESAID CONTENT ION OF THE ASSESSEE CAN BE WELL DEMONSTRATED, SAY THE FRESH AD JUDICATION U/S 143(3) SO CARRIED OUT BY THE A.O IS FOUND TO BE BEY OND LIMITATION OR SUFFERING FROM ANY SUCH LEGAL INFIRMITY WHICH WOULD THEREIN RENDER THE SAME AS INVALID AND VOID AB INITIO, THE 'AS IN SUCH A SITUATION THE ASSESSEE WOULD REMAIN VESTED WITH THE STATUTORY RI G) RAISE HIS OBJECTION W.R.T THE SAID LEGAL INFIRMITIES IN AN AP PEAL FILED WITH THE CIT(A), IN THE LIKE MANNER, IN THE PRESENT CASE, NO W WHEN THE ADDITION HAD BEEN MADE BY THE A. O, THEREIN THE ONL Y PLEA THAT HAD BEEN RAISED BY THE ASSESSEE IS THAT AS PER THE LAW AS WAS SO AVAILABLE ON THE STATUTE DURING THE YEAR UNDER CONS IDERATION THE IMPUGNED ADDITION AS REGARDS THE INCURRING OF THE EXCESS EXPENDITURE , AS PER THE PRE AMENDED SEC. 69C OF T HE ' ACT, WAS ALLOWABLE AS A DEDUCTION U/S 37(1), THEREIN THE ADD ITION MADE THEREIN WOULD STAND NEUTRALIZED, PURSUANT WHERETO N O ADDITION WOULD SURVIVE IN THE HANDS OF THE ASSESSEE. THUS, A S THE CONTENTION AS HAD BEEN SO RAISED BY THE ASSESSEE IN THE PRESEN T CASE, INVOLVES PURELY A QUESTION OF LAW ARISING FROM THE FACTS AVA ILABLE FROM RECORD[ WHICH IS IN NO WAY FOUND TO BE IN CONFLICT WITH THE DIRECTIONS OF THE TRIBUNAL, THEREFORE NO ADVERSE INFERENCE AS REGARDS RAISING OF THE SAME BEFORE THE LD.CIT(A) IS LIABLE TO BE DRAWN. THAT STILL FURTHER, IT WOULD BE RELEVANT AND PERTIN ENT TO OBSERVE THAT EVEN FOR A -MOMENT, THOUGH NOT ADMITTING BUT ASSUMI NG THAT THE TRIBUNAL HAD DIRECTED THE A.O THAT IN CASE THE ASSE SSEE IS UNABLE TO RECONCILE THE VARIANCES W.R.T THE EXPENSES, THEREIN AN ADDITION IN THE HANDS OF THE ASSESSEE HAS TO MANDATORILY MADE, AND IN COMPLIANCE THERETO THE A.O, ON MERITS, MAKES AN ADDITION IN TH E HANDS OF THE ASSESSEE, THEREIN THE ASSESSEE BY RAISING THE PRESE NT ADDITIONAL GROUNDS OF APPEAL, IS AT NO STAGE CHALLENGING THE MAKING OF SUCH ADDITION BY THE A.O, ON MERITS, BUT WHAT THE ASSESS EE IS CHALLENGING IS THE RESULT ARISING FROM SUCH ADDITION SO MADE BY THE A.O, WHEREIN AS AVERRED BY THE ASSESSEE, IN LIGHT OF THE CLEARLY WORDED PRE ITA NO.212(ASR)/2016 A.Y. 1998-99 7 AMENDED SEC.69C (AS WAS. APPLICABLE DURING A.Y. 199 8-99), THE ADDITION W.R.T. INCURRING OF THE 'EXCESS EXPENDITUR E BY THE ASSESSEE OUTSIDE HIS BOOKS OF ACCOUNTS, BEING IN THE NATUR E OF AN EXPENSES INCURRED IN THE COURSE OF HIS BUSINESS U/S 37(L)OF THE ACT, THE SAID ADDITION WOULD THEREIN STAND NEUTRALIZED, PURSUANT WHERETO NO ADDITION WOULD SURVIVE IN THE HANDS OF THE ASSESSEE . THUS TO BE BRIEF AND EXPLICIT, THE SAID LEGAL ISSUE SO RAIS ED BY THE ASSESSEE IS IN NO MANNER OR AT ANY STAGE FOUND TO BE IN CONFLIC T WOLH THE DIRECTIONS OF THE TRIBUNAL, BUT RATHER THE SAME WOULD BE IN THE NATURE OF A LEGAL ISSUE, WHICH CAN SAFELY BE HELD AS AN OFF SHOOT OF THE ADDITION MADE BY THE A.O, WHICH IS NOT IN CONFL ICT WITH THE FINDINGS TO THE TRIBUNAL, BUT RATHER IN ITSELF ARIS ES AS A RESULT OF THE ADDITION MAD BY THE A.O. IN THE HANDS OF THE ASSESS ES AS PER THE DIRECTIONS OF THE TRIBUNAL. THAT IN SUPPORT OF THE SETTLED POSITION OF LAW THAT A QUESTION OF LAW ARISING FROM THE FACTS AVAILABLE ON RECORD CAN BE R AISED, THOUGH FOR THE FIRST TIME, BEFORE AN APPELLATE AUTHORITY, RELI ANCE IS PLACED ON THE JUDGMENTS OF THE HON BLE JURISDICTIONAL HIGH COURT AND OTHER HIGH COURTS, AS UNDER: (I) DR. RAGHUVENDRA SINGH VS. CIT (ITA NO.806 OF 2010; DT:10.10.2013)(0&M)(P&H) HELD : IN VIEW OF THE ABOVE, IN OUR OPINION, THE HIGH COU RT IN AN APPROPRIATE CASE WHERE NO DISPUTE ARISES ON FACTUAL GROUND BUT PURELY LEGAL ISSUE ARISES IN THE CASE, MAY CONSIDER A SUBSTANTIAL QUESTION OF LAW EVEN THOUGH IT MAY NOT HAVE BEEN RAISED/ADJUDICATED BEFORE THE TRIBUNAL. (COPY OF THE JUDGMENT HAD ALREADY BEEN PLACED ON YO UR RECORD, AT PAGE 9-32 OF THE 'COMPILATION ) (II) NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 JTR 383(SC) HELD: TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORITIES BELOW AN D HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. (COPY OF THE JUDGMENT HAD ALREADY BEEN PLACED ON YO UR RECORD, AT PAGE 5-18 OF THE COMPILATION ) (III) RAMGOPAI GANPATRAI & SONS LTD. ITA NO.212(ASR)/2016 A.Y. 1998-99 8 IF THE APPELLANT CHALLENGES THE ORDER OF THE TRAIL COURT AND WISHES TO CONTEND THAT THE ORDER IS WRONG BY CERTAIN PROVISIO NS OF THE LAW, EVEN THOUGH HE HAD NOT TAKEN THAT CONTENTION IN THE COURT BELOW, IT IS IMPOSSIBLE TO URGE THAT THE APPELLATE COURT HAS NO JURISDICTION TO REVERSE THAT ORDER ON THE GROUND URGED BY THE APPEL LANT. THE APPELLATE COURT MAY EVEN REVERSE OR MODIFY THE ORDER ON A POINT OF LAW TAKEN BY ITSELF SUO MOTU WITHOUT BEING ASKED TO DO SO BY THE APPELLANT. MERELY BECAUSE AN APPELLANT WOULD HAVE SUCCEEDED ON A QUESTION OF LAW BEFORE THE COURT BEL OW CAN SURELY BE NO GROUND BEFORE THE APPELLATE COURT, AND, THEREFOR E, APART FROM ANY STATUTORY RESTRICTION, IT IS THE INHERENT JURISDICT ION OF EVERY TRIBUNAL TO DECIDE ANY QUESTION OF LAW ARISING OUT OF AN ORDER OF THE SUBORDINATE COURT OR TRIBUNAL WHICH ORDER IS BEFORE IT IN APPEA L, AND IF THAT BE THE TRUE POSITION, THEN ONCE THE RIGHT WAS GIVEN TO THE ASSESSEE COMPANY TO APPEAL AGAINST AN ORDER OF' THE EXCESS P ROFITS TAX OFFICER, THE A AC HAD EVERY JURISDICTION TO DEAL WI TH THAT ORDER ON ANY GROUND OF LAW WHICH APPLIED TO THE FACTS ON WHI CH THAT ORDER WAS BASED. FURTHER HELD: IT IS DIFFICULT TO UNDERSTAND HOW IT IS POSSIBLE T O CONTEND THAT TRIBUNAL HAS NOT THE JURISDICTION TO DEAL WITH AN O RDER WHICH IS IN APPEAL BEFORE IT ON ANY GROUND, EVEN THOUGH SUCH A GROUND WAS NOT TAKEN IN THE TRIAL COURT. IF THE APPELLANT CHALLENG ES THE ORDER OF THE TRAIL COURT AND WISHES TO CONTEND THAT THE ORDER IS WRONG BY CERTAIN PROVISIONS OF THE LAW, EVEN THOUGH HE HAD NOT TAKEN THAT CONTENTION IN THE COURT BELOW, IT IS IMPOSSIBLE TO URGE THAT T HE APPELLATE COURT HAS NO JURISDICTION TO REVERSE THAT ORDER ON THE GR OUND URGED BY THE APPELLANT. THE TRIBUNAL HAS TAKEN THE VIEW THAT BECAUSE THE E XCESS PROFIT TAX OFFICER COULD HAVE DEALT WITH THE POINT IF IT WAS T AKEN AND POSSIBLY GIVEN RELIEF TO THE APPELLANT, AND THERE WOULD HAVE BEEN NO OCCASION FOR AN APPEAL AT ALL, AND, THEREFORE, IT WAS NOT CO MPETENT TO THE APPELLANT TO RAISE THE QUESTION WHICH HE HAD NOT RA ISED IN THE COURT BELOW. WITH RESPECT, WE FIND IT DIFFICULT TO UNDERS TAND OR APPRECIATE THIS ARGUMENT, MERELY BECAUSE AN APPELLANT WOULD HA VE SUCCEEDED ON A QUESTION OF LAW BEFORE THE COURT BEFORE CAN SU RELY BE NO GROUND FOR DEBARRING HIM FROM TAKING THAT GROUND BEFORE TH E APPELLATE COURT, AND, THEREFORE, IN OUR OPINION, APART FROM A NY STATUTORY RESTRICTION, IT IS THE INHERENT JURISDICTION OF EVE RY TRIBUNAL TO DECIDE ANY QUESTION OF LAW ARISING OUT OF AN ORDER OF THE SUBORDINATE COURT OR TRIBUNAL WHICH ORDER IS BEFORE IT IN APPEAL, AND IF THAT BE THE TRITE POSITION, THEN ONCE THE RIGHT WAS GIVEN TO THE ASSE SSEE COMPANY TO APPEAL AGAINST AN ORDER OF THE EXCESS PROFIT TAX OF FICER, THE AAC ITA NO.212(ASR)/2016 A.Y. 1998-99 9 HAD EVERY JURISDICTION TO DEAL WITH THAT ORDER ON A NY GROUND OF LAW WHICH APPLIED TO THE FACTS ON WHICH THAT ORDER WAS BASED. (COPY OF THE JUDGMENT HAD ALREADY BEEN PLACED ON YO UR RECORD, AT PAGE 4-9 OF THE COMPILATION (I V ) CIT VS. SHREE GANESH JUTE MILLS LTD. (1977) 109ITR 562 (CAL) HELD: APPEALS PREFERRED BY THE ASSESSEE AGAINST THE FRES H ASSESSMENT MADE ACCORDING TO THE DIRECTIONS OF THE AAC, THE AS SESSEE COULD BE ALLOWED TO RAISE A NEW GROUNDS WHICH HAD NOT BEEN R AISED IN THE APPEALS FILED AGAINST THE ORIGINAL ASSESSMENTS WHIC H HAD BEEN SET ASIDE BY THE AAC IN RESPECT OF THE ASST. YRS. 1948- 49, 1949-50 AND 1950- 51?' FURTHER HELD: IT IS THE DULY OF THE REVENUE AUTHORITIES TO COMPL Y WITH THE PROVISIONS OF THE ACT AND HENCE, THE APPELLANT AUTH ORITIES WERE JUSTIFIED IN ALLOWING THE ASSESSEE TO TAKE THE SAID NEW PLEA, FOR THOSE SALE PROCEEDS WERE NOT REVENUE BUT CAPITAL RE CEIPTS. ' (COPY OF THE JUDGMENT HAD ALREADY BEEN PLACED ON YO UR RECORD, AT PAGE 1-3 OF THE COMPILATION ) (III) I HAVE CAREFULLY CONSIDERED THE DIRECTIONS OF THE HONBLE ITAT, AMRITSAR, AND ASSESSMENT ORDER PASSED BY THE A.O. AS PER THE DIRECTIONS OF HONBLE ITAT, AMRITSAR, THE SUBMI SSIONS OF ASSESSEE, COMMENTS AND COUNTER COMMENTS OF A.O AND ASSESSEE AND ALSO ADMISSIBILITY OF ADDITIONAL GROUND OF APPE AL SOUGHT TO BE RAISED. IV) IN APPEAL, THE ASSESSEE HAS NOT MADE SUBMISSION S ON THE MERITS OF THE ADDITION THOUGH GROUNDS TO THAT EFFEC T ARE RAISED IN APPEAL. THE SUBMISSIONS FILED ON VARIOUS OCCASIONS BY THE ASSESSEE RELATE TO THE ADDITIONAL GROUND SOUGHT TO BE RAISED . SUBMISSIONS ALSO RELATE TO CHALLENGING THE ASSESSMENT AS BEING BARRED BY LIMITATION BUT NO GROUND OF APPEAL IS RAISED CHALLE NGING THE SAME NOR ANY ADDITIONAL GROUND IS SOUGHT TO BE RAISED. O N MERITS ALSO, THE PLEA OF THE ASSESSMENT BEING TIME BARRED IS NOT SUSTAINABLE AS THIS ASSESSMENT DOESNT FALL U/S 153(2) OF I.T. ACT AS IT WAS NOT MADE IN PURSUANCE OF ORDERS U/S 250 OR SECTION 254 OR SECTION 263/264, SETTING ASIDE OR CANCELLING AN ASSESSMENT. THIS ASSESSMENT IS NOT SET ASIDE BY THE HONBLE 1TAT, AM RITSAR TO BE MADE AFRESH. ITA NO.212(ASR)/2016 A.Y. 1998-99 10 IN FACT, THE HONBLE ITAT, AMRITSAR HAS DECIDED THE ISSUE RELATING TO THE OPENING STOCK IN FAVOUR OF ASSESSEE AND OTHER R ELATED ISSUES WERE DIRECTED TO BE DECIDED BY THE A.O. AFTER PROVI DING AN OPPORTUNITY TO THE ASSESSEE. THE DIRECTIONS OF HON BLE ITAT IS QUOTED ALREADY IN THIS ORDER ARE WELL AS THE ASSESS MENT ORDER. IN VIEW OF THIS THE ORDER FALLS UNDER SECTION 153(3) O F I. T. EADS AS UNDER:- 3) THE PROVISIONS OF SUB- SECTIONS (1) AND (2) SHA LL NOT APPLY TO THE FOLLOWING CLASSES OF ASSESSMENTS, REASSESSMENTS AND RECOMPUTATIONS WHICH MAY,' SUBJECT TO THE PROVISION S OF SUB- SECTION (2A),] BE COMPLETED AT ANY TIME- (I) WHERE A FRESH ASSESSMENT IS MADE UNDER SECTION 146 ; (II) WHERE THE ASSESSMENT, REASSESSMENT OR RECOMPUTATIO N IS MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE O F OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED I N AN ORDER UNDER SECTION- 250, 254, 260, 262, 263 OR 264 6 OR IN AN ORDER OF ANY COURT IN A PROCEEDING OTHERWISE THAN BY WAY OF APPEAL OR REFERENCE UNDER THIS ACT]; (III) WHERE, IN THE CASE OF A FIRM, AN ASSESSMENT I S MADE ON A PARTNER OF THE FIRM IN CONSEQUENCE OF AN ASSESSMENT MADE ON THE FIRM UNDER SECTION 147. EXPLANATION 1-IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF THIS SECTION 16. THE CASE LAW RELIED IN SUPPORT BY ASSESSEE IN M /S. GREEN WORLD CORPORATION 285 ITR 118 (H.P.) IS DISTINGUISHABLE A S IT RELATED TO SETTING ASIDE OF THE ASSESSMENT BY THE CONCERNED CI T U/S 263 OF I.T. ACT AND RELATED TO PROVISIONS OF SECTION 150(1 ) AND 153(2) OF I.T. ACT, IN RESPECT OF DIRECTIONS FOR REOPENING TH E ASSESSMENT PERTAINING TO A.Y. OTHER THAN THE A.Y.(S) COVERED B Y THE REVISIONAL PROCEEDINGS. THESE FACTS ARE ENTIRELY DISTINGUISHAB LE AS IN THE PRESENT CASE THE SECTION APPLICABLE IS 153(3) OF I. T. ACT, ON THE DIRECTIONS OF HONBLE ITAT. THIS CASE LAW WOULD NOT HELP ASSESSEE. 17. IN VIEW OF THE ABOVE, THE CONTENTION RAISED BY THE ASSESSEE REGARDING THE ASSESSMENT BEING BARRED BY LIMITATION IS NEGATED ON TWO GROUNDS I.E. NO GROUND OF APPEAL IS RAISED ON T HIS REGARD AND ON MERITS ALSO. THE OBJECTIONS OF ASSESSEE ON THIS GROUND WERE DULY MET BY THE AO ALSO. 5. THE LD. CIT(A) HAS FURTHER OBSERVED THAT : ITA NO.212(ASR)/2016 A.Y. 1998-99 11 25. NOW, THERE REMAINS DELIBERATION ON THE ADDITIO NAL GROUND, SOUGHT TO BE RAISED BY THE ASSESSEE, CLAIMING IT TO BE LEGAL GROUND, CITING VARIOUS JURIDICAL DECISIONS IN SUPPORT AS UN DER: I. CIT VS. SHREE GANESH JUTE MILLS LTD. (1977) 1091TR 562 (CAL) II. RAMGOPAL GANPATRAI & SONS LTD. VS. CIT (1953) 24IT R 362 (BOM) III. CIT VS. JINDAL SAW PIPES LTD. (2010) 328 ITR 338 (D EL) IV. NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC) V. DR. RAGHNVENDRA SINGH VS. CIT (ITA NO. 806 OF 2 010; DT: 10.10.2013) (O&M) (P&H) 26. THERE CANT BE ANY DOUBT THAT ALL THE DECISION S CITED ARE WELL ACCEPTED AND THERE CANT BE ANY DISPUTE. HOWEVER, I N ALL THESE CASE IT IS HELD THAT A PURELY LEGAL QUESTION CAN BE RAIS ED BEFORE A HIGHER JURIDICAL FORUM, EVEN IF IT WAS NOT RAISED BEFORE L OWER AUTHORITIES. IN THE PRESENT CASE THE FACTS AND CIRCUMSTANCES ARE EN TIRELY DIFFERENT. THIS IS A CASE WHERE IN THE FIRST ROUND NO SUCH GRO UND WAS RAISED UPTO HONBLE ITAT. THE HONBLE ITAT IN THEIR ORDER ISSUED SPECIFIC DIRECTIONS TO THE AO TO PROCEED FURTHER WHICH HE DI D AND THUS THIS MATTER IS IN APPEAL. IN THE PRESENT CASE THE ASSESS MENT WAS COMPLETED NOT IN THE NORMAL COURSE BUT ON SPECIFIC DIRECTIONS OF HONBLE ITAT WHICH WERE BINDING ON THE AO AND HE CO ULDNT TRAVEL BEYOND THOSE DIRECTIONS WHATEVER THE CASE MAY BE. I N APPEAL NOW, THE CIT(A) IS ALSO BOUND TO DECIDE THE ISSUE WITHIN THESE LIMITS PUT BY THE HONBLE ITAT AND HE CANT TRAVEL BEYOND THOS E DIRECTIONS AND ENTERTAIN SOME GROUND WHICH WAS NOT EVEN RAISED BEF ORE THE HONBLE ITAT. THE CIT(A) HAS NO RIGHT TO BROADEN THE SCOPE 8 APPEALS BEYOND WHATEVER IS DECIDED BY THE HIGHER JUDICIAL AUTHORIT Y. IN SHORT, IN THIS CASE THE SITUATION IS IN CONTRAST TO THAT IN THE CA SE LAWS RELIED BY THE ASSESSEE. IN THE PRESENT CASE, A GROUND WAS NOT RAI SED BEFORE THE HIGHER JUDICIAL AUTHORITY BUT SOUGHT TO BE RAISED B EFORE A LOWER QUASI-JUDICIAL AUTHORITY WHICH IS BOUND BY THE DIRE CTIONS OF HONBLE ITAT. I PLACE RELIANCE M THIS REGARD ON THE CASE OF SH. BALDEV SINGH GIANI REPORTED AT 248 ITR 2661 DECIDED BY HONBLE P UNJABAND HARYANA HIGH COURT IN WHICH IT IS DECIDED THAT WHEN THE HONBLE ITAT DIRECTS THE CIT(A) TO RECORD FINDING ON ONE IS SUE THEN THE POWERS OF CIT(A) IS LIMITED TO THAT ISSUE ONLY. 27. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING T HE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, I DECLINE TO ADM IT ADDITIONAL GROUND AS I HAVE NO POWER OR JURISDICTION TO GO BEY OND WHAT IS ITA NO.212(ASR)/2016 A.Y. 1998-99 12 MANDATED TO ME BY HONBLE ITAT, VIA THEIR DIRECTION S TO AO AND SUCH AN ENTIRELY NEW PLEA CANT BE ADMITTED BY ME. 6. THUS, THE ASSESSEE RAISED A LEGAL ISSUE BEFORE THE LD. CIT(A), CONTENDING THAT THE ADDITION SUSTAINED BY THE AO ON ACCOUNT OF EXCESS EXPENDITURE INCURRED IN THE COURSE OF BUSINESS BEIN G ALLOWABLE EXPENDITURE UNDER 37(1) OF THE ACT, GETS NEUTRALIZE D IN VIEW OF THE PRE- AMENDED SECTION 69C OF THE ACT, AND, THEREFORE, NO ADDITION SURVIVES. THE ASSESSEE PLACED RELIANCE ON KRISHNA TEXTILES VS. C IT, 310 ITR 227 (GUJ.). THE LD. CIT(A) REJECTED THIS PLEA OF THE ASSESSEE, RELYING ON BALDEV SINGH VS. CIT, 248 ITR 266 (P&H). 7. THE ASSESSEE CONTENDS THAT THE FACTS OF THE PRE SENT CASE ARE DIFFERENT FROM THOSE OF BALDEV SINGH (SUPRA), IN AS MUCH AS IN THAT CASE, THE AO SOUGHT TO CREATE FRESH EVIDENCE, WHICH WAS N OT PERMISSIBLE AND WHICH IS NOT THE CASE HEREIN. 8. WITH EFFECT FROM 01.04.1999, SECTION 69C WAS AME NDED AND THE PROVISO WAS INSERTED THEREIN. THE EXCESS EXPENDITUR E INCURRED IN THE COURSE OF BUSINESS WAS HELD TO BE ALLOWABLE EXPEND ITURE UNDER SECTION 37(1) OF THE ACT, IN KRISHNA TEXTILES (SUPRA). TH E PROPOSITION PUT FORTH BY THE ASSESSEE, THUS, IS THAT THIS EXPENDITURE GETS N EUTRALIZED IN VIEW OF THE RELEVANT PROVISIONS OF SECTION 69C OF THE ACT, LEAV ING NO ADDITION. NOW, THIS PLEA IS A LEGAL ISSUE, NOT INVOLVING LEADING O F FURTHER EVIDENCE. SUCH PLEA, IN OUR CONSIDERED OPINION, IS AVAILABLE TO TH E ASSESSEE AT ANY STAGE, DESPITE THE MATTER HAVING BEEN REMANDED TO THE LD. CIT(A) BY THE ITAT. ITA NO.212(ASR)/2016 A.Y. 1998-99 13 9. IN THE ABOVE VIEW OF THE MATTER, WE DEEM IT APPR OPRIATE TO REVERSE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIREC T THE LD. CIT(A) TO ADJUDICATE THE GROUND RAISED BY THE ASSESSEE ON ADM ITTING IT. 10. THE DECISION BY THE LD. CIT(A) ON THE MERITS OF THE CONTROVERSY WILL DEPEND ON HIS DECISION ON THE ADDITIONAL GROUND RAI SED BY THE ASSESSEE. 11. ORDERED ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 /07 / 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 11 /07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RAJESH KUMAR, JALANDHAR. 2. THE ITO WARDS 1(3), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.