DCIT,Circle-17(2), Hyd, Hyderabad V. Veen Promoters Pvt.Ltd., Hyd, Hyderabad

ITA 788/HYD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0610 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-07-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K SRINIVAS REDDY
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 788 /HYD/201 5 ASSESSMENT YEAR: 20 1 0 - 1 1 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 17 ( 2 ), HYDERABAD. VS. VEEN PROMOTERS P. LTD., HYDERABAD. PAN AADCP 9272 B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K. SRINIVAS REDDY ASSESSEE BY : SHRI K.A. SAI PRASAD DATE OF HEARING 28 / 0 8 /2018 DATE OF PRONOUNCEMENT 17 / 0 9 / 201 8 O R D E R PER P. MADHAVI DEVI, J .M. : THIS IS REVENUES APPEAL FOR AY 20 10 - 11 AGAINST THE ORDER OF CIT(A) 5, HYDERABAD DATED 1 2 /0 2 /201 5 DELETING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD . C!T(A) IS BAD AND ERRONEOUS IN LAW AND ON FACTS OF THE CASE. 2. THE LD. CI T(A) ERRED IN DELETING THE PENALTY U / S. 271(1)(C) WHEN THE ASSESSEE DID NOT DISCH ARGE THE ONUS OF SATISFACTORILY E XPLAINING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION NEITHER IN ASSESSMENT PROCEEDINGS NOR DURING THE PENALTY PROCEEDINGS. 3. THE LD. CI T(A) ERRED IN DELETING THE PENALTY U/S. 271(1)(C) IGNORING THE FACT THAT THE AO HAD CARRIED OUT IN - DEPTH VERIFICATION AND INVESTIGATIONS, AS A RESULT OF WHICH THE ASSESSEE DID NOT CHALLENGE THE ADDITION IN APPEAL AND ACCEPTED THE SAME. 2 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . 4. THE LD. C I T(A) OUGHT TO HAVE DECIDED THE APPEAL ON MERITS OF THE CASE AND UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. ANY OTHER GROUND THAT MAY ARISE AT THE TIME OF HEARING. 2. VIDE LETTER DATED 31/05/2018 , ASSESSEE HAS FILED A PETITION FOR ADMISSIO N OF ITS ADDITIONAL GROUND OF APPEAL, WHICH IS AS UNDER: IN THE ABSENCE OF SPECIFIC CHARGE RAISED BY THE AO IN THE NOTICE U/S 274 R.W.S. 271(1)(C), THE LEVY OF PENALTY U/S 271(1)9C) IS NO VALID. 3. LD. DR OBJECTED TO THE ADMISSION OF THE ABOVE ADDITIONAL GROUND OF APPEAL SUBMIT TING THAT THE RESPONDENT - ASSESSEE IS NOT ENTITLED TO RAISE ANY GROUNDS OF APPEAL IN THE APPEAL FILED BY THE REVENUE. ACCORDING TO HIM, ASSESSEE CAN ONLY FILE A CROSS - APPEAL OR CROSS - OBJECTIONS, BUT, CANNOT FILE ANY GROUNDS OF APPEAL IN THE REVENUES APPEAL. HE RELIED UPON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NEW INDIA LIFE ASSURANCE CO. LTD., VS. CIT , REPORTED IN [1957] 31 ITR 844 (BOM.), IN SUPPORT OF H IS CONTENTION. 4. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT GROUND RAISED BY THE ASSESSEE IS PURELY A LEGAL ISSUE AND THE ASSESSEE CAN RAISE SUCH A GROUND EVEN IN THE REVENUES APPEAL , AS UNDER RULE 27 OF IT RULES, RESPONDENT - ASSESSEE CAN DEFEND THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. HE SUBMITTED THAT THE ASSESSEE HAS RAISED THIS GROUND IN VIEW OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE IN THE RECENT PAST AND IT BEING A LEGAL ISSUE , CAN BE RAISE D AT ANY STAGE. HE PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HAZARIMAL NAGJI & CO, 46 ITR 1168 (BOM.) WHEREIN THE HONBLE BOMBAY HIGH COURT H AS CONSIDERED ITS EARLIER D ECISION IN THE CASE OF NEW INDIA LIFE ASSURANCE PVT. LTD. (SUPRA) AND HAS HELD THAT RESPONDENT - ASSESSEE IS ENTITLED TO RAISE A GROUND BEFORE THE TRIBUNAL FOR THE FIRST TIME , PROVIDED SUCH GROUND DOES NOT REQUIRE ANY FRESH INVESTIGATION OF FACTS. HE ALSO PLACED RELIA NCE O N THE DECISION IN THE 3 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . CASE OF CIT VS. DEHATI COOPERATIVE MARKETING - CUM - PROCESSING SOCIETY, 130 ITR 504 (P&H) WHEREIN A SIMILAR FINDING HAS BEEN GIVEN BY THE H ONBLE PUNJAB & HARYANA HIGH COURT . ON THE MERITS OF THE ISSUE RAISED IN THE ADDITIONAL GROUND, ASSESSEE HAS RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. SMT. BAISETTY REVATHI IN ITTA NO. 684 OF 2016, JUDGEME NT DATED 13/07/2017 WHEREIN THE HONBLE HIGH COURT HAS HELD THAT IF THE AO DID NOT STRIKE OFF THE IR RELEVANT PORTION IN THE NOTICE ISSUED U/S 271 READ WITH SECTION 274 OF THE ACT, THEN, SUCH NOTICE IS NOT VALID. HE RELIED ON THE DECISION OF ITAT AT DELHI I N THE CASE OF VIJAY POWER GENERATORS LTD. VS. ITO REPORTED IN 6 DTR (AT) 64 (ITAT - DELHI) IN SUPPORT OF H IS CONTENTION THAT UNLESS AO RECORDS SATISFACTION IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACC URATE PARTICULARS THEREOF, PENALTY PROCEEDINGS ARE NOT VALID. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THE RESPONDENT - ASSESSEE HAS NOT FILED CROSS - OBJECTIONS OR CROSS - APPEAL AGAINST THE ORDER CIT(A) . S INCE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY DELETING PENALTY IN TOTO, ASSESSEE COULD NOT HAVE FILED CROSS - OBJECTIONS OR CROSS - APPEAL. IT IS ONLY BECAUSE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF CIT(A) DELETING PENALTY , THAT ASSESSEE HAS RAISED THIS GROUND OF APPEAL. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NEW INDIA LIFE ASSURANCE PVT. LTD. (SUPRA) HAS HELD THAT THE POWERS OF THE TRIBUNAL ARE RESTRICTED TO THE GROUNDS OF APPEAL RAISED BY THE APPELLANT AND THE RESPON DENT - ASSESSEE CANNOT RAISE ANY GROUND S IN THE APPEAL FILED BY THE APPELLANT. WE FIND THAT THIS DECISION HAS BEEN CONSIDERED BY THE SUBSEQUENT BENCH OF THE HIGH COURT IN THE CASE OF HAZARIMAL NAGJI & CO. (SUPRA) WHEREIN THE HONBLE COURT HAS OBSERVED AS UN DER: 6. MR. JOSHI SAYS THAT IF THE FRESH GROUND WHICH THE RESPONDENT WANTS TO RAISE HAS THE EFFECT OF AFFECTION THE APPELLANT ADVERSELY, SUCH A GROUND CANNOT BE PERMITTED TO BE RAISED BY THE RESPONDENT, AND HE SAYS THAT THIS 4 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . SUBMISSION WHICH HE IS MAKING IS SUPPORTED BY SOME DECISIONS OF OUT COURT. NOW, IF WHAT IS MEANT BY SAYING THAT A GROUND CANNOT BE PERMITTED TO BE TAKEN BY THE RESPONDENT WHICH AFFECTS THE APPELLANT ADVERSELY IS THAT A GROUND CANNOT BE PERMITTED TO BE TAKEN BY THE RESPONDENT WHICH RELA TES TO THAT PART OF THE DECREE AGAINST THE RESPONDENT AND IN FAVOUR OF THE APPELLANT OR RELATES TO THE MODIFICATION OF THE DECREE PASSED BY THE LOWER COURT IN FAVOUR OF THE RESPONDENT; WE AGREE WITH MR. JOSHI THAT SUCH A GROUND CANNOT BE ALLOWED TO BE TAKE N UNLESS THE RESPONDENT HAS FILED A CROSS - APPEAL OR HAS FILED CROSS - OBJECTIONS IN THE APPEAL OF THE APPELLANT. BUT, IF THE FRESH GROUND SOUGHT TO BE URGED HAS NO SUCH EFFECT AND IS ONLY FOR THE PURPOSE OF MAINTAINING THE DECREE OF THE LOWER COURT AS IT IS, WE DO NOT THINK THAT IT IS A GROUND WHICH AFFECTS THE APPELLANT ADVERSELY. A GROUND WHICH WOULD AFFECT THE APPELLANT ADVERSELY IS A GROUND WHICH IN THE EVENT OR ITS SUCCEEDING PUTS THE APPELLANT IN A POSITION WORSE THAN THAT IN WHICH HE WAS UNDER THE DECR EE OF THE LOWER COURT. IF THE APPELLANT IN HIS CHALLENGE TO THE DECREE OF THE LOWER COURT IS ENTITLED TO TAKE A NEW GROUND NOT AGITATED IN THE COURT BELOW BY LEAVE OF THE COURT, THERE APPEARS TO BE NO REASON WHY A RESPONDENT IN SUPPORT OF THE DECREE IN HIS FAVOUR PASSED BY THE LOWER COURT SHOULD NOT BE ENTITLED TO AGITATE A NEW GROUND IN THE SAME WAY AND SUBJECT TO THE SAME LIMITATIONS. TAKING THE PRESENT CASE, FOR INSTANCE, SUPPOSE THE DECISION OF THE INCOME - TAX OFFICER INSTEAD OF BEING REVERSED BY THE APP ELLATE ASSISTANT COMMISSIONER HAD BEEN CONFIRMED BY HIM AND THE ASSESSEE HAD COME UP IN APPEAL TO THE TRIBUNAL AND HAD NOT ONLY SOUGHT TO CHALLENGE THE DECISION OF THE LOWER AUTHORITIES ON THE GROUNDS DECIDED AGAINST HIM, BUT HAD ALSO SOUGHT TO URGE THE FR ESH GROUND, WHICH HE HAS NOW TRIED TO RAISE AS A RESPONDENT, HE COULD HAVE URGED THIS ADDITIONAL GROUND IN THE MEMORANDUM OF APPEAL, AND THERE WOULD HAVE BEEN NO WANT OF JURISDICTION IN THE TRIBUNAL TO ALLOW HIM TO AGITATE THE SAME. SINCE THE DECISION OF T HE APPELLATE ASSISTANT COMMISSIONER WAS WHOLLY IN HIS FAVOUR, THE ASSESSEE COULD NOT APPEAL, AND HAD NO OCCASION ALSO TO FILE ANY CROSS - OBJECTIONS. IF THE VIEW IS TAKEN THAT A RESPONDENT, WHO COULD NOT HAVE APPEALED OR FILED CROSS - OBJECTIONS BECAUSE THAT D ECREE WAS WHOLLY IN HIS FAVOUR, CANNOT BE PERMITTED TO RAISE A NEW GROUND AVAILABLE TO HIM IN SUPPORT OF THE DECREE, ALTHOUGH THE SAME GROUND WOULD HAVE BEEN AVAILABLE TO HIM IF HE WAS IN THE POSITION OF AN APPELLANT, IT WOULD AMOUNT TO PUTTING HIM IN A WO RSE POSITION AS A RESPONDENT THAN AS AN APPELLANT. IN OUR OPINION, THEREFORE, THE TRIBUNAL HAD JURISDICTION TO ALLOW THE ASSESSEE - RESPONDENT TO URGE A FRESH GROUND WHICH IT SOUGHT TO RAISE IN THE PRESENT APPEAL BEFORE IT. 7. THE DECISIONS TO WHICH MR. JOSH I HAS INVITED OUR ATTENTION DO NOT, IN OUR OPINION, GO CONTRARY TO THE VIEW WHICH WE ARE INCLINED TO TAKE. IN MOTOR UNION INSURANCE CO. LTD. V. COMMISSIONER OF INCOME - TAX IT WAS HELD : 'THE WORD 'THEREON' USED IN SECTION 33(4) OF THE INDIAN INCOME - TAX ACT ONLY MEANS 'ON THE APPEAL' WHICH MUST MEAN ON THE GROUNDS RAISED IN THE APPEAL. THE SUB - SECTION ONLY GIVES POWER TO THE APPELLATE TRIBUNAL TO GIVE ITS DECISION AND PASS ORDERS IN RESPECT OF A LL GROUNDS URGED ON BEHALF OF THE APPELLANT IN RESPECT OF THE DECISION APPEALED AGAINST. IN DECIDING THOSE GROUNDS IT CAN 5 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . PASS APPROPRIATE ORDERS. BUT IT IS NOT OPEN TO THE TRIBUNAL ITSELF TO RAISE A GROUND OR PERMIT THE PARTY, WHO HAS NOT APPEALED, TO RAI SE A GROUND, WHICH WILL WORK ADVERSELY TO THE APPELLANT. THE WORDS OF THE SECTION ARE NOT WIDE ENOUGH TO INCLUDE A POWER OF ENHANCEMENT, WITHOUT AN APPEAL BY THE COMMISSIONER.' IN THAT CASE, THE INCOME - TAX AUTHORITIES HAD HELD THAT THE ASSESSEE COMPANY, WH ICH WAS A NON - RESIDENT COMPANY, HAD INVESTED INDIAN MONEY IN THE UNITED KINGDOM, AND IT WAS, THEREFORE, LIABLE TO BE TAXED UNDER SECTION 42(1) OF THE INDIAN INCOME - TAX ACT. THE INCOME - TAX OFFICER COMPUTED THE AMOUNT OF INTEREST WHICH WAS HELD TO HAVE BEEN EARNED BY THE COMPANY OUT OF INDIAN PRIMA BY THE APPLICATION OF RULE 6 OF THE SCHEDULE. FROM THE ORDER PASSED BY THE INCOME - TAX OFFICER, THE ASSESSEE COMPANY HAD APPEALED TO THE APPELLATE ASSISTANT COMMISSIONER, AND, ON THE DISMISSAL OF THE APPEAL BY THE APPELLATE ASSISTANT COMMISSIONER, HAD TAKEN A SECOND APPEAL TO THE TRIBUNAL. IN THIS APPEAL, THE TRIBUNAL TOOK THE VIEW THAT IN ARRIVING AT THE INCOME IN THE SHAPE OF THE INTEREST, THE INCOME - TAX OFFICER OUGHT NOT TO HAVE PROCEEDED UNDER RULE 6 OF THE SCHE DULE, AND THAT RULE 8 WAS THE PROPER RULE TO BE APPLIED. THE RESULT OF THE VIEW TAKEN BY THE TRIBUNAL WAS THAT THE INTEREST ITEM WAS INCREASED TO A LARGER AMOUNT THAN THE AMOUNT AT WHICH IT WAS DETERMINED BY THE INCOME - TAX AUTHORITIES. NOW, IT MUST BE REME MBERED THAT THE DEPARTMENT HAD NOT APPEALED FROM THE DECISION, NOR HAD IT FILED ANY CROSS - OBJECTIONS ASKING FOR COMPUTATION UNDER RULE 8. THE EFFECT OF APPLICATION OF RULE 8 WAS TO MODIFY THE DECISION OF THE INCOME - TAX AUTHORITIES NOT IN FAVOUR OF THE APPE LLANT WHO HAD GONE TO THE TRIBUNAL, BUT IN FAVOUR OF THE RESPONDENT WHO HAD NEITHER APPEALED NOT CROSS - OBJECTED. IT WAS, THEREFORE, A CLEAR CASE WHERE THE FRESH POINT ENTERTAINED BY THE TRIBUNAL WAS ONE WHICH AFFECTED THE APPELLANT ADVERSELY. MR. JOSHI ARG UES THAT EVEN IN THE PRESENT CASE THE APPELLANT IS BEING AFFECTED ADVERSELY INASMUCH AS THE ITEM IS DEDUCTED FROM ASSESSMENT ON A GROUND NOT TAKEN BY THE ASSESSEE. IF THE ASSESSEE WERE TO BE CONFINED ONLY TO SUCH GROUNDS AS IT HAD TAKEN BEFORE THE INCOME - T AX AUTHORITIES, THE TAX COULD NOT HAVE BEEN AVOIDED. IT IS ONLY BECAUSE OF THE NEW GROUND URGED THAT THE TAX IS BEING AVOIDED AND, THEREFORE, THE APPELLANT IS BEING AFFECTED ADVERSELY. IN OUR OPINION, THE SUBMISSION MADE BY MR. JOSHI IS NOT A CORRECT ONE. THE DISPUTE BEFORE THE INCOME - TAX OFFICER WAS WHETHER THE AMOUNT OF RS. 90,000 WAS SUBJECT TO TAX. THE INCOME - TAX OFFICER HAD HELD THAT IT WAS SUBJECT TO TAX AND HAD ADDED IT TO THE INCOME. THE APPELLATE ASSISTANT COMMISSIONER HAD DELETED IT. THE DISPUTE B EFORE THE TRIBUNAL WAS WHETHER IT SHOULD BE TAXED OR NOT AND THE RESPONDENT - ASSESSEE WAS SUPPORTING THE DECISION OF THE APPELLATE ASSISTANT COMMISSIONER THAT IT WAS NOT SUBJECT TO TAX. WHETHER THE GROUND THAT IT WAS URGING IN SUPPORT OF THE DECISION OF THE APPELLATE ASSISTANT COMMISSIONER WAS THE ONE ON WHICH THE APPELLATE ASSISTANT COMMISSIONER HAD RELIED OR SOME OTHER GROUND DID NOT MAKE ANY DIFFERENCE. THE APPELLANT WAS NOT BEING AFFECTED ADVERSELY IN THE SENSE THAT THE PERMITTING OF THE GROUND TO BE RAI SED BY THE RESPONDENT WAS TO AFFECT THE DECISION OF THE LOWER AUTHORITIES WHICH WAS AGAINST THE APPELLANT TO A FURTHER DETRIMENT OF THE APPELLANT AS IN THE CASE REFERRED TO BY MR. JOSHI. IN OUR OPINION, WHAT IS MEANT BY THE OBSERVATION THAT THE RESPONDENT WILL NOT BE PERMITTED TO RAISE A 6 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . GROUND WHICH WILL WORK ADVERSELY TO THE APPELLANT IS THAT THE RESPONDENT WILL NOT BE ENTITLED TO RAISE A GROUND WHICH HAVE CAN ONLY RAISE PROVIDED HE HAS CROSS - APPEALED OR CROSS - OBJECTED. WE MAY REFER, IN THIS CONNECTION, T HE FOLLOWING OBSERVATIONS WHICH APPEAR IN THE DECISION, AT PAGE 282 OF THE REPORT : 'APART FROM STATUTE, IT IS ELEMENTARY THAT IF A PARTY APPEALS, HE IS THE PARTY WHO COMES BEFORE THE APPELLATE TRIBUNAL TO REDRESS A GRIEVANCE ALLEGED BY HIM. IF THE OTHER S IDE HAS ANY GRIEVANCE, HE HAS A RIGHT TO FILE A CROSS - APPEAL OR CROSS - OBJECTIONS. BUT IF NO SUCH THING IS DONE, THE OTHER PARTY, IN LAW, IS DEEMED TO BE SATISFIED WITH THE DECISION. HE IS, OF COURSE, ENTITLED TO SUPPORT THE JUDGMENT OF THE FIRST OFFICER ON ANY GROUND OPEN TO HIM, BUT HE IS NOT ENTITLED TO RAISE A GROUND SO AS TO WORK ADVERSELY TO THE APPELLANT AND IN HIS FAVOUR.' 8. THE NEXT CASE TO WHICH MR. JOSHI HAS REFERRED IS NEW INDIA LIFE ASSURANCE CO. LTD. V. COMMISSIONER OF INCOME - TAX . THE QUESTION AGITATED IN THAT CASE WAS WHETHER IT WAS OPEN TO THE TRIBUNAL UNDER SECTION 33(4) TO DECIDE A CASE ON A QUESTION WHICH WAS NOT RAISED BY THE APPELLANT IN THE GROUNDS OF APPEAL, AND THE COURT HELD THAT THE APPELLATE TRIBUNAL HAD POWER TO GIVE LEAVE TO THE APPELLANT TO RAISE THE QUESTION, AND MUST BE PRESUMED TO HAVE GIVEN SUCH LEAVE IN THE CIRCUMSTANCES OF THE CASE, AND IT WAS COMPETENT TO THE TRIBUNAL TO REVERSE THE DECISION OF THE APPELLANT ASSISTANT COMMISSIONER ON THAT GROUND. THE DECISION, THEREFORE, WAS NOT WITH REFERENCE TO THE RESPONDENT'S RIGHT TO RAISE A FRESH GROUND IN THE APPEAL. MR. JOSHI, HOWEVER, HAS RELIED ON CERTAIN OBSERVATIONS IN THE SAID CASE, RELATING TO THE RIGHT OF THE RE SPONDENT. THUS, IN DEALING WITH THE CASE OF MOTOR UNION INSURANCE CO. LTD. V. COMMISSIONER OF IN COME - TAX (WHICH WAS CITED BEFORE THE COURT), IT WAS OBSERVED THAT IT WAS A CASE OF A RESPONDENT AND NOT OF AN APPELLANT WHO WAS SEEKING TO RAISE A FRESH GROUND, AND IT WAS ALSO OBSERVED : 'SO FAR AS THE RESPONDENT IS CONCERNED, HE CANNOT RAISE A NEW GRO UND' AND FURTHER 'THEREFORE, AGAIN, WHAT IS BEING EMPHASIZED IS THAT THE TRIBUNAL SHOULD NOT GIVE A RELIEF TO THE RESPONDENT WHICH RELIEF WAS NOT GIVEN TO HIM BY THE TRIAL COURT AND WHICH RELIEF HE HAS NOT HIMSELF SOUGHT BY EITHER CROSS - APPEALING OR CROSS - OBJECTING.' NOW, THESE OBSERVATIONS WERE MADE IN THE CONTEXT OF DISTINGUISHING THE CASE WHICH WAS CITED BEFORE THE COURT FROM THE CASE WITH WHICH THE LEARNED JUDGES WERE DEALING. IN OUR OPINION, FROM THESE OBSERVATIONS, IT COULD NOT BE SAID THAT THIS COURT TOOK THE VIEW THAT THE RESPONDENT WAS NOT ENTITLED TO SUPPORT THE DECREE IN HIS FAVOUR ON A GROUND OTHER THAN THE ONE ON WHICH THE LOWER COURT HAD DECIDED IN HIS FAVOUR. ANOTHER DECISION TO WHICH MR. JOSHI HAS INVITED OUR ATTENTION IS RAJKUMAR MILLS LTD. V. INCOME - TAX APPELLATE TRIBUNAL . IT WAS HELD IN THAT CASE THAT 'THAT THE JURISDICTION OF THE AP PELLATE TRIBUNAL UNDER SECTION 33 IN AN APPEAL AGAINST AN ORDER OF THE APPELLATE ASSISTANT COMMISSIONER IS LIMITED TO THE GROUNDS OF APPEAL RAISED BEFORE IT AND THE TRIBUNAL IS ONLY ENTITLED TO DETERMINE THE OBJECTIONS RAISED BY THE APPELLANT, DOES NOT PRECLUDE THE TRIBUNAL FROM DETERMININ G THE MATTER ON THE BASIS OF FACTS CANVASSED BEFORE 7 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . THE INCOME - TAX OFFICER AND THE APPELLATE ASSISTANT COMMISSIONER, ON WHICH EITHER THE INCOME - TAX OFFICER OR THE APPELLATE ASSISTANT COMMISSIONER MIGHT HAVE RECORDED A FINDING BUT CONSIDERED THAT FINDING NO T NECESSARY FOR THE DETERMINATION OF THE ASSESSMENT BECAUSE HE TOOK A PARTICULAR VIEW OF THE ASSESSEE'S LIABILITY, WHICH VIEW THE TRIBUNAL DISSENTS FROM; AND THE POSITION IS THE SAME WHERE THE TRIBUNAL ACCEPTS THAT VIEW, BUT UPON A REFERENCE THE HIGH COURT HOLDS THAT THAT VIEW IS WRONG.' NOW, THE ACTUAL DECISION IN THE CASE HAS NO APPLICATION TO THE CASE BEFORE US. MR. JOSHI, HOWEVER, HAS POINTED OUT THAT, IN DECIDING THE CASE, THE COURT HAS CONSIDERED THE SCOPE OF THE JURISDICTION OF THE TRIBUNAL IN ITS AP PELLATE POWERS AND HAS OBSERVED THAT 'IF THE CASE WHICH WAS PUT FORWARD BY THE DEPARTMENT BEFORE IT WAS A NEW CASE, THE TRIBUNAL WOULD HAVE HAD NO JURISDICTION TO MAKE THE ORDER THAT IT DID. IF, ON THE OTHER HAND, IT WAS NOT A NEW CASE FOR THE DEPARTMENT, BUT HAS ALWAYS BEEN ITS CASE, THEN THE TRIBUNAL WOULD HAVE JURISDICTION TO MAKE THE ORDER THAT IT DID.' MR. JOSHI SAYS THAT APPLYING THESE TESTS, THE CASE WHICH THE ASSESSEE MADE BEFORE THE TRIBUNAL AND WHICH THE TRIBUNAL ENTERTAINED WAS A CASE WHICH HAD N OT BEEN THE CASE OF THE ASSESSEE AT ANY STAGE BEFORE THE LOWER AUTHORITIES. IT WAS, THEREFORE, A NEW CASE WHICH THE TRIBUNAL HAD NO JURISDICTION TO ENTERTAIN. IN OUR OPINION, THE OBSERVATIONS REFERRED TO BY MR. JOSHI WERE MADE IN THE CONTEXT OF THAT PARTIC ULAR CASE, AND WERE NOT INTENDED TO MEAN THAT IN THE APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL HAD NO JURISDICTION TO ENTERTAIN A NEW GROUND NOT MADE OUT IN THE LOWER COURTS EITHER ON BEHALF OF THE APPELLANT OR THE RESPONDENT. ANOTHER CASE REFERRED TO BY MR . JOSHI IS COMMISSIONER OF INCOME - TAX V. T.M. BHUMRADDI . IT WAS HELD IN THAT CASE THAT 'IT WAS NOT OPEN TO THE COMMISSIONER TO RAISE FOR THE FIRST TIME A NEW CASE BEFORE THE TRIBUNAL WHEN THE ASSESSEES WERE THE APPELLANTS' AND IT WAS OBSERVED : 'IN SUPPORTING THE DECISION OF THE APPELLATE ASSISTANT COMMISSIONER APPEALED FROM, THE COMMISSIONER OF IN COME - TAX MAY NO DOUBT SUPPORT IT ON ANY GROUND OTHER THAN THE ONE ON WHICH THE APPELLATE ASSISTANT COMMISSIONER BASED HIS DECISION. BUT SUCH GROUND MUST ARISE ON THE RECORD OF THE ASSESSMENT PROCEEDINGS AND MUST HAVE BEEN RAISED ON BEHALF OF THE DEPARTMENT AT SOME STAGE IN THE PROCEEDINGS. NO NEW GROUND MAY BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL BY THE RESPONDENT.' WHAT THE INCOME - TAX DEPARTMENT HAD SOUGHT TO URGE FOR THE FIRST TIME BEFORE THE TRIBUNAL WAS ENTIRELY A NEW BASIS WHICH HAD NOT BEEN S ET UP IN THE COURTS BELOW, AND THE FACTS IN RESPECT OF WHICH HAD NOT BEEN FOUND UNTIL THE STAGE THE ASSESSEE FILED AN APPEAL TO THE TRIBUNAL, AND WAS SOUGHT TO BE BASED ON AN OPINION EXPRESSED BY THE APPELLATE ASSISTANT COMMISSIONER IN HIS REMAND REPORT AN D WHICH OPINION WAS BEYOND THE SCOPE OF THE REMAND. IT WAS IN THESE CIRCUMSTANCES THAT THE OBSERVATIONS, TO WHICH MR. JOSHI HAS DRAWN OUR ATTENTION, WERE MADE BY THIS COURT. NOW, THE CIRCUMSTANCES OF THE CASE BEFORE US ARE ENTIRELY DIFFERENT. ON THE FACTS AS STATED BY THE TRIBUNAL, THE CONTENTION RAISED IN THE PRESENT CASE WAS ONE PURELY, IN LAW, ON THE FACTS AS THEY EXISTED ALL ALONG BEFORE THE INCOME - TAX OFFICER AS WELL AS THE APPELLATE ASSISTANT COMMISSIONER, THOUGH THE LEGAL ARGUMENT AVAILABLE ON THOSE FACTS WAS NOT URGED BEFORE EITHER OF THE AUTHORITIES. IN OUR OPINION, NONE OF THE DECISIONS TO WHICH MR. JOSHI HAS INVITED OUR ATTENTION, GOES CONTRARY TO THE 8 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . VIEW WHICH WE ARE INCLINED TO TAKE IN THE MATTER. IN OUR OPINION, THEREFORE, IT WAS WITHIN THE JU RISDICTION OF THE APPELLATE POWERS OF THE TRIBUNAL TO PERMIT THE ASSESSEE - RESPONDENT TO RAISE THE QUESTION, WHICH IT SOUGHT TO RAISE FOR THE FIRST TIME BEFORE THE TRIBUNAL, AND THE TRIBUNAL, THEREFORE, COULD NOT BE SAID TO HAVE ERRED IN PERMITTING THE ASSE SSEE - RESPONDENT TO DO SO. OUR ANSWER, THEREFORE, TO THE QUESTION NO. 1, AS REFRAMED BY US, IS IN THE NEGATIVE. 9. COMING TO THE SECOND QUESTION, THE ARGUMENT OF MR. JOSHI IS THAT THE TRIBUNAL WAS NOT JUSTIFIED IN REFUSING TO GIVE A DIRECTION WHICH THE DEPA RTMENT HAD REQUESTED IT TO GIVE. IF A NEW CONTENTION WAS PERMITTED TO BE RAISED BY THE ASSESSEE - RESPONDENT FOR THE FIRST TIME IN APPEAL BEFORE THE TRIBUNAL, IT WAS BUT FAIR AND PROPER THAT A DIRECTION, AS WAS PRAYED FOR BY THE DEPARTMENT, SHOULD HAVE BEEN GIVEN BY THE TRIBUNAL UNDER SECTION 34(3) OF THE INCOME - TAX ACT. MOREOVER, SAYS MR. JOSHI, THE RE ASON WHICH THE TRIBUNAL GAVE IN REFUSING TO GIVE A DIRECTION, VIZ., THAT NO USEFUL PURPOSE WILL BE SERVED BY GIVING SUCH A DIRECTION IN VIEW OF THE DECISION OF THIS COURT IN HIRALAL AMRITLAL SHAH V. K.C. THOMAS, I INCOME - TAX OFFICER, M - WARD, BOMBAY , IS ERRONEOUS. IN THE FIRST PLACE, THE MERE CIRCUMSTANCE THAT NO USEFUL PURPOSE WILL BE SERVED BY GI VING A DIRECTION, SHOULD NOT BE A REASON FOR NOT GIVING A DIRECTION WHEN OTHERWISE IT IS JUST AND PROPER TO GIVE SUCH A DIRECTION. SECONDLY, THE VIEW OF THIS COURT IN HIRALAL AMRITLAL SHAH V. K.C. THOMAS, I INCOME - TAX OFFICER, M - WARD, BOMBAY IS NOT A SOUND VIEW OF THE RELEVANT LEGAL PROVISIONS AND A CONTRARY VIEW IS TAKEN BY THE MADRAS HIGH COURT I N K. SIMRATHMULL V. ADDITIONAL INCOME - TAX OFFICER, OOTACAMUND . MR. JOSHI HAS ALSO STATED THAT THE DECISION OF THIS COURT IN HIRALAL AMRITLAL SHAH'S CASE IS PENDING IN AN APPEAL BEFORE THE SUPREME COURT, AND, IN VIEW OF THE CIRCUMSTANCE, THE REASON GIVEN BY THE TRIBUNAL THAT NO USEFUL PURPOSE WILL BE SERVED, CANNOT B E REGARDED AS A GOOD REASON BECAUSE, IF THE SAID DECISION IS REVERSED AND THE CONTRARY VIEW TAKEN BY THE MADRAS HIGH COURT IS ACCEPTED BY THE SUPREME COURT, A USEFUL PURPOSE MAY INDEED BE SERVED IF THE DIRECTION WHICH WAS SOUGHT WAS GIVEN BY THE TRIBUNAL. 10. NOW, THE QUESTION WHICH IS BEFORE US IS WHETHER THE REFUSAL OF THE TRIBUNAL IS A VALID ONE. IN VIEW OF THE QUESTION WHICH IS BEFORE US, WE ARE NOT SO MUCH CONCERNED WITH THE CORRECTNESS OR OTHERWISE OF THE REFUSAL. BUT, WHAT WE ARE CONCERNED WITH IS TH E LEGALITY OF THE REFUSAL. IT IS NOT ARGUED THAT IT WAS OBLIGATORY ON THE TRIBUNAL TO GIVE SUCH A DIRECTION. IF IT WAS OBLIGATORY, AND THE TRIBUNAL HAD REFUSED TO GIVE A DIRECTION, THE REFUSAL WOULD INDEED HAVE NOT BEEN VALID. BUT, IF IT WAS NOT OBLIGATORY TO GIVE A DIRECTION, WE CANNOT SEE HOW WE CAN SAY THAT THE REFUSAL IS NOT VALID. IT SEEMS TO US THAT IT CANNOT ALSO BE SAID, SO FAR AS THE TRIBUNAL IS CONCERNED, THAT IT WAS NOT JUSTIFIED IN REFUSING TO GIVE A DIRECTION. THE DECISION OF THIS COURT IN HIRA LAL AMRITLAL SHAH'S CASE WAS BINDING ON THE TRIBUNAL AND, IN VIEW OF THAT DECISION, IT WAS INDEED PERMISSIBLE FOR THE TRIBUNAL TO TAKE THE VIEW THAT NO USEFUL PURPOSE WILL BE SERVED EVEN IF THE TRIBUNAL WERE TO GIVE A DIRECTION SUCH AS WAS REQUIRED. IN OUR OPINION, THEREFORE, THE REFUSAL BY THE TRIBUNAL TO GIVE A DIRECTION UNDER THE PROVISIONS OF SECTION 34(3) OF THE INCOME - TAX 9 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . ACT WAS A VALID REFUSAL AND THE SECOND QUESTION, THEREFORE, MUST BE ANSWERED IN THE AFFIRMATIVE. WE ANSWER ACCORDINGLY. THE DEPARTMENT WILL PAY THE COSTS OF THE ASSESSEE. 5.1 THIS VIEW HAS BEEN FOLLOWED BY THE HONBLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF CIT VS. DEHATI COOPERATIVE MARKETING - CUM - PROCESSING SOCIETY (SUPRA) WHEREIN THE HONBLE COURT HAS HELD AS UNDER: UNDER R. 11 OF THE RULES RELATING TO THE APPELLATE TRIBUNAL AN APPELLANT CAN BE ALLOWED TO URGE A GROUND IN SUPPORT OF THE APPEAL WHICH HAS NOT BEEN SET FORTH BY HIM IN THE MEMORANDUM OF APPEAL. THE TRIBUNAL IN DECIDING THE APPEAL IS NOT CONFINED TO THE GROUNDS SET FORTH IN THE MEMORANDUM OF APPEAL OR TAKEN BY LEAVE OF THE TRIBUNAL . THE ONLY PROVISO TO THIS RULE IS THAT THE TRIBUNAL CANNOT REST ITS DECISION ON A NEW GROUND UNLESS THE PARTY WHO WOULD BE AFFECTED THEREBY HAS HAD SUFFICIENT OPPORTUNITY OF BEING HEARD ON THAT GROUND. IF THE APPELLANT CAN BE ALLOWED A CONCESSION OF THE N ATURE CONTAINED IN R. 11, THERE IS NO JUSTIFICATION FOR DENYING THE RESPONDENT IN AN APPEAL A SIMILAR CONCESSION. THE TRIBUNAL CAN, THEREFORE, ALLOW AN ASSESSEE TO RAISE A GROUND WHICH HAD NOT BEEN TAKEN BEFORE OR ADJUDICATED UPON BY THE ITO, SO LONG AS TH AT DOES NOT REQUIRE A FURTHER INVESTIGATION INTO FACTS. 5.2 RESPECTFULLY FOLLOWING THE ABOVE JUDGEMENTS, WHICH ARE IN AGREEMENT WITH THE ASSESSEES CONTENTION THAT IT CAN RAISE ADDITIONAL GROUNDS OF APPEAL IN THE APPEAL FILED BY THE REVENUE WHEREIN THE CIT(A) HAD GIVEN RELIEF IN TOTO AND THE ASSESSEE HAD NO GRIEVANCE TO FILE CROSS - APPEAL OR A CROSS - OBJECTION. THEREFORE , WE ARE INCLINED TO ADMIT AND ADJUDICATE THE SAME AS UNDER: 6. AS REGARDS THE MERITS OF ADDITIONAL GROUND RAISED BY THE ASSESSEE, WE FIN D THAT IT IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE TELENGANA AND AP HIGH COURT IN THE CASE OF SMT. BAISETTY REVA THI (SUPRA) WHEREIN IT WAS HELD AS UNDER: ON PRINCIPLE, WHEN PENALTY PRO CEEDINGS ARE SOUGHT TO BE INITIATED BY THE REVENUE UNDER SECTION 2 7 1(1)( C ) OF THE ACT OF 1961, THE SPECIFIC GROUND WHICH FORMS THE FOUNDATION THEREFOR HAS TO BE SPELT OUT IN CLEAR TERMS. OTHERWISE, AN ASSESSEE WOULD NOT HAVE PROPER OPPORTUNITY TO PUT FORTH HIS DEFENCE. WHEN THE PROCEEDINGS ARE PENAL IN NATURE, RESULTING IN 10 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . IMPOSITION OF PENALTY RANGING FROM 100% TO 300% OF THE TAX LIABILITY, THE CHARGE MUST BE UNEQUIVOCAL AND UNAMBIGUOUS. WHEN THE CHARGE IS EITHER CONCEALMENT OF PARTICULARS OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS THEREOF, THE REVENUE MUST SPECIFY AS TO WHICH ONE OF THE TWO IS SOUGHT TO BE PRESSED INTO SERVICE AND CANNOT BE PERMITTED TO CLUB BOTH BY INTERJECTING AN OR BETWEEN THE TWO, AS IN THE PRESENT CASE. THIS AMBIGUITY IN THE SH OW - CAUSE NOTICE IS FURTHER COMPOUNDED PRESENTLY BY THE CONFUSED FINDING OF THE ASSESSING OFFICER THAT HE WAS SATISFIED THAT THE ASSESSEE WAS GUILTY OF BOTH. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE NOTICE ISSUED U/S 271 R.W.S. 274 OF THE ACT IS NOT VALID AND CONSEQUENTIAL PENALTY PROCEEDINGS ARE NOT SUSTAINABLE. 7. EVEN ON MERITS OF THE GROUND S RAISED BY THE REVENUE, WE FIND THAT THE CIT(A) HAS BROUGHT OUT THE FACTS EXTENSIVELY TO THE EFFECT THAT THE ASSESSEE H AS FURNISHED ALL THE RELEVANT MATERIAL BEFORE THE AO BOTH DURING THE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE PENALTY PROCEEDINGS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION OF PAYMENT OF SHARE APPLICATION MONEY, BUT, THE AO HAD FAILED TO CARRY OUT PROPER INVESTIGATION TO VERIFY THE DOCUMENTS SUCH AS PAN, ETC. FURTHER, HE ALSO BROUGHT OUT THAT THE AO HAS NOT RECORDED SATISFACTION ABOUT CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. ASSESSEE HAS PRODUCED RELEVANT MATERIAL, BUT, SINCE AO WAS NOT SATISFIED WITH THE SAME, HE MADE ADDITION. ASSESSEE, IN ORDER TO AVOID FURTHER LITIGATION, HAS NOT APPEALED, BUT, THAT DOES NOT MEAN THAT THE ADDITION WILL AUTOMATICALLY ATTRACT PENALTY PROVIS IONS. THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A ) . 11 ITA NO. 788 /HYD/1 5 M/S VEEN PROMOTERS PVT. LTD. . 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER , 2018 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 14 TH SEPTEMBER , 2018 KV C OPY TO: - 1) D CIT, CIRCLE 17 ( 2 ), 6 TH FLOOR, B BLOCK, IT TOWERS, AC GUARDS, HYDERABAD 2) VEEN PROMOTERS PVT. LTD., 8 - 2 - 277/B, GROUND FLOOR, INWINEX TOWERS, ROAD NO. 2, BANJARA HILLS, HYDERABAD. 3) CIT(A) - 4 , HYD. . 4) CIT 5 HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE