IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA.No. 425 of 2009()
1. COMMISSIONER OF INCOME TAX,
... Petitioner
Vs
1. M/S.JASS ROLLER FLOUR MILLS PVT. LTD.,
... Respondent
For Petitioner :SRI.JOSE JOSEPH, SC, FOR INCOME TAX
For Respondent :SRI.P.BALAKRISHNAN (E)
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :22/09/2010
O R D E R
C.N.RAMACHANDRAN NAIR &
K.SURENDRA MOHAN, JJ.
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I.T. Appeal Nos.425 of 2009 and
412 of 2009
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Dated this the 22nd September, 2010
JUDGMENT
Ramachandran Nair, J.
The connected appeals are filed by the revenue
challenging the orders of the Tribunal, both issued in the
block assessment appeal and in the appeal filed against
penalty levied under Section 158BFA(2) of the Income Tax
Act.
2. We have heard the Senior Standing Counsel
appearing for the appellant and Sri.P.Balakrishnan,
Advocate appearing for the respondent-assessee.
3. During the last hearing of the case, the
department’s main challenge against the order of the
Tribunal in the assessment appeal, that is against the
Tribunal exceeding it’s jurisdiction, was considered. The
grievance of the department was that without raising any
dispute against the assessment pertaining to the estimation
of income made for various years in the first appeal, the
ITA 425/2009 & 412/2009 2
Tribunal considered the appeal before it on those matters as
if it is the first appeal and decided the appeal. We,
therefore, directed the department to produce the grounds
of appeal raised by the assessee before the Commissioner of
Income Tax (Appeals). After going through the grounds of
appeal filed by the assessee before the Commissioner of
Income Tax (Appeals) and after considering the CIT(A)’s
order, we notice that the Tribunal has prima facie exceeded
its jurisdiction in considering and deciding the matters that
do not arise from the orders of CIT(A). Both sides cited the
decisions reported in National Thermal Power Co. Ltd. V
Commissioner of Income Tax 229 ITR 383 and another
decision reported in Goetze (India) Ltd. V Commissioner
of Income Tax 284 ITR 323, wherein the Supreme Court
has held that the Tribunal is entitled to consider questions
of law to be raised for the first time before it and the
Tribunal can, based on the facts available on record, decide
such questions of law raised for the first time before it.
However, in this case what we find is that the matters
which were never agitated in the first appeal were allowed
to be raised before the Tribunal for the first time and the
Tribunal decided the appeals on several factual issues
ITA 425/2009 & 412/2009 3
treating the same as first appeal before it. From the orders
of the CIT (Appeal) on the grounds raised before it, prima
facie, we find that the assessee has contested the reliefs
granted under Section 80-IA for the assessment year 1994-
1995 and for the assessment year 1998-1999. The CIT
(Appeal) has considered in detail the claim for relief under
Section 80-IA and it was in fact granted. So far as the
estimation of income for several years in the assessment
made is concerned, what the assessee contested before the
CIT (Appeal) was only in respect of the mistakes in the
computation for the block period ending in 1998-1999.
Here again, the First Appellate Authority has granted relief.
However, from the grounds of appeal filed before the CIT
(Appeals) and the order of the CIT (Appeal), we find that the
assessee has not contested the assessment on any other
grounds other than the issues considered and decided by
the CIT (Appeal). However, on going through the appellate
order of the Tribunal, we notice that the assessee has raised
absolutely new grounds which were never raised or
considered by the CIT (Appeal). We, prima facie feel that
the Tribunal exceeded its jurisdiction under Section 253.
The Tribunal has to decide the appeal as the Second
ITA 425/2009 & 412/2009 4
Appellate Authority against the orders of the CIT (Appeal).
We do not think the Tribunal can convert itself to the First
Appellate Authority on questions of fact that too relating to
estimation of income. If the assessee has a case that the
grounds raised before the CIT (Appeal) were not considered
and decided by it, then the assessee’s remedy was to file a
rectification application and in the course of appeal, if
found the Tribunal finds that CIT (Appeal) has not
considered and decided the grounds raised by the assessee,
it was for the Tribunal to remand the case and direct the
CIT (Appeal) to consider the appeal on those grounds.
Therefore, prima facie, we feel the Tribunal exceeded it’s
jurisdiction by deciding matters pertaining to estimation of
income for various years in the block period, which were
not raised before the CIT (Appeals) and decided by
him. Therefore, we are of the view that matter requires
re-consideration by the Tribunal on this aspect, because the
department’s objection about maintainability of appeal on
fresh grounds raised is not considered and decided by the
Tribunal. We, therefore, allow IT Appeal No.412/2008 by
setting aside the orders of the Tribunal and by restoring the
appeal back to the Tribunal for considering the
ITA 425/2009 & 412/2009 5
maintainability of appeal on the new grounds raised and to
decide the matter afresh on all grounds.
4. I.T.Appeal No.425/2005 is an appeal filed against
the penalty. The first appeal was disposed of by the CIT
(Appeal) on the assumption that the assessee has no
objection against the addition. However, the assessee
contested addition in the second appeal filed before the
Tribunal which is already set aside by us as indicated above.
Since the Tribunal has decided penalty appeal also,
following their order in assessment appeal which we have
set aside, we set aside this said order also directing the
Tribunal to re-consider the matter based on the decision in
the assessment appeal and after or along with the said
appeal. Both sides are free to raise all objections and the
Tribunal will decide both the appeals on all issues raised.
C.N.RAMACHANDRAN NAIR
JUDGE
K.SURENDRA MOHAN
JUDGE
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