ORDER
Egbert Singh, Account Member
1. The cross objections have been filed by the assessee. In this connection, it may be clarified at the outset that against the order of the A.A.C. which is being impugned now, the revenue have already filed an appeal earlier. That appeal by the revenue was that the A.A.C. erred in allowing the assessee’s claim for carry forward of loss though the return was not filed within the specified time. The Appellate Tribunal heard both the sides and sustained the order of the A.A.C. in allowing the loss to be carried forward. That was the only point of appeal by the revenue.
2. The assessee did not file appeal on his own but after the appeal was filed by the revenue, the assessee as provided under Section 253(4), filed the present cross objections in which the assessee claimed full relief in respect of different expenses, like general charges, telephone etc. Hence, we take up the cross objections of the assessee for disposal. At the stage of hearing of the assessee’s cross objections, the learned Departmental Representative raised preliminary objections that the cross objections of the assessee in the present circumstances should not be admitted in view of the fact that the subject matter of appeal preferred by the revenue, as stated earlier was only on the point of carrying forward of loss as allowed by the A.A.C., whereas in the cross objections, the assessee has claimed relief on expenses, which were partly sustained by the A.A.C. It is urged on behalf of the revenue, that the assessee if felt aggrieved with such part disallowance of expenses, the assessee could and should have filed its independent appeal in the normal course. It is pointed out that when the revenue had preferred an appeal on a particular point, that particular point only is the subject matter of appeal before the Appellate Tribunal and the assessee may file cross objections in respect of that subject matter only. It is also submitted that if the cross objections of the assessee are admitted for consideration, then the revenue would be put to a irreparable loss which was not the intention of the law. It is also urged that if such view is taken, then the revenue would have to file cross objections on the cross objections filed by the assessee. It is, therefore, urged that interpretation of statute or any provision thereof should be in such a manner which would not bring about any absurdity or mischief which was never the intention of the statute. It is urged that interpretation particularly in the present context would have to be in harmony with the provisions of the other relevant provision.
3. It is also submitted by the learned Departmental Representative that there might be cases supporting the case of the assessee under the procedure adopted in Civil Court proceedings. It is contended that income-tax proceedings are completely different and in no way similar to the civil court proceedings and, therefore, any ruling given under the Civil Procedure Code, would not have any bearing or material on the issues involved. It is argued at length that if any party has filed an appeal and the other side has not filed his own appeal, then this other side has not filed his own appeal, then this other side has accepted the order or part of the order which might have been against the second party and, therefore, the first party has a vested right which has accrued to the first party in consequence of such part of the order of the appellate authority appealed against by the second party. It is pointed out that in such a situation as is in the present case, the assessee did not file his own appeal and thereby it accepted the part relief allowed by the A.A.C. and, therefore, that party cannot in the guise of cross objections come up in appeal claiming full relief at that stage. The learned Departmental Representative refers to a decision as reported in State of Kerala v. Vijaya Stores [1979] 116 ITR 15 (SC) in order to support its contention. In fact, the learned Departmental Representative refers to various case laws in order to stress the different points and different aspects of the matter argued. It is submitted, therefore, that since the scope and the appeal before the Appellate Tribunal as preferred by the revenue constituted the subject matter of appeal, then if the cross objections of the assessee related to other subject matters, then such cross objections cannot be entertained at all. It is urged at length that in the circumstances of the case, the cross objections preferred by the assessee in the present context may be dismissed.
4. On the other hand, the learned counsel for the assessee reiterated the right of the respondent to file cross objections in terms of Section 253(4) of the I.T. Act, 1961. It is stressed by him that if the view expounded by the learned Departmental Representative is to be accepted, then whole Sub-section (4) of Section 253 would have been amended drastically. It is urged that in view of the present provision mentioned above, the respondent assessee though may have filed his own appeal, may file his cross objections, within the specified time on being intimated that the first party has filed an appeal before the Appellate Tribunal. It is pointed out that in the cross objections, the assessee can raise objections or appeal against any part of the order of the A.A.C, not necessarily that part of the order appealed against by the revenue. It is submitted that there are various authorities for the proposition that a memorandum of objections may be filed against a decree as a whole or against a part of it which may not be the subject matter of the appeal. Details are given in the paper-book at page 1 onwards which we have gone through for our consideration along with the different case laws cited on behalf of the revenue. In other words, the assessee’s learned counsel relied on the provision of Section 253(4) before us. It is submitted that this section and other clauses may not be misread as it was sought to be made out by the revenue.
5. We have given our consideration of the different aspects of the matter after we have gone through the different case laws and authorities cited before us. It may be mentioned here that different authorities were given under the Income-tax Act, 1922, in which there was no provision for filing cross objections. But even then, the respondent could support the order appealed against. Reference may be made to the decision as reported in Vahiwatdars of Ambaji Temple v. CIT [1965] 58 ITR 675(Guj.)and Kanpur Industrial Works v. CIT [1966] 59 ITR 407(All.). But under the Income-tax Act, 1961 there is specific provision under Section 253(4) for filing cross objections and there is no ambiguity in the intention of the Legislature in bringing out this provision. The provision available under the Income-tax Act, 1961, had been dealt with in the case as in ITO v. Fagoomal Lakshmi Chand [1979] 118 ITR 766 (Mad.) as well as in CIT v. New India Assurance Co. Ltd. [1983] 141ITR 367 (Bom.) which support the view we have taken. We find that there is considerable force in the submissions made on behalf of the assessee. We are of the opinion that the provisions of Clause (4) of Section 253 is quite clear and unambiguous. We should read the section as such. If we take the view which the revenue wants us to take, then we would have to import certain meanings which were not there in the section. In fact, it would tantamount amendment of the clause itself. This the Appellate Tribunal cannot obviously do. We are of the opinion that on filing of an appeal by the ITO or by the assessee before the Appellate Tribunal, the respondent concerned though might have filed an appeal on its own at the first instance, may after filing of the appeal by the first party, file cross objections against any part of the order of the first appellate authority. In this view of the matter, the preliminary objections raised by the revenue are rejected.
6. At the time of hearing, the parties have been advised to take up the issues on merits also. The assessee’s learned counsel points out before us that in respect of general charges and travelling expenses, the points in the cross objections are not pressed. The other points relating to electric charges, telephone charges, motor vehicle charges and fooding expenses are pressed. We have heard the learned counsel for the assessee in respect of these points also. The learned Departmental Representative, on the other hand, declined to argue the case on merits as he is of the opinion that the cross objections cannot be entertained by the Appellate Tribunal as argued by him earlier. He has only clarified certain points regarding depreciation which will be dealt with by us in the following paragraphs. Accordingly, we proceed to dispose of the claim of the assessee on merits.
7. The ITO has disallowed part of the expenses, as according to him there was element of personal and non-trading expenditure. The assessee obtained part relief from the A.A.C. We have gone through the orders of the authorities below on this point. Having regard to the facts of the case and the findings of the authorities below, we find that the A.A:C. has given part relief, as according to him the disallowance made by the ITO were excessive. After considering the materials placed before us and after considering the nature and line of business of the assessee, we are of the opinion that adequate relief has been allowed by the A.A.C. and no further relief is called for.
8. The next point in the cross objections is that the A.A.C. erred in not considering ground Nos. 2 and 4 relating to disallowance of depreciation on car etc. This point cannot be said to have arisen out of the order of the A.A.C. impugned before us. It appears that the A.A.C. has not even dealt with this issue. In the circumstances, the Tribunal would not have jurisdiction to embark an enquiry or investigation to find out facts for or against any party. It is not known whether the assessee has approached the A.A.C. under Section 154 for necessary follow up action. As far as the Tribunal is concerned, we are of the opinion that this ground of objection cannot be adjudicated.
9. In the result, the cross objections on merits are rejected.