ORDER
M.M. Cherian, A.M.
This is an appeal by the assessee, M/s. Season Rubbers Ltd., in respect of the assessment year 1981-82. The only ground raised by the assessee in this appeal is that the Commissioner (Appeals) erred in not holding that the order passed by the assessing officer on 8 -3-1994 in respect of the assessment year 1981 82 was invalid as barred by limitation.
2. For the assessment year 1981-82 the assessee-company was assessed to tax on a total income of Rs. 3,04,770 by the order under section 143(3) dated 12-3-1984. In the assessment there was addition of Rs. 3,34,654 as capital gains and the difference was on account of the loss under the head ‘Business’. Against the assessment, the assessee filed an appeal before the Commissioner (Appeals). One of the grounds in the appeal was regarding the disallowance of salary of Rs. 24,000 paid to Smt. Rosamma Thomas, Manager of the company. The Commissioner (Appeals) disposed of the appeal by his order in IT 19-CCE/84-5 dated 16-2-1985. In disposing of the appeal in para 4 of the order the Commissioner (Appeals) held as under:
“The disallowance of the salary payment for the assessment year 1979-80 and 80-81 had been subject-matter of appeal before the Income Tax Appellate Tribunal, Cochin Bench. The Hon’ble Tribunal by, its order dated 22-10-1984 has set aside this issue and restored the matter to the Income Tax Officer in order to make comprehensive enquiries about the experience of Smt. Rosamma Thomas in the matter of management and the services rendered by her to the company and to decide the admissibility of the payment afresh accordingly. Since the disallowance of the salary for the year under appeal before me is for the. same reasons as for the assessment years 1979-80 and 1980-81, it is only fair and proper that this matter is also sent back to the Income Tax Officer for a fresh consideration and decision keeping in mind the observations and directions of the Tribunal on the matter. I would do so.”
The Commissioner (Appeals) further observed that as the assessment had been set aside for re-examining the admissibility of the salary paid to Smt. Rosamma Thomas as a deductible business expenditure, he was not deciding the other issues and grounds raised in the appeal before him. He then held further as under:
“The Income Tax Officer will, however, be free to give a fresh look to those issues -and grounds also while making the fresh assessment. In the light of the decision of the Tribunal for the assessment years 1979-80 and 1980-81, it may be possible for the Income Tax Officer to make a reappraisal of same of the questions involved in this appeal. I would, therefore, leave it to him to carry out such reappraisal as he considers fit in the circumstances of the case. The assessment is set aside.”
3. In giving effect to the order of the Commissioner (Appeals) the assessing officer passed the order on 8-3-1994 allowing the deduction for the salary, of Rs. 24,000 paid to Smt. Rosamma Thomas. In addition, there were also further deductions allowed by the assessing officer and the computation under the head ‘Business’ thus resulted in a loss of Rs. 1,34,420. The capital gains of Rs. 3,34,654 as assessed originally was., reduced to Rs. 3,19,983. As regards the loss from business, the assessing officer held that the loss was not allowed to be carried forward since the return of income filed by the assessee was after the issue of notice under section 139(2).
4. Against the order passed by the assessing officer giving effect to the appellate order, the assessee again filed an appeal before the Commissioner (Appeals). In that appeal the assessee had raised the following grounds :
1 . The order of the Deputy Commissioner (Assessment) is opposed to law. facts and circumstances of the case.
2. The learned Deputy Commissioner (Assessment) has erred in not allowing the benefit of carry forward of loss of Rs. 1,34,420.
3. For the above and other grounds that may be advanced at the time of hearing, it is prayed that the order of the Deputy Commissioner (Assessment) be set aside.
The Commissioner (Appeals) disposed of the assessee’s appeal by the order in ITA-S/ DC/K/CIT-II/94-95 dated, 27-7-1995. From para 1 of the appellate order and also from the grounds of appeal, it can be seen that the only, issue raised by the assessee in the appeal was with regard to the claim of carry forward of loss computed during the year. The Commissioner (Appeals) decided the matter in favour of the assessee with the reasoning as under:
It -has stated on behalf of the assessee that the liability to file a return under section 139(1) to obtain the benefit of carry forward of loss was introduced only by the Taxation Laws (Amendment) Act, 1984 with effect from 1-4-1988. Prior to this amendment the only requirernent was the filing of return under section 139. In the assessee’s case return due on 31-7-1981 was filed on 13-2-1982.
Meanwhile the assessee had filed Form No. 6 seeking time to file the return upto 31-10-1981. No doubt, no return was filed by that date. A notice under section 139(2) was issued on 14-1-1982 received on 25-1-1982 and the return was filed on 13-2-1982. The Circular of the Board No. 397, dated 6-10-1984 was also relied upon in this connection. In support of the claim it was stated that the amendment to section 80 takes effect from 1-4-1985 and will, accordingly apply in relation to any a loss for the assessment year 1985-86 and subsequent years. The decision of the Kerala High Court in CIT v. Chandran 1991 (1) KLT 795 was relied upon in this connection. It was held that the return filed or deemed to have been filed under section 139(4) of the Act before the assessment is made, should be considered and the assessee is entitled to carry forward the loss determined by the Income tax Officer.”
The Commissioner (Appeals) accepted the contentions raised on behalf of the assessee and held that the assessee was entitled to carry forward the loss computed in terms of the order dated 8-3-1994. The appeal was thus allowed in favour of the assessee.
5. Now the assessee has filed the present appeal before the Tribunal with the grounds of appeal as under:
1. The learned Commissioner (Appeals) has erred in not considering the invalidity of the assessment order since the assessing authority had passed the order only on 8-3-1994, whereas the original order is dated 16-2-1985.
2. The learned Commissioner (Appeals) ought to have found that by virtue of section 153(2A) the assessment is barred by limitation and your petitioner was entitled to the original loss to be determined as per the return amounting to Rs. 6,06,866.
6. Shri K.I. John, the learned representative of the assessee explained the grounds of appeal as under:
The earlier appellate order had been passed by the Commissioner (Appeals) on 16-2-1985 in respect of the assessment year 1981-82. As per section 153(2A), an order of fresh assessment in pursuance of an order under section 250 would have to be made within two years from the end of the financial year in which the order under section 250 was passed by the Commissioner (Appeals). He pointed out that though the Commissioner (Appeals) passed the appellate order on 16-2-1985, the assessing officer passed the order giving effect to the appellate order only on 8-3-1994. Shri John submitted that, that order was beyond the time limit and in that sense it was an invalid order. Shri John further contended that it was open to the assessee to raise at any time a ground of appeal challenging the legal validity of the order passed by the assessing officer. Shri John stated that even though the assessee had not specifically raised a ground of appeal before the Commissioner (Appeals) questioning the legal validity of the order passed by the assessing officer on 8-3-1994, the assessee was not precluded from raising such a ground in the further appeal before the Tribunal. It was his contention that even though the assessee has not challenged the validity of the order in the first appeal, such an illegal order would have no legal validity and so there could be a plea raised by the assessee for cancelling the same at any time in the appellate proceedings. Shri John submitted that the Commissioner (Appeals) ought to have cancelled the order passed by the assessing officer as time barred and if the first appellate authority had not done so, it was open to the assessee to raise such a ground for the first time before the Tribunal. The learned representative has also referred to the Circular No. 96, dated 25-11-1972 issued by the CBDT explaining the provisions of the Taxation Laws (Amendment) Act in regard to the time limit for completion of set aside assessments. He also relied on the decision of the Allahabad High Court in the case of Manik Chand Buhrinan v. Income Tax Officer (1998) 229 ITR 90 (All) to contend that the order passed after the prescribed time-limit was bad in law, which required to be cancelled.
7. Per contra, Smt. T. Prasannakumari, the Departmental Representative submitted that the present appeal was not at all maintainable as the assessee was in no way aggrieved by the order of the Commissioner (Appeals). The learned Departmental Representative referred to the assessee’s grounds of appeal before the Commissioner (Appeals) and pointed out that the appellate authority had accepted all the contentions raised on behalf of the assessee and decided the entire matter in favour of the assessee and allowed the appeal. The assessee’s grievance before the Commissioner (Appeals) was that the assessing. officer had erred in not allowing the benefit of carry forward of the loss under the head ‘Business’. Smt. Prasarnnakumari stated that as could be seen from the appellate order, the Commissioner (Appeals) held that the assessee’s claim to carry forward the loss computed in terms of the impugned order was in order. The learned Departmental Representative further stated that as per section 253 of the Income Tax Act, any assessee aggrieved by an order passed by the Commissioner (Appeals) under section 250 could file an appeal before the Tribunal. But then, the essential condition, according to the learned Departmental Representative, is that the assessee should be aggrieved with the order passed by the Commissioner (Appeals) under section 250. In the present case, the assessee could not have been aggrieved by the order of the Commissioner (Appeals), as the appellate authority had fully allowed the appeal and in that sense, according to Smt. Prasannakumari, this appeal could not be entertained. Regarding the claim that the assessee could at any time in appeal raise a legal ground questioning the validity of an order, the learned Departmental Representative submitted that, that would be true only if a valid appeal already filed by the assessee was pending. In other words, according to Smt. Prasannakumari, only if there was already an appeal filed under section 253 it would be open to the assessee to raise an additional ground challenging the validity of the assessment, even if such a ground had not been raised at the first appeal stage. It is her contention that section 253 of the Income Tax Act does not permit the assessee to file an appeal altogether on a ground which was not raised in the first appeal stage and on which there was no adjudication by the Commissioner (Appeals) and in that sense the assessee could not have been aggrieved. There was also another submission made by the learned Departmental Representative in this context to the effect that the provisions of section 153(2A) regarding the time-limit were not applicable in the present case as the order passed by, the assessing officer on 8-3-1994 was not afresh order of assessment, but only an order allowing certain deductions in accordance with the directions given by the Commissioner (Appeals) in the earlier appellate order. Smt. Prasannakumari submitted that by the earlier order dated 16-2-1985 the Commissioner (Appeals) had not set aside the entire assessment and that the setting aside was only for the limited purpose of considering the assessee’s claim for deduction of the remuneration paid to the Manager in the light of the decision taken by the Tribunal for the assessment years 1979-80 and 1980-81. Though the Commissioner (Appeals) had observed that he was not deciding the other issues and that the assessing officer would be free to give a fresh look to those issues and grounds while making the fresh assessment, it was not in fact a fresh order of assessment that the assessing officer had passed on 8-3-1994. The contention of the learned Departmental Representative was that the time-limit provided under section 153(2A) applied only for making a fresh assessment order in pursuance of an order under section 250. In the present case it was only a simple order passed by the assessing officer on 8-3-1994 giving effect to the order of the Commissioner (Appeals), rather than a fresh assessment as envisaged in section 153(2A). The learned Departmental Representative thus contended that in any case, the order passed by the assessing officer was not time barred and it was in that sense not an invalid order.
8. It is provided in section 253(1) that any assessee aggrieved by any of the orders mentioned therein may file appeal to the Appellate Tribunal against such order. It can be seen from the section that the right of appeal is conferred on an aggrieved assessee.
It has been held by the Madhya Pradesh High Court in the case of CIT v. Princess Sarla Kumari (1988) 171 ITR 14 (MP) that when an assessee’s appeal has been fully allowed by the first appellate authority, he cannot be said to be aggrieved by the order of that authority. In the case decided by the Madhya Pradesh High Court, the assessment order was passed purporting to be on the same date on which the notice under section 143(2) was issued. Aggrieved by the order of the Income Tax Officer, the assessee preferred an appeal to the Appellate Asstt. Commissioner, who allowed the appeal in its entirety. The assessee filed a second appeal before the Tribunal, which held that the order of the Income Tax Officer was void and non est as it had been passed before the receipt of the notice under section 143(2) by the assessee. On a reference by the Commissioner, the High Court held : “The second appeal filed by the assessee was not maintainable inasmuch as the order of the Appellate Asstt. Commissioner was an order whereby the appeal preferred by the assessee had been allowed in its entirety and they could not be said to be aggrieved by the said order within the meaning of section 253 of the Act. Therefore, the Tribunal exceeded the jurisdiction conferred on it under section 254(1) in entertaining the appeal.”
In the present case, we have already seen that the assessee’s appeal in its entirety had been allowed by the Commissioner (Appeals). As already stated, the assessee’s grievance in the appeal before the Commissioner (Appeals) was that the assessing authority had erred in not allowing the benefit of carry, forward of the loss of Rs. 1,34,420. The Commissioner (Appeals) upheld the assessee’s claim to carry forward the loss computed in terms of the order dated 8-3-1994 and allowed the assessee’s appeal. It can thus be seen that the assessee could not have been aggrieved with the order of the Commissioner (Appeals) to confer on him a right of further appeal against that order. In view of the judgment in the case of Princess Sarala Kumari (supra), we have to hold that the present appeal by the assessee before the Tribunal is not maintainable.
9. The learned representative of the assessee has referred to various judicial decisions for the contention that the assessee is free to raise any time in an appeal a legal ground questioning the validity of all assessment. Shri John has drawn our attention to the decision of the jurisdictional High Court in CIT v. Kerala State Co-operative Marketing Federation Ltd. (1992) 193 ITR 624 (Ker) and submitted that an appellant before the Tribunal can, urge a new ground in an appeal with the leave of the Tribunal. The Tribunal has the jurisdiction to permit the appellant to raise any ground which has not been raised before the assessing authority, or the Commissioner (Appeals). Once any such new or additional ground is raised, the Tribunal is duty bound to entertain that ground and render a decision thereon, the learned representative contended. In the case decided by the High Court, the assessing officer had disallowed the assessee’s claim under section 80P(2)(a)(iii) of the Income Tax Act. On appeal, the Commissioner (Appeals) held that the assessee would be entitled to exemption in respect of the income derived from the marketing of agricultural produce belonging to the members. Since the break up of the figures regarding the quantum or value of materials supplied by the primary societies who were not members of the society were not available, the Commissioner (Appeals) directed the Income Tax Officer to determine the income ‘derived by the society from the marketing of the agricultural produce of its members by apportioning the income in the ratio of the turnover. The matter was carried by the assessee to the Tribunal in second appeal. In that appeal, the assessee took an additional ground claiming deduction for the purchase tax liability accrued under the Kerala General Sales Tax Act. That claim had not been made either before the Income-tax Officer or before the Commissioner (Appeals). The High Court held that the Tribunal has the ‘ jurisdiction to permit the additional ground of appeal which had not been raised before the assessing authority or the Commissioner (Appeals). It is not difficult to see that on facts, that case is distinguishable. When valid appeal filed by the assessee is pending before the Tribunal, there is no doubt that the assessee can raise a new or additional ground, that had not been raised earlier before the revenue authorities. But then, there should be a valid appeal pending before the Tribunal. If the assessee had no reason to be aggrieved with the order of the Commissioner (Appeals), can the assessee file an appeal before the Tribunal, on a new or additional ground before the Tribunal ? A new or additional ground presupposes that there is already another ground raised in a valid appeal before the Tribunal. The decision of the Kerala High Court relied on by the learned representative does not support the claim that the assessee has a right of appeal before the Tribunal, even when he is not aggrieved by the order of the first appellate authority’. Though the learned Departmental Representative has referred to another decision of the Kerala High Court in the case of Asian Techs Ltd. v. ITA T (1999) 237-ITR 348 (Ker), we find that, that is a case where the Tribunal had refused to consider an additional ground of appeal. That decision also does not help in deciding the question whether the assessee could file an appeal before the Tribunal, on a ground not raised before the assessing officer or the Commissioner (Appeals) and the appellate authority had allowed to assessee’s appeal in its entirety leaving the assessee with no reason to be aggrieved with that order.
10. As a matter of fact, here the assessee is aggrieved by the order of the assessing officer and not by the order of the Commissioner (Appeals). If aggrieved by the order of the assessing officer, the assessee’s right of appeal is before the Commissioner (Appeals) and not before the Tribunal. Hence as already held, in view of the decision in Princess Sarala Kumari, we have to hold that this appeal is not maintainable.
11. The appeal filed by the assessee before the Tribunal is thus rejected as not maintainable.