ORDER
VIMAL GANDHI, J.M. :
This appeal by the assessee for the asst. yr. 1988-89 is directed against order of Dy. CIT(A), Rohtak, refusing to rectify his earlier order dt. 21st January, 1991, under s. 154 of the IT Act.
2. Briefly stated, the facts of the case are that assessment of the assessee under s. 143(3) was made on 29th March, 1990, on net income of Rs. 52,948. The said assessment was challenged in appeal before learned Dy. CIT(A), Rohtak, who disposed of the same vide order dt. 21st January, 1991. On three grounds relevant in these proceedings, the learned Dy. CIT(A) passed the following order :
(a) On 4th ground of appeal raised before him relating to disallowance of Rs. 4,000 out of total expenditure of Rs. 22,408 under the head “Travelling and conveyance expenses”, the learned Dy. CIT(A) agreed with AO and dismissed the appeal with the following observations :
4.4 I have gone through the details of travelling expenses. These expenses include the hotel expenses in respect of the assessees husband. I have seen the voucher dt. 5th November, 1987. Other expenses have been debited at Rs. 830. Hotel expenses are Rs. 311. The hotel bill shows that the assessee has incurred hotel expenses ranging from Rs. 144 per day to Rs. 118 per day. This does not include the refreshment expenses which has been separately included in the voucher. The travelling expenses are to be restricted as per r. 6D. The expenses claimed are in excess of limit permissible under r. 6D. Such instances of excessive expenses are there. It was the duty of the assessee to have claimed the expenditure permissible under r. 6D. The assessee has not worked out the expenditure disallowable under r. 6D. Therefore, I am declining to interfere with the findings of the AO. 4th ground of the appeal is dismissed.
(b) On 5th ground of appeal raised before him, learned Dy. CIT(A) sustained disallowance of Rs. 1,500 with the following remarks :
5.4 I have considered the submissions of the learned authorised representative. It is true that staff welfare expenses are allowable and these are not to be treated as entertainment expenses. However, it is not possible to verify that each and every item debited under the head staff welfare relates to the staff. Considering the quantum of expenses debited under customer welfare and looking to the details of staff welfare expenses filed before me, it will be fair and reasonable to restrict the disallowance to Rs. 1,500. The appellant gets a relief of Rs. 5,035.
(c) On 7th ground of appeal raised before him, relating to 1/5th of car repairs and car petrol expenses, the learned Dy. CIT(A) held as follows :
7.4 I have considered the submissions of the learned authorised representative. The above issue has been adjudicated by the learned Tribunal and they restricted the disallowance to 1/5th out of car repairs expenses and petrol expenses. The learned authorised representative during the course of proceedings was required to let me know the details of petrol expenses incurred in respect of car owned by the appellants husband. It was submitted that withdrawals made for household expenses were used for meeting the petrol expenses of such car. It has already been mentioned that withdrawals for household expenses are only Rs. 18,000. At that time it was nowhere mentioned that petrol expenses of the personal car has also been met. Moreover, no log book has been maintained. Therefore, personal use of the car cannot be ruled out. Following the order of the Tribunal the learned AO is directed to disallow 1/5th of car repair expenses and petrol expenses.
The assessee was not satisfied with above order of learned Dy. CIT(A) and moved an application dt. 29th December, 1995, under s. 154 of the IT Act contending that on three points mentioned above, mistakes of facts and law which are apparent from record have crept in and, therefore, these mistakes should be rectified. The learned Dy. CIT(A) disposed of the said application vide order dt. 31st March, 1993. The contention relating to all the three disallowances were considered and it was held that in the relevant appellate order, the claim of the assessee was duly considered and there is no mistake apparent from record. The learned Dy. CIT(A) further observed that in case the appellant was not satisfied with the appellate order, he should have gone in further appeal before the Tribunal. Thus, after discussing the issue, the learned CIT(A) dismissed the application of the assessee. The assessee has come up in appeal before the Tribunal. The assessee raised the following grounds of appeal in the original memorandum :
1. That the orders of assessment under s. 143(3) is bad in law as the AO not only failed to determine in writing the sum payable based on such assessed income but also failed to communicate to the assessee within the limitation provided under s. 153(1)(a).
2. That since the first ground hits the very root of the assessment order and purely a question of law, though omitted to be agitated before the first appellate authority, may be permitted to be raised before the Honble Tribunal.
3. That the AO disallowed Rs. 4,000 from travelling and conveyance expenses based on suspicion, conjecture, surmises, contrary to facts of the case, by non-speaking order and without adhering to the provisions of natural justice and statutory provisions under s. 143(3) whereas learned Dy. CIT(A) erred in law and facts in sustaining disallowance by applying sub-r. (1) when the appellants case falls within the ambit of sub-r. (2) of r. 6-I of IT Rules, 1962.
4. That the AO erred in law and facts in clubbing staff welfare and customers welfare expenses by treating them as entertainment expenses and disallowed a sum of Rs. 6,535 whereas, the Dy. CIT(A) erred in law and facts by restricting such disallowance of Rs. 1,500 from staff welfare expenses in the nature of serving tea, coffee or cold drinks and when such expenses are outside the scope of entertainment expenses defined under s. 37 of the IT Act.
5. The AO erred in law and facts in disallowing 1/5th of vehicle repair and maintenance expenses amounting to Rs. 5,962 based on suspicion, conjecture, surmises, contrary to facts, by non-speaking orders and without adhering to the provisions of natural justice and statutory provisions under s. 143(3) whereas learned CIT(A) erred in law and facts by restricting such disallowances to 1/5th share of car expenses in spite of the fact that appellant did not know driving, no driver was employed and another car was owned by appellants husband and these facts not disputed by the Department.
6. That the appellant craves leave of the Honble Court to add, substitute, amend, alter, urge any of the grounds of appeal either before or at the time of the hearing of this appeal.
The assessee moved application dt. 16th January, 1996, seeking to raise an additional ground of appeal contending that assessment order passed on 29th March, 1990, was without jurisdiction, void ab initio and arbitrary. The AO had no pecuniary or subject-matter jurisdiction in terms of orders passed under s. 124(1) r/w s. 120(2) of the IT Act, dt. 3rd May, 1988, and 10th July, 1990, by learned CIT(HR). A copy of order of Dy. CIT(A), Rohtak (Haryana), dt. 3rd May, 1988, was enclosed. In the application, a further ground was sought to be raised that return of income filed under s. 139(4) on 30th March, 1989, and notice issued under s. 143(2) on 12th December, 1990, were issued much after the period of limitation prescribed in proviso to sub-s. (2) of s. 143 of IT Act and, therefore, assessment made was ultra vires and liable to be quashed.
3. The appeal was heard by the Bench comprising of Vimal Gandhi, J.M. and Shri G. D. Aggarwal, A.M. on 16th January, 1996. During the course of discussion between the Members after the hearing, the learned Accountant Member wanted further clarifications from the assessee under s. 124 and accordingly the appeals were treated as de-heard (sic) for getting necessary clarifications under s. 124(2) on 23rd January, 1996. Soon thereafter Shri Aggarwal was transferred from Delhi.
4. The appeals were refixed on 27th March, 1996. The husband of the assessee who had appeared before the Bench was directed to file proper power of attorney. On 23rd June, 1996, when Shri G. D. Aggarwal already stood transferred from the Delhi Benches, the husband of the assessee Shri R. K. Mangla requested Vice-President, who directed that this appeal be heard by a Bench in which Mr. Gandhi was a Member. Accordingly these appeals were fixed before a Bench comprising of Shri Vimal Gandhi and Shri N. S. Chopra as Members. The appeals were taken for hearing on 17th July, 1996. It was also heard on 18th July, 1996. At the very outset the husband of the assessee Shri Raj Kumar Mangla argued that additional ground raised by him pertaining to territorial jurisdiction of AO under s. 124(3) has already been accepted as order to above effect was announced on behalf of the Bench by the Judicial Member on 16th January, 1996. Shri Mangla was informed that this claim was false and there was no material on record to support such a claim. He was, therefore, asked to argue the appeal on all the grounds. Shri Mangla accordingly started arguing the appeal. He first argued on additional ground relating to territorial jurisdiction of AO under s. 124 of the IT Act. According to Shri Mangla, as per order of CIT dt. 16th December, 1992, r/w other orders under s. 120 of IT Act, the AO, i.e., Asstt. CIT, Investigation Circle, Gurgaon, had no jurisdiction in this case. Shri Manglas attention was drawn to statutory provision of s. 124 particularly to sub-s. (3) and also to the authority mentioned in sub-s. (2) who has jurisdiction to decide this question. It was pointed out that the Tribunal having regard to statutory provisions referred to above, cannot go into above question of territorial jurisdiction. The said question should have been raised before the AO. Shri Mangla explained that the order passed by the CIT under s. 124 r/w s. 120 was not published and, therefore, the same could not come to his knowledge earlier. He was, therefore, raising this question before the Tribunal after above facts came to his notice. Shri Mangla further argued that the question of jurisdiction which is a pure question of law, can be raised at any stage of proceedings. The Tribunal cannot refuse to allow the assessee to raise this question. There is no estoppel on a question of law. In this connection, Shri Mangla drew our attention to Commentaries of “Chaturvedi & Pithisaria” on Income-tax Law, Vol. V, pages 5312 and 5313. He also submitted that the return filed by him and notices issued by the AO were out of time, ultra vires and without jurisdiction. On the above plea relating to limitation, the learned Departmental Representative pointed out that the action taken by the AO was well within the limits prescribed under s. 153 of IT Act and assessment made and other action taken were not out of time. The Bench after hearing the parties, announced that pleas sought to be raised through additional ground of appeal, as prayed in application dt. 29th December, 1995, cannot be permitted to be raised. Sub-s. (2) of s. 124 provides that where a question arises under this section as to whether the AO has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief Commr. and other authorities mentioned in the said sub-section and as per procedure laid down. Sub-s. (3) of s. 124 further provides as under :
“124(3). No person shall be entitled to call in question the jurisdiction of an AO –
(a) Where he has made a return under sub-s. (1) of s. 139, after the expiry of one month from the date on which he was served with a notice under sub-s. (1) of s. 142 or sub-s. (2) of s. 143 or after the completion of the assessment, whichever is earlier;
(b) where he has made no such return, after the expiry of the time allowed by the notice under sub-s. (1) of s. 142 or under s. 148 for the making of the return or by the notice under the first proviso to s. 144 to show cause why the assessment should not be completed to the best of the judgment of the AO, whichever is earlier.”
In the light of above statutory provision, the question cannot be raised for the first time before the Tribunal particularly when the same was not raised at any stage of assessment proceedings or in other proceedings before the Revenue authorities. There is no doubt that purely legal question not requiring any investigation of facts can be raised for the first time before the Tribunal and the Tribunal can permit the assessee to raise additional ground of appeal relating to legal questions. But all this would depend upon facts and circumstances of the case. In the present case, having regard to statutory provisions, there would be no authority with the Tribunal to permit the assessee to raise the question through additional ground of appeal. The assessment order was passed well within the time prescribed under s. 153 of IT Act and the assessee could not show as to how assessment order is null and void, ultra vires and without jurisdiction. The plea relating to limitation as raised in additional ground of appeal is without substance. Therefore, the Bench on 18th July, 1996, informed Shri Mangla that he is not permitted to argue additional ground of appeal and he should confine his arguments to the grounds raised in the original memorandum.
5. Shri Mangla got excited and informed the Bench that this could not be done as additional grounds have not only been admitted but accepted by the Bench on 16th July, 1996, when order to the above effect was announced by the Judicial Member who was presiding over the Bench. Shri Mangla was told that his claim is not supported by material on record and is incorrect. Shri Mangla then started arguing on ground raised in original memorandum. After some arguments he said that he was not fully prepared on all the grounds and, therefore, further time be granted to him. The appeals were treated as part heard and adjourned to 7th August, 1996.
6. On the adjourned date, Shri Mangla again started arguments on additional ground of appeal sought to be raised in application dt. 3rd January, 1996. He filed written application dt. 7th August, 1996, as also an affidavit in which it has been affirmed that additional grounds of appeal raised in the application dt. 3rd January, 1996, were not only admitted but the Judicial Member had also announced oral order on 16th January, 1996, directing the learned Dy. CIT(A) to adjudicate this ground. Shri Mangla was requested to argue on the grounds raised in the original memorandum for which the appeal was treated as part heard. Shri Mangla then addressed us on those grounds. His arguments are discussed hereinbelow :
(1) It was argued that assessment purported to have been made under s. 143(3) was illegal and bad in law as in that assessment the tax found to be payable by the assessee was not determined. According to Shri Mangla, the computation of tax should have been made in the assessment order. Although this plea is not emerging from the limited controversy raised before learned Dy. CIT(A) and arising out of his order, Shri Mangla submitted that a question of law can be raised at any stage of proceedings. The plea raised by him goes to the root of the matter. He further contended that computation of tax was also to be served on him within the prescribed period of limitation. The said computation has not been served upto this day and, therefore, assessment made was out of time and vitiated. The mandatory requirement of s. 143(3) has not been satisfied in this case. Shri Mangla relied upon decision of J&K High Court in the case of S. Mubarik Shah Naqshbandi v. CIT (1977) 110 ITR 217 (J&K). He also cited decision of Honble Supreme Court in the case of Kalyan Kumar Ray v. CIT (1991) 191 ITR 634 (SC). It was accordingly submitted that assessment made in this case be declared as null and void and illegal.
(2) On merit, Shri Mangla submitted that the assessee was carrying on business at four places and expenditure on travelling were incurred exclusively for business purposes. The husband of the assessee was an employee and provisions of r. 6D were not applicable in the case of foreign travelling. The husband has gone to Kathmandu and details of travelling were filed with the AO and before learned Dy. CIT(A). Shri Mangla did not think it necessary to file those details before the Tribunal.
(3) In respect of disallowance of Rs. 1,500 out of entertainment and staff welfare, Shri Mangla argued that complete details were furnished and there was no justification to sustain disallowance of Rs. 1,500. The details of expenditures were not placed on our record.
(4) In respect of disallowance of 1/5th of car expenses, Shri Mangla stated that in the asst. yr. 1981-82 when part of expenses were disallowed by the Tribunal, the assessee had only two branches but in the year under consideration, the assessee had four branches. Shri Mangla also objected to the enquiry directed by learned Dy. CIT(A) towards expenditure by the assessee. He further argued that maintenance of log book was not necessary. Shri Mangla accordingly emphasised that the Dy. CIT(A) had committed mistakes which were apparent from record and should have been rectified under s. 154 of the IT Act. The Departmental Representative opposed above submissions. He argued in the first place that limited issue was involved before the Tribunal, relating to mistake “apparent from record” committed by Dy. CIT(A) in his order on three disallowances. The scope of the appeal cannot be permitted to be enhanced by raising grounds not arising out of the order of Dy. CIT(A). The learned Departmental Representative further argued that different pleas raised by the assessee were without any substance. He pointed out that assessment was made by the AO on 29th March, 1990. On the same day, the AO prepared check sheet (ITNS 193) in which detailed working of tax was available. The said sheet with working was signed on 29th March, 1990. He showed us the sheet and placed a photostat copy thereof on record. The notice of demand under s. 156 was also issued on the same date and served on the assessee on 20th April, 1990. Thus assessment was made in accordance with law and well within the period prescribed. Such assessment was held to be legal by the Supreme Court in the case of Kalyan Kumar Ray v. CIT (supra). The Departmental Representative also read out provisions of s. 153 of IT Act and pointed out that assessment could be made upto 31st March, 1991, and thus assessment made on 29th March, 1990, cannot be said to be out of time. On merits, the Departmental Representative pointed out that the Dy. CIT(A) had upheld three disallowances in question after considering relevant record and after application of mind to the material available on record. There was no error apparent from record. As regards additional grounds of appeal, the Departmental Representative pointed out that the same were not permitted to be raised by the Tribunal on 18th July, 1996, and, therefore, application moved by the assessee dt. 7th August, 1996, and affidavit of Shri Mangla were of no consequence.
7. We have given careful thought to the rival submissions of the parties. As regards the question that assessment order is illegal and without jurisdiction as computation has not been made in the body of order, we may only refer to decision of Honble Supreme Court in the case of Kalyan Kumar Ray (supra) where such plea advanced by the assessee was not accepted by their Lordships of Supreme Court. As per the headnote, their Lordships observed as under :
“”Assessment” is one integrated process involving not only the assessment of the total income but also the determination of the tax. The latter is as crucial as the former. The ITO has to determine, by an order in writing, not only the total income but also the net sum which will be payable by the assessee for the assessment year in question and the demand notice has to be issued under s. 156 of the IT Act, 1961, in consequence of such an order. The statute does not, however, require that both the computations (i.e., of the total income as well as of the sum payable) should be done on the same sheet of paper, the sheet that is supercribed “assessment order”. It does not prescribe any form for the purpose. Once the assessment of the total income is complete with indications of the deductions, rebates, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally, time consuming. If, therefore, the ITO first draws up an order assessing the total income, and indicating the adjustments to be made directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the ITO that the process described in s. 143(3) will be complete.
ITNS 150 is also a form for determination of tax payable and when it is signed or initialled by the ITO, it is certainly an order in writing by the ITO determining the tax payable within the meaning of s. 143(3). It may be only a tax calculation form for Departmental purposes as it also contains columns and code numbers to facilitate computerization of the particulars contained therein for statistical purposes, but this does not detract from its being considered as an order in writing determining the tax payable by the assessee. There is no reason why this document, which is also in writing and which has received the imprimatur of the ITO, should not be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of s. 143(3). All that is needed is that there must be some writing initialled or signed by the ITO before the period of limitation prescribed for completion of the assessment has expired in which the tax payable is determined. The form usually styled as the “assessment form” need not itself contain the computation of tax as well.
To avoid unnecessary controversies like this, the Department should, in future, adopt the salutary and useful practice of incorporating the entire tax calculations in ITNS No. 65 form itself or, in the alternative, make the ITNS 150 an annexure to form part of the assessment order, have it signed by the ITO and have it served on the assessee along with ITNS 65. That will enable the assessee to have the full details necessary to enable him to file a proper appeal, if needed, against the order and demand. If these safeguards are not taken, there is a danger of the tax calculations being left entirely to the subordinate staff, the ITO contenting himself with a cursory glance thereat. Though, largely, the tax calculations are only matters of detail and arithmetic, there do arise sometimes difficult questions of interpretation of the provisions relating to tax rates, additional tax, interest and so on, and the assessee should, in all fairness, have full details regarding the computation to enable him to take further steps in the matter.”
Their Lordships did observe in the last para that to avoid unnecessary controversy, it would be useful practice if the calculation sheet signed by the ITO is served on the assessee but their Lordships did not grant relief to the assessee on a similar claim made in the case before them. The said decision was given after considering earlier decisions including decision of Honble J&K High Court in the case of Mubarik Shah Naqshbandi (supra). The decision has to be accepted as last word on the issue. Having regard to above decision, the plea raised on behalf of the assessee has no substance. We have already observed that the assessment was made within the period prescribed by s. 153 and cannot be held to be out of time merely because calculation sheet was not served on the assessee. The legal points raised by the assessee are accordingly rejected. Now, on merit, we find that learned Dy. CIT(A) upheld assessment relating to disallowance out of travelling expenses after considering details of expenses and held that they were in excess of the limit prescribed under r. 6D. The assessee had not furnished working as per requirement of above rule and, therefore, on an estimate basis, a part of it was disallowed. It is clear from the order of Dy. CIT(A) that he did consider details and other relevant documents and his order cannot be treated as a mistake apparent from record. The other disallowance of Rs. 1,500 was sustained after considering details of expenses. Learned Dy. CIT(A) held that part of them were not staff welfare expenses. The disallowance was made after applying relevant test and there is no mistake apparent from record. Likewise, 1/5th of car maintenance expenses were disallowed following such disallowance made in the case of the assessee by the Tribunal in asst. yr. 1981-82. The assessee has himself furnished details of withdrawal made by assessees husband in connection with household and personal expenses of the family. On account of above, the learned Dy. CIT(A) made a reference to the withdrawal made by the husband for petrol expenses. By no stretch of imagination the order passed by learned Dy. CIT(A) can be said to contain mistakes “apparent from record”. As rightly pointed out by learned Dy. CIT(A), the assessee, if she was not satisfied by order dt. 21st January, 1991, could have filed an appeal before the Tribunal but could not get relief under s. 154 which has a limited scope and is confined to rectification of mistakes apparent from record. Shri Mangla tried to match above situation by arguing that the assessee, against order of appellate authority, has two remedies – one to file an application under s. 154 and the other to take appeal before higher authorities. As the second alternative is more expensive, the assessee can always adopt the first remedy, and in case application under s. 154 is rejected, the matter can be taken in appeal before the Tribunal or higher authority. From this argument of Shri Mangla, it is clear that he does not understand the difference between a regular appeal against order under s. 250 and an appeal in proceedings under s. 154 of IT Act. Be that as it may, we do not find any substance in this appeal and are unable to grant any relief to the assessee.
8. From the above discussion, it is clear that a small issue relating to disallowance of Rs. 4,000; Rs. 1,500 and 1/5th of car maintenance has been sought rolled into much larger controversies. Shri Mangla has gone to the extent of making groundless allegations of accepting the claim through oral pronouncement in favour of the assessee. The application dt. 7th August, 1996, uses intemperate and offensive language. As an illustration, we may produce the following extract from para 5 of above application :
“5. The Bench sought clarification as to how to get out of the mischief of the provisions in s. 124(3) of the Act.”
He purposely underlined above sentence. During the course of hearing when it was pointed out that he has used impermissible language, Shri Mangla retorted that the Bench is at liberty to issue contempt notice to him. It is thus clear that Shri Mangla did not come simply to argue the appeal, but was more interested in picking up a quarrel with the Bench and carry on expensive litigation not involving substantial tax. Be that as it may, we are disposing of this appeal on merit in accordance with law.
9. Before close, it may be pointed out that Shri Mangla is quite in the habit of putting favourable orders in the mouth of authorities. In this connection, we may refer to the letter dt. 17th March, 1993, filed before Dy. CIT(A) and available at page 13 of the paper book. In the said letter, it has been observed as under :
“That during the previous hearing on 15th January, 1993 and 23rd February, 1993, your honour has consented with the submissions made with respect to errors in decision on grounds Nos. 4 and 5 in the above appeal.”
We have already noted above that ground Nos. 4 and 5 were rejected by learned Dy. CIT(A). But, Shri Mangla claimed in writing that the Dy. CIT(A) had consented with his submission on these grounds.
10. In the application dt. 11th March, 1996, filed before the Bench, Shri Mangla had claimed as follows :
“In the above noted appeals, appellant additional ground of appeals were admitted, and order was announced in the open Court, however, so far written orders have not yet been communicated so far.
In the interest of justice, it is, therefore, prayed to communicate not only written orders but also next date of hearing for argument on law and facts.”
But, subsequently in the written application as also in affidavit, Shri Mangla claimed that additional grounds of appeal were not only admitted but Members also issued directions to learned Dy. CIT(A) to adjudicate these grounds. Thus, admitted grounds automatically became accepted grounds and decision favourable to Shri Mangla announced on those grounds. We have only very limited record with us but if all record available with the AO is scrutinised, many such instances are sure to be found. We do not wish to say anything further except that the claim of the assessee is wrong, liable to be rejected and is hereby rejected. In the light of above, the appeal of the assessee is dismissed.
11. In the result, assessees appeal is dismissed.