ORISSA CEMENT LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) At the instance of assessee following question has been referred for opinion of this Court pursuant to directions given by this Court under Section 256(2) of the Income-tax Act, 1961(in short the 'Act'), by the Income-tax Appellate Tribunal, Delhi Bench 'B' in short the Tribunal);

(2.) Facts in nutshell are as follows. Assessee derived income from manufacture and sale of cement and cement products and refractories. The assessment year involved is 1966-'67 for which the-previous year ended on 31st December, 1965. Assessee filed its return of income on 27th June, 1966, declaring total income of Rs.98,60,126.00. It, inter alia, made a claim under Section 80E to the extent of Rs.7,54,562.00 in respect of the. refractory and cement works. Income-tax Officer(in short the 'ITO) worked out the deduction under Section 80E at Rs.7,75,377.00. Assessee carried an appeal on certain grounds before the Appellate Assistant Commissioner (in short the 'Appellate Assistant Commissioner'). Before the Appellate Assistant Commissioner, assessee did not raise any grievance relating to Section 80E of the Act. Challenging denial of relief on certain grounds assessee preferred an appeal before the Tribunal. In addition to the grounds raised in the memorandum of appeal, assessee sought permission to raise, inter alia, the following additional grounds:

(3.) There was no appearance on behalf of assessee when the matter was called, we have heard learned counsel for the Revenue. Referring to the decision in GurJargravures' case( supra), learned counsel for Revenue submitted that view of the Tribunal is sound and needs no interference. It has to be noted that subsequent to Gur jargravures' case(supra). the Apex Court had occasion to deal with a similar question in Jute Corporation of India Ltd. vs. Commissioner of Income-tax , (1991 ) 187 ITR 688. It was observed that Gur jargravures' case (supra) was founded on special facts and, therefore, there was no necessity to over-rule the view taken. In the Jute Corporation's , case (supra,), while dealing with the powers of the Appellate Assistant Commissioner it was held- by the Apex Court that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the powers of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. The Court went on to further observe that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reason. The Appellate Assistant Commissioner should exercise his discretion ..in permitting or not permitting the assessee to raise additional ground in accordance with law and reason. The issue was again considered by the Apex Court in National ThermalPower Co. Ltd. v. Commissioner of Income-tax. (1998) 229 ITR 383. It was observed that the observations made in Jute Corporation's case (supra) would apply to appeals before the Tribunal also. In addition to what has been stated earlier in Jute, Corporation's case, the Apex Court observed that undoubtedly the Tribunal will have the discretion to allow or not to allow a new ground to be raised but where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, there was no reason as to why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the- tax liability of an assesses. Keeping in view the aforesaid principles, the question referred is answered in the negative, in favour of assessee and against the Revenue. Tribunal shall consider the new grounds raised by the assessee on merits. The reference stands disposed of.