Independent legal issue is beyond scope of adjudication through cross objection u/s. 253(4)

ITAT AHMEDABAD

DCIT  v/s.   Sandip M. Patel

IT APPEAL NOS. 866 TO 871, 1016 & 1339 (AHD.) OF 2008

[ASSESSMENT YEARS 1998-99 to 2003-04]

APRIL 30, 2012

ORDER

Mukul Kr. Shrawat, Judicial Member – In the case of Mahendra A. Patel for A.Y. 2002-03 cross appeals have been filed arising from the order of the CIT(A)-III, Ahmedabad dated 31.01.2008. For rest of the years, i.e. A.Ys. 1999-2000 2000-01, 2001-02 & 2003-04 Revenue is in appeal. For A.Ys. 1999-2000, 2001-02 and 2003-04 separate orders have been passed by ld. CIT(A) all dated 31/10/2007 and for A.Y. 2000-01 the date of order is 27/11/2007. In the case of Sandip M. Patel, Revenue is in appeal for AYs 1998-99 & 2001-02 and the orders of the ld. CIT(A) are respectively dated 19/10/2007 & 23/10/2007. In all these eight appeals facts are stated to be identical, hence we have proceeded to decide all these appeals by this common order.

2. At the outset, we have been informed that for A.Ys. 1999-2000, 2000-01, 2001-02 & 2003-04 the respondent-assessee has filed cross objections, however, those cross objections were dismissed, being withdrawn by the assessee, vide ITAT “C” Bench Ahmedabad order dated 01/11/2011. The Respected Co-ordinate Bench has also noted that those cross objections were belatedly filed and time-barred by 1170 days as well. Considering the said request of withdrawal, the Bench has decided as follows:-

“3. It may be noted that in all the Cross Objections the assessee challenged initiation of proceedings u/s. 153C of the IT Act. The learned Counsel for the assessee submitted that the grounds of Cross Objections have been decided by the learned CIT(A) against the assessee and submitted that delay in filing the Cross Objections was due to the bona fide belief that the assessee could support the order passed by the learned CIT(A) without filing the Cross Objections because Rule 27 of the Appellate Tribunal Rules permit the Respondent in departmental appeal to support the order appealed against on any of the grounds decided against him. He has, therefore, submitted that the assessee however, due to abandoned precaution filed the Cross Objections. The learned DR submitted that the points raised in the Cross Objections are decided against the assessee by the learned CIT(A) and submitted that the above reason would not disclose any sufficient cause for filing the Cross Objections belatedly. The learned DR submitted that the apprehension of the assessee is misplaced in moving the Cross Objections; therefore, same should be dismissed being time barred. The learned Counsel for the assessee in view of the above facts stated that the assessee may be permitted to withdraw the Cross Objections with liberty to argue the validity of the assessment in the departmental appeal being the Respondent.

4. On consideration of the above facts, we permit the assessee to withdraw the Cross Objections Rule 27 of the Appellate Tribunal Rules provides that the Respondent (assessee) though he may not have appealed, may support the order appealed against him on any of the grounds decided against him. Since the points raised in the Cross Objections have been decided by the learned CIT(A) against the assessee, therefore, remedy under Rule 27 of the Appellate Tribunal Rules is available to the assessee and as such no sufficient cause is disclosed in the affidavit of the assessee for explaining the delay in filing the Cross Objections. The Cross Objections of the assessee are accordingly dismissed as withdrawn with liberty to the assessee to argue the same points at the time of disposal of the departmental appeals. “

2.1 Before we proceed further, we have noticed from the order-sheets of this case that in the past these appeals were adjourned on number of occasion due to the reason that the Ld. Counsel has requested to consolidate these appeals along with an appeal of this very assessee for A.Y 2004-05(ITA No.4575/ahd/2007) and an appeal of Shri Tarun Karia for A.Y. 2004-05 (ITA No. 2310/Ahd/2010). At that time, prima-facie, it was felt that rest of the group of eight appeals, listed in the nomenclature, might be connected with A.Y. 2004-05 appeals. But the fact is that the directions of the Hon’ble Jurisdictional High Court in Tax Appeal No. 1798 of 2010 order dated 19/10/2010 pertained to A.Y. 2004-05 and not for any other assessment years. Otherwise also, the issue involved in the case of Mahendra A. Patel for A.Y. 2004-05 is altogether different because of the fact that as per the grounds of appeal the only objection raised is that ld. CIT(A) ought to have held that the cash and jewellery requisitioned u/s. l32A belonged to the assessee, i.e. Mahendra A. Patel and not Shri Dharan Karia. Likewise, in the case of Tarun D. Karia the issue is in respect of assessment of cash and jewellery in his hands. Considering these reasons, those two appeals for A.Y. 2004-05 have been segregated and we have decided to proceed with this group of eight appeals and those two appeals have been adjourned as per the notings on the order-sheet of those cases. We have made this clarificatory remark to overcome any confusion or misunderstanding, may arise in future.

3. At the start of the hearing, Ld. AR Mr. S.N. Divatia has raised an issue, that in the light of the observation of the ITAT “C” Bench order dt. 1.11.2011 (referred supra), the respondent-assessee is entitled to invoke the provisions of Rule 27 and thereupon wanted to challenge the initiation of proceedings u/s.l53C of the I.T. Act. His vehement contention is that the withdrawal of Cross Objection was conditional as is appearing from the language of the said judgment of the Tribunal. The appellant has a right to raise a legal issue. Since the assessee wants to challenge the initiation of proceedings u/s. l53C of IT Act, therefore the issue being a legal issue therefore the same can be raised at any stage of appeal. He has contested that even though the cross objections have been withdrawn but under Rule 27 of Appellate Tribunal Rules, he may be permitted to raise this legal ground. In support of this contention, reliance is placed on the following decisions:-

3.1 [This para is not reproduced here as it involve minor issue]

3.2 Ld. Commissioner Mr. Gupta has also raised an interesting argument that Rule 27 simply prescribes that a respondent may support the order appealed against. However, the ld. AR is trying to agitate/attack a finding of ld. CIT(A) on the issue of jurisdiction under the guise of ITAT Rule 27. He has no legal right to agitate under Rule 27, but the only right available is to support an order appealed against. Ld. DR has placed reliance on Kanpur Industrial Works v. CIT [1966] 59 ITR (All.) and B.R. Bamasi v. CIT [1972] 83 ITR 223 (Bom.).

3.3 A legal issue has been raised pertaining to the applicability of Rule 27 of Income Tax Rules, for ready reference, reproduced below:-

“Respondent may support order on grounds decided against him

27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.”

3.4 The meaning of the phraseology used in this Rule has been not been defined either in the I.T. Act or in the I.T. Rules. Therefore we have studied few case laws. The moot question is that the assessee-respondent having not appealed against the order of the first appellate authority, whether entitled to contend the question of jurisdiction of the assessment in a Department’s appeal before the Tribunal. Such a situation arises when the assessee has accepted the decision of CIT(A), but the department did not, so the Commissioner of Income-tax filed an appeal before the Tribunal against it. During the hearing of the appeal before the Tribunal it was admitted that although no appeal had been filed but also withdrawn the Cross Objection and that under rule 27 of the Income-tax Appellate Tribunal Rules, 1946, the respondent is entitled to support the order of the CIT(A) on any of the grounds decided against him though the respondent has not appealed and prayed that he be allowed to support the order on any ground even on the question of the jurisdiction. Assessee’s counsel also pressed orally that he should be allowed to argue on the question of assessability also in view of Rule 27. It would mean that he would be cutting at the very root of the matter and if he is successful would completely destroy the CIT(A)’s order. So the question is that whether such an action through which an order could get annulled be termed as an action in support of it? Otherwise in this appeal the Revenue has challenged the quantum deletions and there is no ground in respect of the issue of jurisdiction. Rather the Revenue Deptt. ought not to be aggrieved since the validity of the invocation of Sec. 153C was decided in favour of the Revenue. Can the respondent -assessee be allowed to raise the fundamental issue of the assessability as such, when admittedly no appeal has been filed against the said verdict of CIT(A) and on top of it the Cross Objection has also been withdrawn?. To resolve the controversy we have to see the parallel provisions in the other Act, i.e. Civil Procedure Code , rather that was the source of incorporation of Rule 27 in the Tribunal Rules. Before we go to that area of legislation it to be clarified that the Commissioner Appeal’s powers are slated in sec 251(l)(a). He can confirm, reduce, enhance or annul the assessment. Therefore in exercise of those powers, the issue of validity of the provisions of Sec. 153C was decided in favour of the revenue and the impugned assessment order was not annulled. Reverting back, the law enacted and the procedure adopted in civil matters is as per the Order 41, rule 22(1), of Civil Procedure Code, to the effect that “any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the court below but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader” and it is in the form of a memorandum of appeal. This position of law has been elaborately explained by the Hon’ble Allahabad High Court in the case of Kanpur Industrial Works (supra) and the relevant portion is necessary to reproduce :-

“The Tribunal’s power, vide sub-s. (4), is to “pass such orders thereon as it thinks fit”. Rule 27 of the ITAT Rules is as follows:

“27. The respondent, though he may not have appealed, may support the order of the AAC on any of the grounds decided against him.”

This provision reminds one of order 41, r. 22(1), CPC to the effect that “any respondent though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the appellate Court within one month from the date of service on him or his pleader” and it is in the form of a memorandum of appeal.

When a trial Court decrees or dismisses a suit entirely, no difficulty arises about the respondent’s rights in the appellate Court. In such a case the appeal, whether it is by the plaintiff or by the defendant, is in respect of the whole subject-matter of the suit (unless he gives up a portion of it and it is therefore out of consideration). Whatever is the judgment of the trial Court, whether accepting the plaintiffs case, or rejecting it, in toto, it may be based upon one ground or more than one ground. A plaintiff may have one, or more than one, ground of attack and similarly a defendant have may have one, or more than one, ground of defence. To simplify the discussion I would confine myself to one ground and two grounds of attack and one ground and two grounds of defence. When both grounds of attack are accepted by the trial Court, it cannot be doubted that the defendant-respondent has a right to urge that both of them are wrong. Actually in order to succeed in the appeal he must show that both are wrong. When both grounds of attack are rejected the plaintiff has right to urge that both or either of them is valid and in order to succeed he must show at least that either of them is valid. When both grounds of defence are accepted the plaintiff has a right to, and must, urge that both of them are untenable. When both grounds of defence are rejected the defendant has a right to urge that both or either of them is valid and cannot succeed unless he shows that at least either of them is valid. Complications arise when one ground of attack is accepted and the other rejected or one ground of defence is accepted and the other is rejected. When one ground of attack is accepted the appeal must of necessity be by the defendant because on either ground being accepted the judgment is in the plaintiff s favour and he cannot file an appeal merely against the finding rejecting the other ground of attack. An appeal lies from the operative judgment and not from the reasons in support of it or the findings given on the issues whether of fact or law on which the operative part of the judgment is based. A successful party cannot appeal merely to have a finding given adversely to him corrected; as notwithstanding the adverse finding the operative judgment is in his favour he is not aggrieved by it and cannot gain anything by appealing against the adverse finding. Similarly, when one of the two grounds of defence is accepted and the other is rejected, the appeal must be by the plaintiff and there can be no appeal by the defendant since the operative judgment is in his favour. When a defendant appeals he appeals from the acceptance of one ground of attack and if he succeeds the appeal must be allowed and the suit must be dismissed. But if the rejection of the other ground of attack is wrong, justice requires that the suit must not be dismissed because if there is one valid ground of attack the plaintiff must succeed. Consequently he must have an opportunity of urging in the appeal that the rejection by the trial Court of the other ground of attack was wrong. Since he could not appeal against the rejection of the other ground of the attack there is no question of his being barred by res judicata or estoppel from contending that it was wrongly rejected. This is the reason behind r. 22(1) of order 41, CPC. This result also follows from the doctrine that an appeal is a continuation of the suit and that in the absence of provisions to the contrary an appellate Court has all the powers of the trial Court in respect of the subject-matter of the suit and the whole suit is laid open before it (barring, of course, what has been given up in appeal). Both grounds of attack are again for consideration before the appellate Court, the one accepted by the trial Court and brought before it by the defendant-appellant and the other rejected by it and brought before it by the plaintiff-respondent in his oral argument. It is not necessary for the plaintiff even to file at cross-objection against the rejection, which is merely a substitute for an appeal. In the same way when one ground of defence is accepted and the other rejected the defendant-respondent in the appeal filed by the plaintiff has a right to urge that the trial Court had wrongly rejected the other ground; if he succeeds the appeal will fail even though the plaintiff succeeds in showing that one ground was wrongly accepted, So far I have been dealing with decreeing or dismissing a suit in toto.

Now I come to the complicated case of a suit being decreed in part and dismissed in part. This is a case different from that of a suit being decreed on accepting one ground of attack and rejecting the other or a suit being dismissed on accepting the ground of defence and rejecting the other. When a suit is partly decreed and partly dismissed either party can be the appellant-the plaintiff in respect of the part of his claim that was rejected and the defendant in respect of the part that was accepted. If the plaintiff wants a decree for the remaining part of the claim he must file an appeal or a cross-objection as permitted by r. 22(1) of order 41, CPC, in an appeal by the defendant and if a defendant wants that the decree for part of the claim should be quashed he must file an appeal or a cross-objection in the plaintiffs appeal as permitted by r. 22(1) of order 41. It is to be noted that an appeal and the cross-objection filed in the appeal relate to two different subject matters even though both arise out of one decree or judgment of the trial Court. The subject-matter of a cross-objection has nothing to do with the subject-matter of the appeal. On account of part of the suit being decreed and part being dismissed the decree is split up into two parts or is treated as two decrees and the appeal is from one decree and the cross-objection from the other. This is made clear by r. 22, which speaks of an appeal from part of a decree and of the decree being supported by the respondent on any of the grounds decided against him. If the plaintiff had two grounds of attack and one of them was accepted and the other rejected by the trial Court in respect of part of the claim and the defendant files an appeal from the decree passed in his favour he may support it on the other ground rejected by the trial Court. But if he wants a decree for the remaining part of the claim he must file a cross-objection in the defendant’s appeal if he has not filed an appeal himself. This cross- objection is to the decree, e.g., the remaining part of the decree and not to the decree passed in his favour and forming the subject-matter of the appeal. The provision that he can support the decree on any of the grounds decided against him deals exhaustively with his right in respect of the decree passed in his favour for part of his claim and, consequently, the further provisions relating to cross-objection must relate to the decree in respect of the other part of his claim which was rejected. The cross-objection is to be in the place of an appeal which he could have filed and he could have filed an appeal only in respect of the decree regarding the other part of his claim. Therefore, the words “the decree” with reference to the cross-objection in the rule mean the part of the decree other than that dealt with in the earlier part of the rule and in respect of which he has been given the right of supporting it on any of the grounds decided against him. It is important to bear this distinction in mind and the failure to do so has resulted in confusion and error.

The provision in r. 27, with which we are concerned, is to be distinguished from that in order 41, r. 22(1). While r. 22(1) gives two rights to the respondent, one in respect of part of the claim decreed in his favour, and the other in respect of the part disallowed, r. 27 deals with the order of the lower Court, viz., the AAC in its entirety. It does not contemplate the splitting of the AAC’s order into two parts for the simple reason that an assessment order is incapable of being treated as an order partly allowing something and partly disallowing the other thing. While in respect of a claim of a plaintiff it can be said that part of it is allowed and part disallowed the same cannot be said in respect of an assessment order and it cannot be said to involve two orders partly assessing something and partly disallowing assessment of another thing. When a person is assessed he is assessed on all the income found assessable. There are no two parties before an ITO or an AAC and there is no claim by one party to be met by the other; so the analogy of a suit part of which may be decreed and part rejected, does not apply to an assessment proceeding. A dispute may arise in an assessment proceeding about certain receipts being income or not income or the assessees being entitled to a certain deduction or being not entitled to it and the assessment order is passed after deciding the dispute. The dispute may be decided partly in favour of the assessee and partly against him. But since the assessability is indivisible the order assessing the income is treated as one indivisible order and the facts on account of which the various receipts are held to be assessable income are treated as various grounds of attack and the various facts on account of which deductions or exemptions are allowed or receipts are not treated as assessable income are treated as grounds of defence. So an assessment order is based upon allowing and disallowing grounds of defence. An appeal to the Tribunal whether by the Department or by an assessee is like an appeal by a defendant or a plaintiff from a decree accepting or rejecting the entire claim of the plaintiff. There is no scope for any cross-objection and consequently no scope for the respondent’s, e.g., the assessee’s or the Department’s urging for reduction in the assessed income or increase in the assessed income, as the case may be. If the appellant before the Tribunal is the Department claiming increase in the assessed income all that the assessee can urge is that there should be no increase; that is the only subject-matter of the appeal. If the assessee desires reduction in the assessed amount he himself must file an appeal; he has not been given the right to file a cross-objection. The only right given to him is of urging that there should be no increase, not only for the ground of defence accepted by the AAC but also for the other ground of defence rejected by him. This is the only right given to him by r. 2 7. There is only one order of the AAC that assessing the income at a certain figure, and the right given to him is of urging another ground, though rejected by the AAC, in support of it; he must support the order, i.e., must not ask for any variation (in his favour) in the order. In other words he must not ask for any reduction in the assessed income. Asking for any reduction in the assessed income is not supporting the order assessing it.”

3.5 From the above reproduction few important points of law emerges, to be highlighted so as to resolve the controversy. (1) An appeal lies from operative part of the judgment and not from the reasons in support of it. Naturally certain findings ought to have been given, whether on facts or on law, on which the operative part of the judgment is based, but those ought not to be the ground of an appeal. (2) A successful party, i.e. presently the respondent- assessee, cannot appeal merely in respect of a finding given adversely to get corrected, as notwithstanding the said adverse finding, the operative judgment is in his favour. He is not aggrieved by the outcome of the judgment. (3) An appeal lies by an aggrieved litigant, if not aggrieved no appeal. There is no gain by appealing against an adverse finding. That could be a cause of grumble but not a cause of grievance. An appeal is a redress or recompense or restitution of a substantial grievance for an aggrieved party arising from the result of a judgment. (4) A cross-objection is a substitute for an appeal. It is not permissible simply to file a cross-objection against the rejection of any argument or point of attack. (5) When one line of defence is accepted but the other rejected, the defendant/respondent in an appeal, filed by the aggrieved party against the judgment, has a right to defend that part of the finding which was adversely expressed, though not appealed against by him. Rule 27 covers this situation only. The defendant has a right to urge under Rule 27 that a particular finding was wrongly given and if that adverse finding is upheld than the favourable result of the appeal may get over-turned, (6) That a cross-objector has a legal right to support an order of the first appellate authority but no right is enshrined under Rule 27 to attack that judgment. (7) That Rule 27 sanctions a defendant only to “support” the order of CIT(A) and not permitted to “attack” the judgment. (8) That by the very language of Rule 27 a respondent can support the verdict of the first appellate authority and side by side can argue against any of the grounds held against him. This shows that the grounds against the respondent is within the circumference of the favourable judgment. Such finding or the grounds thus are linked to the final verdict of the issue decided and has a direct link with the final view taken. The ground is not independent of the issue decided, because while arriving to the conclusion, in between the process of drafting of an order, there is a possibility of taking an adverse view by rejecting any of the argument or the grounds of defence taken. (9) Lastly, how a respondent can support “any of the grounds decided against him” as worded in Rule 27?. But the Hon’ble Courts have removed this confusion by explicitly mentioning that the judgment being favourable but could have an adverse finding or reasoning and that ground though against the respondent can be defended in Rule 27, nevertheless by supporting the final verdict. The interpretation of the word “grounds” is in wider sense because the same is not at par with the “ground” of appeal.

3.6 On this issue, there is one more decision pronounced by the Hon’ble Bombay High Court in the case of B.R. Bamasi (supra), wherein the assessee wanted to raise a new point as a ground of defence in the appeal but stopped to raise due to the reason that such new point may affect the validity of the entire assessment proceedings. The Court has said that the point would have served as a weapon of defence against the appeal, but it could not be made a weapon of attack against the order insofar as it was against the assessee. Relevant portion of this judgment is reproduced below:-

“It has further held that the respondent in an appeal is undoubtedly entitled to support the decree which is in his favour on any grounds which are available to him, even though the decision of the lower Court in his favour may not have been based on those grounds. It has further held that if the appellant in his challenge to the decree of the lower Court is entitled to take a new ground not agitated in the Court below by leave of the Court, there appears to be no reason why a respondent in support of the decree in his favour passed by the lower Court should not be entitled to agitate a new ground and subject to the same limitation. A Division Bench of the Allahabad High Court has taken a similar view in Kanpur Industrial Works v. CIT [1966] 59 ITR 407 (All). That judgment has considered the position of an appeal under s. 33 of the IT Act along with the relevant Rules and that of an appeal under the CPC and the provisions of O. XLI, r. 22. The judgment holds that when the Department files an appeal for an increase in the assessed income, the subject-matter of the appeal is the increase claimed by the Department and the assessee can urge any ground of defence even though it might have been rejected by the AAC for showing that there should be no increase. It has further held that that the assessee is not liable to be assessed at all is a ground for showing that there should be no further assessment and the Department’s appeal can therefore be resisted on that ground and that there is no incongruity in maintaining the assessment order passed against the assessee and yet refusing to increase it on the ground that he was not liable to be assessed at all. The judgment points out however that if the Tribunal accepts the ground of defence that the assessee was not liable to be assessed, it can only refuse to increase the assessed income as only such an order would be within the scope of the appeal filed by the Department and any other order such as annulling the assessment would be outside the scope of the appeal. That judgment holds that the position of an appeal under s. 33 of the IT Act and an appeal under the CPC is identical. A Full Bench of the Madras High Court has in Venkala Rao v. Satyanarayanamurthy ILR 1944 Mad 147 : AIR 1943 Mad. 698 (FB) held that it was open to a respondent in appeal who had not filed cross-objection with regard to the portion of the decree which had gone against him to urge in opposition to the appeal of the plaintiff a contention which if accepted by the trial Court would have necessitated the total dismissal of the suit, but the decree insofar as it was against him would stand. The judgment of the Tribunal in our case clearly shows that, although the assessee wanted to raise a new point as a ground of defence in the appeal, he specifically stated that he wanted to rely upon it only for the purpose of having the appeal by the Department for enhancement in income-tax dismissed. But even if the assessee had not made such a statement, the above judgment shows that the assessee would be entitled to raise a new ground, provided it is a ground of law and does not necessitate any other evidence to be recorded the nature of which would not only be a defence to the appeal itself but may also affect the validity of the entire assessment proceedings. If the ground succeeds, the only result would be that the appeal would fail. The acceptance of the ground would show that the entire assessment proceedings were invalid, but yet the Tribunal which hears that appeal would have no power to disturb or to set aside the order in favour of the appellant against which the appeal has been filed. The ground would serve only as a weapon of defence against the appeal. If the respondent has not himself taken any proceedings to challenge the order in appeal, the Tribunal cannot set aside the order appealed against. That order would stand and would have full effect insofar as it is against the respondent. The Tribunal refused to allow the assessee to take up this ground under an incorrect impression of law that if the point was allowed to be urged and succeeded, the Tribunal would have not only to dismiss the appeal, but also to set aside the entire assessment. The point would have served as a weapon of defence against the appeal, but it could not be made into a weapon of attack against the order insofar as it was against the assessee.”

3.7 An another legal proposition has been raised that the Tribunal passes an order u/s. 254(1) of IT Act and empowered to “pass such orders thereon as it thinks fit”. Section is reproduced below:-

Sec.254 (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.

The word “thereon” restricts the jurisdiction of the Tribunal to the subject matter of appeal. If this word “thereon” is to be read in conjunction with Rule 27, then the respondent is to support the order appealed against but required to confine to the subject matter of the appeal. Interestingly, in the present case though the first appellate authority has decided the issue of the applicability of the provisions of section 153C of IT Act, which was one of the ground of appeal raised by the assessee before ld. CIT(A), but even after an adverse decision of the CIT(A) on the said legal ground, no appeal was preferred by the assessee. Because of this reason, the Tribunal is not empowered to pass an order “thereon” on the subject matter which is not in appeal as per the appeal memo to be adjudicated upon. As far as the question of withdrawal of cross-objection is concerned, in our humble opinion, in the light of the above discussion, had the cross-objection was not withdrawn, even then, such a legal issue was beyond the scope of the adjudication through a cross-objection under Sec. 253(4) of IT Act because the impugned legal issue was altogether an independent as well as a separate issue, then the issue decided in favour of the assessee which are to be supported but u/s. 27 of Appellate Tribunal Rules. The applicability as also the operation of Sec. 253(4) of I.T. Act (i.e. the procedure of filing of cross-objection) is distinct than the area of operation of Rule 27. In any case, provisions of Rule 27 and the provisions of Sec. 253(4) do not over-lap each other; rather operate in two different situations. Admittedly, right now, we are not on the adjudication of a cross-objection but on the question of granting permission to argue an independent legal ground under the shelter of Rule 27 of the Tribunal Rules.

3.8 to 25 [This paras are not reproduced here as they involve minor issues and not  related to above issue].

NF