In the case of JB Greaves (supra), which is the decision of the jurisdictional High Court, it has been held that the subject – matter of appeal before the Tribunal would be the grounds raised by the appellant before it. Rule 11 provides that the appellant shall not except by the leave of Tribunal, be heard in support of any ground not set forth in the memorandum of appeal.
But the Tribunal in deciding the appeal shall not be confined to the grounds set forth in the memorandum of appeal and grounds taken by leave of the Tribunal. Rule 27 provides that even though, the respondent may not have filed appeal, he may support the order of Appellate Assistant Commissioner on any of the grounds decided against him. Thus the subject matter of appeal consist of three elements :- I) grounds taken in memorandum of appeal, 2) grounds for which leave is allowed by the Tribunal, and 3) grounds taken by the respondent for supporting the order of AAC/CIT(A). This position has also been explained in the case of Hazarimal Nagaji & Co. decided by Hon’ble Bombay High Court, in which it has inter alia been mentioned that the position of Appellate Tribunal is same as that of a court of appeal under the Civil Procedure Code and its powers are identical with the powers enjoyed by an appellate court under the Code. Thus a 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 such grounds. We have already held that a ground can be validly taken in the memorandum of appeal only if the appellant is aggrieved by the order of AAC I CIT(A). It has also been held that the ground No. 1 in the present appeal was never taken before any of the lower authorities and , therefore, this ground can not be validly taken up in memorandum of appeal. This brings us to the question whether this ground can be taken up as additional ground with the leave of the Tribunal. To our mind, the answer to the question is obvious in view of the decision in the case of NTPC, decided on 12.4.1996, after the decision was rendered in the case of Late Begum Noor Banu Alladin on 21.4.1993. The Hon’ble Supreme Court has held with the view that Tribunal is confined only to issues arising out of the appeal before the CIT(A) takes too narrow a view. This view was taken in the case of Anand Prasad , Karamchand Premchand Pvt. Ltd. and Cellulose Products of India Ltd. This means that the ratio of these cases has not found favour with the apex court. The decision in the case of Late Begum Noor Banu Alladin heavily relies on the decision in the case of Karamchand Premchand and Cellulose Products of India Ltd. If these cases have not been approved by the Apex Court, it follows that the decision based on these cases may not be followed by us. Further the Hon’ble Apex Court in very clear terms has held that the Tribunal will have 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, it fails to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assessee the tax liability of an assessee. The position of the assessee in the case at hand is similar to the position of NTPC, as both of them are appellants. Therefore, on the basis of the decision, it abundantly clear that if the pure question of law arises for which facts are on record of the authorities below, such a question should be allowed to be raised, if it is necessary to do so to assess the correct tax liability.
The Ld. Counsel has submitted that this ground could not be raised earlier as the assessee was not properly advised in the proceedings before the lower authorities, and it did not have the services of an advocate at his command. On perusal of record, this submission is found to be correct. The question is one of law and not one of fact. Therefore, it could be that a proper ground could not be raised in absence of services of an advocate although the denial of the deduction had been disputed. This constitutes a reasonable cause in the light of the decision in the case of Shaik Ibrahim (supra). Thus, we find that there are reasons to hold that the assessee could not take up this ground before lower authorities for bona-fide reasons.
INCOME TAX APPELLATE TRIBUNAL, SPECIAL BENCH : MUMBAI
I.T.A Nos. 5018 to 5022 & 5059/M/10 – Asstt. Years 2004-05 to 2009-10
M/s. All Cargo Global Logistics Ltd. Vs. DCIT
Date of pronouncement: 21-05-2012
INTERIM ORDER
PER BENCH:
These appeals involve common grounds in respect of the claim of he assessee u/s 80IA (4) of the Income Tax Act, 1961 (“the Act” for short). The issue was discussed before us with reference to the facts of the case for assessment year 2004-05. The grounds taken by the assessee in this appeal are as under :-
1. “On the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that the order passed by the Assessing Officer is without jurisdiction and bad in law as the jurisdiction u/s 1 53A is vitiated.
2. The Commissioner (Appeals) erred in confirming the disallowance of deduction of’ 1,25,77,637/- u/s 80IA(4) of the Act.
3. The CIT(A) erred in relying on the decision of the Appellate Triubnal in the case of Container Corporation of India Ltd. vs. ACIT [30 SOT 284 (Del.)], without appreciating that the facts in the present case are different from that of the aforesaid case.
4. The Commissioner (Appeals) failed to appreciate that the appellant is covered by the definition of the term “infrastructure facility” given in Explanation to section 80IA(4)(i) of the Act as “Ports”.
5. The Commissioner (Appeals) erred in not following circular No. 793 dated 23rd June, 2000 and clarification dated 16th December, 2005 issued by the CBDT which is binding on the Income Tax Authorities.
6. The Commissioner (Appeals) failed to appreciate that sub-clause (aa) of section 7 of the Customs Act, 1962 clarifies that the Customs Ports are the places which are identified and demarcated for the unloading of imported cargo and the loading of exported cargo and, therefore, the Container Freight Stations would be Customs Ports with reference to the Customs Law and, therefore, it would be qualified for the benefit of section 80-IA (4) (i) of the Act.
7. In the alternative and without prejudice, the Commissioner (Appeals) failed to appreciate that the Container Freight Station is an Inland Port and therefore, it is an infrastructure facility within the meaning of section 80-IA (4) of the Act.
8. The order of the Commissioner (Appeals) is bad in law and without jurisdiction.”
1.1. Appeals were heard by the Division Bench. It came to the conclusion hat two questions, mentioned in reference u/s 255 (3) dated 19.1.2011, should be considered by the special bench. The findings in this respect are contained in paragraph nos. 4.1 and 5, which are reproduced below :-
4.1 “Having heard both the sides and perused the relevant material on record, it is noticed that the assessment years under consideration are 2004-05 to 2009-10. The Delhi Bench of the Tribunal in Container Corporation of India Ltd. (supra) also considered assessment years 2003-04 to 2005-06. Some of the arguments raised by the Ld. Sr. A.R., in the proceedings before us, were also raised, considered and rejected by the Tribunal. At the same time, it is also true that there is no reference to certain relevant material in the Delhi Bench order, such as Notification S.O.744(E) dated 1.9.1998 (copy placed at page 118 of the paper book), letter of Director, CBDT, to all Chief Commissioners of Income-tax dated 16.12.2005 (copy placed at page 120 of the paper book) etc., which may have some bearing on the issue.
5. Under such circumstances, we propose the following two questions:
1. “Whether, on the facts and in law, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search”?
2. “Whether, on the facts and in the circumstances of the case, the Ld. CIT (Appeals) was justified in upholding the disallowance of deduction u/s 80IA(4) of the Act, on merits”?”
1.2 Consequently, the Hon’ble President, Income Tax Appellate Tribunal, constituted the special bench to decide following questions :-
1. “Whether, on the facts and in law, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search?”
2. “Whether, on the facts and in the circumstances of the case, the learned CIT(Appeals) was justified in upholding the disallowance of deduction u/s 80IA (4) of the Act, on merits?”
2. In the course of hearing before us, Ld. Standing Counsel for the revenue submitted at the outset that ground No. 1 was not taken up by the assessee either before the AO or the Ld. CIT(A). In this connection, he furnished the grounds taken before us and the grounds taken before the Ld. CIT(A) in a tabular form, which is reproduced below to the extent it is relevant to us:
