Case Law Details

Case Name : Udyog Bharti Vs Income Tax Officer (Gujarat High Court)
Appeal Number : Tax Appeal No. 2284 of 2010
Date of Judgement/Order : 15/11/2011
Related Assessment Year :
Courts : All High Courts (3632) Gujarat High Court (306)

Udyog Bharati Vs ITO (Ahmedabad High Court)- In the first place it was not necessary for the appellant to file a cross-objection. As already noted, the assessee had raised an alternative contention of exemption under Section 11 of the Act before the CIT(A). The CIT(A) in view of his opinion that the benefit of Section 10(23) of the Act is required to be granted, did not examine this alternative contention on merits. In that view of the matter, when the Revenue had carried the CIT(A)’s order before the Tribunal, it was open for the assessee to support the order on all grounds including those which may not have been accepted or examined by the CIT(A). For this purpose, cross-objection was not necessary. In that view of the matter, the Tribunal not entertaining such cross-objection on the ground of delay, to our mind, would not be fatal to the assessee’s contention. It is clarified that if the Revenue’s appeal before the Court is entertained further, it would be open for the assessee to support the orders in its favour on all grounds.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

TAX APPEAL No. 2284 of 2010

UDYOG BHARATI

Versus

INCOME TAX OFFICER

Date : 15/11/2011

ORAL ORDER

(Per : HONOURABLE MR. JUSTICE AKIL KURESHI)

1. Assessee has preferred this appeal against that portion of the order of the Tribunal dated 19.3.2010 which is against the appellant. The appellant has framed following question for our consideration “

“(I) Whether on facts and in law the Tribunal is right in law in rejecting the alternative contentions of claim of deduction under Section 11 of the Income-Tax Act,1961 as an aspect of Revenue’s appeal without adjudicating on the legal plea and dismissing the same on the ground of limitation ?”

2. In brief, the facts are as follows :

2.1 Before the Assessing Officer, the assessee claimed benefit of Section 10(23B). The Assessing Officer having decided against the assessee, the issue was carried in appeal. Before the CIT(A), the assessee reiterated his claim and also raised alternative contentions with respect to the benefit under Section 11 of the Income Tax Act. This can be gathered from the appeal memo in which following ground was taken :

“5. The alternatively and without prejudice to the above, the learned AO has grievously erred in not computing the income in accordance with the provisions of Sec.11 of the Act.”

3. The CIT(A) allowed the appeal of the assessee and accepted its claim for benefit under Section 10(23) of the Act. In view of this conclusion, CIT(A) did not consider the alternative ground of the assessee by observing as under :

“6. Ground No.5 being an alternative ground, becomes infructuous since this is an alternative ground and the other grounds have been allowed in favour of the appellant. This ground is, therefore, dismissed for statistical purpose.”

4. Against the order of CIT(A), since it was adversed to the Revenue, an appeal was preferred before the Tribunal by the Revenue. Before the Tribunal also, the assessee maintained its alternative contention by filing cross-objection No.4 of 2009 and raised the following contentions :

“(i) That alternatively and without prejudice to the other grounds the A.O. Grievously erred in not computing the income in accordance with the provisions of Sec.11 of the Act.”

5. The Tribunal by order dated 19.3.2010 dismissed the appeal of the Revenue. While doing so, the Tribunal refused to entertain the assessee’s cross-objection on the ground that the same was filed belatedly and no explanation was offered for such delay. The Tribunal held and observed as under :

“19. We have duly considered the contention of the Learned D.R. and the A.R. of the assessee. We are of the opinion that since no reasonable explanation has been offered by the assessee for the con donation of delay, the same can not be conduct. The cross objection of the assessee is therefore dismissed on the ground of having been filed beyond the time prescribed.”

6. Counsel for the appellant submitted that the decision of the Tribunal on merits is in favour of the assessee. However, the question of alternative contention assumed significance in view of the fact that the Revenue has challenged the said decision further in appeal before this Court. He submitted that in view of the order passed by the Tribunal, on the cross-objection of the appellant, the appellant’s alternative contention would get barred.

7. We are, however, of the opinion that in the first place it was not necessary for the appellant to file a cross-objection. As already noted, the assessee had raised an alternative contention of exemption under Section 11 of the Act before the CIT(A). The CIT(A) in view of his opinion that the benefit of Section 10(23) of the Act is required to be granted, did not examine this alternative contention on merits. In that view of the matter, when the Revenue had carried the CIT(A)’s order before the Tribunal, it was open for the assessee to support the order on all grounds including those which may not have been accepted or examined by the CIT(A). For this purpose, cross-objection was not necessary. In that view of the matter, the Tribunal not entertaining such cross-objection on the ground of delay, to our mind, would not be fatal to the assessee’s contention. It is clarified that if the Revenue’s appeal before the Court is entertained further, it would be open for the assessee to support the orders in its favour on all grounds.

8. With the above observations, Tax Appeal is disposed of.

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