CPT V24P7-Art1 (Content).pmd - Taxmann

Direct Tax Laws
The High Court ultimately held that the Tribunal
had erred in setting aside the order of the
Commissioner of Income-tax (Appeals) in its
entirety and by restoring the proceedings to
the Assessing Officer in regard to the
disallowance to the extent of ` 28.69 lakhs and
confirmed order of the Tribunal only to the
extent to which it restored the proceedings to
the Assessing Officer as regards the amount
of ` 13.73 lakhs
The High Court, however, observed that the
assessee, if so advised, could take necessary
steps for restoration of the appeal before the
Tribunal which was dismissed earlier for nonprosecution
by the assessee. The High Court
also observed that it would be open to the
Tribunal to deal with such application, when
made by the assessee for restoration of appeal,
in accordance with law.
5. OTHER IMPORTANT DECISIONS
5.1 The Kerala High Court in the case of CIT
v. Commonwealth Trust (India) Ltd. [1996]
221 ITR 474/87 Taxman 393 in which it was
observed that - The law of procedure has to
be approached, understood and appreciated
as a helpmate in the course of the process of
administration of justice and never as a situation
of obstruction or obstacle in regard thereto.
The High Court, therefore, held that “even
though limitation is not specifically set up as
a defence, a barred proceeding has to be
dismissed. Rule 27 of the ITAT Rules, 1963,
enacts that the respondent (in this case the
assessee) may support the order, though he
may not have appealed, on any of the grounds
decided against him.”
5.2 The Supreme Court in the case of
Hukumchand Mills Ltd. v. CIT [1967] 63 ITR
232 - Held that Rule 12 (dealing with rejection
of memorandum of appeal) and Rule 27 of the
Appellate Tribunal Rules, 1946, (the ITAT
Rules,1946) are not exhaustive of the powers
of the Tribunal. They are merely procedural
in character and do not, in any way, circumscribe
or control the power of the Tribunal under
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section 33(4) of the Indian Income-tax Act,
1922.It is to be noted that the earlier rule 27
of the Appellate Tribunal Rules, 1946 was on
the same lines as the rule 27 of Income-tax
(Appellate Tribunal) Rules, 1963. It is further
to be noted that provisions of section 33(4) of
the 1922 Act were akin to section 253 of the
Act.
5.3 The Madras High Court in the case of CIT
v. Sundram & Co. (P.) Ltd. [1964] 52 ITR 763
- It was held that “Rule 27 of the ITAT Rules,
1946, confers a right on the respondent in an
appeal to the Appellate Tribunal to support
the order of the Appellate Assistant
Commissioner, on any of the grounds decided
against him, even though he may not have
himself preferred an appeal to the Tribunal.
Being a right conferred on the respondent, the
Tribunal has no right in its discretion to deprive
him of the benefit of this rule.”
5.4 The Madras High Court in the case of
M.R.M. Periannan Chettiar v. CIT [1960] 39
ITR 159 - Held that “Rule 27 recognizes the
principle that the Appellate Tribunal would
have authority only to decide the question
decided by the Appellate Assistant Commissioner
against the appellant, and makes a special
provision, enabling the respondent alone to
support the order on a ground decided against
him.” The Madras High Court also opined
that the existence of an appeal which related
only to a distinct matter in controversy did
not entitle the Tribunal to take up and decide
the appeal in favour of the appellant on the
basis of a ground not in controversy by taking
recourse to any of the ITAT Rules,1946.
5.5 The ITAT Chandigarh Bench in the case of
Asstt. CIT v. Balbir Chand Maini [2007] 111
TTJ 160 - Held that where issue relating to
validity of reopening was decided against
assessee, in light of rule 27 of the ITAT Rules,1963,
assessee was entitled to contest issue in an
appeal filed by Revenue.
5.6 Durgeshwari Investments (P.) Ltd. v. ITO
[2005] 146 Taxman 56 (Mum.)(Mag.) - The facts
of the case which arose in Durgeshwari Investments