CPT V24P7-Art1 (Content).pmd - Taxmann

ground not raised earlier in appeal memo is
governed by rule 11 of the ITAT Rules. This
rule must be read subservient to the provision
in the Act providing for the right of appeal.
Therefore, additional ground that could be
permitted to be raised under rule 11 is the one
that should relate to the subject-matter of the
appeal which, in turn, is linked to the subjectmatter
of the order passed by the first appellate
authority. Further, it is always desired in taxing
statutes that there should be finality to subjectmatter
of appeal. The assessments need not be
thrown to contest throughout the stages of
appeal, revision and reference. Thus, the issues
which are not raised before A.O. or CIT(A) are
presumed to have become final and, therefore,
cannot be raised before Tribunal. However, an
exception has been carved out from this principle.
A question of law can be raised before the
Tribunal for the first time. Hon’ble Apex Court
in National Thermal Power Corpn. Ltd. (supra)
upheld the jurisdiction of the Tribunal to examine
a question of law which arose from the facts
as found by Income-tax Authorities and having
a bearing on the tax liability of the assessee.
Hon’ble Apex Court observed as follows:
“Under section 254 of the Income-tax Act,
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 power of the Tribunal
in dealing with appeals is thus expressed
in the widest possible terms. The purpose
of the assessment proceedings before the
taxing authorities is to assess correctly
the tax liability of an assessee in accordance
with law. If, for example, as a result of
a judicial decision given while the appeal
is pending before the Tribunal, it is found
that a non-taxable item is taxed or a
permissible deduction is denied, we do
not see any reason why the assessee should
be prevented from raising that question
before the Tribunal for the first time, so
long as the relevant facts are on record
in respect of that item. We do not see any
reason to restrict the power of the Tribunal
under section 254 only to decide the grounds
which arise from the order of the
Commissioner of Income-tax (Appeals).
Both, the assessee as well as the Department,
have a right to file an appeal/cross-objections
before the Tribunal. We fail to see why
the Tribunal should be prevented from
considering questions of law arising in
assessment proceedings, although not raised
earlier. The view that the Tribunal is confined
only to issues arising out of the appeal
before the Commissioner of Income-tax
(Appeals) takes too narrow a view of the
powers of the Appellate Tribunal.”
Therefore, issues relating to facts can be raised
before CIT(A) but within the parameters of
record and proceedings before A.O., whereas
for the first time only legal issues can be
raised before the Tribunal.
CONCLUSION
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Since the power of first appellate authority is
co-terminus with that of the A.O., he can entertain
a new claim not raised before the A.O. On the
other hand, the power of the Tribunal is
comparatively restricted to decide new grounds
only when all the facts relating to those grounds
are available on the record. On the other hand,
Tribunal is not vested with such power as
given to the CIT(A) by the Explanation to section
251. It is only vested with the power to pass
such orders on the appeal as it thinks fit.
Therefore, it can consider the new grounds
which are legal in nature and do not require
investigation of facts. From this point of view
a new claim not made before the A.O. could
be made before the CIT(A) or even before the
Tribunal, if all the facts relating to the claim
are already on the record.
• DT - Secs. 139(5), 251 & 254-EC-CIT v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 23 taxmann.com 23 (Bom.)
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