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Section 253 of the Income-tax Act, 1961 - Appellate Tribunal - Appeals to - Assessment years 1968-69 and 1969-70 - Books of account of assessee firm were rejected and ITO made certain additions after estimating rate of profit - On second appeal, assessee instead of focusing attention on rejection of accounts tried to contend that rates adopted were high - Tribunal declined to entertain such a contention say ing that there was no pointed ground raised in appeal - On instant reference, it was seen that grounds were so framed that they did admit a dispute in relation to reasonableness of rate of profit - Whether, in aforesaid circumstances, Tribunal was not correct in rejecting assessee's contention as not tenable - Held, yes - Whether, therefore, matter was to be remitted to Tribunal for disposal afresh - Held, yes [Matter remitted] FACTS While completing the assessments the ITO rejected the accounts of the assessee-firm and, accordingly, made additions. On second appeal, the assessee instead of focusing the attention on rejection of accounts tried to contend that the rates adopted were high. The Tribunal declined to entertain such a contention saying that there was no pointed ground raised in appeal. Thus, the assessee's attempt to get reduction in the estimate failed. On reference : HELD On reading of the grounds it could be said that they were so framed that they did admit a dispute in relation to the reasonableness of the rate of profit and, therefore, the Tribunal was not correct in rejecting the contention as not tenable. It was conceded by both sides that such a question had not been examined on merits and, therefore, once it was answered in favour of the assessee, it would follow that the appeals would have to be reheard and disposed of on merits in accordance with law. In view of the above, it could be concluded that the Tribunal was not justified in saying that the assessee had not raised any specific ground as to the reasonableness of the rate of profit applied to the cases. Note : The case has been remanded back to the Tribunal. JUDGMENT R.N. Misra, J.-At the assessee's instance, on applications made under section 256(2) of the Income-tax Act of 1961…

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