Law: Income Tax Act, 1922

Section: 66

Appellate Tribunal-Jurisdiction-Additional grounds of appeal---Return fled by assessee treating certain income as revenue receipt Claim of loss and other allowances disallowed by Income Tax Officer and Appellate Assistant Commissioner-Appeal to Tribunal-Application before Tribunal to raise additional grounds of appeal by relying upon decision of Tribunal in the case of another person -No plea in that behalf raised before Income Tax Officer or Appellate Assistant Commissioner and no material on record-Application to raise additional grounds rejected by Tribunal Whether proper exercise of discretion by Tribunal-Held yes In the computation of its business income the assessee had claimed a loss of Rs. 4,75,488 and various other deductions. The Income Tax Officer disallowed the loss as fictitious and so also some of the allowances claimed and they were all added back. The assessee, aggrieved by the order passed by the Income Tax Officer, preferred an appeal to the Appellate Assistant Commissioner who confirmed the order of the Income Tax Officer. In second appeal before the Appellate Tribunal the assessee sought to raise additional grounds of appeal that a sum of Rs. 7,93,837 received by it was not a revenue receipt by relying upon the order of the Tribunal in respect of another assessee, in whose case the Tribunal had treated the same amount of Rs. 733,837 as capital expenditure and the claim made by that assessee on the footing of deduction as expenditure was disallowed. The Tribunal held that none of the relevant facts on the basis of which the additional grounds were sought to be urged was to be found in the order of assessment passed by the Income Tax Officer or by the Appellate Assistant Commissioner, the grounds which were sought to be urged by way of additional grounds of appeal were not even raised before the Income Tax Officer or the Appellate Assistant Commissioner and the assessee itself had filed -the return on the basis that the amount was a revenue receipt. The Tribunal, therefore,-rejected the application of the assessee to urge additional grounds of appeal. The question arose whether the Tribunal erred or misdirected itself in law or failed to act…

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