Law:

Section:

Section 254 of the income-tax Act, 1961-Appellate tribunal-Orders of-Assesses neither contested disallowance of development rebate in appeal before AAC nor taken initially in grounds of appeal before tribunal-Whether tribunal justified in law in declining to admit additional ground agitating against impugned disallowance-Held, on facts, yes Facts For the assessment year 1959-60, the ITO rejected, inter alia, the assessee-company's claim for development rebate (a) on new electric motors and, (b) on certain other items like power house machinery, motor cars and jeeps, etc. In appeal before the AAC, it challenged the disallowance in respect of items mentioned in (b) . The appeal was partly allowed. On second appeal to the Tribunal, the assessee-company did not contest the disallowance of development rebate qua electric motors but subsequently raised this question as an additional ground. The Tribunal, however, refused to allow the same. On reference: Held There is a basic difference in the question as to the Tribunal's "jurisdiction" and its "powers". Its powers, vast as they may be, on the same lines as those of the AAC under section 251, are to be exercised within the four corners of its jurisdiction, which is restricted under section 254( 1) with particular reference to Explanation thereto, only to passing orders on the "subject-matter" of appeal and not on "all matters" arising in the appeal. If initially the Tribunal did not have such jurisdiction to adjudicate on any finding of the ITO, then it would not get that jurisdiction merely because such a contention was taken in the memorandum of appeal or sought to be taken as an additional ground of appeal with its have or otherwise argued before it. The ITO's finding regarding disallowance of the development rebate on electric motors was not appealed against before the AAC giving rise to the assumption that the assessee had accepted the same. The assessee could not, therefore, be considered to be aggrieved by any decision of the A AC on the said finding so as to entitle it to file an appeal to the Tribunal under section 253. Thus, the impugned finding could never be the subject-matter of appeal before the…

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