26 January 2008
The relevant questions should be answered appropriately. The orginal assessment order of the AO and two sets of xerox of the order have to be enclosed. An appeal fees of Rs.1000/- has to be paid and the copy of the challan counterfoil enclosed with Form 36.
The statements of facts and grounds of appeal should be prepared and typed in the relevant column.
The appeal form No.35 should invariably be signed in the Verification coulumn by the applicant.
Q.51 How to draft the grounds of appeal or cross objection?
Ans. As per Rule 8 of the Rules, the grounds of appeal should be concise and under different heads. Grounds of appeal should not be argumentative or narrative. Such grounds should be numbered consecutively. Grounds should be drafted very carefully, the point in dispute be highlighted. It is desirable to challenge findings of facts which are contrary to the material on record or are objected to. On receipt of defect memo, grounds originally filed can be substituted. If ground is not comprehensive, the Respondent/Tribunal may object at the final hearing and may not allow to raise additional ground. If ground is exhaustive and framed in general words – all aspects can be argued. See CIT vs. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC); CIT vs. Birad Kanwarji (HH) (1979) 119 ITR 96 (Raj.).
The statement of facts should be filed before the Commissioner of Income-tax (A). It is very vital for assessees to present the statement of facts in such a manner so as to bring out clearly the issues in the assessment/penalty proceedings which are under challenge. There is no requirement of filing statement of facts before the Appellate Tribunal. But copy of statement of facts filed before the CIT(A) should be annexed.
Q.52 Whether additional ground can be filed at the time of hearing of appeal?
Ans. Rule 11 of the Rules, provide that the appellant, shall not except by leave of Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal. However, the Tribunal is competent to allow the appellant to raise, at the hearing of the appeal, an additional ground even without a formal amendment of the memorandum of appeal (CIT vs. Nelliappan (1967) 66 ITR 722 (SC). New India Life Ass. Co. Ltd. vs. CIT (1957) 31 ITR 844, 846 (Bom.).
The appellant should make an application in writing containing the additional ground, its necessity and reasons as to why it could not be taken earlier. It should be established that it goes to the root of the issue and is necessary for dispensation of justice. A copy of such application should be provided to the respondent and respondent is heard, before its disposal. Permission to raise the additional ground is discretionary. Reasons for admission have to be recorded by the Tribunal and the discretion should be exercised judiciously so as to further the cause of justice and not arbitrarily.
In Ahmedabad Electricity Co. Ltd. vs. CIT (1993) 199 ITR 351 (Bom) (FB), the Court held that, Rules 11 and 29 of the Appellate Tribunal Rules indicate that the scope of enquiry before the Tribunal can be wider than the points which are raised before the Tribunal. The Tribunal, therefore, would ordinarily have the power to allow additional points to be raised before it so long as they arise from the subject matter of the proceedings. The proceedings before the Tribunal are not necessarily confined only to the subject matter raised in the memorandum of appeal. The word “thereon” in section 254 does not in any manner restrict the jurisdiction of the Appellate Tribunal. The word “thereon” merely refers to the appeal. To read the word “thereon” as restricting the jurisdiction of the Appellate Tribunal is not warranted. It does not refer to the scope of jurisdiction at all. The words which prescribe the extent of jurisdiction of the Tribunal under section 254 are the words “may pass such orders.... as it thinks fit”. These are the words which describe the jurisdiction of the Appellate Tribunal. The word “thereon” merely refers to the fact that the Tribunal while deciding the appeal has to exercise its jurisdiction. Looked at from a slightly different point of view, if the word “thereon” can be said to refer to the subject matter of the appeal, then the subject matter of the appeal is the entire tax proceeding of the assessee which is before the Tribunal for consideration; and this will cover the proceedings before the ITO, before the AAC as well as before the Tribunal — including the grounds raised before the Tribunal, any additional grounds which may be allowed to be raised before the Tribunal as also cross-objections, if any, before the Tribunal. Undoubtedly, the Tribunal has a discretion to decide whether any additional points can be allowed to be raised at the stage of appeal before it, and it may not permit such a new point to be raised for good reasons. But the extent of jurisdiction of the Tribunal is not confined only to points which were considered by the AAC and which may be challenged in appeal before the Tribunal. The Tribunal can permit other grounds also to be raised before it, provided, of course, that they arise out of the proceedings. Accordingly, it can be said that, the Tribunal has jurisdiction to permit additional grounds to be raised before it even though they may not arise from the order of AAC, as long as these grounds are in respect of the subject matter of the entire tax proceedings.
So far as legal issues are concerned, additional grounds can be raised at any time. Few case laws on the subject of power to allow a new ground of appeal to be raised are: National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC), Jute Corporation of India vs. CIT (1991) 187 ITR 688 (SC), Godavari Sugar Mills Ltd. vs. CIT (1993) 199 ITR 351 (Bom) (FB), Ramgopal Ganpatrai & Sons vs. CIT (1953) 24 ITR 362 (372) (Bom), Anam Venkata Krishna Reddy vs. CIT (1988) 172 ITR 425 (A.P.), Deep Chand Kothari vs. CIT (1988) 171 ITR 381 (Raj), J. S. Parkar vs. V. B. Palekar (1974) 94 ITR 616 (Bom), CIT vs. Stepwell Industries Ltd. (1997) 228 ITR 171 & 463 (SC), ACIT vs. Soni Photo Films (P) Ltd. (1998) 67 ITD 81 (SB), CIT vs. Delhi Sanitary Stores (1981) 127 ITR 822 (Raj.)
Q.53 Whether additional ground can be raised orally?
Ans. Leave to urge additional grounds may be sought either in writing or by oral prayer. Rule 11 of the Appellate Tribunal Rules speaks only of leave and the leave may be sought either in writing or by an oral prayer — Amines Plasticizers Ltd. vs. CIT, (1997) 223 ITR 173 (Guwahati). Grounds of Appeal can be amended by taking leave of the Tribunal orally — Assam Carbon Products Ltd. vs. CIT (1997) 224 ITR 57 (Guwahati). There is no particular form for raising an additional ground. Baby Samuel vs. ACIT (2003) 262 ITR 385 (Bom.). The additional ground can be raised at any time. Shilpa Associate vs. ITO (2003) 263 ITR 317 (Raj.). New plea can be raised orally though no cross objection or appeal has been filed, Assam Company (India) Ltd. vs. CIT (2002) 256 ITR 423 (Guwahati), Baby Samuel vs. ACIT (2003) 262 ITR 385 (Bom.)
Q.54 Whether issues regarding jurisdiction or limitation not raised before the CIT (A) can be raised for first time before the Income Tax Appellate Tribunal?
Ans. Yes. Legal ground going to the root of the issue and if facts are on record, can be raised at any time. In CIT vs. Mohd. Iqbal and Others (1996) 221 ITR 481 (MP) Krishna Gopal Bhadra vs. ITO (1980) 124 ITR 580 (Cal.), CIT vs. Commonwealth Trust (India) Ltd. (1996) 221 ITR 474 (Ker.) CF Town Municipal Council Atharia vs. Labour Court AIR 1969 SC, 1335 (1338) courts have held that the question of limitation can be raised at any point of time because it goes to the root of the matter. Similar is the position about the jurisdiction. The Supreme Court in UOI vs. British India Corp. Ltd. (2004) 268 ITR 481 observed, the question of limitation is a mandate to the forum and irrespective of the fact whether it was raised or not, the forum must consider and apply it, if there is no dispute or facts.
Q.55 Whether assessee can raise a ground regarding jurisdiction in respect of the assessement in the penalty appeal at any time?
Ans. The assessee is entitled to raise the ground relating to jurisdiction stating that the assessment based on the return is bad in law, hence penalty is liable to be quashed — Union of India vs. Rai Singh D. L. Singh Bist (1973) 88 ITR 200 (SC), CIT vs. Dumraon Cold Storage and Refrigeration Service (1974) 97 ITR 137 (Patna), Shri Bhormal Aidanmali Jain vs. IAC of I.T. [No.9204 and 9205 — assessment year 1977-78, Bench “E”, dated November 23, 1989 (SMC)], Sanabhai R. Dalwali vs. ITO (1990) 34 ITD 183 (Ahd.). Q.56 Can assessee support the order of Commissioner of Income Tax (Appeals) on any ground decided against it, even though no appeal is filed?
Ans. In Dy. CIT vs. Smithkline Beecham Consumer Brands Ltd. (2003) 126 Taxmann 104 (Cal.), the Tribunal held that, in view of Rule 28 of Income Tax (Appellate Tribunal) Rules, assessee can support order of Commissioner (Appeals) on any ground decided against it even though no appeal is filed.
Q.57 Can appellant agitate the issue not pressed before the CIT(A)?
Ans. Yes. An appellant despite having not pressed an issue before the authorities below, can still raise and agitate the same before the Tribunal. There cannot be any estoppel against statute. No concession on law is permissible. Vijay Kumar Jain vs. CIT (1975) 99 ITR 349 (P&H); J. K. Oil Mills Co. Ltd. vs. CIT (1976) 105 ITR 53 (Allahabad); Hindusthan Zinc Ltd. vs. DCT (2002) 77 TTJ 315 (Jodhpur Bench).
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