IT : Where additional ground of grievance against Assessing Officer's order was not raised before Commissioner (Appeals) raising of same before Tribunal was not sustainable
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[2013] 34 taxmann.com 220 (Agra - Trib.)
IN THE ITAT AGRA BENCH
Farrukhabad Investment India Ltd.
v.
Assistant Commissioner of Income-tax, 2(1), Farrukhabad*
BHAVNESH SAINI, JUDICIAL MEMBER
AND A.L. GEHLOT, ACCOUNTANT MEMBER
AND A.L. GEHLOT, ACCOUNTANT MEMBER
IT APPEAL NO. 207 (AGRA) OF 2005
[ASSESSMENT YEAR 1997-98]
[ASSESSMENT YEAR 1997-98]
SEPTEMBER 7, 2012
Section 254, read with section 246A, of the Income-tax Act, 1961 - Appellate Tribunal - Powers of [Power to admit additional ground] - Assessment year 1997-98 - Assessee filed a miscellaneous application for admission of additional ground before Tribunal against Assessing Officer's order which was not raised before Commissioner (Appeals) - However, Tribunal passed its final order, neither admitting application of assessee nor dismissing it - Assessee again filed appeal before Tribunal for admission of additional ground - Whether, where additional ground of grievance against Assessing Officer's order was not raised before Commissioner (Appeals) and cross-appeals before Tribunal were dismissed in final order, raising of additional ground before Tribunal was not sustainable -Held, yes [Para 4] [In favour of revenue]
FACTS
| ■ | The Assessing Officer passed an ex parte assessment order by making certain additions. Thereafter, considering the totality of the facts, he passed a rectification order in which he did not allow carry forward of loss computed by the assessee and determined the income at NIL. | |
| ■ | On first appeal, the Commissioner (Appeals) partly allowed the assessee's appeal by deleting certain additions. | |
| ■ | On cross-appeals before the Tribunal, the assessee also filed a miscellaneous application for admission of an additional ground regarding disallowance of carry forward of loss in rectification order by Assessing Officer resulting into NIL income. | |
| ■ | However, the Tribunal dismissed both the appeals of revenue and assessee by an order dated 29-8-2008. | |
| ■ | The assessee further filed an appeal before the Tribunal on ground that the miscellaneous application moved for admission of additional ground was neither admitted nor dismissed by the Tribunal in its final order. Therefore, it was a mistake on record. | |
| ■ | The revenue contended that when final order had been passed by Tribunal, it would amount to disposal of additional ground. | |
| ■ | However, the appeal of the assessee was allowed for hearing for limited purpose of disposal of application filed by the assessee for admission of additional ground. |
HELD
| ■ | It is not in dispute that the appeal of the assessee has been dismissed by the Tribunal vide order dated 29-8-2008. The additional ground so raised clearly spell out that the assessee has shown grievance in the additional ground against the assessment order passed by the Assessing Officer in disallowing the loss and estimating the income at nil. The assessee had not shown any grievance against the impugned order of the Commissioner (Appeals). Section 246A provides, the appeals would be maintainable before the Commissioner (Appeals) when the assessee was aggrieved against the order passed by the Assessing Officer. | |
| ■ | Therefore, if the assessee was having any grievance against the order of the Assessing Officer, he should have preferred appeal before the Commissioner (Appeals) under section 246A. No direct appeal against the assessment order is provided under the Act before the Tribunal. According to section 253, if the assessee is aggrieved against the order of the Commissioner (Appeals), he should have preferred the appeals before the ITAT. Thus, no direct appeal is provided under the scheme of the IT Act from the assessment order to the Appellate Tribunal. In the additional ground of appeal so raised, the assessee has not shown any grievance against the order of the Commissioner (Appeals). No reasons have been explained why the above additional ground showing grievance against the order of the Assessing Officer was not raised before the Commissioner (Appeals). It is, therefore, clear that the above additional ground is not arising out of the impugned order passed by the Commissioner (Appeals). Since, it is admitted fact that the appeal of the assessee and the Revenue have reached finality on dismissal of respective appeals by the Tribunal, therefore, such additional ground could not be raised at this stage, otherwise it would amount to interfere with the order of the Tribunal dated 29-8-2008. | |
| ■ | It is well settled law that all interim applications shall have to be decided before passing of the final order. In the aforesaid case, both the cross-appeals have already been decided finally, therefore, no interim application raising additional ground could be entertained at this stage. The Tribunal had become functus officio after passing the final order in this case on 29-8-2008 and as such has no jurisdiction to entertain application for admission of additional ground after disposal of the main appeal. Even with regard to the estimation of income at Nil by the Assessing Officer, the Assessing Officer had referred to the order passed under section 154 for taking such a view against the assessee. | |
| ■ | Therefore, it is a different order which had to be taken care of before taking any step in the matter. Therefore, it is a factual matter to be considered on merits only after deliberations and further probing into the matter, which is not permissible at this stage. | |
| ■ | Further, for seeking relief in computation of income, the assessee could have availed to remedies under section 154 but it appears that the assessee did not take any step deliberately before the Assessing Officer as per section 154. It may also be noted here that the Tribunal had not admitted the additional ground of appeal above, before finally deciding the appeals. | |
| ■ | Therefore, the request of the assessee could not be considered legally at this stage. Considering the above discussion in the light of the fact that the appeal of the assessee has already been dismissed on merits, it is not inclined to admit the additional ground of appeal so raised above. In the result, the application for admission of additional ground is dismissed. [Para 4] |
Anurag Sinha for the Appellant. Waseem Arshad for the Respondent.
ORDER
Bhavnesh Saini, Judicial Member - This appeal by the assessee is directed against the order of ld. CIT(A)-II, Agra dated 29.03.2005 for the assessment year 2007-08.
2. Before proceeding further, it would be relevant to mention that the present appeal has been re-fixed by the office as per directions issued in M.A. No. 109/Agra/2008 dated 30.11.2010 for limited purpose of disposal of application of the assessee filed for admission of additional ground. The background of this case had been that the AO passed exparte assessment order u/s. 144/147 of the IT Act dated 17.02.2004. The AO made the following additions:
| (i) Interest disallowed | Rs. 1,18,21,350/- |
| (ii) Commission disallowed | Rs. 38,14,947/- |
| (iii) Investment in hotel building | Rs. 1,74,04,718/- |
The AO thereafter noted that considering the totality of the facts, the loss claimed by the assessee is ignored. This resulted into addition of Rs.4,59,81,800/-, i.e., residue loss after order u/s. 154 dated 25.10.1999. Accordingly, the assessment is made at Nil income. The assessee preferred appeal before the ld. CIT(A), which was decided vide order dated 29.03.2005 and the appeal of the assessee was partly allowed reducing the addition of interest to Rs.11,82,135/-. The addition of Rs.38,14,947/- on commission was confirmed. The addition on account of investment in hotel building in a sum of Rs.1,74,04,718/- was deleted. The assessee as well as the Revenue preferred appeals before the ITAT, Agra in ITA No. 207/Agra/2005 and 258/Agra/2005 and vide order dated 29.08.2008, the Tribunal dismissed both the appeals of the assessee as well as the Revenue. The assessee filed M.A. No. 109/Agra/2009 before the Tribunal in appeal of the assessee in ITA No. 207/Agra/2005 stating therein that the assessee requested for admission of the additional ground vide letter filed before the Tribunal on 29.05.2007 in which following additional ground was raised:
"Because the Assessing Officer has erred in disallowing the loss and estimating the income at "nil" without any material on record."
The assessee's M.A. was considered by the Tribunal. The assessee submitted that the Tribunal neither rejected the application to raise the additional ground nor granted and appeal of the assessee has been disposed of. Therefore, there is mistake on record. The ld. DR, however, contended that when the order has been passed by the Tribunal, it would amount to disposal of the additional ground. The Tribunal, however, allowed the M.A. of the assessee vide order dated 30.11.2010. The findings given in paras 3, 4 & 5 of this order are reproduced as under:
3. We have carefully considered the rival submissions and perused the material on record. We have also gone through the application, which has been filed by the assessee on 29.05.2007 before the Registry and the order of this Tribunal dated 29.08.2008. We noted that in this application, the assessee has requested the Bench to permit it to raise the following additional ground of appeal:
"Because the Assessing Officer has erred in disallowing the loss and estimating the income at "Nil" without any material on record."
4. We noted that even though the Tribunal has passed the order dated 29.08.2008 disposing of the appeal of the assessee but did not pass any order on the application moved by the assessee for permission to raise additional ground in appeal. The original application, although available on file, but the Tribunal neither admitted the application nor dismissed the same. Thus, in our opinion, there has been a mistake apparent on record in the order of this Tribunal dated 29.08.2008. We, therefore, recall the order of this Tribunal dated 29.08.2008 only for the purpose of disposing of the application of the assessee filed by him before the Registry on 29.05.2007 requesting the Tribunal to grant permission to the assessee to raise the following additional ground:
"Because the Assessing Officer has erred in disallowing the loss and estimating the income at "Nil" without any material on record."
5. Thus, the miscellaneous application filed by the assessee is allowed.
The office accordingly re-fixed the appeal of the assessee in ITA No. 207/Agra/2005 for hearing for limited purpose of disposal of application of assessee for admission of additional ground above.
3. The ld. counsel for the assessee submitted that the AO instead of allowing carry forward loss as computed, determined the income as Nil. Due to inadvertence, no specific ground was raised in respect of determination of income at Nil. He had submitted that no reasons have been given by the AO in the assessment order for disallowance of resultant loss, which has been done purely on adhoc basis. He had, therefore, submitted that the assessee may be allowed to raise the above additional ground. The ld. counsel for the assessee, however, could not explain whether this additional ground was argued before the Tribunal at the time of original hearing because he was not the counsel in this case at that time. The ld. counsel for the assessee also could not explain as to how interim application could be agitated after disposal of appeal of the assessee in ITA No. 207/Agra/2005 vide order dated 29.08.2008. The ld. DR has submitted that since the appeal of the assessee has already been disposed of, therefore, the assessee cannot be permitted to raise additional ground of appeal. Therefore, the application of the assessee is not maintainable.
4. We have considered the rival submissions and the material on record. It is not in dispute that the appeal of the assessee has been dismissed by the Tribunal in ITA No. 207/Agra/2005 vide order dated 29.08.2008. The additional ground so raised clearly spell out that the assessee has shown grievance in the additional ground against the assessment order passed by the AO in disallowing the loss and estimating the income at nil. The assessee has not shown any grievance against the impugned order of the ld. CIT(A). Section 246A provides, the appeals would be maintainable before the ld. CIT(A) when the assessee was aggrieved against the order passed by the Assessing Officer. Therefore, if the assessee was having any grievance against the order of the AO, he should have preferred appeal before the ld. CIT(A) u/s. 246A of the IT Act. No direct appeal against the assessment order is provided under the Act before the Tribunal. According to section 253, if the assessee is aggrieved against the order of the Commissioner (Appeals), he should have preferred the appeals before the ITAT. Thus, no direct appeal is provided under the scheme of the IT Act from the assessment order to the Appellate Tribunal. In the additional ground of appeal so raised, the assessee has not shown any grievance against the order of the ld. CIT(A). No reasons have been explained why the above additional ground showing grievance against the order of the AO was not raised before the ld. CIT(A). It is, therefore, clear that the above additional ground is not arising out of the impugned order passed by the ld. CIT(A). Since, it is admitted fact that the appeal of the assessee and the Revenue have reached finality on dismissal of respective appeals by the Tribunal, therefore, such additional ground could not be raised at this stage, otherwise it would amount to interfere with the order of the Tribunal dated 29.08.2008. It is well settled law that all interim applications shall have to be decided before passing of the final order. In the aforesaid case, both the cross appeals have already been decided finally, therefore, no interim application raising additional ground could be entertained at this stage. The Tribunal has become functus officio after passing the final order in this case on 29.08.2008 and as such has no jurisdiction to entertain application for admission of additional ground after disposal of the main appeal. Even with regard to the estimation of income at Nil by the AO, the AO has referred to the order passed u/s. 154 dated 25.10.1999 for taking such a view against the assessee. Therefore, it is a different order dated 25.10.1999, which has to be taken care of before taking any step in the matter. Therefore, it is a factual matter to be considered on merits only after deliberations and further probing into the matter, which is not permissible at this stage. Further, for seeking relief in computation of income, the assessee could have availed to remedies u/s. 154 of the IT Act, but it appears that the assessee did not take any step deliberately before the AO as per section 154 of the IT Act. It may also be noted here that the Tribunal has not admitted the additional ground of appeal above, before finally deciding the appeals. Therefore, the request of the assessee could not be considered legally at this stage. Considering the above discussion in the light of the fact that the appeal of the assessee has already been dismissed on merits, we are not inclined to admit the additional ground of appeal so raised above. In the result, the application for admission of additional ground is dismissed.
5. In the result, the appeal of the assessee to the above extent also is dismissed.
ISHARegards
Prarthana Jalan
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