ORDER
MISS MOKSH MAHAJAN, A.M. :
These two appeals, by the assessee, are directed against the orders passed under ss. 154 and 143(3) of the IT Act, 1961 (the Act) for asst. yr. 1989-90. As both are interconnected, they are disposed of by a single order after consolidating them.
2. Shri R. Ganesan appeared on behalf of the assessed and Shri M. S. Syali, standing counsel, represented the Department.
3. Briefly put, the facts are that the assessed filed its return declaring an income of Rs. 30,95,450. The return was processed under s. 143(1)(a) of the Act and the income determined was at Rs. 31,14,600. This was after including an amount of Rs. 19,150 the depreciation claimed at hundred per cent on the machinery. Subsequently, the AO modified the income under s. 154 of the Act by restricting deduction under s. 80HHC of the Act to Rs. 13,83,30,602 as against Rs. 15,06,77,328 claimed by the assessee. In appeal, the learned CIT(A) confirmed the action of the AO. The assessed is aggrieved against the order on the ground that deduction under s. 80HHC differently computed could not be made the subject-matter of s. 154 and that the provisions of s. 143(1A) of the Act are not applicable at all. It is also contended that the provisions of ss. 234A and 234B are also not applicable to the case of the assessee.
3.1 In the meanwhile notice under s. 143(2) was issued to the assessed and the assessment was framed under s. 143(3) of the Act on 12th Feb., 1992. In an appeal filed before the CIT(A) the assessed challenged the quantum of deduction allowed under s. 80HHC of the Act. As per the contentions raised, the deduction has to be computed in accordance with s. 80HHC r/w s. 80AB and other sections of the Act. The provisions of ss. 234A and 234B as well additional tax levied under s. 143(1A) are contended to be not applicable in the case of the assessee. However, ground No. 3 relating to income of Rs. 35,90,025 was not pressed during the course of the hearing. The assessed nonetheless raised additional grounds during the course of the proceedings which read as under :
(1) The order under s. 143(3), dt. 12th Feb., 1992 is invalid, non-est in law and has, thereforee, to be annulled.
(2) The AO has no jurisdiction to issue a notice under s. 143(2) to frame a second assessment namely order, dt. 12th Feb., 1992 and thus such order, dt. 12th Feb., 1992, is illegal.
3.2 Advancing his arguments on both the appeals, Shri R. Ganesan, the learned Authorised Representative submitted that while making the prima facie adjustment in regard to sum of Rs. 19,150 neither any opportunity was given nor notice under s. 143(2) was issued to the assessee. The assessees claim of depreciation at hundred per cent was allowable under law as is evident from allowance of the same under s. 143(3) of the Act. The assessment under s. 143(1)(a) can only be done on the basis of admissions and claims in the return. In support, reliance was placed on the case of Jaipur Udyog Ltd. & Anr. vs . CIT : [1969]71ITR799(SC) . As per the arguments advanced, prima facie adjustments can only be of matters which are apparent from record. As per the provisions of s. 143(1)(a) existing at the relevant period of time the adjustments could only be made in respect of the following :
(a) arithmetic errors;
(b) prima facie admissible items; and
(c) prima facie inadmissible items.
Beyond this, the AO had no jurisdiction to make any further adjustments. In support, reliance was placed on the decisions in the following cases :
(i) Modi Cement Ltd. vs. Union of India & Ors. (1992) 193 ITR 91 ;
(ii) Khatau Junkar Ltd. & Anr. vs . K. S. Pathania & Anr. : [1992]196ITR55(Bom) .
In case of exceeding the jurisdiction, the order would tantamount to be the one framed under s. 143(3) of the Act. Support was derived from the decision in the case of ITO vs. Deepak Aggarwal (P) Family Trust 202 ITR 68 (TM). It was contended that the jurisdiction should be traced to the appropriate section to consider the validity of an order. For this reliance was placed on the decisions in the cases of L. Hazari Mal Kuthiala vs . ITO : [1961]41ITR12(SC) , M. Chockalingam Chettiar vs. CIT (1973) 91 ITR 592 and Delhi Auto & General Finance (P) Ltd. vs . Dy. CIT . No order could be held as invalid because of the label it contains. In the circumstances the order framed under s. 143(1)(a) of the Act in the case of the assessed is to be treated as passed under s. 143(3) of the Act. Any order without jurisdiction can either be upheld under different sections or is otherwise a nullity. Apart, two assessments cannot exist simultaneously. This is as held by their Lordships of the Supreme Court in the case of CIT vs . S. Raman Chettiar : [1965]55ITR630(SC) . In any case, argued the learned authorised representative, the AO was not empowered to restrict the claim of the assessed in respect of deduction under s. 80HHC by exercising jurisdiction under s. 154 of the Act. The assessed carries on exclusive export business as well exclusive domestic business. Separate books of account were maintained and separate P&L; a/c's were prepared. The AO while passing the order under s. 154 of the Act, applied s. 80HHC (3) and considered such computation as, the only correct computation. As there were two views possible, s. 154 could not be invoked. The proposition was supported by the decision in the case T. S. Balram vs. Volkart Brothers & Ors. (1971) 82 ITR 60 .
4. Shri M. S. Syali, the learned standing counsel, on the other hand submitted that there is no dispute in regard to the proposition that it is only the prima facie adjustments which could be made under s. 143(1) of the Act. In case the information furnished by the assessed (page 40 onwards of the paper book) is perused, it would be clear that the relevant information relating to the claim for hundred per cent deduction was not contained in the same. Out of the over all cost of Rs. 5,29,476, a sum of Rs. 19,153.60 was claimed as a deduction. These items could not be identified and as such the AO was justified in making an addition. Meeting the objections of the learned Authorised Representative, it was stated that no opportunity is contemplated where the return is to be processed under s. 143(1)(a) of the Act. Prima facie adjustments can only be made with reference to items which do not admit of two views. The very intention of introducing s. 143(1)(a) of the Act and the concept of intention is to ensure the diligence on the part of the assessee. A distinction to this effect has already been made in the decision of the jurisdictional High Court in the case of S. R. F. Charitable Trust (supra), on which reliance has been placed by the assessee. The AO while issuing intimation has acted within the four corners of powers vested in him. It is also important to note that the intimation after making the alleged adjustment of Rs. 19,150 has been accepted by the assessed inasmuch as the same was not contested by way of revision or in an appeal so filed. In the return filed, the assessed has claimed deduction under s. 80HHC in excess of what was permissible in law. The particulars given in Form No. 10-CCAC would reveal that the total turn over of the business was taken at Rs. 76.69 crores. Export turnover at Rs. 68,27 crores and deduction claimed was at Rs. 15,06 lacs. This shows that the assessed was carrying on single business and as such the deduction claimed was not in order and as such needed rectification as there was an error, apparent from the record in terms of the position admitted by the assessee. According to Shri Syali, despite repeated opportunities allowed to the assessee, no information was furnished by him. Accordingly, the rectification was rightly made by the AO.
4.1 Meeting the contentions of the learned Authorised Representative that the deduction under s. 80HHC was wrongly computed under s. 143(3) of the Act, it was submitted that the same is the view as taken by the special bench of the Tribunal in the case of International Research Park Laboratory Ltd. vs . Asstt. CIT .
5. We have carefully considered the rival submissions. There is no dispute with the proposition that it is only prima facie adjustments which are covered under s. 143(1)(a) of the Act. While processing the return under the aforesaid section no notice under s. 143(2) is contemplated. It is also undisputed that the adjustments can only be made with reference to items which do not admit of two views or for which further investigation is called for. These could be only covered under assessments framed under s. 143(3) of the Act. Both the provisions which exist in statute operate in their own respective fields. A glance at the present evolution of the provisions of s. 143 would clearly bring out the scheme of the Act and the intent of legislature in framing the provisions relating to s. 143(1)(a) along with s. 143(3) of the Act. The AO is empowered to process the return or frame assessments under either of the sections on the conditions and in the circumstances as laid down in the aforesaid relevant provisions. For this view of ours, we are supported by the decision of the jurisdictional High Court in the case of Apogee International Ltd. & Anr. vs . Union of India : [1996]220ITR248(Delhi) . The finding as summed up in the head note, we would like to quote :
'From a bare reading of sub-cl. (i) to sub-s. (1)(a) of s. 143 of the IT Act, 1961, it is evident that giving of intimation in terms of the provisions is 'without prejudice' to the provisions of sub-s. (2), which means that an intimation sent to the assessed specifying the sum payable by him in terms of that sub-section does not preclude the operation of the provisions of sub-s. (2). By force of the expression 'without prejudice', the jurisdiction of the assessing authority to proceed under sub-s. (2) of s. 143 is preserved despite intimation under sub-s. (1). This is so also for the reason that under the recast section, w.e.f. 1st April, 1989, the power of the AO to make adjustments in terms of its proviso is very limited. The power under s. 143(1) can be exercised only in the circumstances mentioned in the proviso strictly within the bounds fixed therein. The new procedure, referred to as the 'summary assessment scheme' envisaged under s. 143(1) is an exception to the normal procedure of assessment under s. 143(3) after issue of a notice under s. 143(2) of the Act and an assessed cannot, thereforee, demand as a matter of right to be treated as an exceptional case. An order of assessment is made only after a proper scrutiny of the return and the material produced in support thereof. It is true that a notice under s. 143(2) puts into motion the normal procedure of assessment but in Chapter XIV which prescribes the procedure for assessment there is no prohibition on the issue of intimation under s. 143(1)(a)(i) after a notice under sub-s. (2) of the section has come to be issued. The fiction in sub-s. (1)(a)(i) of s. 143 to treat the intimation as a notice of demand under s. 156 is to make the machinery provision for recovery of tax applicable to the recovery of tax assessed in terms of the said sub-section and nothing more. By the fiction so created, all incidents of the notice or demand shall become applicable even to that intimation even though no regular recovery notice of demand in the prescribed form under s. 156 is served on an assessee, which otherwise is mandatory to enforce any recovery of tax or interest on an assessee. thereforee, intimation to the assessed under s. 143(1)(a)(i) of the amounts payable by him as tax or interest even after issue of notice under s. 143(2), does not oust the jurisdiction of the AO to issue a fresh notice under s. 143(2) of the Act, where he considers it to be necessary or expedient to ensure that the assessed has declared his income correctly.'
6.1 As to the adjustments made on account of Rs. 19,150, we find that as per information (contained in the paper-book) from the over all cost of Rs. 5,29,426, Rs. 19,150 has been deducted. As a number of items are below Rs. 5,000, the specific items which total up to Rs. 19,150 have not been specifically identified. Even accepting the assessees stand that the adjustment was not called for, at best it can be termed as an error on the part of the AO in making an adjustment under s. 143(1)(a) of the Act. It certainly does not amount to lack of jurisdiction or for that matter exceeding jurisdiction which could convert the processing made under s. 143(1)(a) to assessment framed under s. 143(3) of the Act.
6.2 Coming to the case laws cited, there is no dispute in regard to the ratio as laid down in the case of Jaipur Udyog Ltd. & Anr. vs. CIT (supra). The aforesaid case related to provisional assessments made under s. 141 of the Act. It was held by their lordships that the ITO was not empowered to rejected the claim of the assessed for carry forward of losses of earlier years and set off on the ground that lesser amount was determined in regular assessment for earlier years. This was on the interpretation of the provisions of s. 141 as they prevailed at the relevant period of time. In the case of the assessed the return was processed under s. 143(1)(a) of the Act and an addition of Rs. 19,150 was made on the ground that the claim or the assessed was not admissible as per the information available on record. The facts are distinguishable.
6.3 In the case of Modi Cement Ltd. vs. Union of India & Ors. (supra), the issue before their lordships was whether additional tax could be levied in case where the loss is reduced but no income results. The facts are again distinguishable.
6.4 In the case of Khatau Jhankar Ltd. vs. K. S. Pathania & Anr. (supra), the AO made adjustments on account of investment allowance, expenditure incurred on presentation of articles cash purchases etc. It was held by their lordships of Bombay High Court that substantial adjustments which require hearing to be given to the assessed are not contemplated under s. 143(1)(a) of the Act. It was further held that when by unilateral Act, claim of the assessed is disallowed, s. 154 is not efficacious remedy and thereforee, the directions were given to deal afresh with the return in accordance with law. Nowhere it was held that the order had become a nullity.
6.5 In the case of ITO vs. Deepak Aggarwal (P) Family Trust (supra), the assessees status was changed in the assessment framed under s. 143(1) of the Act. It was held by the Tribunal that the assessment was not made under s. 143(1) but under s. 143(3) of the Act. No such adjustment has been made in the case of the assessee.
6.6 Coming to the case cited in Hazari Mal Kuthalia vs. ITO (supra), in the aforesaid case the CIT while transferring the case referred to the Patiala IT Act as against the Indian IT Act. On the facts their lordships of the honble Supreme Court observed that :
'exercise of the power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory.'
This, in fact, illustrates the issue that doctrine of sustaining jurisdiction has a limited scope and is applicable only where power can be validly exercised under one section but in exercise thereof wrong section which is para materia has been referred.
6.7 In the case of CIT vs. S. Raman Chettiar (supra), it was held that if a valid return is filed, the same cannot be ignored. This is not so in the case of the assessee.
6.8 In the case of CIT vs . National Small Industries Corporation : [1973]91ITR579(Delhi) , reference was made to s. 154 as against s. 35 of 1922 Act. After finding that the provisions are para materia it was held by their lordships that this would not take away the ITOs jurisdiction to rectify the assessment. In the case of the assessee, the AO was empowered to make arithmetical adjustments which he proceeded to do. On the other hand, as stated by the learned standing counsel, the issue is brought home by the two decisions of the jurisdictional High Court in the case of CIT vs . Kishni Bai : [1977]110ITR19(Delhi) and (b) Gangasaran & Sons vs . ITO : [1981]130ITR212(Delhi) . In short we would hold that action under s. 143(1)(a) and that under s. 143(3) are not analogous and do not cover the same ground as is held by their lordships of Delhi High Court in the case of M/s. Apogee International Ltd. & Anr. (supra). In our considered view the AOs action in making adjustments of Rs. 19,150 did not tantamount to exceeding the jurisdiction. Hence, the processing made under s. 143(1)(a) of the Act would not be termed as assessment framed under s. 143(3) of the Act.
6.9 Coming to the restriction of deduction of Rs. 15,06,77,328 to Rs. 13,83,30,602 under s. 154 of the Act, we find that along with the return the assessed furnished report in Form 10CCAC as required under s. 80HHC(4) of the Act. On going through the format of Form 10-CCAC r/w Annexure A (at the relevant period of time) we find that while column 3 relates to total turnover of the business, column 4 to total export turnover. The figures shown against these columns have been taken from the P&L; a/c drawn by the assessee. In the latter, two kinds of sales have been shown - one relating to exports and the other to 'other sales'. The profits on the other hand shown against column 6 are the one relating to the entire business. As per remarks against column 6, computation is in accordance with provisions of sub-s. (3) of s. 80HHC of the Act. Sub-s. (3) in turn at the relevant period of time read as under :
'(3) For the purpose of sub-s. (1), profits derived from the export of goods or merchandise out of India shall be, -
(a) in a case where the business carried on by the assessed consists exclusively of the export out of India of the goods or merchandise to which this section applies, the profits of the business as computed under the head 'Profits and gains of business or profession';
(b) in a case where the business carried on by the assessed does not consist exclusively of the export out of India of the goods or merchandise to which this section applies, the amount which bears to the profit of the business (as computed under the head 'Profits and gains of business or profession') the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.'
6.9 Thus as per auditors themselves the deduction is to be computed under sub-s. (3) of s. 80HHC of the Act as per which it is the proportion of export turnover to total turnover that the profits have to be taken. No where in the return the assessees claim is in regard to exclusive export business and exclusive local business. In the circumstances, the error being patent one on record justified rectification. Accordingly, we uphold the order of learned CIT(A) in this regard.
7. Coming to the additional grounds of appeals which questioned the very jurisdiction of the AO, reliance was placed on the case of Taylor Instrument Co. (India) Ltd. (1992) 198 ITR 1 where the assessed claimed deduction of sur-tax in the computation of business income before the Tribunal. After holding that it was altogether a new point, the Tribunal did not permit the admission of the ground. The Delhi High Court after considering r. 11 of the ITAT Rules, 1963 as well as Art. 265 of the Constitution held otherwise. While holding in favor of the assessed the judgment of the honble Supreme Court in the case of Jute Corporation of India Ltd. vs . CIT 0044/1991 : [1991]187ITR688(SC) , was also relied upon.
7.1 In view of the aforesaid decision of jurisdictional High Court, it was contended that the judgment of Andhra Pradesh High Court in CIT vs . Late Begum Noor Bano Alladin : [1993]204ITR166(AP) , could not be considered wherein the judgment of Delhi High Court in CIT vs . Anand Prasad in was referred to. In the present case the assessed is questioning not the jurisdiction of the AO to make assessment at all but assessment framed under s. 143(3) of the Act. Jurisdiction can neither be waived nor can be vested in the authority by consent. The proposition was supported by the decision rendered in the case of CIT vs . Bharat General Insurance Co. Ltd. : [1971]81ITR303(Delhi) . Then the jurisdiction can be challenged at any stage as held in the case of P. V. Dosi vs. CIT : [1978]113ITR22(Guj) , Vijay Kumar Jain vs. CIT . Since the AO did not possess the jurisdiction, the entire proceedings are void. Relying on the decision in the case of Gunda Thur T. Himappa & Sons vs. CIT : [1968]70ITR70(KAR) , it was submitted that any point which goes to the root of the matter and affects not only the liability to pay tax but also the jurisdiction of the authorities, merits admission. The ratio laid down by the Delhi High Court in the case of M/s. Appojee International Ltd. vs. Union of India (supra) was distinguished. It was thus argued that the judgment of the honble High Court as relied upon by the Revenue is not relevant to the case of the assessee.
7.2 As regards deduction under s. 80HHC it was submitted that the assessed carries on two businesses - one exclusively relating to export and the other exclusively to domestic business. Separate books were maintained and separate P&L; a/c were prepared. While computing deduction under s. 80HHC the provisions of s. 80AB are to be taken into consideration and as such on this issue too the assessees claim is to be accepted.
8. Responding to the contentions as raised, Shri M. S. Syali stated that the jurisdiction by virtue of s. 254 of the IT Act, 1961 is restricted to the subject-matter of appeal. Rule 11 of the Tribunal Rules is an enabling provision for raising an additional ground and it cannot widen the subject-matter. The subject matter of the present appeal, as evident from the grounds of appeal, relates to deduction under s. 80HHC of the Act. On the other hand, the assessed challenges the jurisdiction of the AO in framing the assessment which is beyond the subject-matter of appeal. Reliance was placed on the decision of Andhra Pradesh High Court in the case of Late Begum Noor Bano Alladin (supra). In the aforesaid case after going through the facts on the issue their lordships held that the additional ground is to be confined within the compass of subject-matter of appeal. In the case of Taylor Instrument Co. (India) Ltd. (supra), the honble Delhi High Court was not concerned with the subject-matter of appeal. This was, however, specifically raised and dealt with in : [1981]128ITR388(Delhi) . Reliance was also placed on the decision of Rajasthan High Court in the case of Santlal Kalyani & Co. vs. CIT (1995) 213 ITR 273 . The decision of the Calcutta High Court in the case of Indian Steel & Wire Products : [1994]208ITR740(Cal) , was also relied upon wherein it was held that an additional plea which altogether changes the complexion of the case as originally brought before the CIT(A) and the Tribunal in second appeal cannot be raised at the stage of hearing before the Tribunal. In the case of assessed proceedings were initiated as early as on 18th June, 1990. The assessment order was passed on 12th Feb., 1992 during which period the assessed had not raised any objection to the jurisdiction. No such plea was also raised before the first appellate authority which clearly shows the acquiescence on the part of the assessee. Challenging the jurisdiction at the present stage is stated to be only a dismal tactic to prolong the proceedings.
9. Meeting Shri Syalis arguments it was submitted by the learned Authorised Representative that in the present case the controversy is in regard to interpretation of section and the form cannot over-ride the same. It was vehemently argued that the assessment framed under s. 143(3) is non-est as the AO had no jurisdiction to frame the second assessment. In any case, according to Shri Ganesan, even on merits, the stand of the assessed is to be accepted.
10. We have considered the submissions as made. The facts in brief, as stated earlier, are that the assessees return was processed under s. 143(1)(a) of the Act. It was rectified suo motu by the AO under s. 154 of the Act. The assessed filed an appeal against the aforesaid order and the appeal was heard by the CIT(A) and order passed on 5th Sept., 1992. In the meanwhile notice under s. 143(2) was issued to the assessed and the assessment was framed under s. 143(3) on 12th Feb., 1992. In an appeal filed before the CIT(A) the assessed challenged the quantum of deduction allowed under s. 80HHC of the Act. It is an admitted fact that all along the period, the assessed never challenged the assessment framed under s. 143(3) of the Act to be nullity in law. The admission of the additional ground of appeal has to be examined in the light of this background. The issue in question is whether the Tribunal could permit the parties to raise an additional ground of appeal, never raised before the AO or the CIT(A). The power of the Tribunal as wide as that of the CIT(A) which is co-terminus with that of the AO as held by the honble Supreme Court as well as by various High Courts. This has been discussed at length in the case of Late Begum Noor Bano (supra). As per discussion contained therein, relevant sections in this regard are 251 and 253 of the IT Act, 1961 and the rules framed in this regard. As per provisions of s. 251, the Dy. CIT(A)/CIT(A) may confirm, reduce, enhance or annual the assessment. He may also send back to the AO for fresh assessment in accordance with law. Expln. to s. 251 provides that in disposing of an appeal the Dy. CIT(A)/CIT(A) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Dy. CIT(A) or as the case may be the CIT(A), by the appellant. Sec. 253 of the Act on the other hand provides for appeals to be filed before the Tribunal. Rule 11 of the Tribunal Rules, 1963 provides for an admission or additional ground of appeal. Sub-s. (5) of s. 253 empowers the Tribunal to admit an appeal or permit the filing of cross-appeal if so satisfied for the reasons of delay. As per r. 11 of the Tribunal Rules, 1963, the Tribunal can permit the parties to raise any ground not set forth in the memorandum of appeal. As per provisions of s. 254 of the Act the Tribunal may after giving both the parties to the appeal an opportunity of being heard pass such orders thereon as it thinks fit. The language used in ss. 251 and 254 is different. To appreciate this difference one has to look into the remedy provided in the form of appeal under the Act to the assessed as well as to the Department. The assessed has been provided with the right of two adjudications - one at the stage of first appellate authority and then before the second forum i.e. the Tribunal. Before the first appellate authority the entire range of assessment is open to challenge by the assessee. The powers of the first appellate authority are thus not confined to the subject-matter of the appeal but extends to the subject-matter of the assessment. The order of the first appellate authority may consist of decisions on many matters. Some may be against the assessed while others against the Department. It is in this background that the appeal at the second stage is provided to both Revenue as well as the assessee. Thus the powers of the Tribunal though wide, are not unlimited and unrestricted, and the language used in r. 11 of the Tribunal Rules has to be read as such. This finds its confirmation from the plain reading of s. 254 of the Act, as referred to earlier. The word thereon restricts its jurisdiction to the subject-matter of appeal. This is also as held by their lordships of honble Supreme Court in the case of Hukam Chand Mills Ltd. vs. CIT : [1967]63ITR232(SC) . In the aforesaid case the question related to the proper written down value of the building and machinery belonging to the assessed for the purposes of calculation of depreciation under s. 10(2)(vi) of the IT Act. The Tribunal permitted the Revenue to raise a new ground which was not considered by the ITO or the first appellate authority. Their lordships of the Supreme Court at page 236 of the report observed as under :
'... We are of the opinion that the Tribunal had jurisdiction to permit the question to be raised for the first time in appeal. The powers of the Tribunal in dealing with the appeals are expressed in s. 33(4) of the Act in the widest possible terms. The word thereon of course, restricts the jurisdiction of the Tribunal to the subject-matter of the appeal. The words 'pass such orders as the Tribunal thinks fit' include all the powers (except possibly the power of enhancement) which are conferred upon the AAC by s. 31 of the Act. Consequently the Tribunal has authority under this section to direct the AAC or the ITO to hold a further enquiry and dispose of the case on the basis of such enquiry.'
They also referred to r. 12 (corresponding to present r. 11) of the Tribunal Rules and r. 28 relating to power to remand. The additional ground of appeal was permitted as the subject-matter of appeal before the first appellate authority as well as the Tribunal was the same. Thus, it is the scope of the relief which determines the subject-matter of appeal. The issue has been discussed at great length by the decision or Full Bench of the Andhra Pradesh High Court in CIT vs. Late Begum Noor Bano Alladin (supra). After discussing the catena of judgments on the issue, which we need not discuss. Their Lordships have held that r. 11 of the Tribunal Rules which includes an additional ground cannot widen the subject-matter. As to the argument of the learned authorised representative that the ratio of Andhra Pradesh High Court in the case of Noor Bano (supra) is in direct conflict with that of the jurisdictional High Court in Taylor Instrument Co. (India) Ltd. (supra), the same is not correct. In the aforesaid case the issue before their lordships of the honble Delhi High Court pertained to the allowability of sur-tax in computing the income from business. After following the decision in the case of Jute Corporation of India Ltd. vs. CIT 0044/1991 : [1991]187ITR688(SC) , their lordships held that it is a pure question of law and as there was no fresh evidence required to be taken, there was no reason why the additional ground should not be entertained. Apart from that, their lordships were not concerned with the argument that the same was not within the subject-matter of the appeal. Furthermore, the decision of the honble Supreme Court rendered in the case of Hukam Chand (supra) was never placed before them. This apart the decision in the case of 0044/1991 : [1991]187ITR688(SC) related to the powers of the first appellate authority which are extensive. The reason for the same is not far to seek that the Department has no right to an appeal against the assessment order. While the first appellate authority can enhance the income, it is not so with the Tribunal in the case of IT proceedings. This distinction has to be kept in mind while examining the powers of the Tribunal in regard to the admission of new ground of appeal. In this regard we would like to mention the judgment rendered by the jurisdictional High Court in the case reported in the case of Anand Prasad (supra). It is clearly held therein that within the same head of income the ground could be taken as it would be within the subject-matter of appeal but in case it is in reference to a different head of income, the same is not contemplated within the subject-matter of appeal. To similar effect is the decision of the Rajasthan High Court in the case of Santlal Kalyani & Co. vs. ITO (supra). In the aforesaid case the Tribunal did not permit the assessed to raise additional ground of appeal to the effect that the ITO erred in not making an assessment on the assessed in the status of an unregistered firm where he had already made an assessment in the case of the two parties by taking share from the firm as registered firm. It was held by their lordships of Rajasthan High Court that as it was not within the subject-matter of appeal before the Tribunal, the Tribunal was right in not permitting the additional ground to be raised. In the case of Indian Steel & Wire Products Ltd. (supra) it was held by their lordships of Calcutta High Court that even an additional plea which altogether changes the complexion of the case as originally brought before the first appellate authority, the same cannot be raised at the stage of hearing before the Tribunal. In the case of an assessed the subject-matter of appeal relates to deduction under s. 80HHC of the Act. The issue that the assessment framed under s. 143(3) is a nullity and non-est goes much beyond the subject-matter of appeal. As regards the decision in the case of CIT vs. Bharat General Re-insurance Co. (supra), we find that an admission of an income was first made in the return which was subsequently revised and prayer made for its exclusion was held to be valid. The facts are distinguishable.
11. On merits, it is admitted by the learned Authorised Representative that issue is covered by the decision of special bench of the Tribunal in the case of International Research Park Laboratory Ltd. vs. Asstt. CIT (supra). In the circumstances the plea is rejected.
12. In view of the aforesaid discussion on the issue, additional grounds of appeal cannot be admitted.
13. In the result, both the appeals are dismissed.