Ramanujam, J.
1. The above two tax cases filed by the same assessees relate to the assessment years 1962-63 and 1963-64 respectively, and as there are common questions involved, they are dealt with together.
2. In respect of the assessment year 1962-63 the assessees had claimed deduction of a sum of Rs. 2,375 on the ground that it represented bad debts and that it is an allowable expenditure under Section 5(e) of the Madras Agricultural Income-tax Act, 1955. But, that claim has been disallowed by the assessing authority, the appellate authority and the Tribunal. The assessees contend before us that the said sum of Rs. 2,375 represents advances made to the labourers to be adjusted later as against their wages, and as the labourers did not turn up for work as expected nor returned the amount advanced the amounts have become bad debts. According to the assessees such amounts which have been expended for the purpose of the plantation have to be allowed as a deduction under Section 5(e) of the Act. The learned counsel refers to the decision in Commissioner of Income-tax v. Mysore Sugar Co. Ltd., : [1962]46ITR649(SC) where the Supreme Court held that advances made by a sugar mill to the producers of sugarcane to be adjusted towards sales price of the sugarcane to be supplied by them later, which have become irrecoverable, are allowable deductions as bad debts under Section 10(2)(xv) of the Indian Income-tax Act, 1922. In this case we find that the assessees have not established the truth of the advances alleged to have been made and the factum of its having become irrecoverable. As a matter of fact the assessing authorityhas specifically given the reason for disallowing the said sum as bad debt ' as details of names of persons not furnished; rejected as the claim could not be verified '. That shows that the rejection of the claim was for the reason that the assessees have not proved the genuineness of the expenditure said to have been made and not that it is not allowable deduction. It is not in dispute that the assessees have not established the truth of the expenditure by producing the necessary details as to the persons to whom the amounts have been advanced and as to the steps taken to recover them, either before the Appellate Assistant Commissioner or before the Tribunal. In the circumstances of this case, it is not necessary for us to go into the legal contention put forward by the assessees that the advances made to workers towards their wages which have become irrecoverable are allowable deductions under Section 5(e), as we hold that the assessees had not established the truth of the expenditure and the factum of those amounts having become irrecoverable from the workers to whom the amounts are said to have been advanced. We have to, therefore, uphold the view taken by the authorities below on this question.
3. There is a common question that arises in respect of both the years. The assessee have cut shade trees from their plantation which have become useless and realised a sum of Rs. 13,880 in the first year and Rs. 20,342 in the second year by way of sale of the trees so cut. The assessees included these amounts in their return as revenue receipt and the assessment was made on that basis. The assessees did not question the assessment on the said two sums before the Appellate Assistant Commissioner though they filed appeals in respect of other items. After the disposal of the appeals by the Appellate Assistant Commissioner they also filed appeals before the Tribunal but those appeals also did not involve the question of the assessability or otherwise of the said two sums representing the sale proceeds of the shade trees. While the appeals were pending before the Tribunal as regards other items the Supreme Court rendered the decision in State of Kerala v. Karimthantvi Tea Estate Ltd., : [1966]60ITR275(SC) holding that the sale proceeds of the shade trees which have become useless were capital receipts and not revenue receipts. As soon as the assessees became aware of the said decision of the Supreme Court, they filed two applications before the Tribunal for permission to raise additional grounds of appeal questioning the assessability of the two amounts as revenue receipts. Though the said two applications have been filed as applications for excusing the delay in filing the grounds of appeal, they practically amount to applications for excusing the delay in filing the appeals in respect of a new item not objected to by the assessees originally. As already stated, the subject-matter of the appeals before the Tribunal as originally filed did not comprehendthe question of assessability of these two sums. The assessees did not challenge the assessments so far as they related to these two amounts before the Appellate Assistant Commissioner, nor did they challenge the same in the appeals originally filed before the Tribunal, and it is only by way of additional grounds of appeal the question of assessability of these two amounts as revenue receipts came to be canvassed by the assessees. The Tribunal held that raising additional grounds involving a subject-matter which was not challenged in the original appeal filed before them by the assessees, should be treated as filing fresh appeals, and that the same having been filed after considerable delay, they could not be entertained. It is this view of the Tribunal which is challenged by the assessees before us.
4. According to the assessees the Tribunal has got ample powers to excuse the delay in filing additional grounds of appeal, that it is a matter of discretion which has to be exercised by the Tribunal in a judicious manner, and that dismissal of the assessees' applications to excuse the delay in filing the grounds of appeal by the Tribunal is quite arbitrary. We are of the view that the question does not involve a mere question of discretion. It is also a question relating to jurisdiction of the Tribunal. If the assessees have filed an application for permission to file additional grounds of appeal in relation to the subject-matter which is already before the Tribunal by way of an appeal, the matter will merely rest on the discretion of the Tribunal. But, where the assessees seek to bring in new items which had not been questioned by them before the assessing and appellate authorities and which had nothing to do with the subject-matter of the appeal before the Tribunal as originally filed, by way of additional grounds of appeal, the question will arise whether the Tribunal will have jurisdiction to entertain the additional grounds without excusing the delay in filing the appeal. It may be that the Tribunal has a discretion in the matter of excusing the delay in filing the appeal. But, the question is whether the Tribunal can deal with a new subject-matter raised in the additional ground's of appeal, when the same has not been canvassed either before the assessing authority or before the Appellate Assistant Commissioner. This is the reason for our saying that the matter involves not a mere question of discretion but also the jurisdiction of the Tribunal to entertain and deal with the two amounts in question.
5. The learned counsel for the assessees relies on the decision in Phool Chand Gajanand v. Commissioner of Income-tax, : [1966]62ITR232(All) and Commissioner of Income-tax v. S. Nelliappan, : [1967]66ITR722(SC) as supporting his stand that the Tribunal has ample discretion to excuse the delay in filing the grounds of appeal and to deal with the same along with the other items involved in the original groundsof appeal. In Phool Chand Gajanand v. Commissioner of Income-tax additional grounds of appeal related to the same subject-matter of the appeal, and the case does not deal with a situation as the one arising in this case where the assessees want the question of assessability of a new item of income to be considered in the appeal by raising additional grounds. Therefore, that decision cannot apply to the facts of this case. Commissioner of Income-tax v. Nelliappan was a case of best judgment assessment and it was held that the Tribunal in deciding the appeal is not restricted to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal, and that the Tribunal was competent to allow the assessee to raise the contentions relating to the cash credits which was not made the subject-matter of a ground in the memorandum of appeal, so long as the Tribunal did not make a new case inconsistent with the assessee's own plea. This decision also has no application to the facts of the present case.
6. Commissioner of Income-tax v. Karamchand Premchand Pvt. Ltd., : [1969]74ITR254(Guj) directly dealt with a situation as the one arising in this case with reference to the provisions of the Income-tax Act. There in an appeal to the Appellate Assistant Commissioner by the assessee against an order of assessment, he did not question the decision of the officer on a point decided against him, and the Appellate Assistant Commissioner had not in his order considered that point; the assessee, however, wanted to question the decision of the officer on that point in an appeal to the Tribunal against the order of the Appellate Assistant Commissioner. It was held that the Tribunal was not entitled to allow the assessee to agitate the question under the guise of granting leave under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. In that decision, if we may say so with respect, all the earlier decisions on the point including the decisions in Phool Chand Gajanand v. Commissioner of Income-tax and Commissioner of Income-tax v. S. Nelliappan has been considered, and we are in entire agreement with the view expressed by the learned judge in that case. It is significant to point out that there is no rule in the Madras Agricultural Income-tax Rules similar to the one in Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. B.R. Bamasi v. Commissioner of Income-tax, : [1972]83ITR223(Bom) also takes the same view. In R.M. Nitya Thevar v. State of Madras, [1969] 24 S.T.C. 520, Easun Engineering Co. Ltd. v. Joint Commercial Tax Officer, [1970] 26 S.T.C. 486 and Central Camera Co. (P.) Ltd. v. Government of Madras, [1971] 27 S.T.C. 112, a question similar to the one arising in this case came up for consideration with reference to the jurisdiction of the Sales Tax Appellate Tribunal, and this court had expressed the view in all those cases that theTribunal cannot deal with a subject-matter which has been considered bythe assessing authority but not challenged before the Appellate AssistantCommissioner by the assessee, in an appeal before the Tribunal in relationto other items of dispute. It will be a fortiori a case where an assessee didnot seek to challenge a particular item before the Appellate AssistantCommissioner or before the Tribunal at the original stage but seeks tochallenge the same at a later stage by way of additional grounds. We,therefore, hold that the Tribunal is justified in refusing to excuse the delayin filing the additional grounds of appeal dealing with a new subject-matter.
7. The result is both the tax cases are dismissed with costs. Counsel's fee Rs. 150 in each case.